Government ends NFA rice subsidy

MANILA, Philippines – Malacañang may have set the stage for the abolition of the National Food Authority (NFA) with its decision to take away the agency’s P8-billion rice procurement subsidy and transfer it to the Department of Social Welfare and Development (DSWD).

“The rice distribution program for the poor of the DSWD is a program that we (Congress) can support. The problem is now, in the process of funding that program of the DSWD, they in effect abolished the NFA by abolishing its function,” Sen. Franklin Drilon, chairman of the Senate committee on finance, said during a hearing on DSWD’s proposed budget for next year.

Drilon explained that the NFA’s mandate was to purchase rice and sell at subsidized rates to poor consumers.

“I am open to that (transfer of subsidy) but it should not be done in this manner. There should be a deliberate debate that the NFA is not serving its purpose and therefore we must abolish it in a separate piece of legislation, not through a budget,” Drilon added.

Social Welfare Secretary Corazon Soliman said that by assuming the subsidy, her agency would be able to reach out more to the poor through a more efficient use of its national household targeting system.

She explained that the DSWD would use the funds to distribute rice or cash to the poor.

Soliman said that the beneficiaries would even include farmers and fisherfolk who, she said, were also suffering from scarce rice supply.

But Sen. Edgardo Angara balked at the new setup saying farmers should be given more support.

He explained that the artificial pricing set by the government was precisely meant to help them by encouraging them to plant more rice.

“That’s why it requires clarification otherwise, you will cause unrest in the countryside, believe me. It’s not like stealing from the rich like Robin Hood and giving it to the poor, no. It’s stealing it from the poor and giving it to the poor, both are crimes,” he said.

Sen. Francis Escudero chided Soliman for declaring that subsidized rice would also be distributed to farmers saying the latter would likely feel insulted.

“You cannot afford to turn your back on this function of government because at the end of the day, most revolutions are started in countries where people start to line up for rations when the supply of rice diminishes,” Escudero said.

“I question the policy and I question the thrust insofar as this is concerned because while on the one hand, the DOF and DBM are saying that we should let market forces operate and decide and therefore NFA should get zero subsidy, on the other hand, they’re encouraging dole-outs left and right,” he added.

Escudero also pointed out that the NFA and the Department of Agriculture were not consulted about the plan.

He said that in conversations with Agriculture Secretary Proceso Alcala and NFA administrator Lito Banayo, it appeared that the DBM decided to remove the subsidy without considering the mandate of the NFA.

But Soliman clarified that Alcala and Banayo had been consulted about the issue in a meeting on Aug. 24 in the office of Alcala.

Finance Secretary Cesar Purisima, Budget Secretary Florencio Abad, DSWD undersecretary Celia Yangco and DBM undersecretary Mario Relampagos attended the meeting.

Soliman herself was not at the meeting but Yangco, her undersecretary, said Banayo and Alcala agreed when told by Purisima that the removal of the subsidy was a Cabinet decision.

Escudero pointed out that a consultation was no longer relevant considering that the proposed 2011 General Appropriations Act was already submitted to Congress on Aug. 26.

He said that by the time the supposed consultation was made, there was no more time left to incorporate any changes in the proposed budget.

Drilon said that he would discuss the matter with the NFA, DA and DBM to figure out a way to resolve the problem.

He noted that the NFA can only afford to purchase 10 percent of the country’s total rice production for its subsidized rice program so the DSWD, if it wants to engage in the distribution of rice, may tap the balance. –Marvin Sy (The Philippine Star)