NFA shutdown eyed, says Abad

By Dennis D. Estopace, Business Mirror

Posted at Jan 21 2011 07:04 AM | Updated as of Feb 10 2011 07:59 AM

MANILA, Philippines - Amid fresh calls in Congress to investigate anomalies in rice importation in the previous administration, the government may shut down the National Food Authority (NFA) as Budget Secretary Florencio B. Abad said three of its four functions may be devolved.

“The first one [subsidy function] can be best done by the Department of Social Welfare and Development [DSWD] through the Conditional Cash Transfer program,” Abad told members of the Financial Executives Institute of the Philippines in a forum organized by Finex on Wednesday afternoon.

Abad added that for the second function of the NFA, which is to procure rice from farmers, he said “there’s an emerging consensus to bring in private sector in the trading [of rice].”

The government, he added, “will simply perform the function of a buyer of last resort.”

He added that the government can buy to ensure a 15-day supply “and come July, to increase that for a 30-day supply.”

The NFA’s regulatory function on the trading, Abad said, can be transferred to a unit in the Department of Agriculture. “We’ve had two discussions [on this] with the President.”

Still, Abad said the national government has to deal with the P177-billion debt incurred by the NFA. “We have to take that on as a burden.”

The NFA has been reported as having accumulated such debt for allegedly overbuying rice last year.

However, Administrator Angelito T. Banayo told the BusinessMirror that this is the first time he heard about the proposal.

“There will be a need for, one, a policy decision by the President and, two, a legislative move,” Banayo said, when asked for his reaction on Abad’s statement about shutting down the NFA.

He told the BusinessMirror on the sidelines of the last official lecture of UP professor Leonor Briones that he met with President Benigno S. Aquino III this week “and there was no mention of it [move to close the NFA].”