Aquino Cabinet still debating over NFA's abolition

By Willard Cheng, ABS-CBN News

Posted at Jan 21 2011 07:53 PM | Updated as of Jan 23 2011 04:55 AM

MANILA, Philippines - Malacañang officials are currently locked in a debate on whether the National Food Authority (NFA) should be abolished.

Ricky Carandang, presidential communications development and strategic planning chief, said that some Cabinet members believe the NFA is needed to stabilize the prices of food while others see no need to spend billions a year to carry out its functions.

"So we are approaching it from a point of view, kasi dalawang bahagi 'yan: number one, over-importation, who is behind it, how much did we lose; number two, we also want to look at how can we sustain the NFA in a way that doesn't cost so much," Carandang said.

He added: "What reforms need to be put in NFA to make sure that abuses in the past are not going to be committed? So it's proceeding on two tracks and I guess, one track sometimes goes faster than the other."

Budget Secretary Florencio Abad had said that the government is studying the possibility of shutting down the NFA and that 3 its 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 said.

He 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 plan to abolish the NFA came after its new chief, Angelito Banayo, revealed that the government has incurred P177-billion in debt due to the agency's overimportation of rice last year.