Loren seeks NFA reorganization thru SB 1396

Senator Loren Legarda is proposing the creation of two new agencies that would replace the National Food Authority (NFA) and take over the latter's two distinct functions - importing rice and regulating the sale of grains and cereals.

"The rice crisis we are facing, as well as the bleak prognosis on global food security, should impress upon Congress the immediacy of passing Senate Bill 1396 which I filed last year to effect the reorganization of the NFA," said Legarda.

Legarda expressed concern on a report by the World Food Program (WFP) that 20 million children among the poorest of nations are already being threatened by severe hunger. The organization described the problem as a "silent tsunami of hunger."

"Here in our country, the prevalence of malnutrition especially among children should jolt us into action to ensure ample supply of affordable and accessible food for all," she stressed.

Legarda said dividing the commercial and regulatory functions of the NFA would allow its replacement agencies to concentrate on the two distinct tasks being carried out at present by the NFA.

"Separating the commercial functions under one entity and ensuring appropriations for such a function will lessen dependence on borrowings, would instill transparency and better handling of its finances," she said.

On the other hand, the regulatory functions like price monitoring, licensing and registration, will be more adequately performed by a separate entity, which shall then be immune from losses arising from commercial operations, Legarda added.

The chair of the Senate Economic Affairs Committee pointed out that the NFA rice importation program is sourced through borrowings guaranteed by the national government.

In 2006, the NFA posted a deficit of P16 billion from its importation program as it was forced to buy rice at higher prices to meet the demands of the nation, which the local agricultural sector failed to meet.

"The productivity of our agriculture sector is not sufficient to fully meet local needs. This is brought about by inadequate support mechanisms to farmers such as access to irrigation, affordable and readily available credit, low-priced farm inputs, post-harvest facilities and reliable infrastructures such as farm-to-market roads," Legarda said.

Unless the country achieves 100 percent food sufficiency from local produce, Legarda said it will continue to be dependent on imported food items, with the NFA leading the way in buying rice abroad.

"These importations are straining government coffers and saddling us with more debts," she said.

At present, the NFA's procurement program involves buying the produce of individual and organized farmers at prices that would give them a reasonable return on their investment. It also has a distribution program to make available affordable food supply to consumers.