ANGARA SEES NFA AS THE NEXT NAPOCOR

Senator Edgardo J. Angara today said that the National Food Authority (NFA) will become the next National Power Corporation (NAPOCOR) if government failed to overhaul the state-owned agency amidst rice crisis.

"NFA will become exactly like NAPOCOR enjoying sovereign guarantee. What makes the 'balanced budget unbalanced' is NFA, as it incurred billion of losses. However, it does not need to incur unnecessary costs anymore. The solution is for NFA to stick to its regulatory function and give up its trading functions," said Angara, who also chairs Senate Committee on Agriculture and Food.

He added, "The NFA should give up its trade functions to the private sector, which can do a much better job. If private rice traders are allowed to import and sell rice without any restriction, the supply and price of rice will likely stabilize. More important, smuggling, corruption, and hoarding will be eliminated."

The former Agriculture secretary also mentioned that NFA should serve as a 'buying support' for rice and corn in order to maintain prices and should be able to buy at least 10% of both commodities during harvest season. Historically, however, NFA can only purchase 1-5%. In effect, traders would become the gainers in the end.

In a review of NFA's operations, its projected accumulated losses in 2007 amounted to Php48 billion while its outstanding loans were around Php69 billion.

Angara observed that NFA will continue to incur losses if it continues to sell rice at a much cheaper price. He illustrated that NFA is selling rice at P18.25 per kilo when the cost of rice is already P32 to P35 per kilo.

In conclusion, Angara said that the government must allocate billions of peso to agriculture in order to maintain rice sufficiency and bring down food prices in general in three years time.