NFA to buy up to 615,000 tons of palay

This refers to the letter titled “NFA’s scaled-down procurement target a step in opposite direction” (Inquirer, 9/19/11) of Eduardo Mora of the Task Force Food Sovereignty (TFFS).

Mora based his letter on a news article titled “Gov’t to buy less palay from farmers, says NFA” (Inquirer, 9/12/11) which reported that the National Food Authority would not be “buying 500,000 metric tons of unmilled rice from local farmers this year due to budgetary constraints…it was likely the agency would be able to buy only 270,000 metric tons of palay…for 2011.”

As of end-August this year, NFA had already purchased 168,930 tons of palay from local farmers. We had to scale down our target of 870,000 metric tons to a doable target of 615,000 metric tons for the year, based on financial capabilities. That’s still more than double the 289,000 annual average of the past five years, as TFFS rightly computed.

It may be pointed out that in the 2011 NFA budget, the subsidy for palay procurement is only P2.5 billion—already an improvement from the Department of Budget and Management’s original “zero budget”; and we thank Agriculture Secretary Proceso Alcala for sharing with the NFA half of the Department of Agriculture’s 2011 allocation of P5 billion for Public-Private Partnership (PPP) undertakings.

In any case, P2.5 billion can only buy the equivalent of 147,000 metric tons of palay at NFA support prices. The difference between what has been bought (168,930 tons), and what we have re-configured as a doable target (615,000 tons) is 446,070. This is why when I was interviewed in the Senate in between the budget hearings, I said “I hope we could raise enough internal resources to be able to buy 500,000 (metric tons), but I am not too optimistic.”

I mentioned that we earned P1.53 billion from the import allocations we bid out to the private sector this year (as against P110 million in the previous year), which we would use for palay procurement. Net lending, as supported by the Department of Finance, could give us additional wherewithal to buy more palay. So it would be wrong to conclude that all we can buy for this year is 270,000 metric tons. We will buy as much as we can reasonably pay for.

The NFA exists not only to support the price of palay but also to ensure that there is enough rice at affordable prices available to the consumers. For as long as the consumption requirements cannot be met by domestic rice production, the shortfall must somehow be met either by coaxing the rice-eating population to shift to camote or white corn (not necessarily an instant thing), or by importing rice. And if NFA’s role in farm price support is deemed important, then our economic managers (and Congress) should give the NFA the resources with which to buy palay at the volumes the DA targets. Parenthetically, it is about time that our economic managers agree on a definition of food security—whether it means rice production self-sufficiency, as TFFS wants, or ensuring that the economy has the wherewithal to source our food requirements either completely from local produce, or partially through importation.

—ANGELITO T. BANAYO, administrator, National Food Authority