NFA’s abolition will lead to unstable rice prices and supply

RICE BUSINESS is a lucrative multibillion-peso industry where the National Food Authority is a major stakeholder. Once state participation in the grains market is diminished or weakened with the NFA’s abolition, profiteering big rice entities in the private sector will take over and dictate rice prices and supply; and there will be instability in both, to the great disadvantage of millions of Filipino families, especially the poor.

Clearly, the NFA’s existing structure has a steep price to pay if it is to remain effective in stabilizing rice price and supply. Yet, this structure ensures an accessible and affordable staple food especially for the poor who are trapped in a vicious cycle of poverty and who, according to a recent study made by the Asian Institute of Management, constitute 40 percent of Filipinos.

Yes, the NFA has incurred debts that have ballooned to P165 billion, largely because of how previous NFA council members ran the agency. The highest policymaking council had senior members who were concurrent officials of the NFA’s creditor banks, such as the Land Bank of the Philippines,  Development Bank of the Philippines and the Philippine National Bank.

As ludicrous as it may sound, these council members, representing both the NFA and their employer-banks, opted to secure contracts with high-bearing interest (P7 billion annually) on commercial bank loans instead of opting for presidential funding or additional congressional budget—admittedly an arduous path to take but, to be sure, more financially sound for the government.

Government policies on rice, from the post-martial law era to the present, have always been aligned with the self-serving interests of international financial institutions (e.g., the World Bank-International Monetary Fund combine and the Asian Development Bank) to force Third World governments into importing cheap rice instead of including rice industry development in their governance agenda.

Hunger and deprivation breed social unrest and, in turn, political turmoil. The unfortunate rice crises of 1995, 2008 and 2013 are painful lessons that our country’s present economic advisers should learn from. When the NFA’s functions are weakened, the specter of lawlessness will endlessly haunt us (think Kidapawan) as the immeasurable social cost of another rice crisis is a disaster waiting to happen.

More support for local rice farmers is a must, along with sustained agriculture development programs, for our country to attain rice self-sufficiency and food security. With President Duterte’s unprecedented popularity and no-nonsense style of governance, we look forward to meaningful changes at the NFA, among them a stop to bank loans in the billions of pesos and the inclusion instead in the 2017 presidential budget of a rice procurement allocation for food security stocks and poverty-alleviation rice subsidy.

If rice subsidy is made available—through the produce of local farmers—to a captured market of some 4.5 million poorest families, including government workers and uniformed personnel, this country will be self-sufficient in rice within six years and surge ahead in its efforts to eradicate poverty.

—ROMAN M. SANCHEZ, National Food Authority Employees Association-Courage, [email protected]