The trillion-peso rice fund and NFA

Published March 12, 2019, 12:04 AM

by Charissa Luci-Atienza & Bernie Cahiles-Magkilat



V. L. Sonny Domingo

Most, of the nation’s farmers are silent and are supportive of rice tariffication. Only a minority (whose real motives, intentions, and identity are even questionable) are the only ones in the streets demonstrating against rice tariffication. These are mostly the beneficiaries and partners of the National Food Authority (NFA) through the years who benefitted from their distribution benefits and water damage sales.

The NFA formerly National Grains Authority (NGA), however, is not to blame for where they are now. NFA become inutile and irrelevant from the time the wheat importation monopoly given to them by President Ferdinand Marcos was taken away by President Cory Aquino and returned it to the wheat cartel that supported her.  The NFA was given the wheat importation monopoly (taken from the wheat cartel immediately after martial law) so it could earn enough to do its mandate of building modern warehouses (which they did) and its mandate to buy high from the small holder farmers to encourage them to produce and sell low to poor consumers.

Unfortunately, when this was done, NFA’s administrat13ors did not take steps to convince the government to provide them another source of income. Instead they borrowed money to sustain their operations that were  no longer sustainable. (Borrowing was the most stupid approach to implement their mandate to buy high and sell low our staple crop.) They then gave in to graft and corruption. In the process, they also prostituted the farmers along with the rice cartel that is now financing the demonstrations, to save their necks.

This must have triggered Congress to pass the Rice Tariffication Law (RA 11203) which was championed by the Senate Committee on Agriculture.  It is now for NEDA to keep it unpolluted in the Implementation Rules and Regulations (IRR), otherwise the farmers will again be disadvantaged and the rice industry cornered by the rice cartel. And so they are now painting a grim scenario in August.

A grim scenario in August

NFA has now announced that by August all of its stocks will have been sold, warning one and all that there will be no more rice at NFA price for poor consumers. NFA and the demonstrators against the rice tarriffication are warning that prices will go up beyond the means of the ordinary worker. Or that the market will be flooded with cheap imported rice to the detriment of small farmers that will not be able to sell their produce even at the break-even price of P12 per kilo. They are right in giving such warning.

But then again and again, NFA has failed in its mandate to stop hoarding and price manipulation.  Under the law of supply and demand, because the government failed in supporting production by the 17 million farmers in the grains industry and the 20 million in the uplands that produce rice during rainy season, NFA failed to do its mandate. Sec. Pinol recently announced that they have proposed in the IRR, if it will be allowed by the law, that NFA will have a rolling buffer stock that will allow them to sell the buffer stock every 6 months. Its impact, however, will be limited when compared to the yearly shortfall shown to be 20% compared to the total importation and smuggling.

NFA, however, is right if the government fails now to do the following and wait for the IRR and the accumulation of the P 22 billion rice funds after one year:

  1. Immediate release of funds to support farmer cluster farming of federations, associations, and the like, with it funding requirements to modernize, mechanize, and do integrated farming systems with professional managers. This paradigm shift is needed because even if the government provides the machinery and subsidies under the present production system of individual farming, the funds will only be stolen along the way. This is more so if the machinery and other supplies will be under a bidding system which is always subject to graft and corruption.
  2. Convert the Department of Agriculture (DA) budget into social investments that will be awarded to farmers that have organized themselves into clusters and are ready to hire professional managers to provide them the track-record needed in agribusiness and professional management.
  3. Provide a direct DA Guarantee Fund (not thru Landbank) to banks to assist and waive their banking requirements of track-record and financial viability for three years, since they are new groupings and new farmer corporations.
  4. Free electricity to Small Water Irrigation Pumps (SWIP).
  5. Stop the rice cartel from importing and continue to manipulate the price of rice.


 ( V.L. Sonny Domingo  is a member of the Board of Agriculture of the Professional Regulation Commission, Office of the President  and a Farmer Rights Advocate  as the permanent national chairman of KaMMMPi (Kapisanan ng Magsasaska, Mangingisda at Manggagawa ng Pilipinas. He has 50 years in depth exposure and experience in subsistence farming and served as consultant of various commercial farms.)