NFA cites excuses for slow palay procurement

Published August 9, 2020, 10:00 PM

by Madelaine B. Miraflor

While the country is assured that the National Food Authority (NFA) will have enough subsidized rice to distribute when needed, the state-run grains agency’s chief said their palay procurement has been slowed down by lack of rice milling facilities and government’s low buying price.

 In a text exchange, National Food Authority (NFA) Administrator Judy Carol Dansal said it’s not the supply, but the lack of rice milling facilities that impedes the agency’s palay procurement.

Under a liberalized regime, NFA’s sole mandate has been reduced to buffer stocking for calamities and emergencies.

To perform this task, the agency buys locally produced palay from farmers, which it sells to local government units (LGUs) and partner agencies like the Department of Social Welfare and Development (DSWD).

 “We are not in a bad situation [in terms of stocks]. We continue to procure stocks now [but] it is not in big volumes yet because the main harvest will start by September or three weeks from now,” Dansal said.

Right now, Dansal said that NFA’s rice milling warehouse could only cater to 25 percent of its palay inventory, forcing the agency to keep its contract with private millers.

“On the milling aspect of our inventory, we still have several rice mills located in different parts of the country and we are still using them,” Dansal said.

“[But] we cannot avoid contracting milling to private sectors to convert our palay stocks into rice in order to address the volume of the daily requirements nationwide. During the past administrations, NFA did not to buy rice mills because of government policy not to compete with the business of private sector,” she added.

She also said that the change to limit NFA’s mandate to “merely buffer stocking has the negative effect of removal of 40 percent of our personnel complement, which we will implement in a few months from now”.

 “Further, the budget being given by the national government is only to buy palay. Hence, we have no budget to buy rice mills,” Dansal further said.

NFA currently has an annual budget of P7 billion for palay procurement.

Dansal also said that the government’s Rice Competitiveness Enhancement Fund (RCEF) program is “clear in so far as the beneficiaries are concerned and NFA is not among them.” RCEF is the collection of rice import tariffs.

“However, [Agriculture] Secretary William Dar is doing his best to look for funds to support our present post-harvest facilities,” the NFA chief further said.

Meanwhile, Dansal likewise said that another reason NFA could not buy big volumes of palay as of now is the still relatively low buying price for palay at P19 per kilogram.

“The market dictates the price. So if the farm-gate price of palay is high, higher than the P19/kg buying price of the government, the farmers sell their produce to the private traders.

Latest data from the Philippine Statistics Authority (PSA) showed that as of the second week of July, the average farmgate price of palay stood at 18.49/kg, rising by 3.9 percent from the 17.79/kg price recorded in the same period last year.

Dansal’s statement came as some groups expressed concern against the alleged dwindling  NFA inventory that is good to last for seven days only.

“This is alarming as the next big harvest is still in October. It pays to be prepared especially with this pandemic still hovering in the picture,” Omi Royandoyan, representative of Nagkakaisang Grupo Laban sa RTL or Rice Tariffication Law, said.

Dansal was quick to defend the agency, saying that NFA only supplies to 5 percent of the market given its new mandate and amid falling purchases from LGUs and government agencies.

“Our current buffer stock, if NFA will feed the 109 million Filipinos daily, will only last for days. But that is not the situation anymore because we only share a maximum of 5 percent market participation. We have the private sector and the household stocks to help the government stocks,” Dansal said.

She also said that NFA’s sales from LGUs and other government relief agencies have been reduced from 10 percent during the first few months of COVID-19 pandemic to 2 percent as of now.