Unfazed by budget cut, NFA to buy more rice from farmers

Its P5.5-billion budget cut this year has not stopped the National Food Authority (NFA) from planning to buy from farmers more rice in 2011 than the target it set in the previous year.

With NFA’s budget down to P2.5 billion from P8 billion in 2010, NFA administrator Lito Banayo over the weekend said the agency targets to buy as much as 870,000 metric tons (MT) of palay or unmilled rice from farmers.

The NFA buys unmilled rice from farmers at P17 — which, Banayo told GMA News on Tuesday, is way above the break-even price of P10.50 — to keep the abusive private sector at bay.

For 2010, the NFA planned to buy less at 612,000 MT, according to a report in September that year.

Data from the NFA website, which include incomplete numbers for 2010, show that this year’s procurement target exceeds the actual procurement in 2009 and 2008.

The NFA bought 463,054 MT of unmilled rice in 2009, and 683,042 MT in 2008 when the Philippines suffered a rice crisis.

To achieve this year’s procurement target, the agency “might have the money now but the funds would have to be sourced through commercial loans,” Banayo said at the sidelines of the recently concluded Agriculture and Fisheries 2025 Summit in Antipolo City.

Citing the cut in the agency’s budget, an opposition lawmaker on Tuesday questioned the NFA’s capability to sustain its rice procurement program. “What can P2.5 billion do to influence the price of palay?” Zambales Rep. Milagros “Mitos” Magsaysay said in an interview with GMA News. “The Aquino administration does not know what it is doing.”

Banayo said the NFA’s procurement target this year makes up 5 percent of the envisioned paddy rice production in 2011, which the government expects to reach 17.4 million MT.

Under its rice self-sufficiency plan, the agency targets to increase its palay procurement to 10 percent of the 21-million MT paddy rice production in 2013.

“But this will remain dependent on whether we will have the resources to buy more palay from farmers,” Banayo said.

Banayo on Tuesday said the NFA inherited P177 billion in debts from the Arroyo administration, up from P25 billion when the former president took over.

The Palace is mulling a change in the setup of the debt-ridden agency due to the anomalies that the NFA faces. — With Paterno Esmaquel II/VS, GMA News