FEF backs call for NFA abolition

MANILA, Philippines — The Foundation for Economic Freedom (FEF) supports calls for the abolition of the National Food Authority (NFA) amid moves to liberalize rice trade in the country, arguing that the agency has been “inefficient” in responding to supply issues.

In a statement, the group of economists, former government officials, and members of the business community urged Congress to immediately pass the rice tariffication bill that would abolish the NFA and give the private sector a free hand in the importation of the staple.

“We, the Foundation for Economic Freedom, support the call of Sen. Cynthia Villar, chairperson of the Senate agriculture committee, and Sen. Sherwin Gatchalian for the abolition of the National Food Authority,” said FEF.

“We urge the Senate and the House of Representatives to immediately pass the rice tariffication bill. We support a version of the bill that will abolish the National Food Authority and its powers, including imposing import quotas to the private sector in the importation of rice and to license traders and importers,” it added.

The organization is also pushing for the setting of tariffs at the lowest rate possible to increase rice supply and drive down prices.

“We also support setting tariff rates as low as possible in order to make rice more affordable to more than 100 million rice consuming Filipinos.

FEF said the NFA is no longer responding to the food supply needs of the country due to lapses in the timing of importation and is contributing to the increase in rice inflation.

“Food security does not depend on the existence of the National Food Authority as recent events have shown. On the other hand, the NFA has been inefficient and clueless in the right timing in the importation of rice and its distribution. The private sector should be free to import rice from any source in whatever quantities the market needs. This is the only solution to the current rice shortage crisis and to the pervasive malnutrition caused by high food prices. To maintain and manage buffer stocks, a new and much smaller agency can be created,” it said.

The group likewise said the ballooning debt of the NFA is becoming a burden to the national government. The procurement process had also provided opportunities for corruption, FEF claims.

“The NFA has only caused and aggravated the rice inflation and rice shortage in several regions, compounded the debt and losses of the national government, and provided opportunities for graft and corruption for its officers and employees, from the purchase of imported rice to the distribution and transportation of subsidized rice. With high average rice prices and periodic shortages, the NFA has also contributed to the country’s high wage costs and lower competitiveness,” the group said.