STATE-RUN National Food Authority (NFA) on Wednesday said it is going back to the negotiating table next year as it continues to institutionalize reforms that would let the national government absorb its P155-billion debt.
NFA Administrator Renan Dalisay said they are currently implementing an internal restructuring as part of the requirements by the Governance Commission for Government-owned and Controlled Corporations for the Department of Finance to reconsider its debt.
“We have presented them with a roadmap last year, which includes cutting costs and reducing losses, among others. By end of 2016, if we can attain all the prerequisites, we can have the momentum to ask DOF to absorb our debt,” Dalisay said.
Part of the so-called CGC scorecard tasks the NFA to maintain quick reaction time in ensuring stable farmgate and retail prices, response time against complaints, good warehousing, and a 50-day and 30-day buffer stock of quality rice, more retail outlets, and a certification from the International Organization Standardization (ISO).
“For this phase, I think we are meeting all the 21 performance indicators that the debt does not recur,” Dalisay said.
NFA accumulated debt from the Land Bank of the Philippines and Development Bank of the Philippines purportedly because of supporting the price for palay (unhusked rice) to small farmers.
NFA’s debt rose as much as P176.8 billion in June 2010.
As of November 2015, the NFA debt to the state-owned banks stood at P155 billion. But Dalisay said they expect to further trim it down to P149 billion by the end of the year.
Dalisay is now reviewing the NFA mandate to maintain buffer stocks and provide small farmers with the necessary support.
“At present, we are paying P6 to P8 billion in interest alone. We want to do away with this waste and make the NFA a profitable agency,” he added.
The agency was created to protect the interests of both rice producers and consumers. Its two primary mandates are to stabilize the price of rice and ensure food security.
Over the past two years, the NFA has relied on cheaper imported rice to replenish its buffer stocks since it could not compete with private millers and traders in buying locally grown palay.
Under the new proposal, buffer stocking will largely be sourced from local farms while reducing the volume of importation by encouraging the private sector to take more imported rice.