Senate Bill 1834 has stated unequivocally that the privatisation of the Philippines National Food Authority (NFA) should not go ahead. Senator Sergio Osmena, chair of the senate committee on agriculture and food, filed the bill to reassure farmers that governmental intervention would prove to be efficient, more transparent and necessary to ensure stable prices for agricultural commodities.
The move towards privatisation was first proposed by the Asian Development bank, which had stipulated that the industry reorganisation was a necessary condition for a US$175m loan from its Grains Sector Development Program.
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Continuing problems with inadequate infrastructure within the rice, corn and sugar industries, however, led to an investigation by the committee and encouraged Osmena to conclude that: “I do not believe it is wise to privatise the NFA at this time. We cannot afford to have our farmers and consumers fall captive to the machinations of private traders and rice cartels. We can achieve [our] goals simply by separating the NFA’s regulatory function from its trading function. The present set-up leads to an anomalous situation where the NFA as regulator makes the rules of the game, and is at the same time the biggest grain trader in the country.”
Osmena has proposed the creation of a National Food Council, which would be able to establish contracts with the National Grain and Sugar Corporation (NGSC) while formulating policy on the Philippine’s food staples and setting targets for price stabilisation. The NGSC will be established as a government owned and controlled corporation, which will take over the trading functions of the NFA.
He commented: “If only for transparency, and to reduce the burden on the national government’s fiscal deficit, this will have been worth the effort the committee put into it.”
With the money saved through this administrative reform, Osmena explained that new resources would be given to the agricultural infrastructure; including irrigation, roads and facilities.
