Zero NFA budget could lead to shutdown of warehouses

National Food Authority (NFA) warehouses in three regions and over 10 provinces are at risk of being closed down next year due to the decision of the government not to provide any budget allocation to the agency. NFA administrator Lito Banayo said the zero budget allocation would prevent them from importing rice and buying the palay (rice grains) harvested by local farmers. "If we do not get a reconsideration of this zero budget, that will happen. I guess that is the interest of the policymakers of this country, the House of Representatives and Congress as a whole," he told the House appropriations committee hearing on the proposed 2011 budget of the Department of Agriculture. Banayo said not allocating a single centavo to the NFA is “akin to slow" abolition of the agency. NFA, an attached agency of the DA, is mandated to buy palay from local farmers at a high price and sell it at a low price. "That is the reason why we have been continually losing because that is the mandate given to us by law, to buy high and sell low," Banayo said. Agriculture secretary Proceso Alcala, on the other hand, assured that the administration is working on the budget of NFA. "We are still working on it. I will meet Budget Secretary Florencio Abad over the weekend. We really need to fight for this budget," he said. Aside from palay procurement, Banayo said the NFA would also have a problem selling rice next year because the government limited their buffer stacking to 15 days instead of 30 days. "That means they will only be having 9.3 million bags of rice a year, and of that number 4.8 million is allotted to the National Capital Region," Banayo said. "More than half of that 9.3 million bags will go to NCR only. Assuming we will keep selling to NCR, what will happen to other provinces? They will be affected so we will just close our warehouses," he added. Banayo said provinces that will be affected are Batanes, Babuyan in Cagayan, Aurora, Masbate, Catanduanes, Sulu, Tawi-Tawi, Bohol, Cebu, Basilan and Romblon, among others. Meanwhile, the regions that will be affected are Western Samar, Zamboanga Peninsula, and the Cordillera Administrative Region (CAR). The NFA chief said the zero budget was due to the debts incurred by the agency in the past years. "By March of next year, we will reach P120.7 billion in debts. So we will have a financial implosion. Of course all of these are guaranteed by the national government but the net effect on our operations is by asphyxiating or financially strangling NFA, it is akin to slow abolition," Banayo said. Nueva Viscaya Rep. Carlos Padilla said once the NFA fails to buy palay, the price would tremendously go down and "this dampens the desire of the farmers to plant again." "Pag umaalis kayo sa (If the farmers will leave the) market, the traders will take advantage of it, mababa ang presyo (because of the low price)," he said. “This is very important in so far as trying to produce more rice. The 10 to 15 percent shortage ng rice production . . . if you can only assure the farmers of good price of palay I assure you in one or two years there will be no shortage," he added. - KBK, GMANews.TV