NFA to get P2.5B in 2011; ‘zero budget’ proposal reversed

Reversing an earlier “zero budget" proposal for the National Food Authority (NFA), the Department of Agriculture (DA) has agreed to appropriate P2.5 billion for the agency next year. An attached agency of the DA, the NFA is mandated to subsidize rice by buying palay from farmers and reselling it to the public at a lower price. The announcement came after the NFA warned that a zero budget allocation for the agency, as earlier proposed, could lead to higher rice prices and a shutdown of the agency’s warehouses. According to NFA administrator Lito Banayo, Agriculture Secretary Proseso Alcala came up with a budget for the NFA because "we are family." "Secretary Alcala agreed to give us P2.5 billion from a partnership program so as not to cause distortion to the budget of the line agency," Banayo said during the budget hearing at the Senate on Tuesday. The department has realigned P5 billion from a public-private partnership project — a research and study program on agriculture projects — to lift the NFA out of the zero budget status. However, that budget is not yet final, pending the approval of the Development Budget Coordination Committee and the Office of the President. The allocation for the NFA in 2010 is P8 billion under the General Appropriations Act, P2 billion of which was released in April. The remaining P6 million will be released by the Department of Budget and Management next week — the start of the palay-buying season. The NFA plans to buy 612,000 metric tons (MT) of palay from local farmers this year. For 2011, meanwhile, the NFA’s target is to buy up to 1.2 million MT of palay at the support price of P17 per kilogram to ensure that farmers are guaranteed a stable price for their produce. “If our budget will be fully restored, we plan to increase our palay, procurement buy as much as 5.5 percent of total harvest next year. This will subsequently increase to 8 percent and eventually to 10 percent in the third year. Once self-sufficiency sets in, we will maintain the 10 percent presence in the buying of palay," Banayo told the Senate. Meanwhile, the DA may come up with rice import figures for 2011 by November, according to Alcala. "The IAC [Inter-Agency Committee on Rice and Corn] is yet to meet. By the first or second week of November, we might have the import figures [for rice]," he told reporters at the sidelines of the budget hearing. —Larissa Mae Suarez/VS, GMANews.TV