The National Food Authority (NFA) is currently crafting a plan that will allow the food agency to start procuring and distributing nongrain commodities, such as vegetables and meat, this year.
NFA Spokesman Rebecca Olarte said the food agency is targeting to come up with a concept paper on how it could reinstate its role which it performed in the Kadiwa program rolled out in February 1980.
Olarte said the paper will be presented for approval of the NFA Council, the highest policy-making body of the food agency.
“Our target is to implement [a scheme similar to Kadiwa] within the year, that’s the instruction of [NFA] Administrator Jason L.Y. Aquino,” she told reporters in an interview recently.
“A ready market will help producers and also make goods affordable by eliminating the middlemen,” Olarte said, adding that the NFA would produce directly from farmers.
Among the points being discussed by the NFA’s technical committee are the additional budget required by the program and the additional manpower needed to implement it.
“One point being discussed is determining the outlet areas by accessibility and not by proximity,” she said. “Because sometimes, an island is near another one, but is not accessible because there’s no way to transportthe goods.”
Earlier, economists warned that expanding the market and distribution activities of the NFA could cause the government to incur losses.
Rolando T. Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agri Business, said the proposal to allow the NFA to procure and distribute nongrain commodities, such as fruit and fish, should be scrutinized.
“This proposal [expanding NFA’s role] needs multisectoral review by the public sector and business groups. The government should not be in business,” Dy told the BusinessMirror via e-mail.
“In the past, the NFA incurred losses with Kadiwa. It will also compete with the private sector, which can do a better job,” he said, adding the food agency “should just stick to rice-buffer stock management.”
Economist Pablito M. Villegas, vice president of Confederation Filipino Consulting Organizations, echoed Dy’s remark that the government should not intervene in the market.
However, Villegas said reviving the NFA’s old Kadiwa scheme could be a “viable” option to address current market failures, particularly the proliferation of middlemen and traders who tend to inflate the prices of goods.
“Given the gravity of supply-chain market failure, there is scope or justification for expanding the powers of the NFA and reverting to the Kadiwa scheme,” he said.
“At present, traders are the only ones benefiting. There is an oligopolistic influence at the current value chain, resulting in lower farm-gate price but higher retail price of goods,” he added.
Earlier, NFA Assistant Administrator for Marketing Operations Maria Mercedes G. Yacapin told the BusinessMirror that the agency would be needing a bigger annual budget if would be tasked to buy other agricultural products.
“Right now, the NFA has very limited capability in terms of logistics. This [expansion] is a big requirement that entails a higher budget,” Yacapin said.
“The NFA also has to consider Republic Act 9184, or the procurement law, which we had to follow when importing rice. We have to consider the requirements of the law if the NFA would expand its procurement program,” Yacapin added.