THE Commission on Audit (CoA) said the National Food Authority (NFA) failed to build up sufficient rice reserves despite receiving a P7-billion subsidy from the government.
In its 2022 audit report released on July 6, the state auditor said that in 2022, “the NFA did not meet the optimum level of national rice buffer stocking requirement of 300,000 metric tons (MT) at any given time… despite the full receipt of the P7-billion government subsidy.”
CoA said the NFA did not comply with the implementing rules and regulations of Republic Act No. 11203, or the Rice Tariffication Act.
The law changed the role of the NFA, which used to hold a monopoly on rice imports, restricting it to purchasing domestically-harvested rice. Its purchases are then held in reserve for calamities and local shortages.
“The optimum level of rice buffer stocks to be maintained by the NFA, as approved by the NFA Council in its Resolution No. 999-2021-B dated Feb. 16, 2021, was fixed at 300,000 MT or equivalent to nine days of nationwide consumption,” CoA said.
Citing the NFA’s annual report for 2022, the agency’s rice inventory ranged from 111,042 MT to 182,612 MT, for an average of 140,354 MT, equivalent to 4.18 days’ demand, CoA said.
CoA also noted that only P5.75 billion of the subsidy was disbursed to procure 302,651 MT of palay (unmilled rice) or 63.05% of the NFA’s procurement target of 480,000 MT for 2022.
It attributed the failure to meet palay procurement targets to typhoons, which dampened rice production areas. CoA added that private traders offering farmers attractive terms that outweighed the NFA’s buying price of P19 per kilogram, including free delivery, advance payment, and free use of post-harvest facilities.
The NFA’s palay procurement was equivalent to 1.54% of the harvest, which amounted to 19.77 million MT in 2022.
“The relatively low absorption rate of the NFA on local palay procurement is an indication that farmers are not aware of the NFA’s palay procurement activities and program,” according to the audit report.
“More farmers could have sold their harvests to the NFA through the mobile procurement teams in their localities at a higher price than the prevailing farmgate price without incurring additional delivery expenses,” CoA added.
In response, the management “committed to continuously exert efforts” to meet the 300,000 MT minimum rice reserve level.
The NFA was asked to comment but had not replied at the deadline. — Beatriz Marie D. Cruz