Rice supply woes blamed on NFA diversion of P5.1-B food fund


The Commission on Audit (COA) has called out the National Food Authority (NFA) for diverting the P5.1-billion subsidy meant to ensure food security to pay off its maturing loans last year, possibly hampering the agency’s ability to maintain a stable rice supply.

In its 2017 annual audit report, the COA said the diversion of the funds “might have … adversely affected” the NFA’s task of stabilizing the prices and supply of rice and corn, as shown by its inability to meet procurement and buffer stock targets.

Under the Food Security Program, the NFA was supposed to buy rice and corn directly from local farmers to stabilize domestic prices and supply.

However, P3.01 billion of the program fund was used to offset the Bureau of Treasury’s payment of the previous year’s guarantee fee and contributions to the Debt Reserve Funds.

The remaining P2.09 billion was deposited to the NFA’s Rice Collection Savings bank account, instead of the Cereal Procurement Fund account. The proceeds were then used to pay the principal and interest of its loans to the state-run Land Bank of the Philippines and the Development Bank of the Philippines.

Targets affected

The NFA’s move to prioritize its debt payments “affect[ed] the agency’s programs and target accomplishments” last year, the COA said.

For one, the NFA procured only 28,514 metric tons of palay from farmers and organizations, a measly 18.6 percent of its target of 153,483 MT.

The agency distributed 700,864 MT of rice, 62 percent of its target of 1.13-million MT.

Meanwhile, it was only able to maintain a buffer stock enough for seven days, instead of the target of 15 days.

State auditors blamed the rice procurement shortfalls partly on the “unavailability of funds in the [regional and field units] during harvest season.”


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