Assignment No. 4 in Economics with Land Reform and Taxation




Read the 12-page article entitled “Subsidizing the National Food Authority: Is It a Good Policy?” published by the Senate Economic Planning Office of the Senate of the Philippines. You can access the article through the following link:

http://www.senate.gov.ph/publications/PB%202010-12%20-%20Subsidizing%20the%20NFA.pdf 

Write a commentary on the said article in not less than 200 words (like a one-page report).

Deadline of Submission: March 12, 2011 (Saturday), 11:59PM

16 comments:

Anonymous said...

FRITZ MARK ANTONIO
BSHRM-2
WED 9:12PM

Despite adopting the recommendation of the previous government regarding the level of subsidies that NFA would be getting next year, Aquino administration would review the operations of the grains agency and come up with long-term solutions to address the problem.
In fact, the government has now created an task force to look into the reasons why its debts ballooned through the years and how to overhaul it.
Data from the Finance department showed that the liabilities of NFA rose to P171 billion as of end-May 2010 from only P28 billion in 2003.
Subsidies given to NFA amounted to P2.85 billion as of end-June from only P2.025 billion as of end-May. The government grants subsidies to NFA to allow the grains agency to fulfill its mandate of selling price at affordable rates even if these were bought at high prices. while changing the mandate of NFA would require legislative amendments in the charter of the agency,rice subsidies directly to the poor would not need legislation and thus, may be implemented immediately. The department is looking at expanding the government’s Conditional Cash Transfer program so that it would target those who cannot afford to buy rice at prevailing market prices.
The idea is to give rice subsidy through to certain recipients or sectors of society so that the target is more specific.

SUMMER IS COMING.....

riza mateo said...

NFA ( National food authority ) ensures balance between supply and demands specially on rice issues.
They surely helps price manipulation and control for the benefit of poor and low incomed citizen. But do the budget allocated for this agency, justify their performance and needs. History, itself foretold that, due to over manipulation and controlling of NFA on rice demands, most of its supply was put into waste. And corruption on this agency still do occur. Right beneficiaries to such rice supply program are inefficient. Sad to say, some of the official still make this program as an opportunity for their own benefits. The Government, I suggest, should review and have a close review on such program to secure the interest of our fellow poor people, not the corrupt official and their families. They should build a committee reviewing every transaction of this agency,, to avoid such unnecessary corrupting practices.
Furthermore, the government should also considerate other agriculture crops, and not concentrate only on rice production. They should allocate funds on seasonal basis for all demand commodities on which crop is to produce on a certain season. This will help on avoiding overstock of certain crops and opportunity of exporting goods.

Anonymous said...

Jude Marck S. Bagsao
BSE-Eng
Economics with LRT
Wed; 9am-12nn



Moving SLUSH FUNDs from NFA to DSWD is a “reform” that will reduce poverty. Really? Aquino government will not provide subsidized rice via NFA but through DSWD. It is an asinine juggling act -- another game of musical chairs being played using taxpayers money -- OUR money.

Here’s the situation -- 70% of Philippine poor are subsistence farmers. Aquino government keeps prices of rice low via NFA-dictated prices. Ergo, if buying price for rice is low AND there is no competition (choice is between local rice trader/miller or NFA) -- then rice farmers have low income and remain poor. The response of farmers to such poverty can be varied: a) join armed movements; b) diversify into high value crops; c) look for a job -- outside of agriculture; d) look for a job- -- inside the industry; e) migrate to the urban centers; f) be stoic and go with the flow; g) augment income with other sources of revenue. It is not uncommon for one farmer to have undergone the entire stew of options at one time or another -- or even have all those going on at the same time. The National Food Authority (NFA), the state-owned grains agency, will no longer provide subsidized rice to the poor as this role would now be transferred to the Department of Social Welfare and Development (DSWD). The move is part of efforts to reform the NFA.
Budget and Management Secretary Florencio Abad said that the provision of subsidized rice to poor consumers has now been proposed to be transferred to the DSWD through its conditional cash transfer program. Abad said the DSWD, with its National Household Targeting System, is better positioned to identify and directly reach indigent households. Citing data from the World Bank, Abad said that through the NFA route, subsidized rice do not reach enough poor households.
According to the Director General of SEPO, Ronald Golding, the government should find better alternatives on how to compensate the loss of NFA to continue its subsidies to its primary target–the poor consumers. It is a good to have a good reform in the Philippine Market, however, it is not the solution to the pressing problem of NFA.
If the management in rice importation is delegated to private sectors, it will cause negative results to the poor local farmers whose harvests are not even enough to sustain their daily needs. Although the plan of the government may solve some of the problems, it is still a one stop-gap and not a long-term solution to the needs of the farmers. These people who are working so hard under the sun to produce rice need high-yielding crops, good irrigation system, farm-to-market roads and post harvest facilities.
It is, therefore, a sensible decision for the government to use poverty-sensitive approach in solving or giving solutions to the problems. Instead of disbanding NFA, it is better to find alternatives on how to compensate its loss and continue subsidizing low-priced rice to the poorest of the poor consumers.

Anonymous said...

Jude Marck S. Bagsao
BSE-Eng
Economics with LRT
Wed; 9am-12nn



Moving SLUSH FUNDs from NFA to DSWD is a “reform” that will reduce poverty. Really? Aquino government will not provide subsidized rice via NFA but through DSWD. It is an asinine juggling act -- another game of musical chairs being played using taxpayers money -- OUR money.

Here’s the situation -- 70% of Philippine poor are subsistence farmers. Aquino government keeps prices of rice low via NFA-dictated prices. Ergo, if buying price for rice is low AND there is no competition (choice is between local rice trader/miller or NFA) -- then rice farmers have low income and remain poor. The response of farmers to such poverty can be varied: a) join armed movements; b) diversify into high value crops; c) look for a job -- outside of agriculture; d) look for a job- -- inside the industry; e) migrate to the urban centers; f) be stoic and go with the flow; g) augment income with other sources of revenue. It is not uncommon for one farmer to have undergone the entire stew of options at one time or another -- or even have all those going on at the same time. The National Food Authority (NFA), the state-owned grains agency, will no longer provide subsidized rice to the poor as this role would now be transferred to the Department of Social Welfare and Development (DSWD). The move is part of efforts to reform the NFA.
Budget and Management Secretary Florencio Abad said that the provision of subsidized rice to poor consumers has now been proposed to be transferred to the DSWD through its conditional cash transfer program. Abad said the DSWD, with its National Household Targeting System, is better positioned to identify and directly reach indigent households. Citing data from the World Bank, Abad said that through the NFA route, subsidized rice do not reach enough poor households.
According to the Director General of SEPO, Ronald Golding, the government should find better alternatives on how to compensate the loss of NFA to continue its subsidies to its primary target–the poor consumers. It is a good to have a good reform in the Philippine Market, however, it is not the solution to the pressing problem of NFA.
If the management in rice importation is delegated to private sectors, it will cause negative results to the poor local farmers whose harvests are not even enough to sustain their daily needs. Although the plan of the government may solve some of the problems, it is still a one stop-gap and not a long-term solution to the needs of the farmers. These people who are working so hard under the sun to produce rice need high-yielding crops, good irrigation system, farm-to-market roads and post harvest facilities.
It is, therefore, a sensible decision for the government to use poverty-sensitive approach in solving or giving solutions to the problems. Instead of disbanding NFA, it is better to find alternatives on how to compensate its loss and continue subsidizing low-priced rice to the poorest of the poor consumers.

Anonymous said...

Sapungay, Mary Grace B.
BSE-English II
Ang Wikang Filipino: kalagayan, Mga Isyu at Hamon sa Ika-21 na Siglo

Ang Pilipinas ay binubuo ng iba’t ibang tribo na gumagamit ng iba’t ibang dayalekto gaya ng Ilokano, waray- waray, tagalong, cebuano, Kapampangan, Panggalatok, at Bicolano.Ngunit taong 1935 sa pangungulo ni Pangulong manuel Quezon, itinakda ang Wikang Filipino upang maging pambansang Wika ng ating bansa. At ito ay isinaad sa 1987 naq pambansang konstitusyon.
Ngunit sa ating panahon, anon a nga ba ang kalagayan ng Wikang Filipino? Kung ating mapapansin, halos karamihan ng nga sesyon sa matataas na departamento ng gobyerno, sa mga pagpupulong at sa halos lahat ng programa na isinasagawa ng mga Pilipino ay kalimitang gamit na wika ay Ingles. Kagaya na lamang ng mga sesyon sa senado, hindi bat kapansin pansin na ang ginagamit ng mga senador at pulitiko ay ang salitang Ingles sa kabila ng katotohanang ang mga kausap naman nila ay kapwa din nila pilioino.Ano nga ba ang dahilan nito? Dahil ba sila ay mga edukado at mga edukada? Malamang gayon nga. Ngunit kung ating titignan sa asang banda, ito ay maling gawi at kasanayan ng mga Pilipino. Isang halimbawa pa nito ay ang hindi paggamit ng mga kanidatang Pilipino sa Ms Universe Kung ating mapapansin, isa ang mga Pilipino sa mga hindi gumagamit ng ng sariling wika.
Ito ay indikasyon lamang na sa panahon ngayon hindi na gaanong nabibigyang halaga an gating wika. Ano nga bang maari nating gawin upang maibalik at muling maipabatid nsa ating kapwa ang kahalagahan n gating bansa?
Sa aking pananaw, isang magandang hudyat ang ginagawa ng Unibersidad ng Pilipinas na pagpapanukala ng muling paggamit ng wikang Filipino sa lahat ng mga memorandum. Ang panukalang pagsasalin ng mga pangalan ng lahat ng departamento sa saling Filipino.
Para sa akin, malaking hamon ang isyung ito sa ating mga Pilipino. Sapagkat hindi maikakaila na nagiging patok saating mga Pilipino ang pagsasalita ng wikang Ingles at ang abilidad nga naman din nating sumulat at magsalita ng Ingles. Lalo na sa panahon ngayon na ang pinakapatok na trabaho sa ating bansa ay ang industriya ng pag co call center.
Ang wikang Ingles dapat ang pagtuunan ng pansin n gating gobyerno upang maipabatid sa mga Pilipino na ang nararapat nating gamitin ay ang Filipino. Ggayanga ng nasabi n gating pambansang bayani, “Ang hindi marunong magmahal sa sariling wika ay daig pa sa malansang isda.

Anonymous said...

Mary Grace Sapungahy
BSE-English II

Subsidizing the National Food
Authority: Is It a Good Policy?


Most filipinos are now experiencing a scarcity on food. We all know that rice has a wide ranging significance in the Philippines. Rice is the staple food in the Philippines. Everyday, the country
consumes more than 30 thousand metric tons of rice. It is the single most
important agricultural crop in the country, and therefore, a major source of
income for millions of Filipino farmers. Rice is a highly political commodity that an increase in its price can also
prompt workers to demand for wage increases (Balisacan, 2007). Rice is a
critical item, particularly in the diet of the poor, accounting for as much as
34 percent of the food expenditure of the bottom 20 percent of households
(ADB, 2008).3 The fact that the poor, more than the rich, depend on rice for
food, highlights the importance of stabilizing rice prices.
That’s why the government created the National Food Authority to protect the interests of both rice producers and consumers. The NFA aims to achieve its twin mandates throughthe regulation of factors that affect the demand for and
supply of rice. , the agency conducts a number of programs to intervene directly in the rice market including (1) the procurement of rice from rice farmers, (2) subsidized retailing of rice to low-income consumers,(3) maintenance of a rice buffer stock, and (4) the importation of rice during periods of shortages. The NFA has also instituted a number of indirect market interventions such as giving farmers access to their postharvest and marketing facilities and services although,to date, this has remained a relatively small part of its activities. In addition to these, the NFA is also set up as a corporation and is vested with the following powers: (1) it regulates the post-harvest facilities that service the rice and corn sector, e.g., mills, warehouses; (2) it has a monopoly on the importation of rice; and (3) it can borrow at commercial rates and with guarantees from the national government.5 The mandate of stabilizing rice prices requires the NFA to ensure a stable supply of rice through various measures.
NFA’s twin mandate of price stabilization and food security are replete with issues. Evidently, the rice operation of the NFA is proving to be too costly for the national government. Large leakage errors and poor availability of subsidized rice to its intended target both contribute to the ineffectiveness of this policy measure,and seemingly does not justify the considerable subsidies it receives from the national government. This brings to the fore the need to review NFA’s mandate. Designing efficient safety nets customized to the specific conditions of a country is a challenge both to government agencies and development institutions.

Anonymous said...

DEWARA, SHEDRICK A.
BS HRM - II

We argue that parastatal food-distribution organizations are less executive when their agents vary the quality of subsidized food and retail service in response to local market conditions. These actions
make assessing need from market signals di¢ cult, hindering the executive allocation of subsidized food. In theory, policies and market conditions can
affect outcomes differently, depending upon how markets for subsidized rice clear. We provide tests to reveal which market clearing mechanism is relevant. Using administrative
and household survey data, we …nd evidence of quality variations, pilfer- age and market clearing through ad-hoc rationing of subsidized rice in the Philippines. Poorer markets and those facing higher rice prices do not receive more subsidized rice, but do appear to receive lower quality service
and smaller rations. We recommend explicit rationing rules, increased transparency
regarding rice allotments and measured reductions in the amount of subsidized rice distributed.

Anonymous said...

orfrecio, mark dave r.
bshrm-2

A variety of solutions to such management problems have been proposed. Politicians often approach these problems, especially pilferage, from a moral perspective, pinning their hopes on personnel changes. Many economists argue that this misses the point - arbitrage opportunities are invitations to
corruption, so that removing subsidies is the key. Given the generally positive reviews of conditional cash transfer programs, they argue for a switch from food-based to cash-based food security arrangements. Other economists have pointed out that, depending on the environment, food-based systems may have some of the following four advantages over cash-based systems: if food supply
is inelastic cash transfers will raise prices, not food consumption; women
–who are often thought to be more attuned to family nutritional needs – are less likely to control cash transfers; food can be self targeting to the poor if the subsidized food is an inferior good; and food-based transfers
are an easier political sell than cash-based ones, which can be advantageous when political systems are not responsive to the needs of the poor.

Anonymous said...

ELVYRA V. GARMA
BSHRM

THE NATIONAL government, through the National Food Authority (NFA), has a duty to help Filipino rice farmers—not foreign farm workers. NFA buys from local farmers for food security stocks. Rice importation is done as a last resort, only when shortfalls in rice production warrant it.
If government would fully support agriculture, our local rice production will be more than enough even for export. But the Aquino administration will have nothing of this simple truth. Instead it wants NFAs twin functions of procuring rice from farmers and importing rice turned over to the private sector.
NFA was created in the 1970s to address rice price manipulation by the private sector. But now President Aquino would have the big rice traders/cartels take over NFA’s food security functions.
With private sector importation, rice farming in the Philippines will soon become a thing of the past; and rice self sufficiency, a great Filipino aspiration for the 21st century, will be flushed down the drain. We will forever be dependent on other rice-producing, but self sufficient, countries for our rice needs.
With private sector importation taking over governments food security functions, grains trading will be monopolized. As in any cartel, there will be no operational or quality standard requirements or public service to speak of. Profit raking will be the order of business.
From 2001 to 2004 private sector imported very much below their allotted volume. In the end, the government, through NFA, had to import at a higher price to ensure food security for the nation.
During the rice crises of 1995 and 2008, the private sector failed to deliver its commitment of additional emergency rice stocks because they deemed it was unprofitable. NFA stood these tests of time without private sector intervention.
Unscrupulous traders will definitely manipulate palay prices by buying at unreasonable low prices from poor farmers; profiteering traders will surely manipulate rice prices in the market.
In calamity stricken areas, limited rice supply will be dictated by the private sector with, of course, huge profits in mind. The detrimental effects of a calamity will be further compounded by skyrocketing prices of commercial rice.
In view of all these, NFA should be made to continue performing its stabilization and regulatory functions. Government should encourage and help local farmers to become more productive, with rice self sufficiency for the country as its ultimate goal.
Further, government should increase the subsidy for local farmers to a level comparable to other rice producing, but developing, countries in Asia to continue providing the people with affordable and accessible staple food.

Anonymous said...

Pamplona, Gelic Connon R.
BS HRM-II

The NFA runs multiple programs. I have learned those institutional details and literature relevant to understanding its retail food distribution operations. The NFA is the monopoly importer of rice to the Philippines. It sells rice through accredited retailers at a …xed, below-market price. The retailers receive a …xed margin on NFA sales. All Filipinos were, and still are, eligible to buy NFA rice. Prior studies level several criticisms of NFA operations. The NFA imports
too little rice, leaving domestic prices signi…cantly above world prices. The NFA rice is also widely sold to non-poor households. This subsidy leakage, coupled with the NFAs operating costs, combine to yield estimates
of the cost to transfer a dollar of subsidy to the poor. Also, consistent with our argument that rising hunger re‡ects an inability of the NFA to control prices in poor regions, they show that access to NFA outlets is more limited in poorer regions of the country.

Anonymous said...

Mechelle T. Calulu
BSE

The national food authority or the NFA one of the government agencies should follow the regulation when it comes to subsidizing it. The rice is the staple food of the country, it is very important to us Filipino, in our daily eating we can’t live or eat properly without rice, but according to the statistics or in the study the NFA didn’t follow well the rules already , how much more if the subsiding will happen?. Base in the news also NFA is importing the “palay” in the other country, so its add to the expenses of the government because they need to buy to the other country, but as we all know our country is rich when it comes to agriculture and our farmers here is good so why the NFA need to buy to our neighbor country?. In distributing also is not fair enough NFA should give it to the poor family in our country the one who really need but it’s not what we encounter, according also to the news some of the NFA rice was give to the “barangay “ to distribute to the poor family of it but opportunity BRGY. Official is the one who benefit more in the rice, when it comes to the price I think it should give it to the low price so that much poor family can avail it, the taste need to be improved. The rice is a blessing comes from GOD we people let by GOD to manage the things that He made, so we should handle, distribute it and use properly.

Anonymous said...

ARBIOL, ANDREA NICOLE A.
BS HRM - II
Economics w/ LRT

Reaction/Comment:

The government is trying hard to meet the demands especially on low income bracket to sustain the needs and at the same time provide an economic stability to meet the demands of higher income bracket. This is a necessity for the government to maintain sound economic flow. The government must secure farmer’s products in order to avoid monopoly among rich businessmen. It is a good thing that they are making marketing programs so that the farmers can take part in marketing their harvests. They are show that they are responsible in providing rice supply on those places that has been stricken by calamities or natural disasters. Selling the rice products in a low price enables the people to buy an amount that will be suitable for their needs. In conclusion, subsidizing the National Food Authority is a good way to help not only our farmers financially but the consumers as well. This will protect the income of the farmers who shed their perspiration in tilling the soil, and will supply the consumers with rice products in an affordable price. On the other hand, it will not be that good if the people who will get involved in this project would stash away the allocated budget.

Anonymous said...

ARBIOL, ANDREA NICOLE A.
BS HRM - II
Economics w/ LRT

Reaction/Comment:

The government is trying hard to meet the demands especially on low income bracket to sustain the needs and at the same time provide an economic stability to meet the demands of higher income bracket. This is a necessity for the government to maintain sound economic flow. The government must secure farmer’s products in order to avoid monopoly among rich businessmen. It is a good thing that they are making marketing programs so that the farmers can take part in marketing their harvests. They are show that they are responsible in providing rice supply on those places that has been stricken by calamities or natural disasters. Selling the rice products in a low price enables the people to buy an amount that will be suitable for their needs. In conclusion, subsidizing the National Food Authority is a good way to help not only our farmers financially but the consumers as well. This will protect the income of the farmers who shed their perspiration in tilling the soil, and will supply the consumers with rice products in an affordable price. On the other hand, it will not be that good if the people who will get involved in this project would stash away the allocated budget.

Anonymous said...

ARBIOL, ANDREA NICOLE A.
BS HRM - II
Economics w/ LRT

Reaction/Comment:

The government is trying hard to meet the demands especially on low income bracket to sustain the needs and at the same time provide an economic stability to meet the demands of higher income bracket. This is a necessity for the government to maintain sound economic flow. The government must secure farmer’s products in order to avoid monopoly among rich businessmen. It is a good thing that they are making marketing programs so that the farmers can take part in marketing their harvests. They are show that they are responsible in providing rice supply on those places that has been stricken by calamities or natural disasters. Selling the rice products in a low price enables the people to buy an amount that will be suitable for their needs. In conclusion, subsidizing the National Food Authority is a good way to help not only our farmers financially but the consumers as well. This will protect the income of the farmers who shed their perspiration in tilling the soil, and will supply the consumers with rice products in an affordable price. On the other hand, it will not be that good if the people who will get involved in this project would stash away the allocated budget.

Anonymous said...

Lara, christiene Marie
-- NFA (National Food Authority)do ways to help a poor and a low income citizen to buy food specially rice in low price. They must need to ensure that they will distributed it in balance. The government should also give their help through giving a high budget to a continued transaction.

-- ang NFA ay isang ahensya na maaring tumulong sa mga mahihirap na mamayan. It is their duty to help those low income citizen. the government should also help the farmer or they must give help through fertilizer and other equipment to produce more rice.

Anonymous said...

maruel aquino
bse eng-II

The NFA makes sure that the farmers are protected with their right regarding their harvests. The government controls rice prices and avoids it from over pricing. This way, poor people will be able to buy the rice products even with a small income. In addition, the government should not only focus on rice products but with the other agricultural crops too. On the other hand, corruption is still an issue. If our politicians will still continue doing corrupt acts, everything that is being planned by the government for the betterment of our food production will be put to waste.

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