Agriculture Reference
In-Depth Information
and to keep the implementation of such programs cost effective. The danger
here is to expand the scope of direct market intervention to undeserving areas.
As in the poverty-reduction program discussed above, further studies ought to
be undertaken to identify such areas and to determine a cost-effective modality
for implementing these programs.
Decoupling the Regulatory and Proprietary Functions of NFA
A key option is the separation of the regulatory and proprietary functions of
NFA, creating a National Rice Board to assume the former and relinquishing
the latter functions to the private sector. This process involves (1) creation of a
National Rice Board (NRB), attached to the Department of Agriculture, which
would assume the relevant regulatory functions essential to managing the pro-
posed price stabilization band; (2) maintenance of the regulatory functions that
are still relevant but are within the scope of work of existing government units;
and (3) total removal of irrelevant functions.
The board would be headed by an interagency committee, composed of
members from the public and private sectors. The secretary of the Department
of Agriculture would serve as its chairperson, while the public-sector members
would be representatives (with the rank of undersecretary or its equivalent) from
other departments or organizations. The Department of Agriculture, as lead
agency, shall have authority over NRB with respect to the review and approval
of its plans, programs, and budget; the assessment of its overall performance;
and the supervision of its policy formulation. However, decisions arising from
the exercise of the regulatory powers of the board shall not be subject to review
by the Department of Agriculture, but may be appealed in the courts of justice.
NRB would basically implement the proposed price-band mechanism,
which involves setting the national target price for rice, estimating the volume
of imports necessary to equate supply with demand at the target price, and al-
locating the import quota to the private sector. Because the exercise is quite data
intensive, NRB has to fully coordinate with the Bureau of Agricultural Statis-
tics. NRB's successful administration of the price-band scheme will be reflected
in the level of the target price and the actual monthly wholesale and retail prices
of rice. At the end of each year, NRB can also verify whether the totals for do-
mestic production, consumption, and importation of rice for that year tally with
the estimates of its supply-demand model.
Finally, the utilization of the import quota by the private sector would give
the government an indication of the correct volume of imports required by the
country. For example, if the quotas become fully expended before the second quar-
ter of the year, then the board may have underestimated the supply-demand gap.
Reformulating Assistance to Farmers
The history of NFA's operation suggests that its procurement program does not
benefit all farmers throughout the country, it has recurring budgetary outlays,
