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CASE STUDY

Farmers’ Group Raps NFA Head on Rice Import Move

A paper in MGT1116

ECONOMIC DEVELOPMENT

Submitted by:

CARANDANG, Angela Nichole S.

CRUZ, Angela Gabrielle R.

DUQUILLA, Danmark

GALDIANO, Ellaijah Marie A.

MOROTA, Aira James

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Viewpoint and Time Context

Viewpoint

The perspective of this paper is through the lens of the National Food Authority

administrator under the leadership of Romeo David.

Time Context

The year 1992, when Romeo David, a former head of the National Food Authority, was

appointed to oversee the organization, is this study's time frame of interest.

Problem Statement

How can we stimulate Philippine agriculture in the face of NFA mismanagement, which

stifles growth, particularly in the local rice industry?

Statement of the Objective

1. To gather information on rice productivity in all agricultural regions one month before the

harvest season to efficiently manage the NFA's discretionary authority to certify a shortage

of rice and surplus production and/or supply as the demand for import and export.

2. To rectify the National Food Authority's mismanagement by presenting performance

optimization that the NFA would have implemented prior to the notice of rice imports. This

will accentuate the efficient management and regulation of the country’s agriculture sector

during Romeo David's three-year term in office.

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Alternative Course of Action

SWOT Analysis

● Strength

1. Thirty million hectares of land make up the Philippines, 47% of which is used for

agriculture.

2. About 5 million farmers cultivate 30% of the nation's total land area, where about 40% of

Filipino laborers are employed.

3. The Philippines has a relatively good soil foundation for a nation in the humid tropics.

● Weakness

1. Lack of irrigation infrastructure hinders the land from being as productive and profitable

as possible.

2. Filipino farmers have struggled with a shortage of storage spaces, farm-to-market routes,

and the tools necessary to guard against pests, degradation from the weather, and exposure.

3. Many farmers are forced to work further and use more labor-intensive techniques to

produce a viable crop due to the excessively high cost of essential inputs like fertilizers,

high-yield seed grains, and mechanized farm equipment.

● Opportunities

1. The Philippines' geography and tropical environment make farming and fishing the biggest

agricultural sub-sectors.

2. Rice is the fundamental staple food in the Philippines since it covers around half of the

population's dietary demands.

3. Most Filipinos live in rural areas and rely on agriculture for a living, making the country

largely an agricultural economy.

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● Threats

1. Seasonal typhoons are more prevalent due to climate change, as well as more intense

summers with previously unknown high altitudes and more severe unusual weather events,

which all hurt the ability of farms to produce.

2. The nation is susceptible to tropical cyclones due to its geographic location, which

frequently results in heavy downpours, floods across vast areas, and powerful winds that

severely destroy crops and property.

3. The rapidly rising population can lead to faulty agricultural methods that severely whole

degrade the land, diminish vegetation, overuse and inappropriately use agrochemicals, and

make it challenging to manage water resources.

Assumptions

1. A failure to adopt decentralized NFA supervision in each region’s innovative production

methods used by other Southeast Asian countries.

This results in the rice industry's productivity being low, which makes it challenging to

offer an adequate amount of rice to its users. The production should become more productive to

meet and satisfy Filipinos' requirements, given the country's continuously expanding population.

2. Instead of using the land to take action to solve the rice crisis, the authorities are

prioritizing land conversion.

Data released by the Congress for People's Agrarian Reform indicates that by September

1992, new industrialization areas had been formed, increasing the rate and extent of these land

conversions, which resulted in the loss of rice farms for thousands of rural households.
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It is noteworthy that farmers should be given precedence at this difficult time, considering that

there is a rice shortage in the country. After all, the shortfall would only get worse if the area where

rice should be farmed were destroyed.

Alternative Course of Action

1. Forecast the volume of rice harvested during crop season by collating the inventory from

the rice warehouse in each region.

NFA would be able to forecast the volume of rice produced each harvest season, which can

be advantageous in their decision-making by gathering data from the DOA and NFA-licensed

warehouses and storage facilities in farming regions, including Region III, Region VI, Region II,

Region XII, Region I, BARMM, MIMAROPA, Region V, Region VII, and Region IX. This

analysis will be performed in compliance with the Naive Approach, a proposed method of

forecasting.

2. Replace rice imported by the NFA as a source of supply for buffer stock, giving local rice

priority.

Maintaining an NFA buffer stock of imported rice that was formerly local rice to postpone

rice imports and give preference to the consumption of local supply. The main source of buffer

stock will be imported rice if the local farmers' supply of rice is completely depleted.

3. Restrict the NFA's scope of work by delegating the function of registering and issuing

licenses to those involved in rice commercial activities to other suitable authorities.

The NFA function will be centralized to focus on the distribution system and guarantee

that users have access to a sufficient and affordable food supply. Therefore, NFA will be in a better
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position to oversee its business operations and accomplish its main objective effectively and over

time.

Analysis

Table 1. Alternative Course Action 1

Alternative Course of Action Advantages Disadvantages

Forecast the volume of rice - Improves scheduling - It is possible for data

harvested during crop season and control amount of to be manipulated,

by collating the inventory importation which might provide

from the rice warehouse in - Organization's internal an inaccurate forecast

each region. irregularities can be - Failure to consider any

identified potential causal links

- Calculation of the that may be relevant to

seasonal rice harvest's the predicted variable

expected yield - Given the necessity for

supervision at each

warehouse, additional

costs can be necessary

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Table 2. Alternative Course Action 2

Alternative Course of Action Advantages Disadvantages

Replace rice imported by the - Fully utilization of rice - Scarcity of rice supply

NFA as a source of supply for stock before may occur in case of

buffer stock, giving local rice considering fortuitous events

priority. importation. - Price of local rice may

- Increased increase since it is

consumption of local fully utilized

rice - People can be

- Local farmers will dissatisfied with the

benefit as their crops increased price of local

will be given priority rice

Table 3. Alternative Course Action 3

Alternative Course of Action Advantages Disadvantages

Restrict the NFA's scope of - Lower agency-wide - It would require some

work by delegating the function corruption time

of registering and issuing - More narrow and - It will result in

licenses to those involved in concentrated employees being

rice commercial activities to workload dismissed or

other suitable authorities - New guidelines and reassigned

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policies will be - Reduction in the

implemented organization's funding

- Employees who are

complicit in

mismanagement are

not discharged

Conclusion/Recommendation

Effectiveness, efficiency, and time to execute were three factors considered while choosing

this study's alternative course of action. IGI Global (n.d.) defines effectiveness as the amount to

which goals are met and targeted issues are resolved and state that effectiveness is assessed without

consideration of expenditures. The first of the three ACAs is assumed to be the most effective

because it pertinently seeks to improve the management of both domestic and imported rice supply,

which is the NFA's foremost responsibility. In contrast, ACA 2 only came in second because

changing the source of rice can better handle the volume of rice in buffer stock but can be

contentious if mishandled. The NFA's general workforce restructuring could lead to distress in the

workforce as some employees will be dismissed, hence ACA 3 received the lowest assessment.

Contrarily, efficiency is the potential to operate satisfactorily or to accomplish a goal without

squandering time, finances, assets, labor, and perhaps other resources (Analytic Quality Glossary,

n.d). In comparison to effectiveness, efficiency can be measured by cost, which results in ACA 3

having the highest rate since its execution does not necessitate a considerable sum of funds, ACA

1 being the second most efficient solution attributable to more processes that would need to be

exerted, especially in data gathering and selecting the best method of forecasting, and ACA 2 being
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the last seeing as the market of domestic rice can really be volatile so it requires an additional

expenditure to be able to acquire. Researchers observed that ACA 1 would be the easiest to enforce

as there are already storage facilities in which information can be accumulated, whereas ACA 2

and 3 would demand a conventional time frame since they involve alterations to the internal

management and planning management of the NFA itself, which require the approval from the

higher hand.

After analyzing and considering the three variables, the researchers concluded that the first

alternative course of action would be the most successful in resolving the aforementioned problem.

By collecting data from the warehouses and storage facilities licensed by the DOA and NFA all

through the state, particularly those in farming regions like Region III, Region VI, Region II,

Region XII, Region I, BARMM, MIMAROPA, Region V, Region VII, and Region IX, and

assessing it by the Naive Approach, a proposed method of forecasting, NFA would be able to

anticipate the amount of rice generated each harvest season. The NFA can now analyze if the

supply will be enough for the people's consumption in the whole country and, if not, how much

rice will only be needed to be imported. The NFA can now calculate whether enough rice will be

produced to meet domestic demand and, if not, how much rice would need to be imported.
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Decision Matrix

CRITERIA/ACA ACA 1 ACA 2 ACA 3

Effective 3 2 1

Efficiency 2 1 3

Easy to Implement 3 2 1

Total 8 5 5

Plan of Action

Activities Responsible Person Time Frame

1. Collection of data National Food Authority, One month before harvest

from rice warehouses Regional Managers season

in each region that are (March 1 - March 14)

abundant in rice

production

2. Review and approval National Food Authority, One Week

of data gathered Administrator (March 15 - 22)

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3. Verification and National Food Authority General Meeting

application of (March 23)

forecasting model

4. Data Analysis National Food Authority One week

(March 24 - 31)

5. Verify model National Food Authority, During the second harvest

performance Regional Managers & season (April 1 - June 31)

Administrator
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