FOREWORD

The government of the Philippines undertakes various economic reform

strategies on the agricultural sector geared toward the achievement of
FOOD SELF-SUFFICIENCY and FOOD SECURITY, generation of gainful
employment,

increased

production

of

raw

materials

for

industries,

increased production and processing of export crops, rational utilization of

agricultural technologies for the improvement of life of its citizens.

The successful existence of National Food Authority as marketing arm of

the government in the region is being manifested in the various support
and services to the farmers and clientele. NFA Region 2 supported by its
seasoned, dedicated and determined personnel have effectively and
efficiently delivered its share in the realization of NFAs mandates of Food
Security and Price Stabilization. Equipped with proper facilities and
manpower, NFA over the years, was able to extend ample support
mechanism

to

its

clients

and

stakeholders

to

achieve

all

its

accomplishments in consonance with its mandate, mission and vision.

NFA programs focused not only in the delivery of basic services called for
by our mandates, but also by closely coordinating with the Provincial and
Municipal levels of the Local Government Units and other government line
agencies in advocating governments hunger mitigating programs to
further alleviate the livelihood of the marginalized sectors of the
community.

The unpredictability of trends in the local market for the year 2014 has
made the Agency profoundly watchful of the moves of the grains business
sectors. NFA Region 02 also takes pride in keeping pace with the thrust of

having maintained another stable year for the grains industry, with its
continuous maintenance of rice reserve for consumption requirement of the
whole region. Food security requirement was secured at all times for the
whole year even during the lean months, when supply of staple is scarce
for many reasons.

For the year 2014, we effectively and efficiently delivered our mandates as
the Region managed its own rice inventory till the end of December 2014
while also providing affordable and quality NFA rice for the consumption of
the lowly end-consumers in its area of responsibility.

INTRODUCTION
Food security is the reason for NFAs existence. It is a commitment to serve the
nation with food by making rice always stable, accessible and affordable. That way, we
can say that NFA existence will triumph when the farmers get returns on their
investments and are provided with opportunities to make themselves self-reliant and
improve their lives.
Our procurement and distribution programs are still our main concern. Looking
at the figures of our accomplishment, honestly, we say that we were not able to attain
our procurement and distribution targets. Nevertheless, these humble achievements
showed our commitment once again in responding to the twin mandate of the
agencys programs and activities to achieve its goals.
NFA region 02, as a marketing support, is equipped with 48 units of
warehouses and 82 units of Silos which serves as storage for 2,765,000 bags of
stocks, be it in palay, corn or rice form. We also have 8 Units of Ricemills which are
being utilized to mill palay stocks. Also, the region has 91 units Mechanical Dryers
ready to cater to NFA drying requirements and the the needs of our lowly farmers and
other sectors most especially during wet season.
The gloomy shadow that engulfed NFA has turned to a brighter hope when it
was tried and tested by circumstances. The occurrence of natural calamity brought
about by the devastating typhoons has served as an eye-opener for the government.
The NFA not only responded promptly to the call of the time but proved its relevance
through the effective delivery of its mandate of Food Security and Price Stabilization.

Today, the roadmap of NFA is gearing towards transformation to a more cost

effective government agency that will facilitate sustained national food security
committed to serve the nation and ensure that every single Filipino will no longer
starve, and that NFA rice is always within their reach.
Behind NFA Region 2s accomplishments for the year 2014 are the ever
enthusiastic, efficient, and dedicated frontline personnel, who are quintessence of
dedicated servants, armed with determination to lift up to a higher stratum of
government service serving its stakeholders particularly the farmers, grains traders,
the general public and the entire grains industry. Having all said, NFA Region 02 was
able to do its duties and responsibilities with utmost dedication and efficiency in
serving our stakeholders through the efficient and effective services provided by the
NFA management and employees.
Region 02 not only proved its worth in matters of operational accomplishments.
For year 2014, the region was a recipient of several national awards for exemplary
performance given during the NFA 42nd Anniversary celebration at the Central Office.
The awardees did not only receive Plaques of Recognition but also cash awards .
Leading the list is Mr. Roy Esteron, Truck Driver of NFA Quirino.

He was

adjudged as the Best Employee of 2013 amongst the more than 4,000 employees of
the National Food Authority nationwide.
The third Best Managed Warehouse was awarded to Duplex Warehouse in
Kalinga. Many warehouses of Region 02 were also recipients of this kind of award
during the previous years ranking from third to the first. A proof that our facilities are

properly maintained and managed with the able leadership of our Provincial Managers
and warehouse personnel in the field.
The Regional Office and Isabela Provincial Office is an Achiever Awardee for
implementing 100% tobacco-free environment.

The RO and Isabela PO was

conferred with the Red Orchid Hall of Fame Award by the Department of Health
(DOH) for 3 consecutive years.
NFA Cagayan Provincial Office likewise was awarded both for the Best Provincial
Office in enhancing the number of Registrants and Licensees and Collections under
Category B.
Indeed, the employees of Region II are honored and are always committed to
serve the agency. With the show of utmost dedication, management has not been
selfish in giving the employees time to relax, refresh and enhance oneself by allowing
the employees to go on Lakbay Aral, Team Building activities and Trainings.
Certificates of Recognition were also given to deserving provinces/employees and
stakeholders during the NFA

Anniversary Regional Celebration and or Regional

Christmas Celebration.
The harmonious relationship between grains businessmen in the Region and
the agency has also been strengthened by conducting regular visits or inspections to
establishments and making aware of the importance of grains standardization like
color coding and usage of grains facilities as well as monitoring of rice stock
inventories to avoid diversion of NFA rice.

Lastly, the significance of NFA in the society has been highlighted during the
year and it has once again served its purpose as it was created with the intention of
protecting the interests of both rice farmers and consumers and the entire grains
industry.

PERFORMANCE HIGHLIGHTS
GRAINS MARKETING OPERATIONS
For the year 2014, NFA was faced with the new directions, programs and
fundamental reforms towards food staples self sufficiency aside from the mandate of
Grains Stabilization and Food Security. The policy direction of NFA includes Increase
Procurement of domestic palay, gradually decrease import volume and bigger
participation of private sector.
Gearing towards this new direction, NFA Region 2 is always committed to
uphold new programs and strategies such as promoting farmer-friendly policies on the
provision of passbooks, intensified and aggressive palay & corn procurement
activities, and a tie-up with LGUs to implement programs aimed at providing additional
incentives to palay & corn farmers that will alleviate their socio economic condition
while boosting their agricultural productivity.

A. STOCK BALANCE and FOOD SECURITY STOCKS

As of December 31, 2014, palay and rice inventory posted 1,617 bags and
147,736 bags respectively, or a total rice equivalent of 148,755 bags. Said stocks will
last for 5 days based on the 29,100 bags daily rice consumption of the region. Of this
quantity, 145,820 bags rice represents our food security stock requirements.
Commercial stocks inventory also posted 2,350,740 bags while household stocks is
1,297,680 bags.
Welcoming the year 2015 is a total of 3,797,175 bags industry stocks assuring
us for 130 days rice supply for the whole region.

B. PALAY PROCUREMENT
Palay production during the year have greatly improved, and it is attributed on
the diffusion of hybrid rice technologies within the system of the new breed of farmers.
Admittedly, our procurement operation did not shine this year, because almost
the entire production was cornered by bigtime traders as the ex-farm prices for palay
were higher than NFAs support prices. We considered this scenario not a setback,
but a result of NFAs stabilization function and it was for the greater advantage of the
farmers. We were happy to see them go home with bigger return of their investments
that boosted their income. We can safely say that this was more vital than pushing so
much on our goal to achieve what we normally set to procure for buffer stock build up.
Luckily, Region 02 was not so much hit by typhoons Luis and Mario in
September 2014 unlike other regions which caused damage to their crops and
properties. The last quarter of the year fared better in as far as production was
concerned. This was manifested by the abundant commercial and household
inventories for the aforesaid period. The calamities may have affected the prices of
commercial rice, but the good thing was, no rice shortage occurred in the Region, it
being a surplus area.
The private sectors gave their fair share of procuring palay at a price almost
parallel and at times higher than the NFA support price. There is a healthy indication
of a government and private unified support system that spur economic growth in the
agricultural sector.
Palay traders have been very aggressive in their procurement activities as
palay prices continue to rise up. Keen competition among the private palay traders in
the region stirs the rise of prices to the benefit of farmers.
As far as palay procurement is concern, the Regions accomplishment for the
year 2014 was far-fetched from its achievement in the previous years. The decrease

from that of last years procurement was an effect of favorable ex-farm prices of palay
that redound to the benefit of the farmers.

C. CORNGRAINS PROCUREMENT
For yellow corngrains, we have procured 54,550 bags which is 22.87% of our
total target of 238,500 bags with an absorption rate of 0.20% from YGN production of
27,210,400 bags. The minimal corngrains procurement is attributed to high ex-farm
prices ranging from P12.02 to 13.60 per kilogram.
NFA Isabela entered into a Memorandum of Agreement between the Local
Government Unit of Isabela represented by Provincial Governor Faustino Bojie Dy III
to implement the CMAPIPULGU program. An additional Incentive is given for the
maximum of 50 bags corn deliveries by farmers in cognizance of corn produce being a
major agricultural commodity of the Province.
For the CY 2014, the incentive was increased from P1.70/kg to P3.00/kg on top of
the government support price for a maximum of 2,500 kg corn deliveries per farmer
effective February 4, 2014.
The implementation of the joint Program was enhanced to better serve our corn
farmer stakeholders which the provincial Government dubbed as special program
"Dagdag Kita Para Sa Magsasaka Caravan". The strategy brought the composite
procurement team - with employees from NFA, the Provincial Government Unit and
concerned Local Government Units - to identified "Forest Regions" and far flung
barangays where NFA services was percieved to be beyond reach.

During the

program, advocacies were conducted, on-site processing and issuances of Farmer's

Passbooks were held and in consideration of the security which was provided by other
Government Agencies, direct cash payments to corn deliveries by farmers were made.
In an evaluation of ex-farm prices for 2013 and 2014 for the same six-months period
when the Program was being implemented, the Program was one among other factors
which influenced the average increase by P1.50/kg for the ex-farm prices of corn.

A total amount of P5,927,179.04 was paid as CMAPIPULGU/BRO-ASP-PPP

Incentives to 810 farmer beneficiaries for the procurement of 37,943 bags under the
Program. Simultaneously, the NFA was able to procure 9,841 bags from 189 farmers
under our regular procurement scheme.
During the disposition of this corn inventory last August, the amount of
P3,951,209.37 was returned back to the Provincial Government and intended to be
added back to the joint program of CMAPIPULGU-BRO-ASP/PPP. The Agency also
earned income in the amount of P3,043,215.37.
The highly successful and income generating implementation of the Corn
Marketing Assistance for Producers, Industry Users and Local Government Units
(CMAPIPULGU) - Dagdag Kita Para sa Magsasaka Caravan and the synergy among
the Provincial Government Local Government and the NFA accomplished the
penetration and delivery of NFA services to the "Forest Regions" of the Province and
more significant was the timely influence on the ex-farm price of corngrains which
highly benefitted our corn farmers.
Although the government buying price for corngrains increased, NFA region 02
failed to meet its procurement target because corn traders relying only on the local
production and the foreseen scarcity, prompted them to be extra aggressive in their
procurement activities.

D. RICE DISTRIBUTION
Rice is the staple food of about 90% of Filipinos. Study shows that - low income
group consumes more rice, but as the income increases, consumption starts to dip.
Whatever the circumstances may be, good and quality rice must always be available
and within the reach of every Filipino.

Stabilization of staple cereal supply and prices has also been ensured
by wisely implementing various strategies through its distribution program
wherein NFA rice is allocated and sold to the different accredited outlets,
government agencies and private institutions with a retail price that is
reasonable for the ultimate beneficiaries to ensure that prices of rice and
corn are reasonable and affordable to the consuming public, thus,
effectively maximizing consumers protection
For year 2014, the region distributed a total of 762,577 bags. This is 89.71%
accomplishment of the total target of 850,000 bags. The total rice distribution
represent 7.18% market participation out of the 10,621,500 bags annual consumption
of the Region. Of the volume distributed, a total of 153,823 bags were Local Rice and
608,754 bags imported rice.
The availability of NFA rice throughout the year served as one factor why
market price of rice was stabilized in the area.

E. MILLING OPERATIONS
NFA Owned ricemill were utilized to augment our rice inventory for our
distribution requirement. This is in addition to the imported rice allocated for Region
02. The assistance of private Millers were not tapped since the volume milled is only
minimal and within the milling capacity of our ricemills.
For CY 2014, the region issued 81,275 bags of palay and recovered 50,128
bags of rice or an average of 61.68% Grains Milling Recoveries utilizing NFA owned
ricemills
With the efforts of NFA field and technical personnel, our milling operations, rice
distribution and rice dispersal activities have been achieved and accomplished. With
sheer determination, all tasks are accomplished through cooperation and the will to do
what is expected in a given time and situation.