THE government has renewed plans to privatize the Northern Foods Corporation (NFC) in Sarrat, Ilocos Norte, a move that could adversely affect hundreds of Ilocano farmers and their families who are dependent on the state-owned agricultural firm for income as contract growers for tomatoes.
According to the 2020 audit on the NFC released last January 8, the government-owned and controlled corporation (GOCC) posted its worst year with 62.18 million in net losses, bringing its current deficit to P837.558 million.
Government auditors likewise said the firm’s outstanding loans increased by P45.93 million from P852.09 million in 2019 to P898.017 million last year.
NFC, a GOCC under the Land Bank of the Philippines, is a major supplier of tomato paste to food chains, sardine manufacturers, and tomato sauce/catsup manufacturers. However, it has not turned up a profit dating back to 2011.
The Commission on Audit noted that as of 2020, interests on NFC’s debts have grown to P688.46 million even as the principal amount of P209.55 million remains unpaid.
The COA said the net losses as well as the growing deficit of the company “cast doubt on its ability to continue as a going concern.”
As of 2019, the NFC said it has 1,577 farmer beneficiaries who are contract growers. This meant the farmers have a sure market for their tomato harvests.
The audit team said 2020 figures show the company’s production area covered 569 hectares which yielded 19,552 tons of tomato fruits converted into 2,686 tons of tomato paste.
However, with poor earnings the COA recommended that the NFC either request the national government for funding subsidy to avoid paying interests on its loans or to proceed with the previously planned privatization.
“Management explained that the NFC Board of Directors, chaired by Agriculture Secretary William Dar, have reviewed and resolved to sustain the earlier decision of the Board to privatize NFC,” the COA noted.