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NFA chief seeking costly rice imports

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After ditching a proposal to buy more locally grown palay from Filipino farmers, state-run National Food Authority (NFA) now wants to import higher-priced commercial grade rice varieties from Vietnam and Thailand.

A document obtained by The Manila Times showed that NFA Administrator Jason Laureano Aquino had asked President Rodrigo Duterte’s approval for the importation of some 1.3 million metric tons (MT) of rice for this year.

The proposal includes the immediate utilization of a 250,000 MT standby authority before the onset of the lean season, and another 1 million MT for the remainder of the year.

The rice to be imported are 5 percent and 15 percent broken varieties, which are more expensive compared with the 25 percent broken rice varieties previously imported by the NFA.

“In line with our concerted effort to improve the NFA’s fiscal position, we have come up with a comparative cost estimates on importing higher grade rice varieties to include the 5 percent brokens,” Aquino told President Rodrigo Duterte in a letter.

Aquino also told the President that the importation of the 5 percent broken rice variety would have a positive impact on the NFA’s financial condition, considering that it could be sold at a higher price.

A source privy to the matter said that 5 percent and 15 percent brokens would directly compete with commercial rice, making NFA buffer stocks too expensive for poor Filipinos.

“This proposal went straight to the President. It bypassed the NFA Council, which gives recommendation for the timing and volume of rice to be imported,” the source said.

With less than three months before the start of the lean season, Aquino in an earlier statement said the government needed to secure an additional 490,800 MT or 9.8 million bags of rice as part of its food security program in preparation for calamities.

Aquino had stressed that the only way the NFA could fill the deficit in its rice buffer stock requirement was through importation, preferably a government-to-government (G2G) deal. The NFA administrator’s order was directly against President Duterte’s order to prioritize local palay procurement.

“Much as we would want this additional stock to come from local produce, we cannot compete with the private traders who are offering prices much higher than the government’s P17/kilogram support price,” Aquino said in a statement.

NFA’s field monitoring shows that traders are buying palay from the dry season harvest at an average of P18-P20/kg across the country.

The proposed purchase of 5 percent and 15 percent brokens, however, will cost the government P26.27/kg and P25.47/kg, respectively.

Double mandate

The NFA was formed in 1972 with the goal of protecting the interests of both rice producers and consumers. Its two primary mandates are to stabilize the price of rice and to ensure food security.

The price stabilization mandate means that the NFA tries to influence prices on two fronts. At one front, it must support palay farmers. At the same time, it must also ensure that the price of rice is low enough for consumers.

Over the past two years, the NFA has relied massively on cheaper imported rice to replenish its buffer stocks since it could not compete with private millers and traders in buying locally grown palay.

Buying rice from abroad cuts the agency’s spending on buying and milling locally grown palay, and it can earn more and slash losses by selling to consumers at higher prices.

Under the new proposal, however, buying higher-priced rice from abroad for buffer stocking while limiting local palay procurement will effectively contradict the grains agency’s mandate.

‘Acts unauthorized’

Cabinet Secretary Leoncio B. Evasco Jr. earlier accused Aquino and the NFA Deputy Administrator Ludovico Jarina of making a cash cow out of government-led rice importations.

Documents sent to reporters showed that Aquino may have conducted backdoor negotiations for rice purchase agreements with both Vietnam and Thailand.

“Aquino with his deputy were given travel authorities mid-March this year by the Office of the President to go to Thailand to attend the Asean Plus Three Emergency Rice Reserve conference. Backdoor negotiation is believed to have taken place during this period,” a document said.

The “negotiation” is believed to be beyond the scope of authority of the NFA and superseded the function of the Department of Foreign Affairs, which should have negotiated on behalf of the NFA Council.

“Such acts of the administrator are unauthorized. It is the NFA Council, the governing board of the NFA, that has sole authority to determine if there is a need to import or not. It appears that Aquino has already made up his mind that the NFA will definitely import via G2G,” the document stated.

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9 Comments

  1. Jose Samilin on

    NFA is not suppose to profit out of its service to the Filipino people, otherwise, if their policy say so, then NFA is not a proper agency to exist in the government, it has to be dismantled. Apparently, NFA Officials were trying to circumvent the mandate of this agency by trying to operate at a profit in their rejection to buy locally produced palay from Filipino farmers. Any officials and employees of the NFA having this kind of mentality cannot be part of the Agency, need to be fired, and this must be how strict in running its affairs. What we need to see in NFA operations is not profit but rather efficient financial management of its affairs and not rotting of stocks in warehouses.

  2. Jose Samilin on

    Under the circumstance, both NFA Administrator and its Deputy, Jason Laureano Aquino and Ludovico Jarina, respectively, be fired immediately and whatever agreement signed by them relating to rice importation be all cancelled and and nullified, for the reason that both official’s actions were unauthorized as duly determined by Cabinet Secretary Leoncio B. Evasco Jr. Apparently these two officials cannot anymore be trusted to perform the official function of the NFA, but rather their personal interest prevailed. In short, Aquino and Jarina are corrupt employees of the government which has no place in the Duterte Administration. I urged President Duterte to fire these two employees immediately and investigation be pursued for possible administrative, civil and criminal liability.

  3. NFA must be the one helping farmers in order gor them to have a higher income. Where in they reason out that traders buy palay at higher price than NFA, so the NFA need to import rice because theycan not compete with rice traders — stupid reason. The only reason we need to import rice is – our local harvest did not meet qouta and we need a stock to mitigate demand in the next 3 to 4 month, before harvest time. My question is?? you only compute harvested rice – why not consider NFA stored rice & rice traders stored rice how many tons??? Why not do an inventory with a third party to really determine the total tonnage of rice available both at NFA & rice traders – by doing this you can also check status & quality of our rice, especially at NFA wherein most of you stored rice got rotten.

    • Very good comment. Rice cartel keeps importing whether perceived rice buffer is really needed or not and then concerned authorities offer the oddest of reasons. Your guess is as good as mine on what motivates government people in doing notorious things to our collective detriment. How ‘stupid, corrupt and incompetent’ our NFA officials could be! Meantime our poorest of the poor are constantly on forced hunger while we always see in the news about rotting rice in storehouses.

  4. Don’t worry he will be fired soon enough before his scheme will be implemented, but on the other hand if his modus has the blessing of PRRD then it is a different story. Aquino see this NFA is the best milking cow for his intention to amass money from the government. Bad intention will be exposed no matter what good presentation you make if this is detrimental to the poor Filipino farmers. Remember, serve first the interest of the Filipino masses. Btw farmers in other countries was protected by their government and their products are subsidized also by their government … FYI…

  5. Aquino’s onstensive declaration of speaking for our farmers and best interest of the government he works for. All sweet talks in public and probably whispers to the president’s ears is however belied by his actions in the workplace and obvious assistance to would-be suppliers. He is not for deadline extension yet secretly permitted other suppliers. He is for costly G2G rice importation than through less costly private suppliers leveled competition as intended by the applicable procurement law. Aquino went to the extent of defying the functions of his superior NFA Council or plain sound timing and logic. Corrupt government officials are so manipulative and cunning but they are easy to be distinguished from among those who talk and act consistently.

    • …there was that non extension deadline but obviously Aquino usurped the functions of the NFA Council just to give undue advantage to his pet would-be suppliers.

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