An audit will expose why NFA rice ran out

Why did cheap rice, P27 a kilo, vanish from public marts this year? Answers lie somewhere in the infighting at the National Food Authority. Caught in the middle are low-income households that must now buy the staple at P38-P40 a kilo.

NFA management accuses the inter-agency governing council of choking its operations. For one, its petition to buy palay (unmilled rice) from farmers at P22 a kilo was rejected. Thus, it could not find standby stocks at its years-old budget of P17 a kilo.

Further, management gripes, the Council delayed the importation of milled stocks. Thus its warehouses ran out of rice for accredited retailers to sell at only P27 a kilo.

Phooey, the Council retorts. Figures from the management itself and other agencies show that the P17-a-kilo buying price for palay was sufficient. Too, there was no need to import until this June, after the dry-season harvest.

The Council alleges that insiders precipitated the shortage. Deliberately buffer stocks were sold to favored traders, at a kickback.

Malacañang should audit the NFA. Records would show the truth.

A starting point could be last year’s similar squabble between the NFA Council and the management. Malacañang had refereed that too, although inconclusively. It authorized the NFA to buy 250,000 tons of commercial-quality rice from Thailand: long-grained, well-milled, only 15 percent broken. Receipts should show if the stocks were delivered to NFA regional warehouses, as contracted, from Oct. to early Dec. 2017.

The 250,000 tons translated to five million bags of rice. It would have been enough to last till March this year. By then, the dry-season harvest would have begun. And the NFA would again be buying palay till May to shore up its standby stocks. The rule is for the NFA to maintain a national buffer of 15 days year round, but increase this to 30 days every July-Sept., the lean supply months.

As it happened, poor consumers could no longer buy cheap NFA rice at public markets as early as Jan. 2018. By mid-Feb. the stocks ran out completely.

That wouldn’t have happened had the Council approved the P22-per-kilo buying price for palay, management says. But figures showed otherwise. The Council, the Dept. of Agriculture, and the Senate committee on agriculture were getting field reports. Palay was selling at only P13-P14 a kilo in Palawan and Mindoro. Those two Southern Tagalog islands were close enough to the NFA’s central office in Metro Manila. Had the management scooped up the stocks at P17, it would have helped the farmers and at the same time boosted its buffers.

To that, management counters that it had indeed received palay offers from farmers as low as P14 a kilo. But those were wet stocks from flooded fields. As a rule, it buys only “clean and dry palay.” Stocks that have more than 40-percent moisture are rejected, for those do not keep.

The management also belied the reports of below-P17 palay rates in Mindoro and Palawan. Supposedly it has certifications from farmers’ cooperatives there that their prices were much higher.

The management did sell about 700,000 bags of “old stocks” from its warehouses in June-Aug. 2017. Allegedly those were delivered as far back as 2014-2015, in all the regions. The bulk came from Central Luzon, Eastern Visayas, the Zamboanga provinces, and the Autonomous Region for Muslim Mindanao, the management says. The policy is to auction such stocks at a discount. Traders re-mill such stocks for resale.

The immediate past NFA management is appalled at such assertion. Supposedly records would show that 2014 stocks already were sold in 2015, and 2015 stocks were sold in 2016. Keeping them in warehouses would have been wasteful; the stocks would have rotted to the point of being unfit for human consumption even if re-milled. The NFA then was confident of ample replenishments as it kept buying palay from farmers.

The NFA Council tends to support the past management’s claim. It doesn’t make sense to sell during the lean months, not even old stocks. More so, in Eastern Visayas which is always hit by typhoons in the second half of the year.

The Council suspects that what was sold were 2016 stocks. Perhaps the initial batches of 2017 imports also were sold; thus the shortage starting Jan. 2018.

In the Senate inquiry the other week, accredited retailers complained that the NFA had cut back their supply as early as 2017. That forced them to buy from big traders. Purportedly the stocks from those traders were in NFA bags.

The Council points to that as proof of anomaly. Imports are supposed to arrive in NFA bags. New stocks were passed off as “aging” to justify auction to colluding traders. An audit should flesh that out.

The racket entails P50-P100 kickback from each auctioned bag. If true, that kickback from 700,000 bags ranged from P35 million-P70 million.

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