Under NFA, was US-funded rice ‘mismanaged’ too?

THIS IS a rejoinder to the editorial titled “Legalized smuggling.” (Inquirer, 5/20/11) In 2008, thousands of Filipinos queued up from sunrise to sunset for a kilo or two of NFA-imported low-grade rice!

Two years later, in April 2010, the National Food Authority posted for auction 43 million kilos of “GSM-102” US premium rice at an indicative price of P24.30/kilo. The stock was stored in warehouses in Pampanga and Bulacan. A separate batch of 1.5 million kilos, Vietnam and Thailand premium grade, also kept in Pampanga storehouses, was also offered for auction at P27/kilo. Although the year these rice stocks arrived was not stated in the auction notice, undoubtedly the American rice formed part of 2008 rice arrivals—100 million kilos from the United States, and 600 million kilos from an Asean neighbor. (“RP to buy 600,000 tons of Vietnam rice,” Inquirer, 6/19/08) These stocks were obviously imported in the third quarter, a period described in the 2008 COA Report when commercial prices for premium rice “started to decline” owing to “stable supply.”

The 2010 auction was based on NFA’s SMDP (sale through market determined price) of “quality-declined rice.” (Source: Technical Research Division [TRD], March 2003). TRD concluded that re-milling would have been more advantageous than SMDP.

The NFA policy of importing high-grade rice (which only ended up “converted” by traders to commercial rice) continued contrary to repeated recommendations of the Commission on Audit in 2005 and 2008.

The auctioned US premium rice was financed in 2008 via an export guarantee from the US Department of Agriculture under GSM-102 assistance (“USDA extends guarantees to RP,” Inquirer, 10/5/08); it was valued at the equivalent of P38/kilo while the Asean premium rice was valued at P44/kilo. In that April 2010 auction, the NFA may have lost P575 million on the US rice and P30 million on the Vietnam and Thailand rice, raising its liabilities by P615 million in addition to the new P30 billion in long-term loans signed in 2008 with Philippine government sovereign guarantee; while debts payable within 360 days soared to P120 billion.

Curiously, while US premium rice under GSM-102 assistance was entering the country in the third quarter of 2008, the NFA was auctioning in NCR and Region 3, 31 million kilos of US high-grade rice, financed under PL-480 loan for developing countries, a loan that had a maximum term of 30 years and low rates of interest. Yet Filipinos lined up under scorching heat or in a downpour for rice to put on their dining tables.

Was there a shortage? US Commerce and Industry statistics show some half a billion kilos reached our country from 2001-2010. But this aging senior does not see them in neighborhood stores. An accounting is in order.

—MANUEL BONDAD,
manuelbondad@yahoo.com