Justify NFA ‘door to door’ import scheme

The merits of a plunder complaint facing Agriculture Secretary Proceso Alcala and National Food Authority (NFA) administrator Orlan Calayag over the P457.2-million “overpriced” April 2013 rice importation and other alleged offenses are better left to the courts (“Plunder rap filed over rice import,” Second Front Page, 12/17/13).

But we focus on the NFA’s decision in April 2013 to price the 205,700 metric tons from Vietnam on a “door-to-door” scheme against the usual “landed cost” pricing in place until 2012.

In the latter, payment by the NFA was based on the weight of rice as evidenced by documents in the foreign port of loading, and not on the quantity in the port of discharge. Any “shortlanding” and losses were absorbed by the NFA, which nevertheless had recourse to partial or full recovery by filing a claim with the shipping company. It is very significant that from Commission on Audit (COA) reports,

“spillages/shortlandings” represented  0.002 to .0082 of NFA imports from 2008 to 2010–a period marked by huge volumes of rice importations 10 times the April importation.

In the door-to-door scheme, payment is based on the volume delivered to the warehouses designated by the NFA. In effect the NFA is paying in advance for expected “shortages.” Moreover, the exporting country takes charge of domestic cargo-handling operations and delivery to the warehouses. Why? Again it is noteworthy that with the rice imports in 2012 (landed-cost basis), the NFA’s operating expenses for “handling, transportation and delivery,” obviously incurred for rice importation and palay purchases, reached P158 million based on the COA reports. Which is advantageous?

From the actual benchmarks, as culled from COA reports, the NFA could have saved $1.3 million to $2.4 million if the landed-cost pricing had been adopted in April.

We have been very supportive of this government’s rice sufficiency program. And consistent with the letter titled “Are rice price offers of 2 gov’ts reasonable?” (Opinion, 12/7/13), the NFA Rice Council is urged to disclose the justification for the adoption of the door-to-door policy.

–MANUEL Q. BONDAD,

[email protected]