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NFA defers to late-June auction for importation of 805,200 metric tons of rice.

FOLLOWING complaints from some farmer groups, the National Food Authority (NFA) has deferred to late-June the auction for the importation of 805,200 metric tons (MT) of rice by the private sector under the minimum access volume (MAV) scheme.

NFA Deputy Administrator Judy Carol Dansal told the BusinessMirror that the NFA Council (NFAC) has decided to cancel the scheduled auction on June 14 and moved it to June 25.

The NFAC also decided to reduce the minimum service-fee requirement for the auction to P100 with a bid offer increment of P10 per MT, from the earlier approved P250 minimum amount with P250 per MT increment, according to Dansal.

The NFAC also moved to extend the filing of application for interested parties to June 18. 'The majority [of the] members of the NFA Council had agreed and voted to consider some of their concerns,' Dansal told the BusinessMirror.

Dansal said the NFAC approved the changes on Monday evening.

However, the NFAC maintained some of the provisions of the importation guidelines, such as the schedule of arrival and the financial standing requirement for participating farmers' organizations and non-FOs.

'[The schedule of the arrival] remains the same, since the arrival should not coincide during harvest time,' she said.

Various farmers group have aired their opposition to the new MAV importation guidelines directly to the Office of the President. They also submitted to the NFAC on June 7 a letter containing some of their complaints on the importation guidelines.

The concerns included the volume allocation for FOs and non-FOs, the amount of service fee, the financial standing requirement and the schedule of the arrival of the importation, according to Edwin Y. Paraluman. Paraluman sits at the NFAC as a representative of the farmers.

Paraluman said farmers are questioning the 20-80 allocation of the 805,200 MT volume between FOs and non FOs. They complain that their 20- percent allocation is too small compared to that of corporations.

'The farmers are saying that the allocation of corporations is too high while the farmers are left with a small volume,' Paraluman, who is also the chairman of the Philippine Farmers Advisory Board, told the BusinessMirror.

'They are questioning why a corporation could import as much as 50,000 metric tons, while farmers could only import 5,000 metric tons at maximum. If you look at it, it seems that the allocation for the MAV between farmers and corporations is not fair,' Paraluman added.

Paraluman said FOs earn from the importation of rice as they sell to businessmen their purchased staple abroad. He noted that the income they gain from importation allows them to purchase farm machinery and inputs they need to improve their productivity.

Paraluman said farmer groups who raised their concerns to the NFAC invoked the provisions of the Agriculture and Fisheries Modernization Act,which seek to protect small-scale farmers through: protection from unfair competition, providing income opportunities, and strengthening farmers' organization through cooperation, according to Paraluman.

'It seems like what they did [with the volume allocation] is far from the objective of our law,' he said.

The NFA earlier explained that it came up with the 20-80 volume allocation for FOs and non-FOs 'based on the history of previous availments' by the respective groups under the MAV importation scheme.

Paraluman dismissed such percentage and noted that the 20-80 volume sharing between FOs and non-FOs only happened in last year's MAV, where many participants signed up for the importation.

'The prorating of allocation in the last MAV was not right. Historically in the previous MAVs, which they have records, the volume allocation between farmers and corporations is 40-60,' he said. 'It is not the fault of the farmer organizations [that] their allocation in the previous MAV accounted for only about 20 percent of the total volume. There were a lot of applicants last year, plus they cut some of the farmers' allocation.'

Farmers also fret over the new financial standing requirement for FOs and non-FOs to be able to join the auction.

The NFAC now requires applicants to submit financial documents on their current net worth, instead of the previous total net worth requirement. The change, Paraluman noted, limits the participation of FOs, particularly the small ones, in the rice importation.

'If it is totel assets, then small farmers would be able to participate and earn income somehow. Because if it is total assets, the net worth of the farmers would be higher and so they will be able to participate,' he said.

However, Dansal said the NFAC has maintained the new financial standing requirement for applicants so as to prove to cynics that cooperatives are capable of importation.

'It is to ensure the import capacity of the cooperatives in order to destroy the allegations of some public figures that these cooperatives have no money and that they are selling their import permits to businessmen,' she said.

Paraluman said farmers are also questioning the schedule of import arrival, as the first phase of the importation coincides with the last phase of last year's MAV importation, which is from July to August.

Due to this, the farmers argued, the market will be flooded with rice, causing lower farm-gate prices of palay by the time of the main harvest in the fourth quarter, said Paraluman.

'For sure the farm-gate price of palay will decline below P20 per kilogram by harvest time due to the volume of imported rice this lean season,' he said. 'That is one concern of the farmers,' who wonder aloud 'why they are rushing the importation of the current MAV when, in fact, there is still a remainder of about 200,000 metric tons from the previous MAV,' he added.

However, Dansal said importers could opt to bring in their imports in the second phase of the MAV importation program, scheduled from December to February of next year.

Paraluman will still raise the concerns of the farmers at the NFAC meeting next week, 'despite the changes to the guidelines.'
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Publication:Business Mirror (Makati City, Philippines)
Date:Jun 12, 2018
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