Press Release
February 25, 2010


Senator Loren Legarda urged the National Food Authority (NFA) to strictly observe bidding rules and transparency in the controversial tariff-free rice importation program being implemented by the agency amid complaints of alleged irregularities in the awarding of permits.

The program involves the tax-free importation of 200,000 metric tons of rice to be allocated to importers from Metro Manila (125,000 MT) and Cebu (75,000 MT). According to reports, this could involve 4 million bags of well-milled white rice worth P4 billion at P1, 000 per bag tax-free.

According to NFA, this was not the first time that the government has asked the private sector to participate in rice importation. As early as 2003, the NFA had already started the Farmers as Importers (FAI) program, which allowed farmer groups to import rice and sell at a price that will afford them sufficient profit.

Loren, chairman of the Senate committee on agriculture and food, also wants the NFA to confirm the report that the agency has already awarded the permit to import tax-free rice to 10 importers from Metro Manila and seven importers from Cebu.

"If this report is true, I want the NFA to publish the names of the importers and the volume of rice that each were allowed to import. This way, the public would know whether there was favoritism in the awarding or the importation was monopolized by the so called 'cartel' in the grains industry", Loren said.

The lady senator also urged the stakeholders in the grains industry to be vigilant enough and check the records of the importers who were given permit to import tax-free rice. She said that if they found out and they have concrete evidence that some of these importers have bad records in the past such as cases of smuggling, hoarding or price manipulation, they should immediately file a protest and seek the cancellation of their permit.

Loren noted a report that rice importers who were not able to get permit warned the public that speculators and smugglers could use the alleged favoritism in the awarding of permits to import tax-free rice to their advantage, which could increase the prices of rice.

The senator was also alarmed by their warning that unscrupulous traders and even smugglers who could avail of the tax-free import permits from the NFA might also hoard the imported rice and sell at a much higher price when a possible rice shortage occur in the coming months due to the El Nino.

"I also urge the NFA to vigilantly monitor the distribution of the tax-free imported rice and to ensure that these are distributed strategically, particularly in areas that would be severely affected by the present El Nino phenomenon or drought. The agency should also oversee if the selling price of this imported rice, once distributed in the country, is reasonable," she said.

Loren urged the NFA to strictly observe bidding rules because she noted reports that many interested importers were caught off-guard by the sudden change in the guidelines that the NFA published in a newspaper on February 19, 2010, which included the general requirements for the awarding of the import permits to qualified importers, thus, they were not able to benefit from the first come-first serve basis scheme traditionally implemented by the NFA in awarding allocations to import rice to make it fair to importers.

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