P-Noy asked to junk rice importation using farmers as fronts

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A shipment of rice from Vietnam gets unloaded in Manila. Photo Courtesy: IRRI/Flicker.com
A shipment of rice from Vietnam gets unloaded in Manila. Photo Courtesy: IRRI/Flicker.com

By Joey Natividad
Special Correspondent

NAGA CITY (BicolToday.com/19-May-12) – A former member of the National Food Authority Council, blew the whistle on the policy and practice of allowing big rice importers in using farmers’ organizations as fronts to legitimize their profit-driven rice imports.

A letter had been sent to President Benigno Aquino III the other week, requesting His Excellency to discontinue the importation of rice using the Private Sector Finance mode of rice importation.

The letter request, addressed to the President, recommends for the NFA to continue the Minimum Access Volume method, in order to give farmers organizations privilege to import rice without being used by big rice importers. NFA uses both import modes in rice importation.

Silvestre “Ka Silver” Bonto, former farmer representative of the NFA Council, and president of the National Confederation of Irrigators’ Association, informed the President by open letter that private rice importers, under the Private Sector Finance (PSF) mode, join the bidding for rice importation by using the legal and technical documents of farmers organizations, including cooperatives, (FOs), while they – the big, rice importers – finance the payment of Service Fees, Performance Bond, and other financial needs where FOs do not have the capacity to finance.

Under the PSF scheme, the farmers organizations and cooperatives are being used as “fronts” by big, rice importers.

After winning the bidding, big rice importers only provide the FO’s a minimal amount as payment for the usage of their documents. Service Fees paid by the importers may reach as high as P69,000,000.00 for the Open Portion equivalent to 10,000 metric tons, and P 15,000,000.00 for the FO’s Portion representing 2,000 metric tons plus P1,000.00 per metric ton if they are awarded the volume, cited Bonto as example in his letter to the President. Bonto is also president of Angat Ahon Magsasaka, Inc.

Bonto, reacted to the recent rice bidding conducted by NFA, particularly the recent 2012 Private Sector Financed Importation for the Open Portion, and the Farmer’s Portion wherein 380,000 metric tons were granted to winning bidders in both portion.

He said he has no intention of meddling with the recent rice bidding, in respect to NFA officials who respect the farmers sector.

Under the PSF scheme, winning bidders are not required to pay taxes for their imports, but are required to bid for a service fee equivalent to the volume of rice to be imported. The NFA Council determines the import volume for each particular importation.

Bonto suggested to the President the Minimum Access Volume (MAV) as the better import mode to pursue, where it is “subdivided into an Omnibus Origin and Country Specific Quota (CSQ).” As explained in his letter, both methods require importers to pay a tariff equivalent to 40% of the total volume to be imported.

He recommended that, under the MAV, importers should be limited to bonafide farmers organizations. On the question of financing, farmers organizations, NFA, and the Land Bank should enter into a Memorandum of Undertaking where the bank will provide a loan equivalent to the amount of importation to be undertaken.

“Upon completion of the importation and sale of imported rice, payments will be coursed thru the Land Bank, and the same will only refund the income generated for the sale less the loan. This will ensure that the Bank will be paid accordingly, and shall commensurate the farmers properly for the sale of the imported rice,” he said.

His suggestion sent to the President, once acted favorably, will “ensure that no farmer organization nor cooperative can be used illegally by big rice importers, hence, stopping rice cartels and monopoly resulting to a more equitable distribution of rice in the whole country.”

Bonto’s open letter to the President had been published in Naga City’s weekly newspapers. [BicolToday.com]

Copyright 2012 BicolToday.com. All rights reserved.  Read BicolToday.com Syndication Policy.

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