Palace defends NFA rice importation

Malacañang defended yesterday the plan of the National Food Authority (NFA) to import rice through negotiated procurement in order to prevent a looming rice shortage in the country.

Presidential Spokesman Ignacio Bunye said the proposal of NFA Administrator Arthur Yap, which will not go through the process of public bidding, is necessary to ensure that the rice supply requirement for this year will be met.

"As far as we know, based on what the NFA administrator said, the requirement is for 300,000 metric tons and the mode of importation being availed of is to ensure that the total requirement is met," Bunye explained.

"I believe there’s really a need for such importation," he added.

Bunye also welcomed the legal opinion issued by acting Justice Secretary Merceditas Gutierrez over the weekend allowing the NFA to import some 91,500 metric tons of rice through negotiated purchase. The planned importation will cost the government P1.3 billion.

In legal opinion No. 74, Gutierrez said the NFA plan could be done under Republic Act 9184, a law providing for the modernization, standardization and regulation of the procurement activities of the government.

She argued that the law allows negotiated procurement "in case of imminent danger to life or property during a state of calamity, or when time is of the essence arising from natural or man-made calamities," and "where immediate action is necessary to prevent damage to or loss of life or property or to restore vital public services, infrastructure facilities and other public utilities."

Rice is the staple food of about 85 percent of the country’s total population of 82 million.

Bunye expressed confidence the legal opinion of the Department of Justice (DOJ) "removes any obstacles on the importation" of rice.

Gutierrez, however, noted that the DOJ "is of the opinion that the proposal to import rice through negotiated procurement is exempt from the requirement of public bidding under existing laws, rules and regulations."

Under normal circumstances, all procurements by the government should go through the bidding process.

But under Executive Order No. 109-A, all procurement contracts involving at least P300 million - which the head of the agency believes should be done through "alternative means of procurement, or without public bidding" - must obtain first a favorable opinion from the DOJ.

Gutierrez clarified the DOJ gave its opinion on the assumption that the documents the NFA submitted were true copies of the originals and that the faction representations made in the documents were true.

In asking for the authority to import rice through negotiated procurement, Yap said the country needs some 91,500 metric tons of imported rice to fill the supply gap.

Yap explained that from this year’s rice import requirement — estimated at 810,000 to 945,000 metric tons — about 310,000 metric tons were allocated for farmers’ organizations and the private sector to import, while the NFA took care of importing the rest. Yap pointed out the NFA had already bidded out 200,000 metric tons of 310,000 metric tons of rice to be imported.

However, out of the balance 110,000 metric tons, only 8,500 metric tons had been imported so far because of the prevailing high market prices for rice. Yap explained that the rice import requirement particularly during the lean months of July to September should be addressed immediately in order to prevent a situation similar to the 1995 rice crisis.

"The importation of rice through negotiated procurement is necessary in order to maintain the (NFA’s) effectiveness in rendering the public service it is providing the public," Yap said.

Gutierrez, for her part, said the circumstances "manifest the element of urgency which justifies resort to the alternative mode of procurement."

She added negotiated procurement of imported rice should be done in observance of existing laws and applicable rules and regulations, including the conditions under the implementing rules of RA 9184.

For rice importation that would undergo bidding, the NFA said it will invite Thailand’s Department of Foreign Trade of the Ministry of Commerce, Vietnam Southern Food Corp., and the China National Cereals, Oils and Foodstuff Import and Export Corp.

But the NFA said it will have to negotiate "with another government corporation" to purchase the rice supply gap created with the failure of the farmers’ organizations and the private sector to import their rice allocation. — With Aurea Calica