Rice import bidding hit

MANILA, Philippines - Importers and farmers’ cooperatives protested yesterday alleged irregularities in the scheduled awarding of tariff-free rice import permits issued by the National Food Authority (NFA).

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).

Sources said the importation of 200,000 MT or 4 million bags of well milled white rice could be worth P4 billion at P1,000 per bag tax-free.

Import permits, if resold, could net winning importers picked by the NFA up to P1 billion.

The source said if the government would collect tax from the importation, it could take in P2 billion since tariff for rice importation is now at P500 per bag or 50 percent of purchase price.

The NFA allows tax-free importation of rice to give incentives to private importers, including farmers’ cooperatives, to assist the government in the rice procurement program to increase rice reserves.

Most importers, the source said, were caught off-guard by the sudden change in the guidelines that the NFA published in The STAR on Feb. 19, 2010, which included the general requirements for the awarding of the import permits to qualified importers.

The NFA traditionally awarded the allocations to import rice on a first-come, first-serve basis to make the awarding fair to all importers.

The source said that on Feb. 19, a Friday, the NFA revised the guidelines by posting on their website www.nfa.gov.ph the procedure to obtain priority numbers, which was not mentioned in the newspaper advertisement of the agency.

The priority numbers that were issued to importers were later used by the NFA to choose the winners to be given the rice import permits.

He said when news regarding the new guidelines were leaked, many importers proceeded to the NFA office in Cebu City to fall in line to get priority numbers last Saturday and Sunday. Some even camped out at the NFA offices overnight. The NFA offices were also surprisingly open last weekend.

The San Jose Vendors Multi-Purpose Cooperative from San Jose, Occidental Mindoro, was able to secure a priority number at the NFA National Capital Region office along United Nations Ave. in Manila.

The source said that the importers and cooperatives were shocked when NFA officials announced yesterday that the permits to import tariff-free rice were already awarded to 10 importers from Metro Manila and seven importers from Cebu.

He said that shortly after the awarding of the import permits were announced, some of the winning importers circulated offers that they would allow other importers to use their import permits for a fee of P250 per bag of rice. At a fee of P250 per bag, that would mean a take of P1 billion to import 4 million bags or 200,000 MT of rice.

The source said that with the expected rice shortage brought about by the El Niño dry spell, speculators and even smugglers would pay the P250 fee per bag to the winners of the import permits to be able to continuously import rice that could be sold at a higher price in the coming months when there is an expected rice shortage.

Rizalina Fernandez, a representative of the Sa Jose Vendors Multi-Purpose Cooperative, sent yesterday a letter of complaint to NFA Administrator Jessup Navarro to protest the alleged irregular process of awarding the import permits.

She complained that the NFA did not inform the public through a newspaper advertisement of the changing of the guidelines that included the giving of priority numbers. The giving of priority permits was only posted on the NFA website.

Fernandez said the NFA should have published the new guidelines in newspapers so that all imtesrested importers would know the new procedure.