NFA sabotaging Phl food security

Davidson Bangayan, alias David Tan, is billed as “the Goliath of rice smuggling.” But no such rap has been filed in court. What he’s facing are unrelated charges of electricity theft, importing trash, and perjury at the Senate.

Why so? For one, the government seems to have no case against Bangayan “illegally bringing in rice.” At best it could be for under-declaring rice imports. As for rice importing per se, there is nothing wrong, contrary to what the National Food Authority makes it look. In the opinion of the justice department, it is the NFA that breaks the law by banning private rice imports.

Justice Sec. Leila de Lima tries to set things right via a memo to the NFA last Dec. She says the law that the NFA invokes to curtail rice imports – R.A. 8178 – is passé. That 1996 enactment had empowered the NFA to impose special permits and quotas on rice importers – to protect Filipino farmers. But the World Trade Organization’s Agreements on Agriculture, signed by the President and ratified by the Senate, has superseded it. That international pact forms part of the law of the land, de Lima reminds the NFA. It lifts all restrictions on agricultural imports, starting 2007. Member-states may impose only regular tariffs; in the Philippines’ case, it is 50 percent of the rice import value.

Before the 2007 deadline, the Philippines had sought and was granted a five-year extension of its rice restrictions. The reprieve expired in June 2012. The NFA has filed for another five-year extension till 2017. Under WTO rules, this can only be granted through negotiations with agricultural trading states. In such negotiations, the Philippines must lower its duties on other agricultural imports. But since no negotiations have been made, the NFA must abide by the WTO lifting of restrictions on rice imports, de Lima says. Since the NFA persists in banning rice imports, the WTO may impose sanctions on the Philippines. Such punishment could include counter-bans on Philippine farm exports, like sugar, banana, and pineapple.

The Philippines is put in a precarious agricultural situation. But the NFA, the agency tasked with food security, makes it worse. Last year it imported 705,000 tons of rice from Vietnam at $460 per ton. It was obviously overpriced, rice watchers say. The going rate then was only $430 a ton, and the government could have gotten it for much less had it so asked. NFA chairman-Agriculture Sec. Proceso Alcala and administrator Orlan Calayag have been charged with plunder. Allegedly the scam, pulled through secret negotiations by a private broker in the government-to-government deal, was at least $100 per ton.

Even with the NFA’s rice imports, the supply ran short. Despite the bumper harvest of April-May, retail prices surged to P33 a kilo from the previous P22. Alcala and Calayag blamed it all on trade cartelists allegedly led by Bangayan. Yet they have not charged him with economic sabotage either. In fact, Bangayan’s firms got the biggest rice import special permits from the NFA in 2011 and 2012. Talk is that a Mafia inside the NFA wants to replace Bangayan’s group with new favored cartelists.

The NFA spent more than P14 billion on rice imports last year. Had it let private firms do the importing, it would have not only saved the amount but also earned 50-percent duty of P7 billion. The 21-billion total could have gone a long way in direct subsidies to rice farmers. Hundreds of palay driers, warehouses, and farm-to-market roads could have been built; thousands of farm tractors distributed.

Due to mismanagement the NFA is P173 billion in debt. Half its annual budget goes to repayment of interest alone: P2 billion. And yet the NFA is intending to import on its own another 800,000 tons this year. Expect another overprice.

The government has left food security in the hands of an unqualified NFA head – a virtual foreigner at that, thus unconstitutional. Calayag, a former congressional aide of Alcala, had already acquired U.S. citizenship when recalled to Manila in Dec. 2012. The commission that vets nominees to government positions ignored his lack of training or experience in food production and distribution. On hindsight, he applied for dual Filipino citizenship. He can easily renounce his Filipino-hood again once he’s done sabotaging food security.

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Speaking of which, is another American citizen running the housing agency?

Manuel Sanchez has been appointed president of the Home Guaranty Corp., the government arm that insures mass housing projects. He is the same Manuel Sanchez whom the House of Reps Electoral Tribunal ousted in 1994 as congressman of Rizal province, for being a foreigner. The Supreme Court has upheld that ejectment.

How come he now returns as head of a government corporation?

The HGC plays a vital role in low-cost housing by guaranteeing swift repayments to builders and mortgagors. Sanchez’s entry is crucial since the agency is in financial distress. The Commission on Audit has been questioning the HGC’s frazzled investments for several years now. Recently the COA reported that the HGC lost P13.3 billion in 2002-2012, jeopardizing its ability to guarantee investments in mass housing.

Corrective measures have been recommended. But Sanchez reportedly is defying COA orders to collect more than P1 billion in receivables from buyers of its housing bonds. The House is to investigate why.

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