COA - Mahigit 13-M bags ng bigas, paluging ibinenta ng NFA sa P25/kilo imbes na... | 24 Oras

Summary

The Commission on Audit (COA) has reported a PHP 5 billion loss due to the National Food Authority (NFA) selling rice at a significantly lower price than market value between 2019 and 2023. Despite having substantial funds, the NFA's rice buffer stock was insufficient, falling short by over 80%. The agency faced challenges in rice procurement due to competition with private traders and regulatory constraints. As a result, 139 NFA officials were suspended, and new guidelines are being developed to prevent future losses. The NFA aims to improve its stockpiling and support local farmers.

Takeaways

• 😀 The Commission on Audit (COA) flagged a loss of over 5 billion pesos due to the National Food Authority's (NFA) sale of rice below cost between 2019 and 2023.
• 😀 The NFA sold over 13 million bags of rice at Php5 per kilogram instead of the recommended Php3 per kilogram, leading to significant financial losses.
• 😀 The NFA's defense was that the rice was near its expiration date and needed to be sold off, but this was questioned by experts.
• 😀 The Rice Tariffication Law prohibits the NFA from selling rice in this manner, and some of the rice sold was of good quality, further raising concerns.
• 😀 Despite high rice prices in the market (over Php50 per kilogram), no evidence was found of rice being sold at Php30 per kilogram by retailers.
• 😀 The NFA's mandate includes stockpiling rice for emergencies and purchasing rice from local farmers, but in 2023, its rice buffer stock was critically low.
• 😀 Even with a Php9 billion fund for rice procurement, the NFA only managed to utilize about Php1.4 billion, resulting in a shortage of 84.1% in buffer stock.
• 😀 Local farmers preferred to sell to private traders offering higher prices, contributing to the NFA's difficulty in purchasing rice from them.
• 😀 The NFA's procurement issues were attributed to competition with private traders, poor quality of some rice crops, and high prices due to India's export ban on non-basmati rice.
• 😀 The NFA has pledged to follow the recommendations of the COA and aims to maintain a 300,000 metric ton buffer stock of rice for emergencies.

Q & A

What was the Commission on Audit’s observation about the National Food Authority's (NFA) rice sales from 2019 to 2023?

The Commission on Audit (COA) observed that the NFA incurred a loss of over 5 billion pesos due to the below-market sales of rice, selling over 13 million bags at 5 pesos per kilo instead of 3 pesos per kilo.

Why did the NFA sell rice at a loss according to their defense?

The NFA defended the sales by stating that the rice was nearing expiration, and they needed to sell it to avoid losses. However, COA pointed out that selling rice at a loss was not appropriate given the legal restrictions.

What law restricts the NFA from selling rice below market value?

The Rise Tarrification Law prohibits the NFA from selling rice below the market value, and COA highlighted this issue in their report.

How did the NFA justify the sale of good-quality rice during the price hike?

Despite some rice being of good quality, the NFA was criticized for selling it during a period when rice prices surged to over 50 pesos per kilo, which was contrary to the interests of the consumers and local farmers.

What was the consequence for the NFA officials involved in the rice sale scandal?

The Ombudsman ordered the six-month suspension of 139 NFA officials due to their involvement in the below-market rice sales.

What is the NFA's mandate in terms of rice procurement and storage?

The NFA's mandate is to store rice for emergencies (calamities) and buy palay from local farmers. However, the agency has faced challenges in meeting its procurement and storage targets.

Why did the NFA fall short in its rice buffer stock in 2023?

Despite having a budget of 9 billion pesos for rice procurement, the NFA only utilized 1.4 billion pesos, leading to an 84.1% shortfall in the buffer stock. Farmers preferred selling to private traders offering higher prices.

What role do private traders play in the NFA’s rice procurement challenges?

Private traders have aggressively purchased rice from farmers, offering higher prices, which has led to the NFA's inability to compete in procuring enough palay for its buffer stock.

How did the NFA address the issue of competition with private traders in rice procurement?

The NFA acknowledged the strong competition from private traders and indicated that it would work to improve its procurement strategies and storage capacity to ensure a sufficient buffer stock.

What is the NFA’s plan to address the understocked rice situation in the future?

The NFA plans to follow the recommendations of COA and continue efforts to maintain a 300,000-metric ton buffer stock of rice. Additionally, they are drafting new guidelines to prevent further issues with below-market rice sales.