It has already hugged the headlines that indeed, there are rotting rice in the NFA Warehouses, orders and deliveries stocked from way back two years ago. That is happening and proven for a fact, and this is the story why it all happened. This is an open secret to rice traders and those who do business with the National Food Authority.
THE “ROAD-TO –MY FARM” SYNDROME:
The first situation why the price of rice and why there are rotting rice in the warehouse is the failure primarily of the government to supply adequate farm to market roads for the farmers to take their produce at markets where it could be sold at a lower rate therefore lower prices when bought by the end consumer. The farm to market roads are being politicized and made an exchange deal for those loyal to the people in power and at times it all becomes a “road to my farm” for the politicians and a farm-to-market road.
Next is, before, I am praying it will not happen this time but the probability is still high, projects like this end up to the favoured ones. The DPWH for instance, there are “sellers” of these projects and the “sellers” also have marketing arms at the Department of Budget when the time for release is already in place.
The time for release is triggered by this situation. If you are the mayor, I am the seller, I will offer to you a project like the road project and I will ask you a request letter addressed to the president. I will do all the walking and talking at the imperial Manila where the central offices are located. Then there is the deal, I also have my contractor for the project which ideally must not be less than 10 Million pesos. Sounds good and pro-poor but wait. The mayor must pledge that for the amount to be released, he must first deposit 30 to 40 percent of the contract price of the project to the “seller”. With this, the mayor can be assured of the immediate release of the funds, ten million for example. But the problem there is, there has already been an expense of 30 to 40 percent? By the way that percentage was already divided by the “seller”, the DBM counterpart and his DPWH associate. All clean and well, manna from heaven.
What happens now, as usually it is the contractor who pays for the percentage, the contractor will now execute the project, expectedly substandard and cannot be utilized by the end user, the taxpayer. If it becomes a “road to my farm” for the politicians not a farm to market road, more so, it cannot be used by the traders and farmers in the far flung barangays.
THE VICIOUS CYCLE: KILLING FARMERS IN THE PROCESS
Next is the scrupulous buyers of the goods taking advantage of the absence of an all weather farm to market road who goes to these areas and offer to buy the harvested crops at a much lower price compared to the competitive price in the markets should there be an existing farm to market road. But the farmer cannot do otherwise except to sell his produce to the buyer who knocks at his doorstep taking with him a truck, haulers and large weighing scales buying the newly harvested rice and other crops at a very low price.
Because it is so low, the price, the farmer only makes a little of his investment and ends up broke for the next planting season as all he earned for that harvest was for his daily subsistence, education for his children and other family expenses. So, the buyer trader offers again to the farmer a loan for the seeds and fertilizers for the farmer to start planting when the next planting season sets in. And when he harvests the same, the same trader buyer buys the produce less the loan earlier taken for the seeds and fertilizers. It is really a vicious cycle which the government could not appreciate as it does not see the reality happening in the countryside.
THE NFA: THEY SELL THE RICE SELECTIVELY
So, we now arrive at the NFA and the trader buyer now sells his marketed goods to the NFA should he be not a rice producer himself. If he is a rice producer himself which is the case, at most, he does not sell his marketed goods to the NFA but mills it at his own rice mill, packs it and sells it at a higher price raking him huge profits to the detriment of the consumers.
But if he sells it to the NFA, his income potential is low as it is the NFA who controls the price after a quality controller checks it.
But most rice traders also buy NFA rice. They cheat, that’s why. In order for them to earn more, they mix the good quality rice with NFA so it could be more good rice to sell but mixed with NFA rice and we will never know as the mixed NFA rice will just be covered by the good variety. Mix so they could pack more.
They also sell the rice at cost because of some corrupt people in the NFA which I was told happens nationwide.
This is the scene.
Buyers at the NFA are varied. Most of the bulk is rice traders. They sell the rice; mix it with the good variety so they earn more. Others are NFA accredited resellers that also are in truth rice traders but can get more supplies from the NFA because they are rolling stores accredited.
They go to the NFA, buy rice with a catch. The people in charge selects those whom they release the rice for sale, only to those that add on to the published rate as we know the NFA rice is relatively cheaper. So, the people add on to say 20.00 pesos per sack to the published rate, but that does not appear in the receipt. The person in charge has the leeway of choosing whom to sell it; it is their prerogative as long as the buyer has the papers. So, that is 20.00 per sack times thousands of sacks from a single warehouse office alone. Next is, the NFA person will not release the goods sold of the trader does not agree to the trucks where the bought goods are to be hauled from the NFA to the place of business of the buyer and these trucks haulers are either owned or rented by the NFA person and they also charge around 5 to 10 pesos per sack. Easy money, isn’t it?
If the buyers do not give in to the caprices of the NFA personnel in charge, the rice is left rotten in stock. That is the reason why a lot of the goods are not sold, should there be any other reasons, we do not know.
Now, Noynoy, what should be done? This is also the reason why there are times there is a shortage of rice, as it is hoarded. If these problems are not addressed, for sure the problem will rise and rice will cease to be the staple food.
Talk to me and we will discuss the possibilities of stopping this cancer! (Hahaha, I am overly presumptuous that Aquino will indeed talk to me but who knows?)
More next time, gasoline stations and their price manipulations perhaps?