The National Food Authority (NFA) on Wednesday rejected claims of anomalous transactions at the agency, saying nothing is irregular about selling aging rice stocks at its warehouses.
It said in a statement such activities are a matter of course, called “distress selling” in its books and allowed by regulation some three months after the commodity is first stored in warehouses.
Distress selling allows the agency to evade the cost of re-milling rice stock, or conduct additional processing, logistics and other costs just to make rice stocks acceptable to consumers.
“To avoid these costs, NFA can opt to sell at the highest mandated price to qualified commercial buyers on as-is where-is, no-selection and first-in first-out and first come-first served basis, meaning the first buyer gets to buy the oldest stocks. In the future, when NFA has modernized, distress selling can be avoided as the shelf life is longer and there is more time to allow the disposition of the stocks in best condition for the preferred purpose – calamity relief,” the agency said.
It said the NFA Council allows for the disposition of aging stocks up to 10 percent lower than the mandated price or P22.50 per kilo floor price up to the maximum mandated ceiling of P25 per kilo and damaged stocks of at least P6.50 per kilo.
“Meantime, NFA management has recommended to the NFA Council to increase the mandated maximum selling price of NFA rice. The current NFA management was able to responsibly dispose its rice stocks to government accounts by stretching the maximum shelf-life, minimizing the sale of residual volume to other accounts by implementing stricter guidelines and safeguards,” it said.
Earlier this week, Agriculture Secretary Francisco Tiu Laurel Jr. ordered a thorough investigation into allegations the NFA sold thousands of tons of rice to certain traders at a price disadvantageous to government.
Laurel created a panel of investigators to look into allegations that certain NFA officials authorized the sale of milled rice stored in an agency warehouse for P25 per kilo without bidding and after purchasing the grains at P23 per kilo.
“We do not brush aside reports of impropriety against officials of the DA, regardless of the source. We also welcome any government agency who may wish to conduct their own probe to ferret out the truth,” said Laurel, in an earlier statement.
DA spokesperson Arnel De Mesa told reporters that a panel had been created and has reviewed documents and made inquiries.
“Actually, there’s a lot of finger pointing, a lot of them accusing both those inside and outside the NFA. What the secretary wants is the truth so he himself initiated the conduct of a probe and he wants to learn what really happened,” De Mesa said.
