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Senators want ex-NFA chief to answer rice smuggle raps

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Convinced that a syndicate is behind rice smuggling in the country, senators want the former head of the National Food Authority (NFA) to answer charges that he “favored” rice importers over domestic farmers as alleged by a disgruntled officer of a rice cooperative.

In an executive session, Simeon Sioson of  4SM Agri Venture Multi-Purpose Cooperative told senators  he was prepared to reveal more of former NFA Administrator Angelito Banayo’s alleged bias for rice importers.

Senate leaders have provided Sioson with 24-hour security after the co-op officer revealed he was receiving death threats and was under surveillance by parties displeased by the ongoing probe by the chamber’s agriculture committee.

Sioson’s revelation prompted Senate President Pro Tempore Jose “Jinggoy” Estrada to ask the committee to invite Banayo anew to the Senate hearings.

Banayo attended previous  hearings as NFA head but he has resigned from the NFA to run for a seat in the House of Representatives.

Contacted by the Philippine Daily Inquirer, Banayo said Monday that he did not favor rice importers during his stint at the NFA.

“I could not have possibly favored rice importers over domestic farmers. We reduced importations drastically at the NFA,” he told the Inquirer in a phone interview.

He said that in 2010, the Arroyo administration imported close to 2.5 million tons of rice, 200,000 tons of which were brought into the country by the private sector.

By 2011, only 860,000 tons of rice were imported, 660,000 tons of which were brought in by traders and farmer-cooperatives. This year, Banayo said, 500,000 tons were imported, 380,000 tons of which were brought in by the private sector while the NFA only brought in 120,000 tons.

“Bigger allocations are given to the private sector… How can they say then that we favored importers over the farmers?” he said.

Bidding of allocations

Banayo said a key change from the Arroyo administration’s practice of allocating imports to traders was the NFA’s bidding out of import permits under his stint. “The government loses a lot of revenue if importation permits are not bid out,” he said.

He said that since the bidding was held by the NFA, the agency started earning revenue. From P103 million in 2010, the agency earned P1.6 billion in 2011 and P2.6 billion this year.

Banayo said that people making the most noise probably lost in the bidding.

As for rice smuggling, Banayo said the illegal activity was the concern of the Bureau of Customs.

But he said, “There are many cooperatives, alleged farmer-cooperatives, which may be allowing themselves to be used or are unwittingly being used by rice smugglers.”

He said the NFA’s only concern was if a cargo of rice had an import permit. “If it does not have an importation permit, then it is illegal. Smuggling is the concern of the Customs,” he said.


Senate President Juan Ponce Enrile told co-op representatives who attended Monday’s hearing that traders were using them as fronts by buying their rice allocations and selling these at a huge profit.

“If you yourselves sell the imported rice that you are allowed to acquire through allocations, then you can earn more than the P5 per bag of rice that you are paid,” Enrile said.

Based on testimonies of various co-op representatives, they pay a “service fee” of as much as P61 million so they can participate in the bidding for an allocation of rice to be imported.

Normally, one allocation is equivalent to 10,000 metric tons (MT), or 200,000 bags.

For each bag, a cooperative receives P5. This means the 10,000-MT shipment earns a profit of only P1 million.

If the cooperatives themselves sell the imported rice, they could earn more than this sum from the sale of 200,000 bags, according to Enrile. This is because the co-ops eventually sell their allocations to wealthier rice traders.

Nixon Kua

Some co-op representatives said it was Banayo’s late associate, Nixon Kua, who subsidized the service fees paid to the NFA since the amounts were prohibitive to co-ops.

They alleged that Kua, a former chief of the Philippine Tourism Authority, would arrive with envelopes containing checks equivalent to the subsidy after convincing them to participate in the bidding.

At least two of the representatives said Kua had been a walk-in visitor in their co-op offices who offered to help them participate in the bidding for imported rice.

In the case of the Indian rice shipment seized in Subic months ago, Magdangal Bayani III of St. Andrews Field Grains and Cereal Trading said Kua had assured him that he would provide the necessary documentation that would allow the co-op to participate in the bidding for rice allocation.

The Bureau of Customs seized 420,000 bags of Indian rice, estimated to be worth P450 million, allegedly smuggled through the Subic Bay Freeport Zone in April. Also foiled was an attempt to smuggle more than P100-million worth of Vietnamese rice in Albay in September.

Four unidentified men shot Kua in the face while he and his daughter were about to enter his brother’s house in Ayala Greenfield Subdivision in Calamba City in July. The attackers fled with the daughter’s bag containing P90,000 in cash meant to pay construction workers of the house that Kua was building in the same subdivision.

Enrile, Estrada and the Senate agriculture committee chairman, Francis Pangilinan, were convinced of an existing syndicate in the NFA that allowed this arrangement that was disadvantageous to the co-ops.

Banayo told the Inquirer that “farmers” and “farmer-leaders” had to be differentiated. Farmers, he said, were planting rice while farmer-leaders imported rice.

“They (farmer-leaders) say they represent farmer cooperatives and the benefits go to farmers but they do not. That is the problem. We always tend to give incentives to organized farmers but who really benefits? The farmers or the farmer-leaders? Most farmers are not able to import at all,” he said.

Banayo said the “farmer-leaders” had sought extra incentives from the NFA.

Originally posted: 5:02 pm | Monday, December 10th, 2012

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Tags: cooperative , importation , investigation , News , rice smuggling

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