Ex-NFA chief defends his work amid rice smuggling | Inquirer News

Ex-NFA chief defends his work amid rice smuggling

/ 01:08 AM October 18, 2012

A former chief of the National Food Authority (NFA) on Wednesday defended the government agency’s performance in the wake of Senate findings that groups with little financial resources had been used as dummies by a few unscrupulous persons to corner the rice import business.

Lito Banayo, who recently gave up his NFA post to run in next year’s congressional elections, told the Senate committee on agriculture that the agency did what it could under the circumstances to ensure the legitimacy of traders and cooperatives it licensed to participate in the government’s rice import program.


“For as long as prices are not manipulated, for as long as the farmers get the right price for their produce and consumer prices are not spiraling, then I have done my job,” Banayo told the senators, who grilled him on the role of NFA-licensed traders being used as dummies.

“Regularity is presumed of the other agencies. Each agency has its own mandate. The NFA’s mandate is to ensure that there is no shortage of rice in the market, the price doesn’t spiral and the farmers get the right price for production,” he added.


Import permits

Banayo told the panel chaired by Senator Francis Pangilinan that the NFA required bidders for import permits to submit documents and clearances from the Securities and Exchange Commission, Department of Trade and Industry, National Bureau of Investigation, Bureau of Customs, Cooperative Development Authority and the local government unit.

It had only two weeks in March to vet the bidders, he pointed out. “If we had the luxury of time to ensure that the rice arrives before the lean months and before the harvest season then perhaps we would have much more time to vet all of these things in case of financial capability,” he said.

“We can only determine financial capability on the basis of bank certificates of deposit,” Banayo said.

Asked by Sen. Teofisto Guingona III if he was trying to justify the existence of dummy cooperatives in the government’s rice import program by saying that the NFA was pressed for time, Banayo said it was this reason that the NFA was opposing the policy of involving farmers in rice importation.

In December last year, the government announced that the private sector would be allowed to import 500,000 tons of rice, 190,000 tons of which would go to farmers’ cooperatives to import using NFA import licenses they would bid for.

“Common sense would dictate that the limits of financial capability and the absence of assistance from government financial institutes to farmers’ organizations and cooperatives would mean that they would need to enter into arrangements with private entities which have the necessary financial, logistical and network capabilities needed for a complicated global rice trade business,” Banayo said.


The role of licensed NFA traders in the smuggling of millions of pesos worth of rice was questioned when licensed importers were used to provide cover for the illegal entry of rice into the country.

“This should not happen again when there is a new bidding for the imports. It has to be done with greater scrutiny and not with this kind of system,” Pangilinan said after the hearing.

Cited for contempt

The Senate committee cited for contempt and ordered the arrest of a rice trader, Magdangal Bayani of St. Andrews Field Grains and Cereals Trading, “for refusing to answer the proper questions of the senators regarding his financing arrangements with his financiers during the public hearing/inquiry.”

It also cited Jan Dexter Marfil of Masagana Import Export Inc. for contempt and ordered his arrest for disavowing ownership of 90 containers of Vietnam rice. The testimony of another resource person pointed to Marfil as the one behind the shipment.

The committee junked the motion for reconsideration of Protik Guha, the importer of P500 million worth of Indian rice seized by customs agents at the Subic Freeport, and ordered his arrest for contempt.

It said Guha lied about his dealings with local traders and in denying his intent to distribute the rice locally.


On Wednesday, the Bureau of Customs auctioned off the 420,000 sacks of Indian rice held in Subic following a foiled attempt to smuggle these into the country.

“We are relieved that the goods have been finally bid out in order to preserve their value. With the months of delay in the disposal, we were concerned about prolonging it in storage,” Customs Commissioner Ruffy Biazon said in a text message to the Inquirer after the bidding.

The Indian rice, stored in two warehouses, would be turned over to the winning bidder, Pelagio de Vera Jr. of Veramar Ricemill and Trading based in Bulacan, who bought the shipment for P487.2 million.

De Vera beat the only other qualified bidder, Jomerito Soliman of Purefeeds Corp., who offered P474,175,800. The floor price was set at P462 million.—With a report from Robert Gonzaga, Inquirer Central Luzon

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TAGS: Business, Lito Banayo, National Food Authority, Philipines, rice, rice smuggling, Senate, Smuggling
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