NFA defends offer to buy confiscated rice from BOC

MANILA, Philippines - The National Food Authority (NFA), defending its proposal to buy the P1.2 billion worth rice seized by the Bureau of Customs (BOC) in Cebu, said releasing the rice to the market would prevent an artificial rise in prices during the lean season and would be the fastest way of disposing of the rice.

In a statement issued yesterday, the NFA said the proposal sent to the BOC in July was meant to give the agency an option to expedite the disposal of the rice stocks and not to preempt the disposal process stipulated under the Tariff and Customs Code.

Under the law, smuggled goods have to be auctioned and sold to the highest bidder.

After two failed biddings, the confiscated commodities could either be donated or disposed through a negotiated sale.

NFA administration Orlan A. Calayag said the NFA’s intentions to buy the seized rice was communicated to Customs commissioner Ruffy Biazon last July 9 and 17.

Calayag said the proposal was also meant “to strengthen the partnership” between NFA and the BOC.

He noted that palay production during the lean months of July to September is traditionally low.

Because of this, he said, traders may limit supply and create an artificial shortage, raising prices. 

“The rice stock held by BOC, if infused into the market, will counteract any attempt to distort the rice market,” said Calayag.

He said the NFA’s legal team is currently re-evaluating the legal basis for the said proposal, particularly in connection with the Procurement Act in relation to the Tariff and Customs Code of the Philippines.

It had been reported that the BOC suspended the auction for the seized commodity because it is considering the request of the NFA.

In a related development, the NFA said that with the release of its well-milled rice to markets, prices of rice have stabilized.

The NFA over the weekend released well-milled rice priced at P32 per kilogram to compete with commercial rice.

After the release, commercial rice traders immediately released their own stocks priced at P31-33 per kilogram which were previously sold for P34 to 35 per kilogram.

Calayag said the NFA would soon release the  well-milled rice in Cebu for  P32 per kilogram to stabilize rice prices in the province.