Unintended

There is this old Persian saying that the road to Hell is paved with good intentions. That is certainly true of many pieces of legislation we have on the shelf that produced truly unseemly outcomes completely unintended by our lawmakers.

Take, for instance, RA 8976 of the Philippine Food Fortification Act of 2000. This law requires that rice products be reinforced with Iron, wheat flour with both Vitamin A and Iron, and refined sugar with Vitamin A.

This is a well-intentioned law. It seeks to address the nutrient deficiencies of poor dietary practices among our people. But it has created problems of unenforceability and waste.

When Lito Banayo took over as administrator of the NFA, he made much fuss about two things: the supposed oversupply of rice in the warehouses and, consequently, the spoilage of the commodity stored by the massively subsidized agency.

The matter of oversupply soon came into question. The NFA, which is mandated to maintain buffer stocks of the key commodity, turns out to hold only two months supply of rice. The policy is to maintain a buffer stock equal to three months of consumer demand.

It turns out the NFA was holding less stock than what policy required. But the matter was quietly massaged with official estimates that traders and households were indeed holding another month’s volume of the commodity — thereby completing the three month’s worth of demand that has long been set as the desired volume for food security.

That is a problematic excuse, however. How do we know exactly how much is stored in the warehouses and the households of consumers? The practice has been for the NFA to actually hold the three months volume of rice in reserve in its warehouses, in addition to what is held by traders and households.

This is not to say that there is anything alarming in the fact that the NFA today holds only two months of buffer stock. Given the volume of rice being smuggled into the country, we surely must have sufficient rice stored. But when a really devastating typhoon hits us before the harvest, we will be at the mercy of rice speculators. Given the tremendous losses of the NFA in fulfilling its mandate, this might be a tolerable risk to take.

The other concern is spoilage in the NFA warehouses. Had media covered this aspect with a little more vigilance, these facts might have been brought to light. Of ten warehouses checked, only one had significant amounts of spoilage. Much of what was found spoiled were iron-fortified rice stocks mandated by RA 8976.

The spoilage is not due to exceptionally incompetent warehouse management. The fact is: there are no buyers for the fortified rice. The rice is costlier. Existing technology causes the fortified rice to be grayish, with a rather unwholesome smell along with a strange aftertaste. Even if the fortified rice is given away free, end-users will tend to wash the grains repeatedly until the expensive vitamin fortification is taken out and flushed down the drain.

Is RA 8976 wrong? Perhaps not, but we need to develop better technology for fortification as well as consumer education about the discolored rice. The market, to be sure, will not be supportive of fortification. It makes the commodity costlier and consumers are hostile to the product. The only way for the law to be enforced is for government to subsidize fortification and then force consumers to accept it. In this country, we want our rice to be white and fragrant.

There is another law that requires all electrical goods imported into the country to secure an Imported Commodity Clearance (ICC) from the Bureau of Product Standards (BPS) of the DTI. The objective of that law appears well-meaning enough: to protect our consumers from substandard electrical products that could cause fires or harm consumers.

The problem with the implementation of this law is that the BPS is said to have only five technicians in its laboratory to check thousands of products imported into the country. Importers who bring in products will have to wait nine months to a year before securing the ICCs that will allow them to release their imports to the domestic market. That implies tremendous financing and warehousing costs to the traders.

More often than not, the products are denied clearances. According to a trader I talked to, the BPS maintains quality standards on some products that are more demanding than even European standards. From his anecdotal account, nine out of ten imported products fail to secure clearances after nearly a year’s wait.

That bottleneck has encouraged traders to bribe officials at the Bureau of Customs in order to secure release of goods even without ICCs. The goods are then tagged with fake BPS stickers and sold down the market.

It used to be, according to my informant, that the “fee” for releasing goods without ICCs used to be P15,000 per container. That is in addition to other bribes paid for getting papers done at the ports. Under the new dispensation, he claims, the “fee” has been raised to P20,000 per container.

That seemed innocuous enough until we did the large numbers. At P20,000 per container times about 1,500 containers passing our ports each day, the take could run up to P30 million daily. That means, these undocumented “fees” add up to just under a billion pesos each month!

Another well-intentioned law, passed without provision for efficient enforcement, simply created one other hurdle for corrupt officials to exploit. The law requiring ICCs unintentionally produced a windfall for the corrupt vermin who transformed the Customs area into another fat checkpoint for “tong”.

Of course, the consumer remains as unprotected as ever. Substandard commodities flood the local market. The end-users of these commodities pay a higher price for them to offset the costs of corruption.