Peasant Group Urges Noynoy to Prosecute Arroyo and Others for NFA Overpricing

The Kilusang Magbubukid ng Pilipinas says Malacañang should make public the report made by NFA administrator Lito Banayo about massive overpricing of rice during Arroyo’s regime.


MANILA — A farmers’ group wants President Benigno Aquino III and National Food Authority (NFA) administrator Lito Banayo to make public a report the latter submitted to Malacañang that reportedly exposed the previous administration’s less-than-above-board practices in rice importation. It also said the Aquino government should move for the prosecution of former president Gloria Macapagal-Arroyo and former agriculture secretary Arthur Yap for the anomalous overpricing of imported rice.

Recently, Banayo submitted a report to the president, stating that based on NFA accounts, rice imports from 2001 to 2010 were overpriced by an average of $60 per metric ton; while from 2008 to 2010, the overpricing increased to as much as to $125 per metric ton.

Banayo’s report has so far not been made public, but the Philippine Daily Inquirer got hold of it and ran a story on it on Friday.

Based on data from the Bureau of Agricultural Statistics (BAS), rice imports in 2008 amounted to 2.432 million metric tons, and in 2009 to 1.755 million metric tons.

Banayo was also said to have included in his report that the NFA allowed businessmen to import 200,000 metric tons to remove the pressure on the government to shoulder the costs of all rice imports, favored contractors were able to corner the allocations.

“While the purpose was correct, the procedures and practices were wrong. Instead of bidding out the service fees that would accrue to government, a ‘first come-first served’ method was employed, which allowed ‘favored’ participants to corner the allocations,” the NFA head reportedly said.

Among the findings were fictitious cooperatives and corporations were given the quotas, and the qualification standards were extremely liberal. Also, control measures were not put in place that allowed smuggled rice to piggyback on legal private sector-financed importation (PSF) imports.

The Kilusang Magbubukid ng Pilipinas pointed out that because of overpricing, imported rice prices were jacked up by roughly US$304 million in 2008, and US$219 million in 2009 — for a whopping total of US$523 million. Using Bangko Sentral ng Pilipinas’ (BSP) rate exchange of the US dollar for 2008 and 2009, the amount translates to pesos as P13.5 billion (P44.4746/$1) and P10.4 billion (P47.6372/$1), or a total of nearly P24 billion.

“This is potentially a far bigger corruption scandal — worse than the P728 fertilizer scam, and to think that the records cover only two years,” said KMP secretary-general Danilo Ramos. “The Filipino people have been robbed blind, and the country’s food security severely threatened. Those behind this massive theft should be pilloried.”

In January last year, farmers groups filed a plunder case against Yap, Arroyo and other agriculture officials in connection with P455 million ice-making machines the government had brought. Complainants said the machines were overpriced by P2.3 million per unit.

Aside from the P455 million ice-making machines scandal, there were other plunder and corruption complaints filed against Yap in connection with missing and highly questionable disbursement of agriculture funds during his term as secretary of agriculture.

The group dared the Aquino government to disclose the details of Banayo’s report and immediately punish those responsible. It said that the public has the right to know the contents of Bayano’s report because it had to do with public interest.

“We know Banayo is doing this again to save his own ass of the NFA’s financial problem. But not disclosing the details of this overpricing would definitely mean that he is considering the same practice in the future. Banayo acted helplessly about the wasted surplus imports last year. He did a lot of whining, but he never filed any cases against those guilty. He should be more proactive now,” Ramos said.

In the meantime, Ramos said there is no discernible difference between the programs of the previous Arroyo administration and that of Aquino when it came to agriculture and agrarian reform. He said that it was as if Aquino was merely picking up where Arroyo left off.

“Aquino has yet to make any decisive move against Arroyo and the crimes her administration committed against the Filipino people. So far, he has been citing the graft practices and the failures of his predecessor as a scapegoat for his own government’s shortcomings, but he hasn’t moved to make Arroyo legally liable,” he said.

Aquino, Ramos said, supports the full liberalization of the agriculture sector, continuing the previous administration’s policy of massive rice importation. According to him, Aquino was ‘hypocritical” when the latter criticized his predecessor for over-importing rice which ended up rotting in the warehouses of the National Food Authority (NFA).

“The Aquino government is implementing the same policies!” he said. He explained that the Aquino government’s moves to allow traders to increase rice importation on the one hand and slashing the NFA’s budget by P8 billion on the other proved the unmistakable bent of the government toward eventual the full liberalization of agriculture.

In effect, the government can be said to be deliberately compromising the capability of the NFA to purchase rice from local producers and farmers, while allowing rice imported from Vietnam and Thailand to flood the market. Because of the severe budget cut it suffered, the NFA’s local rice share will be reduced to 15% while the rest will be comprised of imported varieties.

Ramos said the NFA’s financial burden was a result of liberalization in the agriculture industry. “The effects of this devastating policy are further worsened by the chronic graft and corruption. The agency is in an unsalvageable state,” he said.

In 2010, farmers opposed moves to reduce the DFA budget and instead called for reforms that would improve the agency’s capacity to buy more local rice. (

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