Monday, May 19, 2008


The widespread corruption at the National Food Authority (NFA), with particular emphasis on the importation of rice used as a buffer for the country's rice supply merits a closer study. The NFA has long been a milking cow of politicians. It is a low-profile agency and therefore attracts little attention. The NFA loses hundreds of millions of pesos every year. The following is a summary of corruption at the NFA:

- It is an open secret that each and every sack imported by the NFA yields P100.00 "commission" to all the players in control of this agency. (The country can easily import close to 1 million tons of rice per annum. You can do the math on the scale of corruption involved)

- The less obvious source of corruption is the cargo handling involved in hauling and transporting the rice from the international vessels to the various NFA warehouses.

- The NFA is so brazen in their corruption that they regularly do away with the bidding for the cargo handling services. Their 'modus operandi' would be to invite accredited cargo handlers to a bidding and then cancel the bidding. They then declare a failure of bidding and subsequently award a favored contractor through a negotiated contract.

- A less obvious barrier to entry of other potential bidders is to make the pre-qualifying requirements so complicated, making it impossible for accreditation. The favored contractor specifies the requirements so that it matches their company so perfectly.

- It is an open secret in the lighterage industry that there are more than ten (10) contractors who could do the cargo handling for the importation of rice. A cargo handler close to Malacanang has a virtual lock on NFA's business. What say you, Art Yap?

- The actual market price of the cargo handling on rice to the warehouse ranges from P300-P400 per ton. The NFA pays this 'Malacanang Crony' more than the market price. Subject to actual audit from the NFA, the industry estimates an overprice of P300 per ton of rice imported. A million tons of rice can thus produce a P300 million windfall for the corrupt operators.

Because of this, I won't be surprised if a section now in Malacanang has been converted into an NFA warehouse for the 'greedy group.'

(Image from

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