P 1.8-B fertilizer deal imposes ‘heavy conditions’ on farmers

By: Karl R. Ocampo, Tonette Orejas, Philippine Daily Inquirer, 23 Jun 2020

MANILA, Philippines — The P1.8-billion fertilizer supply deal of the Department of Agriculture (DA) under its COVID-19 response program is not only overpriced but has also forced farmers to turn to loan sharks, former Agrarian Reform Secretary Rafael Mariano said on Monday.

Mariano’s allegations came as four groups called for an investigation of the program and the filing of graft charges against agriculture officials involved in the allegedly overpriced supply contracts.

The DA has maintained that procurement procedures were followed.

Mariano, now chair emeritus of the farmers’ group Kilusang Magbubukid ng Pilipinas (KMP), said the DA had been giving farmers two free bags of urea fertilizer for every hectare of rice land. But farmers need to buy on their own at least two sacks of the same fertilizer before they can get the freebie, he said.

The two free bags can only go to those who have received palay seeds under the rice resiliency project.

According to Mariano, these requirements “limit the chances” of farmers in getting aid from the DA. “These are heavy conditions and drive the farmers to turn to usurers,” he told the Inquirer by phone on Monday.

Noel Reyes, DA spokesperson and assistant secretary for strategic communications, said the agriculture department used the marketing scheme, “Buy 2, Take 2,” in distributing the fertilizer.

“The DA had done this in previous years under the national rice program,” Reyes said.

Negotiated contract

Mariano earlier denounced the DA for buying allegedly overpriced fertilizer in a negotiated contract using funds from the Bayanihan to Heal As One Act (Republic Act No. 11469).

Urea was sold for P870 a sack at a time when the DA picked two suppliers that sold it at P900 to P995 a sack, he said.

On June 11, Agriculture Secretary William Dar said his department had bought 1,811,090 bags of urea fertilizer. The DA began the emergency purchase of 5,691,477 bags at an approved budget of P5.69 billion.

Mariano said the fertilizer subsidy should have been in the DA’s regular program and thus could undergo the regular bidding process.

Samahang Industriya ng Agrikultura (Sinag), an industry umbrella organization, said the reference price that the DA had used in the fertilizer program was a form of “centralized corruption.”

Notices of award for P1.8 billion were issued last month to two suppliers—La Filipina Uy Gongco Corp. for P1.69 billion at P990 to P995 a sack for supply contracts covering Calabarzon, Central Luzon and Western Visayas; and Atlas Fertilizer for P96.74 million for a supply contract in Central Visayas.

‘Pure fiction’

“That’s pure fiction,” Sinag chair Rosendo So said of the DA’s baseline rates.

“They invented those numbers to justify the overpricing. You can go to any outlet store across Central Luzon and you will not encounter such prices. The average price is only P850 per bag. That means under the negotiated bidding, there’s a difference of almost P150 per bag,” So said.

Dar said the baseline prices were recommended by the Philippine Statistics Authority and the Fertilizer and Pesticide Authority. The rates included transport costs going to regional offices from the DA central office in Quezon City.

The agriculture secretary noted that price monitoring reports in Central Luzon—where Sinag said fertilizer prices were lower—showed that the average price was P978 a sack as of June 19.

Reyes said the price was based on the average prevailing market price of urea from January to May.

The fertilizer subsidy was not in the DA regular rice program or in the P10-billion rice competitiveness enhancement fund, according to Reyes.

“It is a new initiative under the rice resiliency project, which is part of the umbrella ‘Plant, Plant, Plant’ program,” he said.

‘Wrong’ fertilizer

Giving urea during the wet-cropping season was wrong because it would weaken the palay, Mariano said, adding that the fertilizer needed the “14-14-14” kind for the plant to survive.

The purchase should be looked into because it involved public funds intended for assistance to those affected by the pandemic, he said.

Sinag, Federation of Free Farmers (FFF), Bantay Bigas and National Federation of Peasant Women also called for a probe of the fertilizer program.

Besides fertilizers, the DA did not bid out seeds, machinery and other supplies, according to FFF national chair Raul Montemayor.

“If this remains unaddressed, this would only lead to worse corruption, depriving farmers of due support, especially during this pandemic,’’ Bantay Bigas spokesperson Cathy Estavillo said.

Grievances came a month after the DA created the Agriculture Dialogue and Information Network Groups (Ading), which was aimed at keeping the DA management in check as President Duterte called for “transparency and integrity in all government interventions” amid the pandemic.