LAWMAKERS were urged by a former Agriculture secretary to pursue their respective investigations into allegations of overprice in the contracts for urea fertilizer under the government’s emergency stimulus program in response to the Covid-19 pandemic.
Federation of Free Farmers President Leonardo Montemayor said the Department of Agriculture must address the complaints raised by farmers that the winning bids were higher than prevailing retail prices.
“One would expect that since it was a centralized bidding, and they were buying in bulk, the winning bids should be lower than prevailing retail prices,” said Montemayor, who led the Department of Agriculture during the Arroyo administration.
“What happened here goes against common sense. How will the DA explain to farmers why the retail price is lower when it already includes additional costs?” he wondered aloud.
The DA had set a ceiling price of P1,000 per bag of urea fertilizer for supply contracts across the country worth P5.69 billion under its stimulus program Ahon Lahat, Pagkaing Sapat Kontra Covid-19 (ALPAS sa Covid-19).
In May, the first contracts worth P1.8 billion were bid out, and suppliers La Filipina Uy Gongco Corp. and Atlas Fertilizer bagged the supply for Central Luzon, Calabarzon, Western Visayas and Central Visayas.
Amid the farmer’s complaints that the initial winning bids were higher by as much as P150 per bag, the DA pushed through with the bidding for succeeding supply contracts worth P1.3 billion.
As with the first centralized bidding process, only one bidder was qualified per lot last month—Goldman’s Supply Corp. for North Cotabato; First Planters Agri-Solution for La Union, Ilocos Sur and Pangasinan; and Universal Harvester Inc. for Cagayan, Isabela, Nueva Vizcaya, and Quirino.
DA officials earlier stressed they had followed the procurement law to the letter, and pointed out that DA’s purchase caused retail prices of the farm input to go down.
However, Montemayor said in a statement sent to media on Sunday, “A lot of questions remain unanswered. These congressional investigations must push through because these are in response to legitimate issues raised by farmers on the ground who will be most affected by these issues. It is the duty of the House of Representatives and the Senate to act on this.”
Montemayor cautioned Agriculture Secretary William Dar against relying solely on the price monitoring reports submitted by the Fertilizer and Pesticide Authority (FPA) and the Philippine Statistics Authority (PSA).
Dar had said the winning bids were not grossly disadvantageous to the government since they were all lower than average price of urea from P1,043 to P1,062 per bag in March to May.
Dar explained that they were able to procure over 1.8 million bags of fertilizer at a cheaper price compared to national average retail prices and below their set approved budget for the contract (ABC).
The DA had set a P1,000 per bag ABC for the procurement of 5.691 million 50-kilogram bags of urea, while the winning bids ranged from P900 to P990 per bag.
The DA explained that both the ABC and the winning bids were lower than the prevailing national average retail price of urea fertilizer at the time of procurement.
Citing data from the FPA, the DA said urea fertilizer cost P1,035.60 for April 27 to May 1; P1,037.53 for May 4 to 8; and P1,040.68 for May 11 to 15.
Data show otherwise–Sinag
Groups like the Samahang Industriya ng Agrikultura (Sinag) claimed, however, that the DA’s fertilizer procurement is overpriced as prevailing retail price of urea fertilizer in the market today is only about P850 to P880 per bag, which is P50 to P140 lower than the winning bids.
Agriculture Undersecretary Waldo R. Carpio said earlier in an interview that DA is guided by the data from FPA and PSA in setting the ABC for the procurement, hence, they will not change the ABC for the bidding of the remaining lots.
Dar argued that the retail prices of urea fertilizer declined after the DA undertook the procurement, which is the goal of the centralizing bidding.
“We started the bidding in April and that is the time that retail prices also started to go down. That’s the outcome of the process, retail prices declined,” he said.
Montemayor said, however, that besides the FPA and the PSA, “the department should also check on the ground using its own people at the regional offices, agri stakeholders, and distributors, among others.”
Montemayor likewise urged the DA to crack the whip on winning bidders who fail to deliver their supply, saying this will have an impact on food security and rice production.
“Farmers are racing against time because of the cropping season. By now until August, they should have already planted so they can maximize production. Otherwise, farmers will be forced to plant without any fertilizer, and this will impact on the volume they will produce,” he said.
The chairman of Sinag, Rosendo So, earlier said that La Filipina Uy Gongco failed to deliver its obligation of 911,073 bags of urea fertilizer in Central Luzon by the end of June.
As of June 30, the supplier was only able to deliver about 110,000 bags of fertilizer, or about 12 percent of its total obligation, according to So.