The National Food Authority granted an ‘original proponent status’ to listed Agrinurture Inc. for its unsolicited joint venture proposal for the financing and purchase of imported rice to help augment the country’s buffer stock.
Agrinurture said in a disclosure to the stock exchange it received a letter from NFA acknowledging receipt of its proposal and that the company was considered and recognized as original proponent.
Under the proposed JV agreement, the ANI consortium will finance the supply of NFA rice with no cashout on the part of the government.
Both parties will jointly determine the origin, suppliers, delivery and arrival periods, packing and loading and discharging ports.
The NFA will solely determine the type of commodity to be imported, specifications and quantity.
As accepted by NFA, the ANI consortium will import 500,000 metric tons of rice, equivalent to two weeks of national inventory of subsidized NFA rice per quarter.
Agrinurture said as NFA would not release a single peso for the purchases, the state-run agency could use its budget to buy more palay from local farmers or import more rice as needed.
Under its mandate, the NFA is required to ensure national food security and to stabilize supply and prices of staple cereals like rice both in the farm and consumer levels.
The agency is required to maintain a rice buffer stock good for 15 days, and good for 30 days during lean months.
The Philippines has a daily rice requirement of 32,750 metric tons. ANI said the planned 500,000 metric ton importation would be just enough to fill NFA’s 15-day requirement.
The NFA needs to import more during the lean months to match the mandate of President Rodrigo Duterte to maintain 60 days inventory.
ANI said the joint venture proposal would not replace local supply to the detriment of local farmers. Instead, it only aims to augment the country’s rice inventory at no cost to the government.
It said that aside from not bearing the costs of importation, the NFA would have no risk or exposure to losses. All risks will be borne by the ANI consortium from the time of purchase up to the point of dealing with undisposed stocks.
ANI said that after being granted original proponent status, the project proposal would now proceed in accordance with both the technical and legal processes under the National Economic and Development Authority’s guidelines.