Lawmakers slam ‘overpriced’ P1.8-B fertilizer supply deal

"The Makabayan bloc is having none of Dar’s explanation."



The Department of Agriculture recently conducted a series of negotiated biddings for supply contracts of urea fertilizer worth P1.8 billion intended for distribution to four regions, namely Central Luzon, Calabarzon, Western Visayas and Central Visayas.

The deal, however, is being questioned by the Makabayan bloc of party-list lawmakers in the House of Representatives. They have filed House Resolution No. 992 seeking a joint inquiry by the Committees on Agriculture and Food and Good Government and Public Accountability on the procurement.

 The lawmakers cited monitoring by the Kilusang Magbubukid ng Pilipinas showing that the average retail price of urea in the regions covered by the supply contracts was lower by as much as P150 per bag (Tarlac at P850 per bag, Nueva Ecija at P830 to P870 per bag and Iloilo at P880 per bag).

 The lawmakers said the four supply contracts may be overpriced by some P271.66 million, which could have been used to buy 400,000 more bags at an average of P850 per bag.

 "The DA must have the sense to put on hold and/or suspend the succeeding bidding for the procurement of an additional P3.8 billion worth of fertilizer until the questionable bidding and procurement of the P1.8 billion fertilizer is given clarity," the lawmakers said.

 The resolution was signed by Bayan Muna party-list representatives Eufemia Cullamat, Carlos Zarate and Ferdinand Gaite, Gabriela party-list Rep. Arlene Brosas, ACT Teachers party-list Rep. France Castro and Kabataan party-list Rep. Sarah Elago.

Funding for the supply contracts came from the DA's stimulus program Ahon Lahat, Pagkaing Sapat Kontra COVID-19 (ALPAS sa COVID-19), which allocated P5.69 billion for urea fertilizer at P990 to P995 per bag.

Suppliers La Filipina Uy Gongco Corporation and Atlas Fertilizer bagged the initial four contracts last month amounting to P1.8 billion. Farmers, however, have complained that the P990 to P995 price tag per bag of the winning bidders was overpriced by as much as P150.

Joseph Canlas, chairman of the Alyansa ng mga Magbubukid sa Gitnang Luzon, said recent purchases of urea fertilizer showed a bag would cost only P830 in Tarlac, P810 in Pangasinan, and P840 in Nueva Ecija.

 Even Oftociano Manalo, national president of P4MP, a national alliance of rural-based organizations affiliated with the DA's Agricultural Training Institute, also said the P990 to P995 per bag retail price does not exist.

 "I personally bought two bags of urea fertilizer—one costing P830 and the other only P810. And these bags were delivered to my house, which is at least 6 kilometers away from the outlet in Rosales, Pangasinan...They are making fools out of us," Manalo said.

 Samahang Industriya ng Agrikultura (Sinag) chairman Rosendo So said the DA was in a position to negotiate for a lower contract price since it was buying in bulk and was dealing with importers. "The DA claims the higher contract price would cover distribution costs but it is the same for retail outlets. In fact, for retail stores, you go through the importer, the distributor, and the dealer until it reaches the retailer. And at every step there is additional cost, yet the retail price average is only P850. The DA went straight to the importer, but the price is P995 per bag. What kind of deal is that?” So said.

Worse, the DA disqualified a supplier who tendered a bid of P850 per bag of urea, citing the supplier's lack of available stocks of the fertilizer. But one of the winning bidders, La Filipina Uy Gongco, also did not have stocks on hand, despite the higher bid price of P990 and P995 per bag.

 The alleged overpriced fertilizer further raised suspicion because news reports stated that the winning bidder, La Filipina, does not also have available stocks of urea fertilizer nor has it shown any bill of lading to prove that it had incoming supply yet it still bagged the contract," the Makabayan bloc said in their resolution.

A bill of lading would indicate a detailed list of shipment of goods in the form of a receipt given by the carrier to the person consigning the goods.

Agriculture Secretary William Dar has denied any irregularity in the supply contracts, citing a survey by the department's Fertilizer and Pesticide Authority which showed that the average price of urea was from P1,043 to P1,062 per bag from March to May. "At less than P1,000 per 50-kg bag, we are already saving a lot for the government,” Dar said.

The Makabayan lawmakers are having none of Dar's explanation, and neither are farmers convinced by his argument.

The KMP has already called for the filing of graft charges against DA officials involved in the bidding, while the Alyansa ng mga Magbubukid sa Gitnang Luzon has asked the Office of the Ombudsman to start a motu proprio investigation.

With the House expected to look into the matter soon, even Senator Cynthia Villar has expressed her intention to call for a Senate probe.

 The alleged overpricing of fertilizer for farmers is unfortunate, particularly since it has taken place amid the COVID-19 pandemic, and the government already scrounging for more funds to assist those sectors adversely affected by the coronavirus outbreak.

The government's economic stimulus funds are intended to help farmers who have been pushed into even deeper poverty by the pandemic. But the alleged overpriced supply contracts may instead be bleeding them dry, and that's what the probe by lawmakers may ultimately reveal.

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Topics: Ernesto Hilario , Department of Agriculture , fertilizer supply deal , Makabayan bloc
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