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NFA okays ‘original proponent status’ to Agrinurture’s joint venture proposal

/ 01:48 PM August 16, 2018

Listed Agrinurture, Inc. (ANI) on Thursday disclosed that the National Food Authority (NFA) has granted ‘original proponent status’ to its unsolicited joint venture proposal for the financing and purchase of imported rice to help augment the country’s buffer stock.

In a disclosure to the Philippine Stock Exchange (PSE), ANI said it received a letter from NFA acknowledging receipt of its proposal and that the company has been considered and recognized as original proponent.

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Under the proposed JV agreement, the ANI consortium shall finance the supply of NFA rice with no cash out on the part of government. Both parties shall jointly determine the origin, suppliers, delivery and arrival periods, packing and loading and discharging ports. NFA, on the other hand, will solely determine the type of commodity to be imported, specifications and quantity.

As accepted by NFA, the ANI consortium will import as much as 500,000 metric tons of rice, equivalent to two (2) weeks national inventory of subsidized NFA rice per quarter. Since NFA will not release a single peso for said purchases, the agency can use its budget to buy more palay from local farmers or import more rice as needed.

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Under its mandate, 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. At any given time, the agency is required to maintain a rice buffer stock good for 15 days, and good for 30 days during lean months. Since the Philippine daily rice requirement is estimated at 32,750 metric tons, ANI’s 500,000 metric ton importation is just enough to fill NFA’s 15-day requirement. During lean months, the NFA needs to import more to match the mandate of President Rodrigo Duterte to maintain 60 days inventory.

ANI clarified that its joint venture proposal will 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.

Aside from not bearing the costs of importation, NFA has no risk or exposure to losses. All risks shall be borne by the ANI consortium from the time of purchase up to the point of dealing with undisposed stocks.

After being granted original proponent status, ANI said the project proposal will now proceed in accordance with both the technical and legal processes under the NEDA “Guidelines and Procedures for Entering into Joint Venture Agreements between Government and Private Entities,” ANI said.

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TAGS: Agrinurture Inc., Business, joint venture, National Food Authority, rice import
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