DA denies fertilizer overpricing, says 'corruption-free' procurement process followed

The Department of Agriculture (DA) on Thursday denied allegations that the fertilizers distributed by the government under its COVID-19 aid program were overpriced.

At a virtual press briefing, Agriculture Secretary William Dar emphasized that the purchase of fertilizers have undergone a “clean and corruption free” procurement process.

Dar refuted the claims of anomaly as he explained that the procured fertilizers were actually cheaper compared to national averages.

“We have initially procured a total of 1,811,090 bags of urea fertilizer at a price lower than the national average retail prices of 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. The volume procured comprises four of the 16 lots for wet season 2020 cropping,” Dar said.

"Such prices were a lot cheaper compared to previous purchases at the regions, ranging from P1,300 to P1,500 per 50-kilo bag of urea fertilizer," he said.

Hence, the Cabinet official said that at less than P1,000 per 50 kilograms, “we are already saving a lot for the government.”

“And there is a downward trend of prices, as we are conducting a more transparent centralized bidding through the DA Bids and Awards Committee (BAC),” he said.

The DA's statement came following allegations by several farmers that the fertilizers were overpriced by over P200 million.

The Agriculture chief said it has completed the procurement of the first batch of fertilizers under the Rice Resiliency Project, strictly following the procurement modality of negotiated procurement or emergency purchase, pursuant to Section 53.2 of Republic Act No. 9184 and Government Procurement Policy Board (GPPB) NPM 003-2020 protocol under the “Bayanihan to Heal as One Act” and the GPPB resolution.

The P1,000 per 50 kilograms approved budget for contract (ABC) was pegged after consultation with various players in the fertilizer industry, and recommendation of the DA's Fertilizer and Pesticide Authority (FPA) based on a four-month price monitoring trend, Dar said, citing the DA’s Bids and Awards Committee (BAC) Secretariat.

“The DA-BAC considered the ABC submitted by the end-user of P1,000 per bag. As per end-user, the DA Operations Group, headed by Undersecretary Ariel Cayanan, the P1,000 was based on the FPA and PSA retail price of urea,” he said.

The DA conducted a series of bidding that attracted fertilizer manufacturers and distributors in the country, starting on April 29, 2020, for the procurement of 5,691,477 bags with the ABC of P5,691,477,000.

It has issued the notices of award to the two winning fertilizer companies namely:

• La Filipina Uy Congo Corporation for the delivery of 97,615 bags at P990/bag to Region 4A; 694,904 bags at P995/bag to Region 6, and 911,073 bags at P995/bag to Region 3, on May 8, 2020 and May 14, 2020, respectively

• Atlas Fertilizer for the delivery of 107,498 bags at P900/bag to Region 7 on May 14, 2020.

“Currently, there was a review on the groupings by the end-user, resulting to an increase in the number of lots from 12 to 26 lots for the other regions. The respective bidding for the 26 lots are ongoing,” Dar said.

“I can personally vouch for the truthfulness and trustworthiness of the procurement process that the DA-BAC has exercised for these fertilizers. Guided by our Legal Office and in constant consultation with the GPPB, we made sure we followed to the number the prescribed procurement procedure as required by the law,” he said.

Dar said he has earlier instructed the DA-BAC to look into the most feasible and fastest way to provide for the fertilizer in time for the main wet cropping season.

“As part of the process, we had to disqualify those who simply did not comply with the requirements. For instance, one winning supplier failed to comply to the availability of the goods on the actual date agreed upon in the specifications,” said DA-BAC Chair Undersecretary Waldo Carpio.

The DA has also streamlined the procurement process for the remaining bid lots to ensure that the suppliers comply to every requirement that is advantageous to the government and the people.

"This is one of our responses to the call of President Rodrigo Roa Duterte to provide transparency and integrity in all government transactions and interventions, as part of our recently created 'integrity circles,' dubbed as 'Agriculture Dialogue and Information Network Groups' or ADING," Dar said.

"ADING is a systematic and institutional system that will enable us to monitor and evaluate our agri-fishery policies, programs, and projects on the ground, and if these are effectively and cost-efficiently implemented, without any shade of graft and corruption," he added. -MDM, GMA News