BY REGINA BENGCO

PRESIDENT Arroyo yesterday decided to scrap rice procurement through bidding and will opt for other modes such as government-to-government contracts and buying locally to maintain a 30-day buffer stock until the end of the year.

Arroyo announced her decision during an informal media interview in Camarines Sur.

Agriculture Secretary Arthur Yap confirmed the new policy.

"I think the important thing to note is we will enter the July 1 lean months with more than 30 days buffer stock. That's the most important thing that we've managed to contract, the 10 percent gap. So whatever we're going to be buying in the coming months, we have flexibilities and it is to maintain the buffer stocks up to December, because that July 1 stock will be depleted if we don't add to it," Yap said.

Yap, in an ambush interview in Malacañang, said the options that can be considered under the Government Procurement Act (R.A. 9184) are government-to-government contracts or an executive agreement and a negotiated contract in case of a failed bidding.

He said the private sector could also import and the National Food Authority could buy locally. He said he has ordered the NFA to buy the last remaining harvest for the summer crop.

He said he has invited the wholesalers and traders to join the May 9 private sector tenders for 163,000 metric tons of rice.

He said government can both buy from local farmers and do the government-to-government deal to buy 400,000 metric tons needed to maintain the 30-day buffer stock throughout the year.

"At this time when we see that the world is going through these very constricted supply phase, we just want to be sure. That's why yung importation rin natin paniguradong inventory na iyon," he said, adding that government raised its buffer stock level from 15 to 30 days.

Government scrapped Mondays' tender for 675,000 tons of rice because Vietnam's state-owned Vinafood II, the sole bidder at the tender, failed to supply a bank guarantee. Instead of the tender, an auction for 163,000 tons for the private sector was set for Friday.

Yap said government-to-government deals can help ease world prices because public tenders, such as what the Philippines has been conducting, drives up prices because the winner also turns to other suppliers.

"We have reason to believe that when transactions are made at least outside the glare of big public tenders, there is every reason to believe that prices can be negotiated lower than international benchmark prices," he said.

BETTER OFFERS

Yap said the Philippines is pushing for government-to-government deals to safeguard the transparency of the procurement and "because we want to ensure that the Philippines gets better offers."

Asked on the Philippines' position on the proposed creation of an Organization of Rice-Exporting Countries (OREC), Yap said what is important is to support greater trade flows into the world market "because when trade flows are being controlled, that's when speculation comes in and prices get affected."

Thailand, the world's biggest rice exporter, yesterday backed off on its unpopular "OPEC-style" rice cartel proposal, with Foreign Minister Noppadon Pattama saying if Thailand was going to set up a rice cartel to fix the price, "that would worsen food security."

Thailand's rice exports account for a third of the world's total.

The cartel would have been composed of Thailand, China, India, Pakistan, Cambodia, Myanmar and Vietnam.

DRIVE INTENSIFIED

President Arroyo, in her opening statement at yesterday's Cabinet meeting, said government will intensify its campaign against price gouging.

In Camarines Sur earlier in the morning, Arroyo announced the earmarking of P15 million for the construction of additional irrigation canals in Albay to boost food production in the province.

She said special attention should be given to government farm-to-market road projects as well as the planned P200 million construction of two dams in Albay province to increase rice production.

ADMISSION URGED

Sen. Manuel Roxas II said the failed bid in Monday's tender should serve as a fair warning to government to consider long-term solutions to the rice problem.

"First, admit that there is a problem. Secondly, come up with a concrete plan that includes both short-term and long-term solutions to solve the problem. Ang problema, sa unang hakbang pa lang ay hindi na tayo nagpakatotoo," he said.

He said maintaining a business-as-usual attitude despite the rice, food, oil and energy crises will plunge more families in the throes of hunger.

Roxas also proposed that all conversions of irrigated land be stopped.

FARMERS' RALLY

At the agriculture department's office in Quezon City, about a hundred farmers from Southern Tagalog staged a rally lambasting the Arroyo government's import policies.