SOP No: GM-DN09

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SOP NO: GM-DN09 (List of Exhibits/Attachments)

Mission: Technical Support Services

Area: Grains Marketing (GM)

Title: Revised Rice and Corngrits Distribution and Retailing Policies and Procedures

Date Approved/Issued: 11/04/1994

Date Effective: 11/01/1994

Digest:

I. TERMS OF REFERENCE

A. Rationale

B. Objective

C. Scope

D. Basis

II. IMPLEMENTING GUIDELINES

Distribution may be categorized into two (2) activities namely distribution thru marketing outlets and distribution direct to end consumers. The National Food Authority (NFA) shall resort to different distribution schemes as maybe applicable for a particular situation in a given place for a specific period of time. It shall be part of the agency's strategy towards market stabilization in response to the ever-changing prices and volume of grain supply and demand.

The approving authority for the implementation of a particular scheme shall be the Administrator upon the recommendation of the Director for Marketing Operations and Assistant Administrator for stabilization. The following are some of the distribution schemes which may be resorted to by the Agency from time to time.

1. Regular Distribution Scheme

These are selling strategies which are regularly implemented at any time of the year.

1.1

Institutionalized Distribution Program (IDP)

This program shall use institutions or any marketing arm accredited by NFA to sell NFA rice and corngrits at the prescribed selling price. The IDP shall be operated through the Bigasang Bayan distribution program under a separate SOP.

1.2

Cash Sales to Government Offices

This scheme is resorted to support government programs in time of

disaster/calamity or as added benefits for government employees (e.g. rice allowance). This scheme does not require prior approval of the Administrator except for issuance of a Selling Price Bulletin (SPB). Pricing shall be based on retailer's price as per latest SPB approved by the Administrator. Approving official shall be the PM/OIC.

1.3

Cash Sales to Private Institutions

This scheme is intended as a support to private institutions (non-governmental organizations) in rendering charity work, assistance during any disaster/calamity and other socio-civic activities. This includes also private institutions availing of the program for their employees' rice allowance. The volume of NFA rice to be sold shall be in accordance with the NFA's stock position and distribution program. Rice to be sold shall be based on consumer's price per latest approved SPB. Approval shall be in accordance with the following volume and levels of authority.

RECOMMENDING

VOLUME

APPROVAL APPROVAL

1 - 50 BAGS APM PM/OIC

51 - 100 BAGS PM RD *

101 - 200 BAGS DMO DIRECTOR Dep. Adm. for

Operations

MORE THAN 200 BAGS Dept. Adm. for Administrator

Operations

* In the absence of the approving official, the official next in rank shall execute the action.

** In his absence, the Asst. Administrator for Stabilization shall execute the action.

*** In the absence of the Administrator, the designated Office-in-Charge shall execute the action.

This scheme shall also be supported by the following documents :

a. Purchase Order (PO) or a letter of intent/request signed by the head of the purchasing institution stating among others reason and volume for purchase, nature and number of recipients, outlets and mode of distribution.

b. Notarized Deed of Undertaking specifying the purpose of rice purchase, that such rice purchase is not for resale and that any diversion thereof shall subject the offender

to whatever sanctions NFA deems appropriate.

1.4

Cash Sales to Institutional Consumers

is shall include consumer cooperatives, hotels, restaurants, hospitals, other private agencies and individuals. Pricing shall be on consumer's price per latest approved SPB. Approving officials shall be based on Item II.A.1.3.

1.5

Rice Sales to Relief Agencies, Government or Private

The purpose of this scheme is to set-up a quick response mechanism to support and assist government efforts in relief operations and rehabilitation during and after emergencies and calamities in any part of the country (refer to approved Memoranda, Guidelines and SOP on NFA's Disaster Preparedness Program.

a. Such sale are limited to the Department of Social Welfare and Development (DSWD), Philippine National Red Cross (PNRC), Local Government Units (LGUs) and members of Congress as well as recognized civic, charitable and disaster councils, but only during calamities and emergency situation as declared by Malacanang.

b. It must be covered by appropriate Memorandum of Agreement (MO
A) or by Application or through Purchase Order (PO) as required under the program.

c. Fifteen (15) days credit are allowed for DSWD, PNRC and LGUs under existing MOA/Guidelines, while purchases of Legislators shall be paid through Notice of Cash Allocation (NCA) from the Department of Budget and Management (DBM).

d. Purchases of private agencies and donors are payable in cash or manager's/cashier's check, Donor may arrange withdrawal of stocks nearest or acceptable to calamity area.

e. Quantity and variety are subject to available NFA stock inventory.

f. Applicable purchase price is NFA's wholesale price based on the latest Selling Price bulletin (SPB) and withdrawable by buyer ex-warehouse.

2. Special Distribution Scheme

These are selling strategies which are implemented on a case to case basis depending on the prevailing situation.

2.1 These special distribution scheme require prior and specific authority from the Administrator as to the cereal type, price, market outlets, area, duration, scheme, etc.

Cash Sales to Accredited Individual Retailers

This is the distribution scheme wherein grains are sold to accredited retailers based on authorized price ceiling and quota.

Mobile Sales Direct to End-Consumers

A distribution scheme wherein stocks are sold directly to end-consumers ex-truck in designated areas.

Cash Sales to Employees

NFA employees are allowed to purchase rice from NFA subject to volume, restrictions. Refer to approved Circular-Memoranda.

Sales of Rice on Credit

This scheme maybe resorted to facilitate rice distribution during times of surplus and excess in rice stocks through accredited outlets/institutions. It shall be supported by a Memorandum of Agreement and established collaterals as approved by the Administrator.

Sale on Consignment to Institutions

A scheme wherein NFA and any private or government institution agrees on a distribution arrangement to be paid when the stocks are sold. It shall be covered by a Memoranda of Agreement and supported by established collaterals as approved by the Administrator.

Open Sale

Stocks are sold in large volume regardless of the allocation assigned to accredited outlets and institutions. This scheme is resorted to during times of surplus/over supply.

Mill Buy Scheme

This may be resorted to only when there are excess stocks scheduled for milling wherein the miller is given the option to buy the milling recoveries.

2.2 The following special distribution scheme requires approval at the level of the Regional Director.

a. Mobile Sales Direct to Retailers

This scheme is used during lean months, calamities and when there is short supply of rice and in areas where there is an irregular supply of rice.

B. General Policies

1. Locally procured stocks are initially intended to remain in the province to meet the consumption requirement of the province where it was procured. These are earmarked for distribution during lean months of supply.

2. First come first serve policy for sale of stocks shall be followed.

3. Sale of rice and corngrits on TITO basis shall be strictly prohibited.

C. Accreditation of Buyers

At any point in time, sale and distribution of NFA rice and corngrits shall be made only to outlets indicated in the SPB. These outlets shall be recognized under the system of accreditation considering the following basic policies and criteria :

1. Retailers must have current license with the NFA and engaged in the business for two (2) years.

2. Government offices by virtue of their being such are automatically accredited buyers.

3. Private institution who are engaged in grains distribution for purposes of assistance in disaster/calamity relief operations, charity work and other socio-civic activities which are not profit oriented or for rice allowance of their employees must possess current accreditation with (DSWD) and current registration with NFA (per Revised Rules and Regulation on Licensing and Registration.

4. In the event of a stepped-up distribution system and market involvement (such as during surplus situations), outlets other than those stated above which are authorized under the SPB, should have a current registration/license with the NFA.

D. Allocation System

1. Bigasang Bayan

1.1 The grains allocation (rice/or corn) of Bigasang Bayan outlets (BBOs) in the province is determined by establishing a Retail Distribution Target (RDT) which is derived from the total distribution objective of the province encompassing the following :

- Food Security Stocks

- Retail Sales through BBs

- Sales to Government Institutions/LGUs

- Stocks for other contingencies

a. The RDT refers specifically to that volume to be sold through the BBOs only.

b. As the distribution objective is based on population and total consumption

requirement (TCR), the RDT is also derived from the consumption requirement (TCR), the RDT is also derived from the consumption requirement of that portion of the population projected to be serviced by the BBOs.

c. The portion pr part of the population targeted to be supplied with NFA rice and corn, refers to NFA's share or participation in the grains retail business in the area, in this case the Province.

For this purpose, the following equation emerges :

RDT = TCR x NFA % share

where :

RDT = the Retail Distribution Target or Provincial BB allocation for the month.

TCR = the Total Consumption Requirement of the Province computed monthly as follows :

Annual Per Capita Consumption in Bags

TCR =

Population x Annual Per Capita Consumption in Bags

NFA % SHARE = Recorded average share or participation of NFA in the rice sales of the Province computed monthly.

NOTE : Refer to approved Guidelines on BBO.

2. Special Scheme

2.1 As basis for determining the quantity that shall be sold to retailers, a weekly allocation per retailer shall be set. NFA P.O.s shall determine the weekly allocation based on the following :

a. NFA stock position

b. Prevailing market supply/demand/price situation

c. NFA distribution program

d. Projected rice and corngrits requirement per area

e. Retailers declared capitalization

2.2 The weekly allocation shall be primarily based on the retailer's declared capitalization, computed as follows :

Capitalization Per Retailer

Selling Price of Cereal

Where :

Capitalization

- is the amount of capital per type of grain declared in the license applied for .

Selling Price of Cereal

- is the NFA prevailing selling price of the variety of cereal that the retailer is buying.

3. Allocations shall not be cumulative, i.e. weekly allocation or the balance thereof not availed of during the previous week shall not be added to the current week but shall be forfeited.

4. The allocation of apprehended retailer/BBOs shall be withheld unless cleared from any violation;/case by the Enforcement and Investigation Section.

5. Where a grains businessman is licensed for retailing and other lines of activity like wholesaling, the final determination of whether or not he is entitled to allocation shall be at the discretion of the PM.

E. Bigasang Bayan/Retailer's Passbook

1. The accredited BB/Retailer shall accomplish a BB/Retailer's Information Sheet (RIS - Exhibit 1) and submit two 1" x 1" pictures of the owner and representative and a Special Power of Attorney for the authorized representative to the Registration and Licensing Section (RLS).

2. Based on the RIS, a BB/Retailer's Passbook (Exhibit 2) shall be issued in the name of the retailer/BBO whose name appears on the NFA grains license. It shall be signed by the Provincial Manager. A minimal fee shall be charged to defray cost of printing of passbook based on prevailing costs.

2.1 All entries in the passbook pertaining to personal/business data shall be handwritten by the RLS personnel

3. The BB/Retailer's passbook shall be presented by the retailer/BB's authorized representative everytime a purchase/withdrawal is made or when demanded during inspection by NFA's Provincial Investigator (Sr. Enforcement and Investigation Officer).

4. The Record of Purchases/Withdrawals portion of the BB/retailer's passbook in which a column for the date and variety are provided shall be filled-up by Marketing Operations Section (MOS). Likewise, the amount and OR No. column shall be filled-up by the Cashier whenever payment by BB/retailers of rice/corngrits allocation is made.

4.1 All the columns for the data provided in the Record of Withdrawals portion of the BB/retailer's passbook shall be filled-up by the Warehouse Supervisor (Sr. GOO) everytime a withdrawal is made.

5. All BB/retailer's passbook shall be revalidated yearly before the peak months of the distribution. The word "REVALIDATED" shall be stamped immediately after the last entry of the previous purchase/withdrawal. It shall indicate the date of the revalidation and the signature of the Provincial RLO (Sr. GOO).

5.1 No payment/withdrawal shall be accepted by NFA using BB/retailer's passbook which have not been revalidated

6. Mutilated and filled-up BB/retailer's passbook shall be surrendered to the RLS and marked "CANCELLED" accordingly, a replacement shall be issued for this purpose.

6.1 Lost BB/retailer's passbook shall be reported immediately to the NFA-RLS thru the submission of a notarized Affidavit of Loss. Replacement of the said BB/retailer's passbook shall depend on the validity of circumstances surrounding the loss.

7. Unauthorized alteration of the entries in the BB/retailer's passbook or any substitution of picture/s shall be a ground for the immediate cancellation/revocation of the BB/retailer's passbook.

7.1 Any violation or infraction enumerated in the Reminder Portion (Exhibit 2) of the BB/retailer's passbook and other pertinent provisions under P.D. No. 4 as amended and SOP, memoranda, circulars, etc. shall be a ground for the revocation of the BB/retailer's passbook notwithstanding the imposition of other penalties prescribed by NFA rules and regulation if evidence so warrants.

8. An index card per BB/retailer's passbook shall be maintained by the MOS. It shall contain all information on the BB/retailer's passbook including transaction details which shall be updated everytime purchases are made. It shall be filed sequentially per cereal type based on the BB/retailer's number.

9. The RLS shall determine the number of BB/retailer's passbook for printing based on existing accredited grains retailers/institutions/BBs. For purposes of control, the BB/retailer's passbook shall be prenumbered. Numbering of the passbook shall be as follows :

AA - xx yy - 0001

: : :

: : :__ sequential numbering of passbook

: :

: :_____________ region and province of issue based : on NFA geographical codes

:________________________ cereal type (i.e. RC for rice and CT

for corngrits.

10. NFA dry seal shall be affixed in the BB/retailer's passbook which shall part of the pasted ID pictures to easily determine substitution of pictures.

11. The date of the issuance of the BB/retailer's passbook shall be indicated/stamped in the first page containing the personal/business data.

12. A retailer/BB shall be issued only one (1) BB/retailer's passbook for both main and branch stall.

F. The DMO shall prepare SPB which shall be the official basis for authorized outlets and pricing. Approval of SPB shall be as follows :

Recommending Approval : Asst. Administrator for Stabilization

Deputy Administrator for Operations

Approval : Administrator

The SPB shall always be consistent with the provisions of this SOP and amendments thereof.

Payment and Withdrawal

The BB/retailer's passbook shall always be presented everytime purchases are made. Only BB/retailer's passbook presented by the BB/retailer or their authorized representative shall be honored by the NFA P.O., that is, from serving the Authority to Accept Payment (AAP) up to the withdrawal of stocks. The AAP shall be pre-numbered by the P.O. Copy distribution shall be as follows :

a. Accounting

b. Buyer

c. File P.O.

2. Retailers/BBOs interested to purchase their grain requirements in the area shall coordinate with the Provincial Operations Officer for the preparation of the AAP. The POO shall secure the approval of the PM/OIC on the AAP.

3. The field office shall ensure that the AAP is paid within the day of preparation. AAP not paid on the date of preparation shall be automatically invalidated/cancelled. It shall not be honored by the Cashier when payment is made.

4. Payment shall be made at the NFA cashier based on the AAP on cash basis or manager's/cashier's check. An Official Receipt (OR) shall be issued to document the payment made. All manager's/cashier's checks must be cleared from the concerned bank prior to the issuance of stocks.

5. An Authority to Issue (AI) prepared by the POO and approved by the PM/OIC shall be issued to the buyer. It shall indicate the designated warehouse where allocation withdrawal shall be made.

6. Buyers shall be required to withdraw all their stock purchases within a specified number of working days after the issuance of AI. Initial withdrawal shall be made immediately on the following working day reckoned from the date of AI. Failure of the buyer to withdraw stocks within schedule for reasons not attributable to NFA shall subject the buyer to pay a corresponding storage fee of P0.50/bag/day. The Warehouse Supervisor shall monitor the date/s of withdrawal thru the Warehouse Stock Issue (WSI) and shall withhold issuances pending the payment of storage fees.

6.1 Withdrawal of stocks by buyer shall commence not later than the first working day after issuance of AI. Stock purchases of 500 bags and below shall be withdrawn in one day. For purchases above 500 bags, withdrawal shall be at least 500 bags per day per buyer and shall be done in successive working days until all stock purchases have been withdrawn. It shall be the look out of the PM to ensure the smooth and efficient withdrawal operation in his province.

7. The BB./retailer's passbook and index card shall be regularly updated based on the transaction documents.

Monitoring and Reporting System

1. A monthly Grains Distribution Status Report (PORO-dist-01-187) shall be submitted by the P.O. to the R.O. It shall cover information on kind of grains sold, quantity, variety and monetary equivalent.

2. A Monthly Distribution Performance Report (ROCP-OPER-04.2-C92) shall be submitted by the Regional Office to DCP/DMO. It shall cover actual volume of grains moved, value and rate of accomplishment against pre-set targets.

3. The NFA Provincial Office shall send to DMO a daily wire report on rice and corngrints sales specifying quantity issued and existing corn inventory available for sale.

III. RESPONSIBILITIES

IV. FLOW CHART
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