SOP Library

SOP NO: Memo-AO-98-10-022

Mission: Stabilization

Area: Grains Marketing (GM)

Activity: Distribution (GM-DN)

Title: Guidelines in the Sale of Premium Grade Rice Thru Institutional Sales (I.S.)

Date Approved/Issued: 11/04/98

Date Effective: 11/01/94

Digest:

This program is envisioned to ensure immediate access both by the government and private
institutions to government rice particularly premium grade rice for their own
consumption/needs. With the importation of 300,000 MT of premium grade rice by the
Philippine government and considering that the bulk of the total rice supply is now in NFA's
possession, there is a need to add/increase existing market outlets of the NFA to widen its rice
distribution base.

1. To set policies in the distribution of premium grade rice thru private institutions and
establishments and all government agencies/instrumentalities.

2. To establish additional market outlet for NFA premium grade rice aside from the
wholesalers, retailers, etc.
 1. Coverage/Qualified Outlets
2. Requirements
3. Limitations
4. Mode of Sales
5. Pricing
6. Payment
7. Withdrawal
8. Control
9. Reporting/Monitoring

1. NFA Rules and Regulations;

2. Memorandum '98 AO-98-06-011 dated June 10, 1998;
3. IDM '95 DMOES-20 dated 28 July 1995

GENERAL POLICIES

1. All buyers shall secure a registration as institution from the NFA.

2. Institutions covered under the program shall have no outstanding loans/obligations

from the NFA,

3. The institution shall issue the grains directly toits employees/customers for their
consumption/own use.

4. In no case shall the institution issue/pass the rice subject of this guideline to its members/
employees at higher than their buying price from the NFA. However, the institution is
allowed to impute a reasonable handling and trucking cost to its members.

5. Quantity to be issued shall be based on the consumption requirements of the

institution if for own use or based on the number of employees if for employees
allowance/requirements.

PROMOTION

A team shall be created to undertake aggressive promotional and sales campaign among
government institutions and private companies/corporations composed of the following:

1. Team Leader
2. Sales Assistants/Representatives
3. Driver

The above team shall be responsible for the massive campaign of the Institutional Sales
Program.
The team shall visit institutions and undertake sales calls and explain the mechanics of the
program,
show samples of premium grade rice offered, etc.

COMMODITY

All NFA rice stocks offered for sale. This guidelines however, gives more emphasis in the sale of
premium grade rice to institutions.

COVERAGE/OUTLETS

Institutions shall refer to all government institutions (including the military and public schools) and
private institutions/establishment covered by SSS such as but not limited to:

1. Restaurants/Kitchenette
2. Hotels/Motels/inns/Lodging Houses
3. Hospitals/Clinics
4. Canteens/Eateries
5. Dormitories/Boarding Houses
6. Agricultural Companies
7. Shipping Companies
8. Logging Companies
9. Mining Companies
10. Seminaries
11. Charitable/Religious Institutions
12. Rehabilitation Centers
13. Orphanages
14. NGO's, Labor Organizations such as TUCP, KMU, etc.
15. Print and broadcast media organizaitons
16. Other Industrial/Commercial Establishments buying grains for their own
consumption or for their employees.

REQUIREMENTS

1. NFA Registration
2. List of employees who are interested to avail of the rice together with their
corresponding signatures as certified by the Head of Office/Personnel Manager
that the persons in the list are the existing employees of the agency/office.
3. Letter of the Head of Organization/Personnel Manager designating representative
who will transact business with NFA and duly authorized to receive the stock during
delivery to their office.
LIMITATIONS

1. Quantity/volume to be issued shall be based on the verified consumption of the

institution if for own use or based on the number of employees listed as certified/
endorsed by the Head/Official/Personnel Manager if for employees requirements
which is estimated at one (1) bag per employee per month. Minimum quantity
considered under this program is ten (10) bags per institution-buyer.

2. Maximum quantity to be issued per institution shall not exceed the three (3) months
requirements of the institutions/establishment. In case it purchases its three (3)
months requirements, the institution-buyer shall only be allowed to repurchase after
the lapse of three (3) months reckoned from the date of last purchase.

3. The premium grade rice to be purchased under this program shall be for the
institutions own consumption/use or for its employees and in no case shall this be
resold by the institution.

MODE/TERMS

Sale of rice shall be undertaken thru:

1. EX-NFA WAREHOUSE BASIS: Grains sold shall be picked up by the buyer at the
NFA warehouse. Handling expenses incurred from the warehouse to the scale and from
the scale to the truck shall be shouldered by NFA.

2. DELIVERED BASIS: Grains shall be delivered to the buyer at designated drop-off point
by the NFA for free within a 30 kilometer radius and subject to the availability of NFA
vehicle/truck. In excess of the 30 kilometer radius, the buyer shall pay the delivery fee
based
on the existing approved NFA trucking rates. Provincial Managers are given the discretion
to decide on the quantity to be delivered after considering the total/lump volume to be
delivered
for a certain route and the breakeven capacity of the vehicle/truck to be used.

PRICING

Selling Prices shall be based on the approved Selling Price Bulletins. At present, the approved
selling price for premium grade rice, RMR, and WMR to institutions are as follows:

Ex whse, including MTS

(Peso/kilogram)
NFA Institutional Price

Premium Grade Rice P 19.00

RMR 14.00
WMR 15.00

PAYMENT

1. Payment shall be on cash basis only, either in cash, managers check or cashier's check
payable to the "NFA" and shall follow the usual/existing NFA procedures on
documentation.

2. Company check may be accepted subject to the usual three (3) days clearing. No
delivery/
issuance shall be made pending the clearing of the said company check.

3. The delivery fee shall be in accordance with the existing delivery rates of NFA at the time
of
delivery and shall be limited to land routes only.

WITHDRAWAL/DELIVERY

1. The NFA designated warehouse/s shall issue rice to the buyer or his representative/s
upon receipt of the approved Authority to Issue (AI).

2. Issuances shall be made only to the buyer or to his duly authorized representative
subject to the presentation of an authorizatio from the buyer.

3. The buyer or a representative shall be present during the weighing and withdrawal
of the grains from the NFA warehouse to inspect the quality of grains to be issued
and witness the weighing of the grains.

4. The weight, quantity and quality of the stocks as received and acknowledged by
the buyer or his authorized representative on NFA official documents shall be final
and binding.

DOCUMENTATION

All issuances shall follow the usual/existing warehouse stock documentation

procedures/systems.

CONTROL

1. Provincial Managers are adviced to exercise precautionary and extra measures

in the sale of rice under the program to avoid undue diversion of NFA rice to the
commercial market.

2. Institution-buyers found violating the provisions of this guidelines shall be blacklisted

and shall be disqualified to continue joining the program
3. The NFA reserves the right to reduce or deny the request of the institution-buyer
depending on the availability of NFA stocks.

REPORTING AND MONITORING SYSTEM

Considering that this is part of our sales strategy, Sales thru Institutions shall be
included in the OPREP on a daily basis. However, to monitor the program, a weekly
consolidated Regional Report on I.S. shall be submitted to DMO inclusive of the
provincial breakdown and volume every Friday.

NO. OF NO. OF QTY AMOUNT PAID

PROV ORGN SERVED EMPLOYEES (BAGS) BASIC DEL. FEE TOTAL