SOP Amendment /

Addendum

Date : 07/01/2000

SOP Amedment / Addendum No. : GM-DL03.C

Title : Additional Guidelines on Dispersal and Milling Activities

Digest :

May 31, 2000

ADDITIONAL GUIDELINES ON DISPERSAL ACTIVITIES

Pursuant to a MANCOM directive during its meeting last March 14, 2000, a Central
Office workgroup composed of representatives from MSD, IAS, TRDD, DMO, DLA, and
ODAO has started a review of the various SOPs, particularly those pertaining to
Operations. On the basis of this review as well as the observations, feedbacks and
recommendations gathered both from the field and at the central office, the following
guide on Dispersal Activities is hereby issued. These guidelines shall amend, modify
and form part of the affected SOPs.

1. All Provincial Managers shall create a Dispersal Committee in their provinces with
the Assistant Provincial Manager (APM)/Provincial Operations Officer (POO) as
Chairman. The composition of the Dispersal Committee shall be left to the
discretion of the Provincial Manager but only permanent employees can be made
as members. The total number of members of the Committee shall be no less than
seven (7) excluding the Chairman.

2. The Provincial Managers shall issue an Office Order for the composition of the
Dispersal Committee. The Provincial Office shall furnish the Regional Manager,
DMO, ODAO, and AA for Operations a copy each of the said Office Order. A new
Office Order shall be issued whenever there is a change in the composition of the
Dispersal Committee.
3. The Regional Manager may:

a. create a Dispersal Committee for a specific province and warehouse with

members coming from the regional staff, whenever he believes necessary;

b. on his own volition, include a regional staff as member of a Provincial

Dispersal Committee - Office Order shall come from the Regional Office;

c. upon request of the Provincial Manager, assign a regional staff to become a

member of the requesting province’s Dispersal Committee - Office Order for
the Dispersal Committee shall include the regional staff assigned by the
Regional Manager.

4. The Provincial Managers of both the issuing and receiving provinces shall always
convene the Dispersal Committee during intra-regional and inter-regional stock
transfers and not only when significant variances are observed. In no case should
there be a dispersal activity without the presence of the Dispersal Committee. The
Provincial Managers shall give utmost importance to the job of the Dispersal
Committee and shall act on its report immediately.

5. At least three (3) members of the Dispersal Committee should be present in any
dispersal activity, including the Vice Chairman whose presence is compulsory. The
Chairman may designate another member as Vice Chairman during simultaneous
transactions.

6. The responsibilities of the Dispersal Committee are as follows:

a. Ensure that there is an approved Authority to Issue (AI)

b. Inform the members of the date, time of loading/unloading of stocks, and the
name of issuing and receiving warehouses

c. Check on Calibration Reports and calibration tags to ensure that the moisture
meter and weighing scales to be used in the issuing and receiving warehouses
are regularly calibrated and are on top condition.

d. Witness weighing of stocks to be loaded/being unloaded and reading of MC

from the moisture meter.

e. Ensure that proper stock documentation is observed.

i. Ensure that the documents are complete and properly filled up particularly
the age and MC of stocks.

1) The actual age of stocks in months and not the codes should be
indicated in the WSR/WSI.. A fraction of more than fifteen (15) days
 shall be counted as one month. The age of stocks shall be
determined using the reference dates provided for in the Revised SOP
on Quality Control Information System for Grains (SOP No. TS-SQ04)
which took effect April 6, 1999. The reference date shall be indicated
in the remarks portion of the WSI/WSR.

2) The Dispersal Committee and all other concerned field personnel

shall be guided by the Table of MC Loss Variationprepared by TRDD
(Annex A) which reflects the MC of the stocks over a period of time.

ii. In case the MC reading registered in the moisture meter during actual
dispersal activity does not reconcile with the Table of MC Loss Variation,
the dispersal shall proceed but the Dispersal Committee and the Quality
Assurance Officer shall resolve the discrepancy through the following
procedures:

1) Request another moisture meter to be used in validating the previous

readings;

2) If the discrepancy persists, grains sample of the subject stocks

shall be submitted to the Regional Laboratory for laboratory analysis
using the air oven method. Meantime, the Quality Assurance Officer
shall leave the MC portion blank and a member of the Dispersal
Committee shall indicate in the remarks portion of the WSR/WSI
“grain sample for laboratory analysis” and shall affix his or her
signature over his or her printed name.

3) The MC obtained from the air oven method as indicated in the

Laboratory Analysis Reports or the LAR shall be considered the
final MC of the stocks in question. The Dispersal Committee of
both the issuing and receiving provinces shall be responsible for
securing and disseminating copies of the LAR of the subject stocks to
the following:

a) Issuing SGOO (Warehouse Supervisor);

b) GOO (QAO) of the issuing warehouse;

c) SGOO (PSQAO) of the issuing province;

d) Receiving SGOO (Warehouse Supervisor);

e) SGOO (PSQAO) of the receiving province;

f) SGOO (RSQAO) of both issuing and receiving provinces (for

inter-regional transfers);
 The aforementioned personnel shall keep on permanent file their
respective copies of the LAR for future reference. The issuing
and receiving warehouse supervisors shall attach certified true
copies of the LAR to their Weekly Stock Reports for purposes of
TOLA computations.

f. Ensure that the weight of stocks is immediately recorded in the document after
weighing (tara system should be prohibited).

g. Validate if age of stocks indicated in the document (WSI/WSR) is true and

correct.

h. Ensure that there are no loose and busted bags loaded in the trucks.

i. At least two (3) members of the Dispersal Committee should be deployed at the
port to observe loading of stocks from truck to vessel (for issuing province) and
unloading of stocks from vessel (for receiving province).

j. Members of the Dispersal Committee deployed at the loading port should

indicate in the Bill of Lading (BL) the average weight per bag, and number of
loose and busted bags, if any. This is to be able to pinpoint responsibility for
loose and busted bags, whether at warehouse or in-transit.

k. Sign in the Bill of Lading as witness.

l. Members of the Dispersal Committee at the receiving province deployed at the

unloading port should compare the average weight per bag of the stocks
received against the average weight indicated in the BL. Loose and busted
bags should also be noted.

m. Report immediately to the Provincial Manager and to the Dispersal Committee

of the issuing province, through the Provincial Manager, even pending receipt of
the WSI, a significant variance in the average weight per bag per BL and WSR,

n. The Dispersal Committee of both issuing and receiving provinces should submit
a Dispersal Report to the Provincial Manager immediately the following day
after the activity, indicating the following:

i. Destination/origin of stocks issued/received

ii. Issuing/receiving warehouse
iii. Quantity and weight of stocks
iv. Variety, MC, and age of stocks
v. AI, WSI, and WSR numbers
vi. Observations:
 1) Average weight per bag of stocks issued (per WSI/BL ) and received
(per WSR).
2) Number of loose and busted bags, if any.
3) Discrepancy in MC per moisture meter reading vis a vis Table of MC
Loss Variation.
4) Actions taken by Dispersal Committee as to noted variance in
quantity, weight, and classification of stocks.
5) Recommendations

The Dispersal Committee may recommend additional control and

remedial measures and other actions to improve operational
efficiencies.

o. All members of the Dispersal Committee who witnessed the dispersal activity
should sign the Dispersal Report and maintain their respective copies.

7. The Provincial Manager shall act immediately on the recommendations of the

Dispersal Committee. The Provincial Manager shall furnish the Regional Manager
of the report of the Dispersal Committee and the report of the actions taken by the
Provincial Manager on the recommendations of the Dispersal Committee.

8. The Quality Assurance Officers shall always see to it that calibrators regularly
calibrate moisture meters and that in no case shall the same be used in actual
operations without being calibrated.

9. The Provincial Manager shall see to it that one warehouse shall be served by only
one Quality Assurance Officer (QAO) at a particular period of time. The same QAO
may however be assigned to other warehouses but in no case shall two (2) QAOs
be assigned to only one warehouse at the same period of time. This is to ensure
proper quality maintenance of stocks and to pinpoint responsibility in case of
misclassification.

10. The tolerable allowance for truckers/haulers shall be .28%.

11. As a general rule, escorts shall not be deployed for dispersal by land except for
transactions that involve single weighing at issuing and receiving points.

12. Escorts for sea transfers shall be compulsory.

13. For dispersal by land, Dispersal Reconciliation Reports (Annex B) shall include
information on MC of stocks issued and received.

ADDITIONAL GUIDELINES ON MILLING ACTIVITIES

Pursuant to a MANCOM directive during its meeting last March 14, 2000, a Central
Office workgroup composed of representatives from MSD, IAS, TRDD, DMO, DLA, and
ODAO has started a review of the various SOPs, particularly those pertaining to
Operations. On the basis of this review as well as the observations, feedbacks and
recommendations gathered both from the field and at the central office, the following
guide on Dispersal Activities is hereby issued. These guidelines shall amend, modify
and form part of the affected SOPs.

1. Concerned field office personnel shall be guided by the attached Table of Expected
MIlling Recovery (Annex A) and Table of Guaranteed Milling Recovery (GMR)
(Annex B) for different paddy varieties/grades per NFA procurement standards for
well milled and regular milled rice, in the conduct of laboratory and actualtest
milling and milling activities. If the results of the laboratory test milling fall below the
minimum recovery prescrined in the Table (Annex A), the RSQAO shall conduct
further tests to validate results of the laboratory test milling. If results of such
further tests are consistent with the results of the laboratory test milling, the
RSQAO shall recommend to the Regional Manager the conduct of an
investigation.

2. To facilitate pinpointing of responsibility in case of low recovery due to

misclassification, the Provincial Manager shall see to it that a warehouse shall be
served by only one Quality Assurance Officer (QAO) at a particular period of time.
The same QAO may however be assigned to other warehouses but in no case
shall two (2) QAOs be assigned to one warehouse at the same period of time.

3. The basic policy that contracted milling shall only be resorted to if the agency has a
processing capacity deficit is hereby amended. Henceforth, prior to milling
operations, a Cost Benefit Analysis shall first be conducted between using NFA
owned facilities as against contracted milling. As part of the Cost Benefit Analysis,
field offices shall undertake the following:

a. Using the same paddy sample, test mill NFA owned milling facilities and at least
three (3) private milling facilities.

b. An NFA owned milling facility shall be used if it yields a milling recovery higher
than the private milling facilities.

c. The option of using a private milling facility which yields a higher milling
recovery than an NFA owned rice miller shall be evaluated further considering
payment schemes (SMF or PIK) and other variable costs such as handling and
transport costs.

If using the same paddy sample, a private milling facility yields a higher milling
recovery than an NFA owned rice miller, the Provincial Manager shall demand
explanation from the concerned Plant Engineer or MPO of the causes or reasons
thereof.
4. The Provincial Manager shall strictly impose the policy that only technically trained
personnel shall be authorized to operate and become accountable for NFA owned
rice milling machines.

5. In awarding milling contracts, the Regional Manager shall evaluate which payment
scheme (i.e. SMF or PIK) is more advantageous to NFA.

All Regional Managers/Provincial Managers/OICs and concerned employees are

hereby directed to implement and strictly enfore the aforesaid guidelines effective July
1, 2000. They shall be held responsible and accountable for the non-implementation
and/or non-compliance to the said guidelines as well as the relevant SOPs.

(SGD.) EDNO N. JOSON II

NFA Administrator

Date Approved:

June 23, 2000