Most of the PHP2 billion-worth of agricultural machinery and equipment held at Department of Agriculture regional sites, because the intended recipients were unable to stump up 15% of the cost – apparently, a pre-condition for receiving the equipment – has now been released and is in the hands of farming smallholders across the country. Meanwhile, state lawyers are determining whether the upfront payment was legal in the first place.
How long the equipment, like that pictured here, had been stored is unclear; reports range from four years to six months. In any event, Agriculture Secretary, Emmanuel Piñol, decided to take immediate executive action to un-mothball it and put it to work, though some of it had fallen into disrepair and needed first to be restored.
Meanwhile, beneficiaries have been asked to sign an undertaking that will make them liable to pay the 15% – through installments over four years – if it is ultimately deemed to be legal. It was a pragmatic solution to what could have become an intractable problem involving that Philippine bureaucracy’s trademark strangulation by red tape. But it could be something more sinister.
Certainly, Piñol does not intent to leave it there. He has ordered the Internal Audit Service to produce a comprehensive report on the misuse of government funds and assets; the farming equipment was procured by the government and was intended for distribution to small farmers.
It certainly seems odd that much-needed machinery that would assist the country’s embattled agricultural sector to get out of a hole, was simply left in a field somewhere. Or does it? What is not know just yet, is who actually gets the 15% which the farmers were expected to pay before the equipment is released. Presumably, it should go back to the public purse. But according to one of the Agricultural Secretary’s sources, it actually goes to the dealer who sold the equipment to the government in the first place.
Really? Let’s see if we understand this transaction. A dealer sells equipment to the government for only 85% of the sale’s price. But he only gets paid the full amount for each items once a third party (with whom he’s probably had no contact whatsoever; much less assessed his credit worthiness) has coughed up the remaining 15% of the equipment’s full cost. And the dealer might have to wait four years to get paid. And if those third parties don’t pay up – which is what’s happened here – then the dealer has to take a hit on the outstanding balance. That sounds like a loose-loose-loose. The government loses the cash for 85% of the bill; the dealer loses 15% of his invoice, and the farmers loose the equipment which is left to rust.
We’ve not come across that sales model before, but – stop us if we’re starting to sound cynical – might there just be a scam in there somewhere? The Agricultural Department certainly seems to provide fertile soil for racketeers. Recently we reported on Goat Gate, in which unscrupulous government officials and dishonest goat traders took cash for pedigree dairy animals in return for supplying old and inferior creatures. Goat Gate – another scam to milk money.