ILOILO – The provincial government is studying the possibility of taking over the operation and management of the state-of-the-art Iloilo Rice Processing Complex (RPC) in Barangay Amamaros, Pototan town.
This P200-million state-of-the-art facility was donated by the Korea International Cooperation Agency (KOICA), inaugurated in March 2013 and turned over to the Department of Agriculture (DA), the Iloilo provincial government, and the municipal government of Pototan.
The RPC was envisioned as a “one-stop service center” equipped with modern post-harvest facilities and technologies that would improve the efficiency of rice production, milling, drying and storage thereby reducing post-harvest losses and enhancing rice quality.
The complex, with an area of 1,700 square meters, was designed to have a drying capacity of 5,600 metric tons (MT) per year or 1,000 bags per day, a milling capacity of 2.5 MT or an equivalent of 50 cavans per hour, and a storage capacity of 1,100 tons.
In March 2015, the DA, the Iloilo provincial government, and the municipal government of Pototan tapped the Pototan Farmers Multi-Purpose Cooperative (PFMPC) to operate and manage the RPC via a Memorandum of Agreement (MOA).
Nine years after, on March 15, 2024, PFMPC informed the DA, the provincial government and local government of Pototan that it was terminating its obligation to manage the RPC, citing management, operational and financial difficulties.
Gov. Arthur Defensor Jr. confirmed that one proviso was that if the facility was not performing well, it could be returned to the government.
“We are currently initiating this process,” said Defensor.
According to PFMPC in a letter addressed to Defensor, DA Region 6 director Dennis Arpia, and Pototan’s Mayor Rafael Enrique Lazaro, the cooperative encountered several challenges leading to its decision to terminate its obligations. Among these were:
* issues and concerns raised by the Bureau of Internal Revenue (BIR)
* legal problems concerning management and appropriation of funds (an estafa case was filed by DA Region 6 but this was dismissed by the Office of the Provincial Prosecutor)
* unliquidated accounts and collections; the person in charge of the RPC’s operation and also acted as collection officer went AWOL (absent without leave)
* financial losses
Part of the letter further read: “The MOA’s General Terms and Conditions state that ‘any income derived from the operation of the Iloilo RPC shall be deposited in a special enterprise fund under the account of the ‘Iloilo RPC’. This fund is intended for administrative expenses, personnel services, maintenance, and other operating expenses, acquisition of additional equipment and facilities, and other agri-related activities to sustain the commercial operation of the Iloilo RPC. The distribution of net income follows the accounting system set by the Cooperative Development Authority, with 70 percent of the net surplus determined by the PFMPC Management Board for patronage refunds and interest on capital.
“Beset with losses, the PFMPC has undertaken remedial measures to sustain the RPC’s operations. However, there is a direct threat of depleting our funds if the losses continue, forcing us to provide our own funds for personnel salaries.”
According to the PFMPC, its the decision to give up the management and operation of the RPC is “irrevocable”.
Exploring the possibility of the provincial government taking over the operation and management of RPC, Defensor said one process he is planning is the procurement of the rice produce of Iloilo farmers for milling at the facility, similar to National Food Authority’s (NFA) approach.
“Our model is to help buy rice from farmers, like what the NFA does, to protect them from erratic palay prices. The bottom line is that the rice processing can return to the province and become part of our rice program,” Defensor explained.
But the governor said he would consult DA-6.
Defensor also said how PFMPC managed the RPC would be reviewed./PN
