Mayor: Capitol’s sheep overpriced

THE Dorper and Damara ewes and rams which the Provincial Government imported from Australia last year are overpriced by approximately P40 million, according to Pulupandan Mayor Magdaleno Peña.

In his letter dated February 4 to Provincial Veterinarian Dr. Renante Decena, Peña stated that he inquired from livestock farmers in Australia and found out that the P83.4-million worth of livestock was overpriced by approximately P34.6 million to P44.2 million.

Decena, who said he has yet to see and study the letter, declined to comment on the matter.

The 5,760 heads of sheep were purchased last year by Capitol from International Livestock Export Pty Ltd of Australia for the province’s food sufficiency program. Funds for the purchase were loaned from Land Bank of the Philippines.

The livestock arrived at Bredco Port, Bacolod City on February 8, 2012, exactly a year from today as the province hosts the 16th Dairy Congress and Expo at Bacolod Pavilion Hotel which is just adjacent to Bredco Port.

Capitol sold approximately 3,700 heads to private individuals and to local government units (LGUs), while the remaining sheep were retained at breeder farms in Sagay City and Murcia.

Last year, Capitol offered to sell the sheep to LGUs at “P16,000 for the imported ewe and P25,000 for the imported ram, plus P600 per sheep for every month of retention at the ranch before dispersal to cover costs of feeds and other utilities.”

Sixty-four heads were offered to Pulupandan at approximately P1.25 million.

Finding issue with the price, Peña declined to buy the sheep. His February 4 letter was “in response to your (Decena’s) letter dated 12 November 2012 which accepts my intention to withdraw the Livestock Contract to Sell supposedly for the purchase by the Municipality of Pulupandan of sixty four (64) heads of Damara breeder ewes and rams, all at a whooping price of P1,256,000.”

Peña said, based on information from at least three Australian livestock farmers, the Capitol’s selling price per sheep is almost three to four times higher than the prevailing price per sheep in Australia, exclusive of importation costs.

He cited that Capitol purchased the ewes at A$230 per head and the rams at A$270 per head, or P10,559.32 and P12,395.70, respectively, based on an exchange rate of P45.91 to one Australian dollar.

Peña said his research revealed that suppliers from the various ranges in Australia offered between A$65 (P2,984.15) to A$100 (P4,591.00) per ewe and A$100 (P4,591.00) to A$150 (P6,886.50) per ram. He stressed that those were the prices prevailing for the period 2009-2012.

Based on the lowest quoted price and Capitol’s purchase price, exclusive of importation and other costs, there is a price difference of P7,575.17 per head or about P42 million for the entire 5,544 heads of ewes and a price difference of P7,804.70 per head or about P2.3 million for the entire 296 heads of rams, stated Peña.

Based on the highest quoted price and Capitol’s purchase price, exclusive of importation and other costs, there is a price difference of P5,968.32 per head or about P33 million for the entire 5,544 heads of ewes and a price difference of P5,509.20 per head or about P1.63 million for the entire 296 heads of rams, added Peña.

Peña further computed in his letter the difference between Capitol’s selling price (P16,000 per ewe and P25,000 per ram) and the quotations he gathered from other Australian sheep suppliers but, this time, inclusive of importation and other costs.

He stated that there is a P50.5 million to P60 million difference between the total cost at which Capitol sold the sheep to the LGUs and the total cost based on prices prevailing in the Australian sheep market for 2009-2012, inclusive of importation and other costs.

The staggering price difference of P50.5 million to P60 million “showed how much money was spent by the government for the purchase of livestock at exorbitant prices when it could have bought the same at a much lower price tag,” stated Peña who pointed out that Capitol could have secured much lower prices because its purchase was in bulk.

“How would you explain therefore this obviously irregular transaction to the people of Negros Occidental who will pay with interest the money loaned out from Landbank and used in the purchase of this pricey livestock? No other explanation could better answer this issue than to deduce from every reasonable man’s conclusion that, “somebody really made profit along the way”,” stated Peña in his letter to Decena.

The Pulupandan mayor lamented that the people of Negros Occidental, as taxpayers, are now burdened with paying the bank loans incurred for what he deemed as an irregular transaction.