Government wants to pay almost US$8 million more to inexperienced urea company

By: César Zorrilla and Alejandra García Espichán

They chose the most expensive option. The fourth attempt to buy urea and save the weak agricultural campaign, which has already been underway since August, could be frustrated again for the ineffectiveness of Agrorural, the Ministry of Agrarian Development and Irrigation (Midagri) and President Pedro Castillo, indicated specialists.

Peru imported 84.3% less urea in the first quarter of the year, according to Sunat, and only in May did the head of state announce that his management would bring the necessary fertilizer so as not to put at risk the supply of markets or national food security. But it never had good results.

LOOK: Midagri: The urea purchase process is expected to end in the coming days

The faults of Direcagro

The Paraguayan company Direcagro participated in several calls to bring the urea and it was only in the last process that it came in fourth place, but made the leap to first place after the Comptroller’s Office found irregularities in the first three bidders.

In the third call, she was disqualified for not presenting her financial statements for the last three years. This requirement was impossible to fulfill since it was only constituted on June 10, 2021, according to the Comptroller’s report. This did not prevent her from appearing again in the fourth pageant.

In the technical specifications -published on October 6 by Agrorural- bidders are asked to prove the sale of fertilizers for an accumulated amount of not less than 100,000 tons, “during the 5 years prior to the date of the presentation of offers.” The company does not meet this requirement as it has only been created for one year and five months. It is not understood, therefore, how she was enabled to continue in the current process.

In addition, Direcagro is the finalist company whose product delivery time is the furthest: it promised to do so in 40 days.

But also, the price of its urea is the most expensive. DU 013-2022 and its amendments established that US$17,600,000 would be paid for the 44,000 tons; however, Direcagro will charge US$25,520,000, that is, it will cost US$7,920,000 more than what had been arranged.

For Rómulo Antúnez, former deputy minister of Midagri, it is important to contract with companies that demonstrate their experience in the field. “Those that have been created for a short time do not guarantee the fulfillment of a contract of such magnitude. Those years of experience that are requested are key, ”he detailed to this newspaper.

On October 31, the term proposed by Agrorural itself to buy the urea expired, but there is still no signature with Direcagro. “This fourth tender will be declared void anyway. You cannot force something that did not occur in the corresponding period. The rules of the game must be complied with due to transparency and institutional capacity”, Antúnez evaluated.

Urea will no longer work

In the first tender, it was sought to acquire 73,529 tons of urea; later it was 65,587 and after three failures only 44,000. Six Ministers of Agriculture have passed, so far, and the product has not yet reached the field and the consequences will be seen in the final price of the food that reaches the supply centers.

“(Without urea) producers use more expensive inputs and the products that reach the markets will cost more. Food prices rise and affect people with fewer resources”, Marco Vinelli, former director of Agrorural, told Peru21.

The agricultural campaign began in August and the planting campaign is “practically about to close,” former minister Juan Manuel Benites told Peru21. Rómulo Antúnez agreed and assured that “it is no longer time to buy urea. A comprehensive soil fertilization strategy must be implemented.”

In his turn, Milton von Hesse said that the majority of farmers “are not expecting anything good” from the purchase of urea. “If urea was going to be brought in, the ideal thing would be for Peru Compras to be commissioned and not Agrorural, which has no experience,” he said.

He looked for the version of the head of Agrorural, Mario Rivero, but he never answered the messages or the calls. He directed the last two calls and both were full of questions.

“It is a total disability that goes from the president. Six ministers of agriculture were changed, as well as civil servants. There is enough mediocrity”, recognized Vinelli.

Keep in mind

Clímaco Cárdenas, president of Conveagro, pointed out that the fourth process has lost “credibility.” “Important companies were expectorated for seeking collusion and theft,” he noted.
The Government gave Direcagro a deadline to deliver the bail letter. There is no date to sign the contract.