The government mandate for the National Food Authority (NFA) to increase its palay buying price may not matter much in terms of better retail price for the staple.
But the mandate, stakeholders claim, is seen as a “win-win solution” for local producers.
The NFA Council on Monday recalibrated its buying price from P19 to P23 per kilo for dry palay and from P16 to P19 for fresh palay consistent with evolving production and market conditions, President Marcos Jr. said.
He earlier convened the NFA Council to review the NFA’s palay pricing stance to help augment farmer income and ensure sufficient supply of the staple.
“That has been our wish since Day One of the rice price spike which we squarely blame on the NFA’s inability to procure even a single kilo of their P8.5 billion budget. They should intervene in areas where the prevailing farm gate price is below P20 per kg,” said Jayson Cainglet, Samahang Industriya ng Agrikultura (SINAG) executive director, in a statement.
Cainglet said the NFA unable to buy from rice farmers “was the single biggest trigger that compelled traders to hike prices.”
SINAG said if the NFA buys at a maximum P23 per kilo of palay, there is less pressure for traders to hike their buying price.
“As things are, peak harvest will start next week. There should be no reason for well milled rice to not go below between P40 to P44 per kg,” Cainglet said.
Raul Montemayor, Federation of Free Farmers national manager, said the government should also boost the NFA’s palay budget and help it set up post-harvest facilities and take as much palay from farmers.
“If traders buy at P23 per kilo clean and dry, the retail price should be in the vicinity of P46 per kilo for well-milled rice or only P1 above the price ceiling of P45. Overall, we feel this is a win-win solution where retail rice is kept in check and farmers get a reasonable price for their palay,” Montemayor said.
The President, also concurrent Department of Agriculture (DA) chief, said the government continues to impose the price cap of P41 per kilo for regular milled rice and P45 per kilo for well-milled which help stabilize rice prices and ensure supply.
The NFA said the original proposal capped the price of fresh and dry palay at P20 and P25 but was deemed too high, leading to a spike in retail prices.
It also meant the NFA would need P15 billion if palay was priced at P23 and P16 billion at P25 per kilo. “The new price range balances farmer profit and will not affect retail prices as much,” the NFA said.
Philippine Rice Research Institute-Philippine Rice Information System data show the price of fresh palay averaging P17.83 per kilo while dry palay averaged P19.33 per kilo in the July-to-August period.
National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the NFA procurement is focused in areas of excess palay supply relative to demand.
“In that case it can help elevate farm gate price,” Balisacan said.
The NFA said the rice it acquires from imports should not be sold in markets since these only serve as buffer.
“The buffer is only for the poor,” Balisacan said.DA monitoring of public markets in the National Capital Region show the price of well-milled rice ranges from P45 to P49 per kilo and regular milled rice from P40 to P44 per kilo.
Imported well milled rice sell for P45 per kilo. Imported regular milled rice price was not available.
Imported rice sell from P53 to P65 per kilo for the special variety and P53 to P58 for premium.
Local special variety rice sell from P54 to P62 per kilo and premium from P50 to P60 per kilo.
