The National Food Authority (NFA) has purchased 3.32 million 50-kilo bags of palay as of 5 June this year of which over 3.17 million bags were purchased from rice farmers the past six weeks.
This resulted in the agency requiring to buy only 47,000 bags of palay to hit the upgraded procurement target of 3.36 million bags, a volume that together with earlier rice stocks of 136,000 metric tons (MT), is enough for four days of national consumption.
“Farmers are asking us to continue with our procurement until the end of the month so they still benefit from higher NFA buying price. They are now enjoying the fruit of the NFA Council’s decision to raise the palay buying price to as much as P30 a kilo,” said Larry Lacson, NFA acting administrator, during an inspection of NFA warehouses in Bulacan.
The NFA Council in mid-April increased the agency’s buying price that allowed the NFA to compete with private traders who have raised their buying price to corner the market.
The NFA buys the commodity from a range of P23 to P30 per kilo of clean and dry rice and P17 to P23 per kilo of fresh and wet palay from only P16 to P19 per kilo for fresh and wet and P19 to P23 per kilo for clean and dry.
Lacson gave assurance the NFA will continue to buy palay even past the procurement target as long as farmers continue to harvest this dry season and provided there is still space in warehouses.
“We want our rice farmers to be inspired to produce more,” Lacson said.
According to him, the first six months of the year account for 30 percent of the purchased buffer with the balance of 70 percent during the wet season.
As of end-May this year, as much as 197,049 MT of palay have been procured by NFA from local producers.
The government targets procuring from local farmers 495,000 MT of palay raised to 545,000 MT for next year.
To achieve next year’s target, Lacson said NFA will seek from Congress a procurement budget of P16 billion, up substantially from this year’s budget of P9 billion.
He said the NFA has an unspent budget of P8 billion from 2023 that now helps NFA buy rice at higher prices.
Lacson said P5 billion of the total P17 billion available funds to buy buffer stock have been spent, leaving the NFA with a substantial P12 billion war chest for the wet season.
The NFA emphasized that its palay procurement budget is separate from that funded by the rice tariff collection and whose rate was lowered to 15 percent.
“We will buy palay at prices that we think are profitable for farmers to ensure they will continue to plant rice and even produce more,” Lacson said.
In a separate development, the Samahang Industriya ng Agrikultura (SINAG) said the government should provide rice production subsidies instead of lowering the rice tariff in order to help keep rice retail prices down.
Rosendo So, SINAG chairman, claimed that for retail rice prices to fall to as low as P29 per kilo as a result of the rice tariff reduction, imported rice should cost only $356.75 per MT.
So argued imported rice costs $635 per MT equivalent to a P45.07 per kilo landed cost plus P4 to P6 retailers’ spread that at best redounds to a retail price of P52 per kilo.
“This means that at least P21 to P22 per kilo would have to be subsidized. We are set to subsidize so why is there a need to lower rice tariffs? Government will lose between P15 to P20 billion from tariff collection and then we will have to spend to subsidize imported rice,” So further said.
