The grains agency National Food Authority (NFA) bought from local farmers 650,000 metric tons of “palay” — rice before milling — last year, the highest recorded in 29 years.

This represents a big jump from the 33,000 metric tons it bought from local farmers in 2007, although way below the target of one million metric tons set by the government for last year.

The previous record was 700,000 metric tons, posted in 1979.

At the average price of P850 per 50-kilogram bag of palay plus a fertilizer incentive of P1,800 for every 50 bags sold to it, the NFA paid local farmers nationwide some P12 billion last year.

In the second half of 2008, the government ordered the NFA to step up its local palay procurement operations to minimize rice importation this year.

The NFA also reported it sold and distributed 39.8 million 50-kilo bags of rice last year, which was about 87 percent of the government’s target of 45 million bags.

NFA Administrator Jessup Navarro said timely infusion of NFA rice into the market, particularly in the first half of 2008, gave consumers greater access to the staple and helped stabilize the price of rice, which had reached as high as P50 a kilo.

Navarro said these figures showed that the NFA performed well last year in domestic palay procurement and rice distribution, which benefited its major stakeholders particularly farmers and low-income consumers.

“The quantity of NFA rice distributed last year manifested the consumers’ growing preference for quality but more affordable government rice,” Navarro said. “The volume of sales of NFA rice remained high even when commercial rice prices have already stabilized and new harvests started coming in the latter part of the year.”

The NFA had been allotted P17 billion for its palay procurement operations last year. In the past it bought only one percent of the country’s annual palay production, relying more on imports, which reached a high of 2.3 million metric tons last year.

Rice importation last year cost the government about $1.5 billion, mainly because of a price surge in the middle of the year. In 2007, the Philippines imported 1.79 million metric tons worth only $494 million.

NFA public affairs director Rex Estoperez said that with its aggressive procurement, the NFA was likely to register an end-2008 rice stockpile of 936,000 metric tons, equivalent to 28 days of consumption.

Filipinos are estimated to consume 33,100 metric tons of rice daily.

The end-2008 national rice stockpile, including stocks in households and commercial depositories, is estimated at the equivalent of 90-120 days of consumption. With editing by INQUIRER.net