MANILA, Philippines?The National Food Authority is increasing its local procurement of palay or unhusked rice by 45 percent to one million metric tons in line with efforts to help raise the farmers? earnings and reduce the country?s dependence on imports.

NFA Administrator Jessup Navarro said the palay bought from farmers last year reached 685,300 MT. It was the largest recorded by the NFA in the last 30 years. The agency?s palay procurement in 2007 amounted to only 33,000 MT.

Navarro said that under the NFA?s procurement policy, priority would be given to farmers who shifted from inbred to certified seeds and to those switching from certified seeds to hybrid seeds.

?The NFA?s Cluster Farming Program will be among the priority beneficiaries of the agency?s procurement program this year,? he said.

?Yields from the Cluster Farming Program will cover the bulk of the agency?s procurement volume in 2009 as production is expected to reach a minimum of 700,000 MT from an area covering at least 235,000 hectares,? Navarro said.

Malacañang last year ordered the agriculture department and the NFA to dramatically increase the volume of palay bought from farmers to encourage them to plant more of the staple and cut the country?s rice imports.

NFA was also ordered to raise its support price for palay from P12 to P17 per kilo to help farmers cope with rising production costs.

In February, prices of commercial rice varieties were selling for an average of P31 a kilo, lower than what the price should be based on the NFA support price of P17 a kilo of palay. At this support price, traders should be selling their stocks for about P32 to P34 a kilogram.

As a result of the NFA?s record palay procurement volume last year, its rice stocks reached 843,700 MT as of February, 205.6 percent higher than the year-ago level. This is enough for the country?s 24-day consumption, at 35,000 MT of rice per day, the NFA said.