NFA raising palay support price, flooding markets with rice

Starting today, Sept. 13, expect two new measures to be implemented by the Department of Agriculture (DA) through the National Food Authority (NFA) to address issues surrounding high rice prices and the low income of palay (unhusked rice) farmers.

First, the NFA will “flood” the country’s markets with 3.6 million 50-kilogram bags of both imported and local rice from its stocks, in an effort to bring down prices from the current P38-P40 a kilo to just P27 per kilo. The second,it will raise the  support price for palay to P19 a kilo from P17.

Agriculture Secretary William Dar, in a press conference on Thursday, said the NFA Council (NFAC),  of which he is chair, was giving the NFA until Oct. 10 to dispose of the 3.6 million bags of rice. While the NFA will make its initial round of the markets in the National Capital Region, NFA Administrator Judy Carol Dansal said the aim was for the distribution to reach the whole country.

These bags will be sold by the NFA at P25 to retailers and P27 to consumers, said Dansal. The goal is to pull down current rice prices to P27. Currently, the average price ranges from P38 to P40 a kilo.

The total sale would amount to P4.86 billion, which the NFA could use to procure more palay, or unhusked rice, from farmers, Dansal said.

That’s for the consumer side. For the farmers, Dar said the NFAC’s decision to raise the palay support price to P19 per kilo could translate to an additional P8,000 additional income for each farmer, based on current national average yield of four metric tons per hectare.

Dansal clarified, however, that the P19 per kilo rate would apply to clean and dry palay. The support price for wet palay—“at 30 percent moisture, not dripping wet,” emphasized Dansal—would be raised from P14 to P16.

Dansal also explained that while the support price for palay would be raised, the P3.70 buffer stocking incentive would no longer be offered to farmers.

“What we considered when we came out with the P19/kilo buying price [from local famers] is the balance of providing them with income and the impact of these rice prices on consumers,” said Dansal. “We believe farmers will still sell to us [despite the removal of the incentive], because that P19 is still higher than what they get from traders.”

Dar said the DA was also set to forge an agreement with the Department of Social Welfare and Development (DSWD), which would see the latter disbursing rice to its Pantawid Pamilya Pilipino Program beneficiaries instead of the usual P600 cash allowance. DSWD will have the option to buy either from the provincial governments or the NFA, ensuring farmers a continued market for their produce.