Despite gov’t interventions, palay prices remain too low

Despite a number of government interventions, the average farm gate price of palay in November had remained low.

Latest data from the Philippine Statistics Authority (PSA) showed that as of the last week of November, a kilo of palay was sold at an average of P15.55, down 22.29 percent from a year ago.

While economic managers said palay rates were only going back to their “average” levels coming from an “abnormal year,” PSA data reflected that between 2015 and 2017, the farm gate price of palay was at P18.53 a kilo, or higher by 19 percent.

The lowest quotation in November was recorded in Zamboanga Sibugay at P10 a kilo—lower than the current palay production cost at P12 a kilo—while the highest quotation was recorded in Surigao del Sur at P20.40 a kilo.

In major rice-producing provinces such as Nueva Ecija, Isabela, Tarlac, Occidental Mindoro and Cagayan, the prevailing palay prices per kilo were at P19.35, P16, P15.60, P16 and P16, respectively.

Before 2019 drew to a close, the government has rolled out several programs to cushion the blow on farmers of the declining palay prices due to the continued inflow of cheaper rice imports.

The Department of Agriculture distributed cash aid and provided loans, issued stricter requirements to be followed by importers, and asked local government units to buy palay from their respective constituents to ensure that there would be a market for local produce.

It also started projects under the rice competitiveness enhancement program, which has a budget of P10 billion yearly.

The National Food Authority, for its part, has intensified its palay procurement operations.However, palay prices remained low.

“The more palay prices drop because of the continued inflow of cheap imports, the more losses farmers will incur and the more pressure on the government to provide relief to farmers,” said Raul Montemayor of the Federation of Free Farmers.

Based on studies of the Philippine Institute for Development Studies and the Philippine Rice Research Institute, the downtrend was seen to continue until 2020, bringing further losses to palay farmers.