Farmers brace for decline in palay prices

Filipino palay farmers are bracing for grimmer weeks ahead as the start of the harvest season is expected to depress palay prices further.

Several industry groups have called on the government to increase the Department of Agriculture’s budget for its palay-buying operations to immediately arrest any drop in prices and save farmers from the debt trap caused by competing with imports.

According to farmer groups, the farmgate price of palay has dropped P12 a kilo, the breakeven rate for producing the staple.

Samahang Industriya ng Agrikultura chair Rosendo So and Federation of Free Farmers (FFF) national chair Raul Montemayor said they were expecting prices to worsen as more provinces enter the harvest season.

“The peak of the harvest season will begin as we approach October,” So said. “That means farmgate prices would decrease further because millers are not willing to buy palay anymore because they are also losing.”

Jun Aguilar, a miller from Cagayan, said the pandemic and the overwhelming supply of imports hurt his business operations as well.

“We cannot compete with cheaper imported rice being sold at P1,500 a sack. The local rice variants that we sell go for P1,600 to P1,700 without factoring in the transport costs. We’ve lost customers from Batangas, Cavite, Tagaytay, Quezon, especially Metro Manila. We had to cut our palay buying, our workers’ hours and their pay and these people have families,” he said.

He stressed that movement restrictions during the height of the pandemic also put on hold a lot of rice shipments, which were coming in only now and were being sold much lower to avoid additional logistics costs and wastage.

With millers also on the losing end, groups Sinag, Amihan National Federation of Peasant Women and Bantay Bigas have urged the national government to earmark between P75 billion and P152 billion for the procurement of palay, which was estimated to reach 8 billion kilos this season.

The National Food Authority (NFA), with the help of provincial government units, could absorb only less than 10 percent of the country’s entire palay output, or not enough to move prices up.

Bantay Bigas spokesperson Cathy Estavillo said giving NFA an additional budget of P75 billion would allow the agency to absorb 20 percent of local palay production—“enough to influence palay farmgate prices and give enough earnings for our farmers.”

Noel Reyes, DA spokesperson, said the agency was doing its best to get more money to buy palay, including getting the commitment of provincial government units to purchase their constituents’ crops.