NFA readies P10B to expand warehouses, boost stocks

MANILA, Philippines – The National Food Authority (NFA) is initiating a P10-billion modernization program aimed at increasing the country’s rice inventory and warehousing capacity in preparation for future emergencies.

The grains agency said the initiative would focus on improving rice storage, building new rice mills and upgrading drying facilities—all of which would be funded by the government’s budget allocations for 2024 and 2025.

According to the NFA, the projects were expected to be operational by the end of next year, in time for the summer harvest of 2027.

READ: NFA seeks P9 billion additional budget to increase rice buffer stock

“This expanded capacity will help us address the current issue where our warehouse space is almost full,” NFA Administrator Larry Lacson said in a statement on Monday.

The NFA set aside P3.5 billion from last year’s funding to increase storage capacity by 800,000 metric tons (MT), or almost double its current capacity, and another P1.5 billion to repair existing warehouses.

Under this year’s national budget, the food agency was given P5 billion to build rice mills, drying facilities and other infrastructure.

Lacson said a total of 136 NFA warehouses nationwide would undergo repairs to store palay (unmilled rice) for harvest in the upcoming wet season.

“We are having all our palay stocks milled to free up space in our warehouses,” Lacson said in a podcast interview uploaded on Agriculture Secretary Francisco Tiu Laurel Jr.’s YouTube account.

One of the warehouses for repair, located at the NFA office in Malolos, Bulacan and capable of storing up to 120,000 50-kilogram bags of rice, will receive rice stocks during the peak of the summer harvest in April.

According to Lacson, several plots of land have been donated to the NFA or made available for use through usufruct agreements for constructing warehouses in Mindanao and Luzon, particularly in Mindoro, as the region’s current storage capacity could not meet demand.

The NFA said the new warehouses, along with updated milling and drying equipment, would maximize storage efficiency. Currently, the NFA’s current storage capacity stands at 1 million MT.

The grains agency also said the construction of rice mills, dryers and silo would help increase rice recovery rates, improve farmers’ profitability and eliminate postharvest inefficiencies.

Silos in major rice-producing areas would be upgraded, including those in Cagayan Valley and Central Luzon, to allow the NFA to store rice for up to two years—longer than the usual six months to one year for bagged rice.

“With the new drying facilities, farmers will be able to sell palay with higher moisture content, removing the burden of drying it themselves,” Lacson said.

“This change is expected to stabilize prices for both producers and consumers by ensuring consistent rice quality,” he said.

Lacson considers such facilities a “game-changer” as this would allow the grains agency to purchase rice with moisture content higher than 14 percent.

“This shift will prevent traders from manipulating moisture levels in palay to drive down prices,” he added.

Moisture content refers to the weight of water contained in paddy or rice, according to the International Rice Research Institute (IRRI).

The IRRI noted that a higher moisture content results in more losses due to poor grain quality. At the same time, lower moisture content results in more losses from shattering.

The NFA is targeting to purchase 545,000 MT of palay to maintain a nine-day supply and 880,000 MT to meet the new buffer stock requirement of 15 days under the expanded Rice Tariffication Law.

Lacson also pushed for regulatory reforms within the NFA to manage rice buffer stocks more effectively and regularly free up storage space for procuring palay. INQ