Hike in NFA’s palay buying price eyed

An interagency committee has been tasked to study proposals to raise the National Food Authority’s palay procurement price as the main harvest starts.

At present, NFA’s buying price is P17 per kilo for clean and dry palay. It gives as an incentive an additional P0.20 to P0.50 per kg for delivery, P0.20 per kg for drying and P0.30 for palay sold by farmers’ organizations and cooperatives.

Agriculture Secretary Emmanuel Pinol earlier suggested an increase of P3 in the NFA’s buying price for unmilled rice. Samahang Industriya ng Agrikultura (Sinag) proposed a P4 increase while the NFA had wanted it raised by P5 per kilo. The NFA’s proposal was rejected by its council due to its impact on inflation.

The interagency group is composed of representatives from the NFA, National Economic Development Authority (Neda), Bangko Sentral ng Pilipinas (BSP), Department of Finance (DOF) and Department of Trade and Industry (DTI).

It would be given five days to study whether the hike should be approved or rejected, based on the economic repercussions of the proposal and the amount of money that would be required to fund the proposed increase.

A reasonable rate is also expected to be agreed upon by the committee. The rate should not substantially push up the prices of rice so the consumers would not be made to bear the brunt of the proposed increase.

The Department of Agriculture, the NFA and Sinag have been pushing for the increase in the palay buying price to motivate farmers to produce more of the staple crop.
During this year’s summer harvest, the NFA’s procurement accomplishment was deemed dismal with private traders and millers offering more favorable prices to farmers.

With the NFA’s low buying price, the grains agency is forced to resort to importation to maintain the required inventory and ensure stable supply and prices of the staple.