Palay farm gate prices improving, average rate hits 8-week high

The average farm gate price for palay hit its eight-week high during the second week of December while retail prices of rice continued to decline.

Data from the Philippine Statistics Authority (PSA) showed the prevailing farm gate price for palay during the period increased to P16.14 a kilogram, up 1 percent and 2 percent from week-ago and year-ago levels, respectively. Prices of regular milled and well-milled rice dipped to P36.21 a kilo and P41.01 a kilo—a few centavos lower than the rates in the previous week and a continuation of a downward trend that started following the enactment of the rice tariffication law.

While palay prices are beginning to climb, the rates are still below the ideal buying price set by the National Food Authority at P19 a kilo.

The government, however, has pointed out repeatedly that the goal was not to increase palay prices but depress production costs to give farmers fair profit without raising rice prices in the market.

PSA records showed that the lowest quotation registered was P10.71 a kilo in the Quezon province while the highest was in Nueva Ecija at P22 a kilo.

With an average production cost of P11 a kilo, these rates may have given farmers in Nueva Ecija an income of P11 while farmers in Quezon, losses of P0.30 a kilo.

For this year, the Department of Agriculture is aiming to increase palay production and lower the cost of producing palay by stepping up interventions under the rice competitiveness enhancement program (RCEP), which has an annual funding of P10 billion.

This would be the third year of the program’s implementation. Under the law, the RCEP would be carried out for five years as a means to help the rice industry’s transition to a new regime where rice imports are deregulated. INQ