NFA Council to create TWG to study hike in palay buying price

MANILA, Philippines — After several rejections in the past, the interagency National Food Authority Council (NFAC) seems to be easing up as it decided to create a technical working group (TWG) that will study the proposal to increase the buying price of palay (unhusked rice).

During the regular NFA Council meeting last Friday, industry sources confirmed the council decided to create a multi-agency TWG to evaluate NFA’s latest proposal for an increase in its palay-buying price of up to P8 per kilogram, its highest so far, to compete with private traders and ensure better procurement of domestic stocks.

The TWG, expected to be created as soon as possible, will be composed of representatives from NFA, the National Economic and Development Authority, Bangko Sentral ng Pilipinas, Philippine Statistics Authority (PSA), Department of Agriculture (DA), Department of Finance, and farmer and consumer groups.

The TWG will conduct deeper analysis on the effect of inflation, which has been on an upward streak since the start of the year.

The TWG will also reconcile data on the cost of production of rice given conflicting data from the DA, PSA and farmer groups.

NFA’s proposal, which was submitted last month, is an increase from P17 to P25 per kg.

Since last year, NFA has been requesting to increase the government support price for palay to help the farmers cope with increasing cost of farm inputs, as well as to give the agency a chance to buy more locally with a more competitive buying price.The P17 per kg NFA buying price had been set nine years ago.

Previous proposals of NFA range from an increase of P2 to P5, but current farm gate prices are now reaching up to P26 per kg, clean and dry, thus a higher increase is being pushed.

Lawmakers backed the proposed increase for the last summer harvest season, but it was also rejected by the council.

NFA continues to have difficulty in attaining its palay procurement target as private traders have been buying at a higher price. The low procurement of NFA even resulted to the depleted stocks of cheaper rice in the market a few months ago which eventually caused the spike in prices of commercial rice.

Latest data from the grain agency showed that it has only bought 76,120 bags as of end-June, only four percent of its target two million bags for 2018.