MANILA, Philippines — The National Food Authority is spending nearly P15 billion to purchase local palay (unhusked rice) this year as the government ramps up procurement to help farmers cope with declining palay prices.
Agriculture Secretary William Dar has instructed NFA to be aggressive in buying palay from farmers particularly from areas that will benefit from the Rice Competitiveness Enhancement Fund.
“We have strengthened measures to ensure that the DA-NFA will be able to repeat or exceed its buying capacity for this year,” he said.
NFA has allocated P4.9 billion for palay procurement for the summer harvest season.
A bigger budget of P9.7 billion, meanwhile, has been earmarked for the main harvest season starting September.
More farmers are selling to NFA due to its current support price of P19 per kilo. This is significantly higher than the prevailing farmgate price of P16 per kilo.
Last year, NFA was able to buy P14.5-billion worth of palay or more than double its annual subsidy of P7 billion.
Dar said Filipino households are reaping the initial benefits of the Rice Tariffication Law as more rice grades become available and affordable to different segments of the society.
“The RTL has not only significantly reduced rice prices in retail markets, but also provided consumers several types or grades of rice to choose from,” Dar said.
“The rice market segmentation is a very important outcome of the RTL with regards to rice prices. It only means that consumers have a choice depending on their preference and what they can afford,” he said.
The lowest price segment ranges from P27 to P32 per kilo, while the middle level rice grades are sold at P33 to P37 per kilo, and the more premium types are retailed at more than P38 per kilo.
“Now that rice is available to all consumer groups, rice is no longer a driver of inflation,” Dar said.
As of the second week of February, the average wholesale price of regular milled rice was P33 per kilo, down 13 percent from the previous year.
Retail price was at P36.33, down 11.6 percent from the year ago.
The average wholesale price of well-milled rice also decreased to P37.06 per kilo while its retail price was P41.22 a kilo.
“We expect the average prices of regular milled rice to go down further, and thus make our main staple more affordable to millions of consumers. We will continue to pursue corrective measures in the implementation of the RTL in the next five years,” Dar said.