Farmgate palay prices rise in May

MANILA, Philippines — The farmgate prices of palay or unhusked rice increased by  1.6 percent in May from year-ago levels, a welcome development for farmers suffering from depressed prices.

The average farmgate price of palay inched up from P16.97 per kilogram in May last year to P17.24 per kilo this year, based on data from the Philippine Statistics Authority (PSA).

Out of the 16 regions, 11 regions saw higher annual increases, which contributed to the overall year-on-year growth.

The PSA data showed that Western Visayas registered the highest annual increment of 10.2 percent during the month followed by the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) with a 7.9 percent jump.

After exhibiting negative annual rates in the previous month, the agency noted that Ilocos Region, Cagayan Valley, Central Visayas and Davao Region posted positive annual growths during the period.

Meanwhile, five regions recorded price declines, with MIMAROPA having the biggest drop at 5.8 percent followed by Calabarzon at 4.9 percent.

On a month-on-month basis, the average farmgate price of palay per kilogram increased by 0.1 percent from P17.23 per kilo in April.

The highest monthly growth was recorded in Cagayan Valley at 4.7 percent while the biggest decline was seen in SOCCSKSARGEN at five percent.

In a text message, former agriculture secretary and Federation of Free Farmers (FFF) chairman Leonardo Montemayor said the higher farmgate prices of palay – although only a slight uptick – is a welcome adjustment for farmers.

He said the farmers “have been suffering from low prices in the last three years due to excessive imports.”

“Although the increase may be small, it will still help farmers cope with the situation and hopefully encourage them to continue producing,” he said.

When asked what could have possibly driven up the farmgate price, Montemayor attributed the increase to higher fertilizer, production and marketing costs, slightly increasing import prices, and relatively tighter supply in the market compared to last year.

“Some traders may also be anticipating a spike in prices (both domestic and international) later this year when the ‘food crisis’ unfolds, so there is increased demand for palay at this time,” he said.

For this year, the Philippine Rice Research Institute estimates the country’s palay production to decrease by as much as 1.1 million to 1.3 million metric tons. This is coming from the record 19.96 million MT level of production last year.

Palay production for the first semester already dropped by 6.8 percent to  4.5 million MT from 4.63 million MT due to rising prices of fertilizer.

Former Agriculture Secretary William Dar earlier said the country would be forced to continue importing rice due to lower production, weighed down by reduced usage of fertilizer which has become more expensive.

More recently, Agriculture undersecretary-designate for consumer and political affairs Kristine Evangelista said importation might still be needed for augmentation and for buffer stocking, but government will continue to prioritize local palay production.

“Although the government is trying to boost production in order to stabilize prices for consumers, it is also important that they provide the right price signals and incentives to farmers,” Montemayor said.

The FFF earlier  said government should institutionalize the protection of farmers from rice imports during the harvest period.