NFA struggles to procure palay

MALOLOS, Philippines – As the palay (unhusked rice) harvest season in Central and Northern Luzon starts to peak up, the National Food Authority (NFA) is struggling to convince farmers to sell their produce to the government grains agency.

Serafin Manalili, NFA-Bulacan chief, told The Star that with the current prevailing palay prices in the local market, the grain agency simply cannot compete in its palay procurement against its private counterparts.

“The government’s palay-buying price is pegged at P17 per kilo and P17.50 if incentives are included,” Manalili pointed out and compared it to the P21 to P24.50 per kilo being offered by private  traders, particularly at the Intercity Industrial Estate in Bocaue town, a major rice trading center of the country.

On the other hand, Manalili said that based on their monitoring, farmgate prices of newly harvested palay are pegged at an average of P17 per kilo.

The standard procedure by the NFA is to procure palay that has moisture content of 14 percent and almost free of impurities.

On the other hand, private traders are buying palay even with 15 to 17 percent moisture content at an average of P21 to P23 per kilo, depending on its quality.

 This translates to a heavier product weight, compared with a 14 percent moisture content, resulting into a higher price for the farmers’ produce.

Bonifacio Silvestre, a palay agent, explained that rice traders are even buying palay with 14 percent moisture content at P24 to P24.50 per kilo and are being stockpiled for milling process in the coming months as the harvest season tapers off.

With the big discrepancy between the private traders and the NFA’s procurement prices, it is but natural for local farmers to sell their produce to the private traders instead of the government grains agency, palay agents in Intercity Industrial Estate noted.

This is the main reason why the NFA is unable to buy local farmers’ produce and has a  zero palay procurement rate despite availability of funds for buying purposes, Manalili said.

Palay traders confirm that private traders in Nueva Ecija  are now engaged in grain stockpiling at their warehouses.

They added that quality control being used by private traders in Nueva Ecija are almost, if not more stringent, than the practice being used by the NFA, thus prices are much higher compared to those in Intercity in Bulacan.

More than two weeks ago, palay traders confirmed that palay prices have gone down to P20 per kilo and for flood-affected grains at P18 to P19 per kilo.

However, the scenario abruptly changed, the palay traders said when rice traders started to buffer stock their warehouse which  again pushed up palay prices.

Manalili assured the consuming public, however,  that affordable NFA rice, pegged at P27 and P32 per kilo, are regularly being allocated to their accredited retail stores and parochial outlets in Bulacan.