NFA faces stiff competition for palay from grain traders

BOCAUE, Bulacan, Philippines – The National Food Authority (NFA) is having a hard time procuring palay (unhusked rice) stocks from farmers due to its lower procurement prices.

Source from NFA’s Bulacan provincial office explained to The STAR that “the government’s palay-buying price is pegged at P17 per kilo and P17.50 if incentives for farmers’ cooperatives are included, while grain traders from the Intercity Industrial Estate in Bocaue-Balagtas are buying ready-to-mill palay at P19 to P22 per kilo.”

The Intercity Industrial Estate in the towns of Bocaue and Balagtas is a major rice trading center of the country that supplies at least 60 percent of Metro Manila’s rice requirements, the source said.

Comparing the procurement process of the NFA with the private traders, the government agency requires strict quality control on the grain’s purity and moisture content of at least 14 percent.

On the other hand,  private grain traders are not as strict on the grain’s purity standards and buy palay even with a  15 to 16 percent moisture content level that translate to a heavier volume weight compared to the NFA’s criteria.

In January this year, when the rice harvest season began, commercial grain traders procured dried palay at an average price of P18 to P21 per kilo, and at an average of P15 per kilo for newly harvested grains that still need to be dried to be commercially sold to rice traders, the sources said.

 As the harvest season peaks, NFA sources said that commercial grain traders’ procurement prices have increased to P19 to P22 per kilo, depending on the variety and grain quality.

On the other hand, palay traders’ current farmgate prices are pegged at P17 per kilo for fresh palay that still needs to be dried

With this situation, sources said that the NFA cannot compete with the commercial grain traders in procuring palay stocks for their buffer stock requirements.

They also said that last week, NFA Bulacan was only able to procure 20 sacks of palay from a farmer’s cooperative compared to the truckloads of palay being delivered in Intercity Industrial Estate.

The cooperative, the sources added, was only forced to sell a minimal volume of its palay stocks just to maintain its good cooperative standings with the grain’s agency and to maintain the group’s incentives with the NFA.

On the other hand, Serafin Manalili, the provincial manager of the NFA in Bulacan, said that their office has a standby fund for procuring palay stocks from the farmers and its regional and central offices could immediately release additional funds if there are more palay stocks that farmers intend to sell.