Commercial palay prices are way above the National Food Authority’s (NFA) buying price, an instance that may compromise the agency’s palay procurement program.
Traders at the Intercity Industrial Estate and the Golden City Business Park in Bocaue, Bulacan confirmed that palay prices are currently at an average of at least P23 per kilo depending on quality and variety compared to the NFA’s buying price of P19/kilo for clean and dry palay.
With the price discrepancy of an average of P4/kilo, this translates to at least P200 per 50-kilo sack, prompting rice farmers to sell their harvest to commercial palay traders instead of delivering their produce to the NFA.
For his part, Raul Montemayor, national manager of the Federation of Free Farmers said, “We noticed that palay prices are on the uptrend, so also with import prices of rice.”
He also pointed out, “If traders buy from farmers at P23, NFA will definitely not be able to compete since they are limited to buy at P19 per kilo.”
Montemayor cited that this is one of the scenarios that the Rice Tariffication Law (RTL) did not foresee—where NFA is unable to buy palay for buffer stocks, even as the agency is prohibited from importing.
Beside this, he said, the NFA is being tasked to dispose of its stocks in Kadiwa stores and to provide rice to the military and other government offices, whereas the RTL states that NFA stocks should be released only during calamities and emergencies.
“So, we will have a situation where NFA buffer stocks are being depleted for non-emergency purposes and the agency will find it difficult to replenish its stocks because of higher prices offered by traders,” Montemayor added.