To P22-23/kilo in time for wet season cropping, to boost buffer stocks
The National Food Authority (NFA) is poised to raise the price at which the government buys palay or unhusked rice by as much as P3 to P4 per kilo, or about P22 to P23 per kilo, in time for the ongoing wet season cropping.
“The P19 (buying price) is not competitive. We need to increase it. But we have to do it properly, not too high and not too low, lest we won’t be able to buy anymore,” an NFA statement issued over the weekend said. “We recognize the need to adjust the buying price since the price of farm inputs has also gone up as inflation sets in.”
The NFA said the proposal to raise the buying price has been with the NFA
board, chaired by President Ferdinand Marcos Jr. as concurrent Agriculture Secretary, since last year, but it is hopeful it will be approved, now that the agency has a new chief in Robert Rayo Bioco.
The agency said the President agrees with the proposal to raise the government’s buying price, to make it at par with the buying price of millers and traders.
The plan is expected to help the agency shore up the required rice inventory for 2024, which was raised to a 15-day buffer stock, as proposed by the President.
The agency said that this year, it would increase its buffer stock to nine days from the seven-day minimum inventory required by the Rice Tariffication Law (RTL). It said President Marcos ordered the increase in the volume stored by the agency.
The RTL transferred the rice importation mandate from the NFA to the private sector but requires the agency to continue maintaining abuffer stock by buying local harvests.
With the proposed buffer stocking volume, the agency will need at least P16 billion to buy the required contingent supply for the lean months that traditionally start in July, August, or September.
The NFA used to be required to hold a 30-day rice inventory, until the Rice Tarrification Law (RTL), which encourages private imports, lowered the figure to only seven days
In 2022, the NFA missed its seven-day worth target by 20 percent because it did not have the capacity to store the rice—and because its P7 billion budget allotted for procurement was not enough to buy seven days of stock.
The NFA said it also doesn’t have the necessary drying facilities and modern storage to hold 30 days’ worth of stocks.
As a rule of thumb, the country should have at least 90 days’ worth of stock during the worst typhoon months. A third of that should be with the NFA and the rest should be with households and the commercial sector.
Meanwhile, an inspection led by the Bureau of Customs (BOC) of two warehouses in Pulang Lupa, Las Pinas City, and Bacoor, Cavite found an estimated P40 million worth of imported rice being sold at high prices.
Customs agents were joined by Philippine Coast Guard personnel andbarangay officials on the Sept. 14 inspection.
The warehouses were verified to be storing rice from Vietnam, Thailand, and China, with an estimated value of P40 million.
During the investigation, it was discovered that the trader wasselling a 25-kilo sack of Vietnamese rice for P1,320 in the market, equivalent to P52.8 per kilo. This significantly exceeded the
Department of Agriculture’s prescribed price range of P41 per kilo for regular milled rice and P45 per kilo for well-milled rice.
The warehouse owner said they were not importers but rather rice traders. In response, Customs agents requested the owner to provide proof of payment of correct duties and taxes from their supplier or importer.
The inspection was conducted in line with the earlier directive of President Ferdinand Marcos Jr. to intensify efforts against ricesmuggling, hoarding, and illicit trading to ensure the affordabilityof the staple amid rising rice prices.
But Senator Francis Escudero challenged the BOC to immediately file charges of smuggling and hoarding against rice traders being blamed for the artificial shortage of the staple and its price spikes in recent months.
While there have already been several raids conducted by the BOC in the past weeks, Escudero asked why no charges have yet been filed.
“Why until now, are there no charges filed? Why haven’t I heard anyone sued for economic sabotage or something? Who owns these warehouses?
Who are the people involved?” Escudero asked.
He underscored the need to file cases and bring these economic saboteurs to court.
The government expects the country’s rice supply to grow by 1.4 million metric tons (MT) this month as a number of farmers have already begun to harvest.
According to Bureau of Plant Industry (BPI) Director Gerald Glenn Panganiban, a number of farmers have opted to harvest early, and there should be enough to meet local demand.