The Department of Agriculture (DA) plans to gradually adjust the palay buying price to balance the financial gains of Filipino farmers with consumer demands for more affordable rice.
DA Secretary Francisco P. Tiu Laurel Jr., who also chairs the National Food Authority (NFA) Council, explained that even with the lower range of the palay buying price adjusted to P23 per kilo, the procurement price remains higher than last year’s range of P16 to P23 per kilo.
“World prices of rice have gone down, but local rice prices won’t decline if the palay buying price remains high. At P23 per kilo, farmers will earn a decent return. Even at P21 per kilo, they’ll still enjoy a good profit. We prioritize the interests of farmers when determining the palay buying price,” he said.
In June, the NFA Council approved a higher buying price range of P17 to P30 per kilo to compete with private traders who drove up prices due to El Niño and India’s rice export ban. Last week, India lifted its export ban on rice, leading to a decline in global rice prices.
NFA administrator Larry Lacson assured that the adjustment of the palay procurement price range to around P23 to P25 per kilo will be “calibrated” based on palay quality and market conditions.
It takes approximately two kilos of palay to produce one kilo of rice. As a general rule, the retail price of rice per kilo is usually double the cost of palay, considering processing and marketing costs.
For this wet season, the NFA plans to buy between 6.4 million and 8.7 million 50-kilo bags of palay.
