The National Food Authority (NFA) announced on Thursday it has raised its buying prices for palay (unhusked rice) to a range of P23 to P30 per kilogram (kg) for dry palay and P17 to 23/kg for wet palay to encourage farmers to sell to the government.
The NFA admitted it still has a long way to go to build up buffer stocks in the face of potential rice supply concerns due to El Niño-induced drought.
“Our current prices couldn’t compete with private traders. We need to incentivize farmers to keep planting rice and even expand their rice fields, especially with the harvest season nearing its end,” said Agriculture Secretary and NFA chairman Francisco Tiu Laurel.
The significant jump from September’s P19-P23 price range for dry palay and P16-P19 for wet palay was a decision that underwent much deliberation and discussion.
Private traders currently offer P27 to P30 per kilo for dry palay, while retail rice prices range from P47 to P57 per kilo, depending on location and quality.
The DA asserted that the NFA has already procured some palay for buffer stocks, and aims to buy more before the harvest season ends in May.
The Rice Tariffication Law mandates the NFA to maintain a buffer stock equivalent to at least nine days of national rice consumption.
The NFA is nowhere near the mandated 330,000 metric tons (MT) of buffer inventory which is crucial for food security in case of emergencies.
The NFA cannot buy from outside sources due to an import restriction in the law.