MORE funding for palay procurement and amendments to the Rice Tariffication Law will be the main legislative agenda items for the National Food Authority (NFA), the Department of Agriculture (DA) said.
A palay-procurement budget of P18 billion, up from the current P9 billion, will help sustain the government’s P20-per-kilo rice program but will also boost the NFA’s ability to influence palay prices at the farmgate level, Agriculture Secretary Francisco Tiu Laurel, Jr. told reporters.
The intention is to buy more palay (unmilled rice) from areas where traders are imposing low prices on farmers, thereby forcing traders to match the NFA price, he said.
Mr. Laurel said the doubling of the rice procurement budget enjoys Palace support.
The NFA opened a newly rehabilitated warehouse in Malolos, Bulacan on Monday, in preparation for stepped-up its palay procurement.
The P10.4-million rehabilitation that began in December involved upgraded electrical systems, improved ventilation, and enhanced safety features.
Built in 1979, the 2,400-square-meter facility had only seen minor repairs over the decades. It can now store up to 70,000 50-kilo bags of palay or rice.
The NFA, which currently purchases palay at P18 to P24 per kilo, said some traders had taken advantage of the 45-year-old warehouse’s temporary closure, offering farmers as little as P11.50 per kilo.
Production costs for palay are estimated at P12-P14, according to the NFA.
“With this warehouse back in action, the NFA can continue buying palay at prices that truly reflect farmers’ efforts,” Mr. Laurel said.
NFA Administrator Larry Lacson told BusinessWorld that the grains agency had sought a P27-billion budget for rice procurement before the P18-billion budget allocation was finalized by the DA.
The NFA will also seek to restore some of the NFA’S powers taken away by the Rice Tariffication Law, Mr. Lacson said, specifically the power to sell rice directly to the public, through which it hopes to exert a greater influence on palay prices.
He said a number of legislators have showed interest in these proposals for the 20th Congress.
The Rice Tariffication Act of 2019 allowed private traders to import rice without restrictions, while also removing the NFA’s own power to import.
The traders, in turn, were made to pay a tariff on their shipments, initially set at 35% and since reduced to 15%. The tariffs are intended to finance efforts to modernize the rice industry.
The law was amended last year to increase the annual allocation for the tariff-funded Rice Competitiveness Enhancement Fund to P30 billion from P10 billion.
Mr. Laurel said the DA also wants a provision that will require rice traders and retailers to be registered with the NFA, to facilitate the monitoring of their activities.
He said the NFA will not seek to restore its power to import rice.
The DA recently announced plans to impose a floor price scheme for palay to keep farmers from being exploited by traders.
Mr. Laurel said restoring the NFA’s regulatory power remains a better option to ensure farmers earn a fair income, as some traders are operating without government supervision.
The DA hopes to implement the floor price scheme by the next harvest, he said. — Kyle Aristophere T. Atienza