DA sees no inflationary impact from hike in palay buying price

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A FARMER harvest rice using a mechanical thresher. -- AFP

AGRICULTURE Secretary Emmanuel F. Piñol said he will continue to push for an increase in the government’s buying price for unmilled rice, or palay, to P20 from the current P17, and denied that such a move would increase inflation.

The decision to raise the purchase price rests with the National Food Authority (NFA) Council, which decided to refer the matter to the government’s economic managers because of budgetary constraints and fears that the price hike will have an impact on inflation.

Mr. Piñol said his proposal will prop up domestic rice production and keep farmers motivated.

“My proposal to the president, that the buying price of NFA be increased from P17 per kilo to P20, should be tackled. The NFA should position itself or focus on provinces where there are depressed buying prices for rice,” Mr. Piñol told reporters on Monday.

“Instead of focusing on rice importation, the NFA should just focus on the procurement of local rice,” he added.

The NFA has proposed its own buying price of P22 starting next year, but was rebuffed by the NFA Council.

Mr. Piñol said he does not believe that adjusting the palay buying price rice will immediately translate to a faster rise in consumer goods prices.

“How much do rice traders buy right now? Between P18 to P20 in Region 2. And this is for rice sold in the market for P40. They’re making a lot of money,” he said.

The NFA effectively sets the guaranteed minimum rate for domestic farmers, who can also sell to private traders for a higher price. The NFA’s rice purchases make up the government’s buffer stock, which it uses to stabilize prices or ensure supply to certain calamity-hit regions. – Janina C. Lim