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Farmer group estimates P36-B subsidy needed due to weak palay prices

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SAMAHANG INDUSTRIYA ng Agrikultura (SINAG), a farmer organization, said the government needs to provide subsidies worth P36 billion to farmers currently receiving low farmgate prices for their palay, or unmilled rice.

In a letter Monday, SINAG Chairman Rosendo O. So asked President Rodrigo R. Duterte to direct the Department of Agriculture (DA) to provide P36 billion, which will subsidize palay by about P4 per kilogram.

Mr. So said that giving P36 billion in subsidies during the harvest will help both rice farmers and the milling industry by ensuring farms can pay for planting materials for the next crop.

“Our expected total harvest for this cropping period is 9 million metric tons (MT) of palay so this means 9 billion kilograms multiplied by P4 pesos is P36 billion,” Mr. So said in the letter.

“The low price of palay means that our famers will not be able to recoup their expenses during this cropping period, and may force them to stop planting palay for good,” he added.

According to SINAG, the farmgate price of palay is at about P11 per kilogram for wet or freshly harvested palay, and P14 to P15 for dry palay.

The Philippine Statistics Authority estimates that the average farmgate price of palay fell 1.5% week on week to P16.84 per kilogram in the third week of September.

Mr. So said that instead of addressing the low price of palay, Agriculture Secretary William D. Dar has claimed that palay prices are at P18 per kilogram in Central Luzon and P19 in Cagayan Valley, according to a Sept. 16-30 price report done by the Philippine Rice Information System.

“The rice milling industry is also on the verge of collapse. They cannot purchase the palay at P17 per kilogram given the deluge of imported rice that is flooding our market,” Mr. So said.

The government, through the National Food Authority, continues to buy palay at P19 per kilogram and has since been directed by Mr. Dar to increase procurement.

Meanwhile, SINAG also requested Mr. Duterte to bring 30% of the live hogs in the Visayas and Mindanao to Luzon in order to balance the pork supply.

“Luzon is overwhelmed with an oversupply of frozen and imported pork stocks,” Mr. So said.

“The decrease of hog production has led to the increase of the retail price of pork in the market at P300 per kilogram. African Swine Fever (ASF) is still a threat to the hog industry not only in Luzon but in Visayas and Mindanao,” he added.

Earlier this month, the DA projected a pork deficit of 231,030 MT or 45 days’ consumption by the end of the year.

ASF has resulted in the death or culling of 316,637 hogs since the outbreak started in August 2019.

The DA was asked to comment on SINAG’s letter to Mr. Duterte, but had not replied at deadline time. — Revin Mikhael D. Ochave

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