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NFA shores up inventory with domestic palay procurement of 1.26 million bags as of April 12

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NFA rice warehouse
Workers at a National Food Authority Quezon City warehouse. -- PHILIPPINE STAR/MICHAEL VARCAS

THE National Food Authority (NFA) said Tuesday that its purchases of palay, or unmilled rice, amounted to 593,123 bags during the month as of April 12, bringing its running total for the year to 1.26 million bags.

In a statement, the NFA, whose importing function was taken away by the Rice Tariffication Law, limiting it to the role of maintaining a buffer stock from domestic rice purchases, said including the last of its rice imports, the buffer stock now stands at 1.86 million bags.

“We are hoping that this will continue as we fulfill our mandated level of buffer stock. Our palay procurement activities will continue for as long as there are palay farmers willing to sell to us, to give them a fair price for their palay,” Tomas R. Escarez, NFA officer-in-charge administrator said in the statement.

Procurement operations in the month to April 12 in San Jose, Occidental Mindoro generated 93,699 bags, while Isabela province supplied 79,020 bags; Nueva Ecija 72,420; Bulacan 52,856 bags; Mamburao, Occidental Mindoro 31,907 bags. The NFA’s Northwestern Cagayan-Apayao (Allacapan) office procured 23,629; Tarlac province 19,484 bags; and North Cotabato 17,896 bags.

With the signing of the Rice Tariffication Law or Republic Act 11203 and its Implementing Rules and Regulations (IRR), the NFA has been stepping up its domestic procurement to fulfill its mandate of maintaining the equivalent of 15-30 days of the country’s rice consumption.

The law was enacted after inflation spiked in 2018, in part due to the depletion of the NFA’s reserves. Poor families depend on subsidized NFA rice for access to the staple, and the lack of supply in NFA warehouses increased the pricing power of private dealers selling their grain at commercial rates.




“The IRR of the Rice tariffication Law or RA 11203 has been signed and the role of the NFA has been refocused to buffer stocking. Based on the IRR, the NFA must now adopt a policy of maintaining a buffer stock equivalent to 15-30 days of national rice consumption, sourced from local farmers only. To be able to meet that, we have to buy around 15M to 30M bags of palay,” Mr. Escarez said.

The NFA recently increased its palay procurement target for 2019 to 14.46 million bags from 7.78 million bags. On the average, it is currently buying 73,233 bags per day.

“More farmers are selling to NFA because we have increased our effective buying price. The NFA started implementing an additional P3.00 per kilogram Buffer Stocking Incentive (BSI) in October, in addition to the previous P0.20/kg drying, P0.20/kg delivery, and P0.30/kg Cooperative Development Incentive Fee, increasing the agency’s maximum buying price for palay from P17.40/kg for individual farmers and P17.70 for members of farmer cooperatives/organizations to P20.40/kg and P20.70 per kg, respectively,” he said.

According to the Philippine Statistics Authority (PSA), the average farmgate price of palay continued to fall to P18.87 per kilogram (/kg) as of April 5 from P18.96/kg in March. There are some areas where the grain sells for as little as P14/kg.

The farmgate price has been trending downwards since the law started moving towards full implementation, with a liberalized import policy expected to bring in more cheap foreign rice to compete with domestic grain. Prices have also fallen despite widespread damage to the standing crop caused by the El Niño dry spell.

As of April 2, El Niño damage, mainly to the rice and corn crops, was P5.05 billion, on lost volume of 276,568 metric tons (MT). The dry spell has affected 177,743 hectares of agricultural land and 164,672 farmers. Damage to the rice crop accounted for P2.69 billion of the total and lost volume of 125,590 MT, affecting 111.851 hectares and 108,845 farmers. — Vincent Mariel P. Galang

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