NFA to stop selling rice at a loss to relief agencies

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rice NFA

THE National Food Authority Council (NFA) has approved the sale of rice to institutional buyers, including local government units (LGUs), at P37 per kilo, in order to make the NFA’s operations more self-sustaining, the Department of Agriculture said.

“The NFA also approved a resolution which sets the price for the rice that we will sell to LGUs and even private NGOs. We will not sell at P27 (per kilo), we will sell at P37 (per kilo),” Agriculture Secretary Emmanuel F. Piñol told reporters at a news conference.

To be affected are institutional buyers like the Department of Social Welfare and Development (DSWD), LGUs, Non-Government Organizations, the Philippine National Red Cross (PNRC), and the National Disaster and Risk Reduction Management Council (NDRRMC).

He said the old selling price of P27 produces losses for the NFA, though that price will still apply to areas suffering from shortages.

The NFA has had to pay out significant incentives to attract sellers of palay, or unmilled rice, ever since its mandate shifted primarily to procuring rice from domestic farmers in order to maintain a buffer stock.

The NFA procures palay at P20.70.

Mr. Piñol said that under the new pricing, he expects the NFA to earn at least P1 per kilo.

“The NFA will now conduct surgical marketing operations. Ibig sabihin [This means]… we will not operate in areas where there is a surplus of rice stocks. Ang focus namin [Our focus] will be Metro Manila and net importing provinces,” he said.

He also said that the council has identified 40 areas with high poverty incidence for targeted sales, which will start in September, when the distribution of domestically-procured rice to the market will start, coinciding with the lean months for rice supply.

The NFA is still running down its last inventories of foreign rice after its importing function was taken away from it this year. The Rice Tariffication Law liberalizes rice imports by private entities, leaving the NFA to maintain a buffer stock from domestic rice.

As of May 20, the NFA has procured a total of 4.025 million bags of palay from farmers.

Meanwhile, Mr. Piñol said the price of rice has stabilized, while the buying price of palay has increased, addressing the concerns of both consumers and farmers.

Inflation spiked in 2018, while the threat of competition from cheap foreign grain, which will be imported more freely, also pressured palay farmgate prices, threatening farmer incomes.

In the first week of May, the average farmgate price of palay rose 0.3% week-on-week to P18.45 per kg, the Philippine Statistics Authority said.

The average wholesale price of well-milled rice decreased 0.4% to P39.55 compared with the previous week. At retail, the price fell 0.5% to P43.30 per kg.

The average price of regular-milled rice at wholesale fell 0.5% to P36 during the period. At retail, the price of regular-milled rice fell 0.5% to P38.97. — Vincent Mariel P. Galang