Palay procurement funding in 2020 estimated at P53 billion

THE Department of Agriculture (DA) said various agencies are expected to spend about P53 billion this year to purchase palay, or unmilled rice, in order to prop up farmgate prices and help farmers recover from sharp price drops last year.

“In all, this year we are looking at an initial P53 billion from the public sector composed of the NFA (National Food Authority), DSWD (Department of Social Welfare and Development), provincial LGUs (local government units) and farmers’ federations to buy palay at favorable prices,” Agriculture Secretary William D. Dar said in a statement.

Rice prices fell after import restrictions were dropped under the Rice Tariffication Law, which took effect in March. Cheap imported grain pressured prices, reducing trader demand for domestic rice, which is sold by farmers in palay form.

According to the Philippine Statistics Authority (PSA), the average price of palay fell 22.3% year-on-year in the first week of December.

“Starting this 2019-2020 dry season, we will buy aggressively from farmers, at P19 per kilo,” Mr. Dar said, citing the support price paid by the NFA as buyer of last resort.

He said that the NFA was instructed to fully utilize its annual P7-billion budget allotted for palay procurement, which should be rolled over at least twice, or up to P14 billion.

The DSWD is also setting aside P31 billion annually for the distribution of NFA rice to beneficiaries of the Pantawid Pamilyang Pilipino Program or the 4Ps, instead of giving them directly the P600 rice allowance.

Mr. Dar said that provincial governments in the 30 major rice producing centers are also expected to continue their procurement activities, including top producers like Isabela and Nueva Ecija.

“They commit to allot an initial P6 billion for the purpose,” he noted.

Farmers’ federations from Isabela, Cagayan, Pangasinan, and Nueva Ecija also committed to purchase at least P2 billion worth of palay from their members. — Vincent Mariel P. Galang