THE Department of Agriculture (DA) said Thursday that the National Food Authority (NFA) will increase the buying price for palay, or unmilled rice, to P19 from P17 while also removing add-on incentive payments under the old scheme.
At the same time, the NFA will release 3.6 million bags of imported rice onto the market until early October, to increase supply in key cities and keep retail prices low.
Agriculture Secretary William D. Dar said the NFA Council approved these measures at a Sept. 10 meeting.
The NFA pays a support price to farmers as a buyer of last resort to reduce their exposure to low prices for palay offered by traders.
According to the NFA website, the agency buys palay under the old scheme for a P17 per kilogram basic payment. Incentive payments for delivery and drying can bring the final price to as high as P20.70 for farmer organizations and P20.40 for individual farmers.
“The Council of the NFA decided for the National Food Authority to flood the Metro Manila market and other cities of the country nationwide with the NFA-imported rice. The 3.6 million bags will be out until October 10,” he said.
The imported rice started to be released on the market Thursday, in an apparent attempt to break the hold of what the DA has called “price manipulators” and “hoarders” on retail prices.
“Continuous ang paglabas ng (The release is continuous for the) 3.6 million bags of imported rice from NFA at the rice of P25 [per kilo] wholesale and P27 retail,” he said.
At P27 per kilo, the 3.6 million 50-kilogram bags will raise P4.86 billion, which the NFA will apply for domestic palay procurement.
“We would like to believe that flooding the market with 3.6 million bags of rice will further have an impact in terms of lowering (retail) prices,” Mr. Dar said.
NFA Administrator Judy Carol L. Dansal said that she expects the retail price of rice to fall to P32 to P34 per kilo from the current P40.
“The reasonable price of rice in the markets should fall within P32 to P34 per kilogram, but if you look at the markets now, the lowest price is P40 per kilo,” Ms. Dansal said.
She said setting the support price at P19 per kilo removes the incentives payments, which were offered in 2018 due to the “abnormal” conditions in the rice market.
The old incentive scheme include payments of P3 per kilo as a buffer stocking incentive (BSI); P0.20 for drying, a further P0.20 for delivery, and a P0.30 cooperative development incentive fee for qualified recipients. — Vincent Mariel P. Galang