MANILA, Philippines — State-run National Food Authority (NFA) is pushing anew for an increase in the buying price of palay by up to P8 per kilogram, to allow it to compete with private traders and ensure better procurement of domestic stocks.
“Our new proposal is an increase from P17 to P25, but NEDA would still have to check the inflationary effect,” a source from NFA told The STAR.
The decision, however, will still be subjected to the review of the National Economic and Development Authority (NEDA) and the Bangko Sentral ng Pilipinas.
“This year’s budget is for P17 per kg only, but if they want it this year or next year, it is up to them since our priority is really to buy domestic,” the NFA source said.
Since last year, NFA has been requesting to increase the government support price for palay to help the farmers cope with the increasing cost of farm inputs, as well as to give the agency a chance to buy more locally with a more competitive buying price. The P17 per kg NFA buying price was set nine years ago.
Previous proposals of NFA range from an increase of P2 to P5.
Lawmakers even backed the proposed increase for the last summer harvest season which was rejected by the NFA Council.
NFA continues to have difficulty in attaining its palay procurement target as private traders have been buying at a higher price. The low procurement of NFA even resulted to the depleted stocks of cheaper rice in the market a few months ago which eventually caused the spike in prices of commercial rice.
Latest data from the grain agency showed that it had only bought 76,120 bags as of the end of June, accounting for only four percent of its target of two million bags for the whole 2018.
For the first semester, NFA is targeting to procure up to 804,000 bags.
In fact, NFA already slashed its original target for the year of six million bags following the continued increase in prices and the repeated rejection of its proposal to hike its palay buying price.