LGUs allot P5 billion to buy palay from farmers

MANILA, Philippines — About 23 provinces have earmarked a total of P4.95 billion for the procurement of palay (unhusked rice) directly from farmers as part of efforts to address declining farm gate prices due to the liberalization of the rice industry.

Farm gate prices of palay have slid to a new eight-year low.

The 23 provinces are Kalinga, Mountain Province, Marinduque, Iloilo, Capiz, Bohol, Biliran, Zamboanga Sibugay, Sarangani, Agusan del Norte, Isabela, Nueva Ecija, Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Nueva Vizcaya, Quirino, Tarlac, Pampanga, Bulacan, Cagayan and Bataan.

“Our efforts to partner with our provincial governors are now coming into fruition as we help prop up palay prices. Through this, we hope to provide sure market for the produce of our rice farmers at a fairly competitive price at least for this season in these provinces,” Agriculture Secretary William Dar said.

Dar said most of the LGUs are already in the preliminary process – including the conduct of committee meetings and crafting of Sangguniang Panlalawigan resolutions that will authorize them to avail of a loan facility from Land Bank of the Philippines.

Under the Palay sa Lalawigan Program, Land Bank would provide easy access loans to interested local government units to bankroll their direct engagement in the rice industry value chain.

“We are closely working with Land Bank to provide loan schemes that are easily accessible with minimal or no interest to our farmers affected by low farm gate prices. We are trimming the requirements to encourage more farmers to avail of loans,” Dar said.

Dar is urging other provinces with budget limitations to avail of loans from Land Bank for drying facilities and access to National Food Authority warehouses for storage of palay and make these available for farmers’ use.

Average price of palay started to steadily decline at the onset of rice tariffication in March.

The influx of imported rice months further depressed the buying price of local palay to levels way below the cost of production.

As of the end of September, average farm gate price of palay declined further to P15.82 per kilogram,  down 29.3 percent from the previous year.