The National Food Authority (NFA) should be ready to buy locally grown palay (unhusked rice) if farmgate prices go down below the “profitable” level as a result of massive rice importation this year, according to a senior official of the Department of Agriculture (DA).
Edilberto de Luna, Agriculture assistant secretary for Field Operations, said the additional rice imports may likely depress farmgate prices for the next harvest season in September, or the end of the so-called lean months.
“This is our reservation when we agreed to the importation of the 500,000 metric tons of rice. If farmgate prices drop below P17 per kilo, the grains agency should be moving to stabilize the price of rice and to ensure continued planting for food security,” de Luna said in an interview.
The NFA buying price for palay is at P17/kg. It could go to as much as P17.70/kg with incentives offered to individual farmers and farmer cooperatives nationwide–including P0.20/kg delivery incentive, P0.20/kg drying incentive and P0.30/kg Cooperative Incentive Fee.
“At present, the average farmgate [price]of palay [is]around P19, which is a very good price considering that it is still summer harvest. Farmgate prices may be depressed at the start of September, which is also the wet cropping season,” the official said.
“They should be ready to buy. Based on our estimates, the NFA should buy at least 1 million MT to ensure stable prices,” he added.
The NFA was created with the intention of protecting the interests of both rice producers and consumers. As such, the agency’s two primary mandates are to stabilize the price of rice and to ensure food security.
The price stabilization mandate means that the NFA tries to influence prices on two fronts. On one front, it must support the palay farmgate prices at a level that is enough to ensure a reasonable return for rice farmers. On the other, it must ensure that the prices of rice are low enough to remain affordable for low-income consumers.
This year, Manila is set to import as much as 2.1 million MT of rice–including the 1.3 million MT government purchases under government-to-government tender and the 805,200 MT commitment under the World Trade Organization.
It is the biggest rice import volume under the Aquino administration or roughly the same level during the 2008 global rice crisis.
Rice Watch and Action Network (RI) convenor Aurora Regalado on Monday questioned accomplishments of the National Irrigation Administration amid the big-budget investment of the Aquino administration in irrigation since 2010.
The group expressed alarm over gaps in rice self-sufficiency target because irrigation fell short of its mandate to raise production targets.
“If it’s true that imports will reach the level approximating [that of]2008, then the people should really be questioning the impact of huge investments [in]rice, particularly irrigation,” Regalado said.
“If these huge investments will not materialize, then our staple food will very vulnerable to risks brought by extreme weather in the near future,” she added.
Data showed that a big part of the increase in rice production the past seasons came from rain-fed areas, which means that good weather played a big part in the higher output, plus the high buying prices of palay, which drive farmers to continue to plant rice.
“We want to know what has been accomplished in real terms. Secretary [Proceso] Alcala said the small irrigation systems have been a big help but these are under the jurisdiction of the Bureau of Soils and Water Management (BSWM). What happened to the big irrigation systems that NIA was supposed to deliver following the big-ticket allocations given to [it]?” Regalado asked.