CURRENT STOCKS OF imported rice and the adoption of P20/kg rice in the market have contributed to declining farmgate prices of palay, which the Federation of Free Farmers said fell 31.8 percent in June, or just when harvest was almost complete in most parts of the country.
Local harvest had to compete with arriving imported rice, which were landed here at P26.34 per kg. in June, versus its level the year before at P41.09/kg. in addition to current stocks of imported rice.
Another factor is the government’s selling price of P20/kg of rice, which though intended for the sector that could least afford the staple at very high retail prices, also dampened local farmgate prices for palay.
“This confirms what many farmers from various parts of the country have been complaining about,” Federation of Free Farmers Cooperatives, Inc. National Manager Raul Q. Montemayor told Business World.
“Normally, palay prices go up after the harvest and into the May-June planting season,” he said, “but this time, prices have been going down,” he added.
‘Local harvest had to compete with arriving imported rice, which were landed here at P26.34 per kg. in June, versus its level the year before at P41.09/kg. in addition to current stocks of imported rice.’
EX-PIER COSTS
Montemayor also noted that rice imports that are already in the country are cheap, with 5 percent broken-grain rice averaging P29.50 per kilo in June — compared to P40.67/kg in June 2024 — ex-pier and with tariffs already paid.
Ex-pier costs include the purchase cost from the source country FOB (or free-on-board), plus freight, insurance, and tariffs.
The landed price of imported rice at 25 percent broken averaged P26.34 per kilo in June, against P41.09 a year earlier.
He also said the P20/kg rice program has led traders to hedge and buy palay from farmers at low prices “in case they have to compete with this cheap rice.”
N.F.A. BILL IN CONGRESS
The Department of Agriculture (DA) is pushing Congress to pass a bill seeking stricter oversight of rice imports and restoration of the National Food Authority’s (NFA) regulatory powers.
The farmgate price of palay fell 31.8 percent year on year (YOY) in June to an average of P16.99 per kilo. Month on month, the average palay farmgate price fell 4.3 percent compared to May.
Agriculture Secretary Francisco Tiu Laurel, Jr. had debunked claims that the P20/kg rice program caused the declining palay prices saying “simply not true,” but that it had helped decongest NFA warehouses and has allowed the government “to buy more palay from farmers.”
“On the contrary, we need to accelerate the expansion of the subsidized rice program,” he said.
“Every bag of rice sold at P20 frees up space for two sacks of palay, which we can purchase at better prices than what private traders offer,” he added.
But Montemayor belittled NFA’s contribution as minimal “due to congestion of its warehouses and strict standards (clean and dry) when buying palay from farmers.”
BLAME TRADERS
“Even without these constraints, its funds can absorb only 5 percent at most of the harvest volume,” he added.
“The government has passed the blame to palay traders and has asked farmers to report to them traders who are ‘nambabarat,’ (forcing them to accept low prices),” he said.
“But it is very possible that the drop in palay prices is due to its own rice subsidy programs, its unlimited import policy, and its failure to support palay prices through the NFA,” he added.
Currently, the NFA buys palay at a minimum of P17 per kilo for fresh grade and up to P24 per kilo for dry.
“To support this effort, the agency is acquiring more trucks, upgrading its warehouses, and requesting a larger procurement budget,” Laurel said.
OVERUSED BUDGET
As of June 30, the NFA procured 149 percent of its first half target, approaching capacity “in response to the clamor from farmers for the agency to buy more palay,” he added.
The DA urged Congress to pass the proposed Rice Act before the first harvest of 2026. It is currently conducting “on-the-ground consultations” with farmers and lawmakers in preparation for congressional deliberations.
It said it is backing a provision that would give the NFA “some control” over rice imports.
It’s “critical gap that leaves the DA with limited ability to manage domestic supply,” Laurel said.
R.T.L AT FAULT
The 2019 Rice Tariffication Law granted unlimited rice importation by the private sector– but required them to pay tariffs (which ironically the government itself reduced from 35 to 15 percent)– and removed from NFA the power to import rice and sell directly to consumers.
The law was amended last year to increase the allocation for the Rice Competitiveness Enhancement Fund to P30 billion from P10 billion, paid out of rice tariff collections.
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