A PROPOSAL BY the Samahang Industriya ng Agrikultura (SINAG) for a P5 per kilogram support price for palay makes better sense than subsidizing President Ferdinand Marcos Jr’s campaign promise embarking on reverting the price of the country’s staple food to P20 per kilo.
SINAG executive director Jayson Cainglet said the prevailing farmgate price of P10 to P12 per kilogram is way below than the buying price of the National Food Authority (NFA) which ranges from P17 to P30 for palay. The current farmgate price of palay is even way below the estimated production cost computed by the Department of Agriculture at P12 to P14 per kilo.
“If the government can subsidize P15 per kilo sa bente pesos na bigas, maliit na hamak yung P5 per kilo,” Cainglet told Bilyonaryo.com.
He said a proposal by the DA to extend by 15 to 30 days the current suspension on importation would not address the problem as the peak harvest season runs until the end of November.
SINAG recommended restoring the tariff on imported rice to its old rate of 35% for ASEAN countries and 50% for non-ASEAN nations. This would be a bigger help for farmers, who because of huge importations can not compete with cheaper imported rice.
Cainglet warned that farmgate prices could fall further as harvests increase in October.
He further noted that the import suspension has not affected rice importers, while some traders have stopped buying palay.
The NFA’s presence in the market is limited, he added, noting that even if it were purchasing, it could only absorb about 2% of the harvest.
Farmers direly need help, especially since they can’t compete with the cheap rates of rice imported even before the temporary import suspension that began on Sept. 1.
NFA’s palay buying prices, though high enough, would depend on the moisture content and quality of unhusked rice sold to it by farmers. The higher end of this (P17 to P30) range is for clean and dry palay (with 13-14% moisture content), while the lower end applies to fresh/wet palay (22-29.9% moisture content). Such an adjustment helps the NFA compete with private traders and provides better support for farmers. Purity is also a big factor for better pricing.
Ideally, the NFA’s higher buying prices allows it to compete with private traders, who might offer lower prices during harvest season. But then again, budgetary constraints get in the way.
Farmers also prefer selling to private traders as the merchants go to their fields, whereas they have to hire transportation to bring their palay to the NFA warehouses, where they wait for tremendous paperwork to be completed before they make a sale and are paid (usually after over a month from transaction date).
In some areas, the NFA deploys small trucks to buy directly from the farmers.