Expanded NFA budget required to boost palay procurement

PHILSTAR FILE PHOTO

AGRICULTURE Secretary William D. Dar said he recommends a P30-billion budget for the National Food Authority (NFA), up from the current P7 billion, to boost procurement of palay, or unmilled rice, in order to enable the sale of more rice to consumers at below-market prices.

“The NFA used to have a lot of buffer stock in its warehouses. It would sell this P27 per kilo. Having that as a benchmark, as long as there is political will and additional budget given to the NFA, you can increase its ability to procure more,” he said during a virtual webinar.

The NFA has a current budget of P7 billion, according to Mr. Dar.

“We need additionally P23 billion to the NFA’s budget so it becomes P30 billion a year,” he said.

“Using that benchmark, you can now extend that to 30 days’ (demand) for buffer stock. Once that is rolled over, it should be sold to the markets, using the network of the NFA. From P27, it can be increased by P3 to become P30 per kilo,” he added.

Mr. Dar said that President Rodrigo R. Duterte approved a proposal that would allow local government units (LGUs) in the provinces to procure their own palay and maintain local inventories.

“We are aiming for the top 20 rice-producing provinces. After these elections, we will have a dialogue with (them),” he added.

He said his ultimate goal after the LGU talks is to raise the buffer stock to 60 days.

“Did you know India and China have a one-year buffer stock of rice? That is how important buffer stocking is to roll over so that there is affordable rice to sell on the markets,” Mr. Dar said.

“I would like to also mention that the rice being sold by the NFA to the markets is for the poorest of the poor,” he added.

The Rice Tariffication Law removed the NFA’s import functions, leaving it to procure rice from farmers at a support price that is typically higher than what commercial traders are willing to pay, though in practice procurement is limited in the absence of funding.

Mr. Dar said an important component of the DA’s mission is to ensure the affordability of food and the competitiveness of agriculture.

He added that the affordability of rice is a powerful tool for managing inflation, and that the DA is looking to ship surpluses from productive provinces to areas facing shortages. — Luisa Maria Jacinta C. Jocson

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