NFA allots P5.1 B for palay procurement

State-run National Food Authority (NFA) is allocating P5.1 billion for its palay-buying program nationwide to boost buffer stock and rice distribution requirements.

Data obtained by The STAR showed that NFA is targeting to buy six million bags of palay, double the three million procurement target last year.

The agency buys palay (unhushed rice) at P17 per kilogram and the standard 50-kg bag costs about P850.

Incentives are also being offered to individual farmers and farmer cooperatives nationwide, including delivery incentive of P0.20 to P0.50 per kg, P0.20 per kg drying incentive and P0.30 per kg Cooperative Development Incentive Fee.

NFA starts buying during the summer harvest season but bulk of the target volume is expected to be bought starting October until December as the main harvest season contributes 70 percent to the country’s total annual harvest.

Under the law, NFA is tasked to buy the palay produce of local farmers as buffer stock for calamities and other contingencies.

Last year, NFA failed to meet its local procurement target following higher prices offered by private traders of up to P25 per kilogram compared to the buying price of the agency at P17 per kilogram.

The agency was only able to purchase 587,748 bags or 19 percent of the target.

Data showed that NFA stocks can only last for three days when it is supposed to have a 15-day buffer stock.

However, total national inventory is good for 92 days and NFA said there is more than enough supply in the commercial market.

NFA is already expecting additional rice supply after the interagency NFA Council approved the importation of 250,000 metric tons of rice as standby authority for buffer stocking.