Gov't raises buying price of palay, but removes incentives for farmers

The government on Thursday said it has increased the price it buys palay (unmilled rice), but removed incentives local farmers were enjoying.

According to Agriculture Secretary William Dar, the National Food Authority (NFA) Council on September 10 decided that the government would buy palay from local farmers at a support price of P19 per kilogram.

"Another major development as a result of the council meeting yesterday is the palay buying by NFA from local farmers will now be at P19 per kilogram clean and dry from the previous level of P17," he told reporters in a press conference in Quezon City.

However, the latest figure is lower than the prevailing buying price of the NFA which is currently at P20.70, as the NFA Council decided to remove the P3.70 incentives currently given to farmers.

The P3.70 incentives covers P3 buffer stocking fee, 20 centavos delivery, 20 centavos drying, and 30 centavos cooperative incentive fee.

NFA Administrator Judy Carol Dansal said the removal of incentives was due to the limited budget of the agency.

"Kapag we use the previous amount of P20.70, we have the so-called rule of thumb that you will spend a palay into rice, P40 ang cost of rice, masyadong mataas," she said.

"If we are going to follow the rule of thumb, P19, so magiging magkano lang 'yun, P38," she explained.

Sought for more details on why the NFA souncil decided to remove the incentives and effectively lower the buying price of palay, Dansal admitted that this was also due to the limited budget.

"Kasi nga, kulang ang pera. Alam naman natin ang sitwasyon ng ating government," she said.

"What do we do? We do not sleep on the P7 billion that is given to us as our procurement fund. Ginagawa namin, pinapaikot namin 'yung pera," added Dansal.

The Philippine Statistics Authority (PSA) last week said that its monitoring indicated that palay prices have already dropped to as low as P8 in some regions of the country.

The government earlier attributed such declines to the implementation of the Rice Tariffication Law, which removed the quantitative restrictions on rice imports and imposed a 35% tariff on shipments from Southeast Asia.

The Department of Agriculture-Agricultural Credit Policy Council (DA-ACPC) and the Land Bank of the Philippines last month signed a memorandum of agreement to implement a P1.5-billion recovery assistance program for rice farmers affected by declining palay prices.

"Hindi naman sila (farmers) lugi na rin... Sana isipin niyo rin na after the harvest time, na magiging consuming ka na rin," said Dansal. —LBG, GMA News