The National Food Authority (NFA) is urging local government units (LGUs) to speed up the pullout of rice stocks under the current food security emergency to free up valuable storage space.
The sale of NFA rice stocks, through the Department of Agriculture’s Food Terminals Inc. (FTI) at P33 to P35 per kilo, will enable the NFA to procure more palay from local farmers, helping protect them from price manipulators.
NFA Administrator Larry Lacson emphasized the importance of this process for both food security and fair pricing. “We appeal to LGUs to fast-track the pullout of rice reserves. This will open up space in our warehouses, allowing us to procure more palay and ensure that farmers aren’t at the mercy of traders pushing down prices,” Lacson said.
By law, the NFA cannot intervene in the market to lower prices for financially-challenged consumers. However, on the recommendation of the National Price Coordinating Council, the Department of Agriculture (DA) ordered the release of NFA stocks to LGUs and other government agencies to address the sharp rise in rice prices and bring them back to levels seen around July 2023.
Rice prices began to climb in July 2023, driven by a rise in global prices following India’s decision to ban the export of non-basmati rice in August of that year. This was further compounded by growing demand in anticipation of poor harvests due to the El Niño phenomenon in early 2024. Despite India’s decision to lift the export ban in August and President Ferdinand Marcos Jr.’s reduction of tariffs from 35% to 15% in July, rice prices have remained high, prompting the declaration of a food security emergency.
San Juan City has already started pulling out NFA rice stocks, with Navotas, Cotabato, and Camarines Sur expected to follow suit. FTI reports that these three LGUs have pending orders for over 120,000 sacks of rice.
Agriculture Secretary Francisco P. Tiu Laurel Jr. has instructed the NFA and FTI to facilitate the quick release of rice stocks, including offering easier payment terms for LGUs. “This program will not only provide affordable, good-quality rice for consumers but will also help the NFA support local rice farmers,” he said.
Lacson added that clearing out existing rice stocks is crucial to meeting the country’s new buffer stock levels, as mandated by the Rice Tariffication Law (RTL). Under the amended RTL, the NFA is required to maintain a buffer stock for 15 days. This year, the agency needs to procure 545,000 metric tons of palay to maintain a 9-day supply, with a total of 880,000 metric tons needed to meet the 15-day target.
With storage capacity nearly at its limit, Lacson stressed the urgency of action from LGUs to help the NFA meet the nation’s rice security needs while protecting both consumers and farmers. He also noted that the pullout of rice stocks would not only free up space but also support the NFA in stabilizing prices, preventing the exploitation of farmers by middlemen and traders.
Reports indicate that traders are purchasing palay as low as P15 per kilo, far below the NFA’s purchasing price of P23 to P24 for clean and dry palay. Given the national average production of 4.1 tons per hectare, each peso movement in palay prices can significantly impact farmers—either adding or subtracting P4,100 per hectare.
Of particular concern is Mindoro, where NFA palay procurement has been hindered by fully stocked warehouses. The NFA plans to build a new warehouse in Mindoro to increase capacity, though it may not be ready until next year.
This appeal comes at a critical time, as the summer harvest approaches. The NFA is aiming to procure as much palay as possible while ensuring there is enough storage capacity for future needs. ### (photo by Jay Morales, DA-OSEC)
