Agriculture Secretary Francisco P. Tiu Laurel Jr. said that the National Food Authority (NFA) will gradually adjust the buying price of palay to balance the financial gains of Filipino farmers with consumer demands for more affordable rice.

The DA chief, who also chairs the NFA Council, explained that even with the adjustment of the lower band of the palay buying price to P23 per kilo—compared to the current floor price of P25 per kilo—the procurement price remains at the higher end of last year’s range of P16 to P23 per kilo.

In June, the NFA Council approved a higher buying price range of P17 to P30 per kilo to enable the NFA to compete with private traders, who have driven prices up due to the effects of El Niño and the lingering impact of India’s rice export ban.

Last week, India lifted its export ban on rice.

“World prices of rice have gone down. But rice prices in the local market won’t decline if the buying price of palay remains high,” Secretary Tiu Laurel stated. “At P23 per kilo, farmers will earn a decent return for their efforts. Actually, even at P21 per kilo, they’ll still enjoy a good profit. We have the interests of farmers at heart when we determine the buying price of palay,” he added.

NFA Administrator Larry Lacson assured that the adjustment of the palay procurement price range to around P23 to P25 per kilo will be “calibrated” and will depend on the quality of palay and prevailing market conditions.

It takes approximately two kilos of palay to produce one kilo of rice. As a rule of thumb, considering the additional costs of processing and marketing, the retail price of rice per kilo is usually double the cost of palay.

For this wet season, the NFA plans to buy between 6.4 million and 8.7 million 50-kilo bags of palay. ###