NFA preps for new stocks in E. Visayas

The government is bracing for massive palay procurement in Eastern Visayas as farmers are expected to commence full harvest next month. National Food Authority (NFA) Regional Information Officer Mary Agnes R. Militante said that buying stations have been opened for farmers interested in selling unhusked rice to the government.

“We have a standby budget of P5 million from our Cereal Procurement Fund to finance palay procurement in six provinces. We can request for more funding depending on the demand,” Ms. Militante said. The NFA buys clean and dry palay at P17 per kilogram, more than the P12-14/kg common prices offered by commercial traders. From January to August 2013, the grains agency has already procured 143,526 bags of palay. The NFA aims to buy 27,000 bags this month, 34,000 bags in October, 30,000 in November and 17,000 in December. “Our procurement target for 2013 is the highest in 20 years,” Militante added. In 2012, the NFA procured only 28,242 bags.

NFA buying stations are located in Tacloban City, Abuyog, Alangalang, Baybay, Hilongos and Ormoc City in Leyte; Maasin and Saint Bernard in Southern Leyte; Naval in Biliran; Calbayog City and Catbalogan in Samar; Catubig, Rawis, Bobon, and Victoria in Northern Samar; and Oras, Borongan, and Guiuan in Eastern Samar. Under its buying scheme, the NFA has been purchasing palay from members of accredited farmers’ organizations and cooperatives at P17/kg, inclusive of drying, transport, and cooperative development incentives. The same rate is extended to individual farmers. The NFA has notified local agriculture offices to help the agency inform farmers about the procurement initiative. The food authority noted that although its price is higher than those of commercial traders, many farmers opt to sell their produce to the latter since they are indebted to those traders, and bringing products to private buying stations is more convenient.

However, the NFA assured that farmers will get a higher buying price and accurate weighing if they sell palay to the government. The NFA also admitted that sufficient supply of government rice is not enough to stabilize the price of staple food in Eastern Visayas, given the agency’s minimal share of the total regional reserve. In a Sept. 1 inventory report released by the NFA today, of the 1,646,112 bags of rice stored in the region, only 395,364 or 24% are government rice. Household stocks account for the biggest share with 978,540 bags or 59% of the total inventory. Stocks of commercial rice dwindled to 272,208 bags (17%) early this month as traders waited for the new harvest.

“The NFA was not able to influence rice prices because of so many rice stocks in the household. To be able to manipulate the price, we have to get the majority share of stocks,” Ms. Militante said. The NFA believes that high stocks in houses could be attributed to the palangoy system where farmers borrow money from lenders and pay interest of one sack of palay for every P1,000 in credit. “These lenders have been keeping rice in their houses for their own consumption or sell the stocks to their friends,” Ms. Militante added. High costs of farm inputs such as fertilizers and seeds, and poor credit support are said to lead small rice farmers to borrow money from individual lenders and loan sharks.

NFA records show that the region’s current stocks would last for 52 days at an average daily consumption of 31,596 bags for the region’s 4,532,935 population. Each person in Eastern Visayas consumes 127.24kg every year. Of the 1,646,112 bags of stocks in three levels, 490,627 bags are in Leyte; 142,249, in Southern Leyte; 61,433, in Biliran; 95,843, in Samar; 430,018, in Northern Samar; and 452,942, in Eastern Samar. As of last week, the modal retail price of well-milled rice per kilogram is pegged at P42.33; regular milled rice, P39.43; and premium rice at P46.20. NFA rice remains priced at P27/kg. The food agency said it will ensure that no government rice will be overpriced or diverted and sold as commercial rice.

Ms. Militante expects the price of commercial price to go down next week as the country approaches harvest season.