Gov’t should purchase palay at higher prices to aid planters

By Cai U. Ordinario, Reporter

Businessmirror, 23 September 2008


FARMERS’ groups urged the National Food Authority (NFA) to buy more palay at the farmgate price of P17 per kilo, saying that palay production costs have increased to as much as P10 per kilo this planting season.


National Rice Farmers Council, along with Rice Watch and Action Network (R1), called on the NFA to intervene and buy more palay from farmers at P17 per kilo following reports of dipping palay prices of up to P9 to P12 per kilo.


The average palay price last harvest season in May this year, R1 and the National Rice Farmers Council said, reached P16 per kilo. The peak of the harvest season starts in October.


“The situation now calls for the NFA’s intervention in palay procurement and forget about rice importation for the farmers’ sake. We badly need to see the government’s presence in palay procurement as the traders threaten to pull the prices of palay downward to level even lower than the price level of P12 per kilo before the rice crisis,” said Jaime Tadeo of the National Rice Farmers Council.


Tadeo said farmers will be incurring losses if the buying price of P9 per kilo persists. He added that on top of higher fertilizer prices, other cost of production inputs posted a sharp increase from an average cost of P7.40 per kilo only last year.


According to the Bureau of Agricultural Statistics, the average price of urea during the planting season in June this year was P1,754.31 per sack. It increased by 78.49 percent from P982.84 only per sack in June last year.


“The reported farmers’ gains due to the sudden rise in palay prices last harvest season only helped them cope with the increase in the cost of production this planting season. The NFA intervened only through rice importation, flooding the market with imported rice, but failed to intervene in palay procurement,” said Tadeo.


Jessica Reyes-Cantos, R1 lead convenor, earlier also warns the NFA of a repeat of the crisis if they will not help the farmers recover from the very high cost of production due to the increase in fertilizer prices and other farm inputs.


“We would like to see the government rescuing the farmers this time, after flooding the consumers with low-priced rice and slowly driving the market prices of rice down,” said Cantos.

Earlier, the Department of Agriculture (DA) has asked the national government to double its P8.5-billion budget for procurement after the NFA has doubled its palay-buying target to 1 million metric tons (MMT) during the main harvest.


Agriculture Secretary Arthur Yap said the NFA doubled its procurement target for the last quarter of 2008 on the back of expectations of a good harvest in major rice-producing provinces across the country.


The DA is confident that paddy- rice production for the main harvest will hit the 10-MMT mark.


NFA Administrator Jessup Navarro said the agency already bought a total of 485,628 bags of palay from individual farmers and farmer organizations as of August, representing a 404-percent accomplishment over target of 120,000 bags for the month.







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