Higher Buying Price Boosts NFA’s Palay Inventory

A Strategic Move Enhances NFA’s Competitive Edge

The National Food Authority (NFA) has reported a significant increase in its palay inventory, a month after raising the procurement price. This strategic move has enabled the NFA to better compete with private traders and bolster its buffer stock, crucial for ensuring food security in times of need.

Substantial Increase in Palay Procurement

Since the approval of the higher procurement price on April 11, the NFA has procured an additional 2.41 million 50-kilo bags of palay by May 15. This marks a substantial increase compared to the 142,244 bags acquired from January 1 to April 15. In total, from January 1 to May 15, the NFA’s procurement reached 2.5 million bags, representing 82.76% of its 3.08 million bag target for the period.

Revised Procurement Prices

The NFA Council’s decision to increase the buying price per kilo of palay to P23 to P30 for clean and dry palay from the previous P19 to P23, and to P17 to P23 for fresh and wet palay from P16 to P19, has proven to be a game changer. This new price scheme has allowed the NFA to effectively compete with private traders, enhancing its ability to build a robust buffer stock.

Impacts of the New Pricing Scheme

“The new price scheme is really the game changer,” stated Larry Lacson, NFA’s acting administrator. He emphasized that the NFA Council’s deep understanding of the agency’s challenges has led to stronger collaboration and more effective procurement strategies. The higher buying prices, implemented on April 17, have significantly boosted the NFA’s purchasing power and competitiveness.

NFA’s Role Under the Rice Tariffication Law

Under the Rice Tariffication Law, the NFA is responsible for maintaining a national rice buffer stock equivalent to at least nine days of consumption, which currently stands at 330,000 metric tons. This buffer stock is essential for meeting demand during disasters and other emergencies. The law mandates that the NFA must source this buffer stock from local rice farmers, prohibiting it from importing rice or trading in agricultural commodities.

Ongoing Efforts to Meet Procurement Targets

Despite the impressive progress, the NFA continues to aim for its procurement targets, with areas like Bulacan still in the midst of their rice harvest. “We’re still aiming to hit that target since there are other areas like Bulacan where farmers haven’t completed their rice harvest,” Lacson noted. This ongoing effort is crucial for ensuring that the NFA can meet its buffer stock requirements and support local farmers.

Conclusion: Strengthening Food Security through Strategic Procurement

The NFA’s recent success in increasing its palay inventory highlights the effectiveness of strategic pricing in enhancing the agency’s competitive edge. By raising procurement prices, the NFA has significantly improved its ability to build a robust buffer stock, crucial for maintaining food security in the Philippines. This move not only supports local farmers but also ensures that the nation is better prepared to handle supply disruptions during emergencies.