NFA Plans to End Re-Bagging of Procured Palay to Save Costs

The National Food Authority (NFA) is contemplating the elimination of re-bagging procured palay (unhusked rice) from local farmers to reduce expenses.

During the Kapihan sa Bagong Pilipinas forum in Quezon City on Tuesday, NFA Acting Administrator Larry Lacson mentioned that the agency is nearing the final stages of a study to discontinue re-bagging the palay it buys.

“It’s in the final stages… but we’re really going towards that direction,” Lacson stated.

Redundancy and Cost Savings

Lacson explained that the current practice of re-bagging palay into NFA sacks is seen as redundant since the agency will still process the palay into rice. The proposal hinges on whether the sacks provided by farmers meet the Department of Agriculture’s (DA) specifications.

“If the sacks being sold by farmers meet the DA’s specifications, re-bagging is unnecessary,” Lacson said. “This change will save us money on re-bagging and handling costs.”

Lacson estimated that eliminating re-bagging could save approximately P13 per sack, and around P30 per sack in handling costs. With the NFA handling about 10 million sacks, the potential savings could reach nearly half a billion pesos.

NFA’s Mandate and Operations

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 is essential for meeting needs during disasters and other emergencies. The law prohibits the NFA from importing or trading rice and mandates sourcing its buffer stock solely from local farmers.

Conclusion

The proposed changes aim to streamline NFA operations, cut redundant processes, and generate significant cost savings, which could be redirected to other critical areas within the agency.