The Department of Agriculture (DA) is optimistic the country can set a record high for palay production this year after President Ferdinand Marcos Jr ordered the restoration of the budget for rice production.
The department said in a statement yesterday the restoration of the previously cut P10 billion budget for the national rice program will allow the agency to implement strategies aimed at hitting a target of 20.46 million metric tons (MT) of palay for this year.
A preliminary estimate for 2024 rice output was about 19.3 million MT, or 3.8 percent lower than the 2023 record-high of 20.06 million MT, the agency said
DA Secretary Francisco Tiu Laurel Jr., said such additional funding can help drive palay production to a volume in excess of 20 million MT.
DA total budget P200B
The DA’s overall approved budget for this year amounts to P200.19 billion. Of the said amount, P31.4 billion is for the National Rice Program and a further P10 billion is for the Rice Competitiveness Enhancement Program.
Tiu Laurel said the decline in last year’s palay production was mainly due to challenges faced by the sector, including a dry spell brought on by the El Niño phenomenon early in 2024 and crop damage caused by flooding during La Niña in the latter part of the year.
Apart from production support, the National Food Authority (NFA) will continue its aggressive rice procurement program, given that it has been allowed to fully stock its warehouses this year, the DA said.
As chairman of the NFA Council, the policymaking body of the NFA, Tiu Laurel reported that last year, the NFA purchased palay equivalent to 300,000 MT of rice, which is deemed important in stabilizing rice supply despite challenges in local production.
He said that such volume purchased by the NFA last year effectively removed that much amount from the market and compelled importers to make up for the shortfall.
“This year, NFA will buy a minimum of 300,000 metric tons,” Tiu Laurel added.
Differing views
Some stakeholders in the industry do not fully share the DA’s optimism about reaching a banner year in palay output.
The Federation of Free Farmers (FFF) said the country had major budget increases in the past but “the output growth had been minimal and even sometimes negative.”
“It all depends on how that budget is spent. Under Republic Act 12078, RCEF (Rice Competitiveness Enhancement Fund) was supposed to increase to P30 billion per year. But in the approved budget, only P10 billion was assured and the rest would depend on unprogrammed funds. There is also no clarity on how the P20 billion in excess tariff collections in 2024 will be used,” Raul Montemayor, FFF national manager, said in a separate statement.
Meanwhile, the Samahang Industriya ng Agrikultura (SINAG) said that if rice tariff would be reverted to 35 percent from the current 15 percent, as much as P15 billion would be immediately added to RCEF, which could be “directly earmarked as support to rice farmers.”
