THE National Food Authority (NFA) is pursuing a P10 billion modernization program to enhance rice storage capacities, build new rice mills to upgrade drying facilities, improve rice recovery and increase farmers’ profitability.
The initiative is funded through government allocations, with half of the budget granted late last year and the remaining P5 billion included in this year’s national budget, NFA said in a statement on Monday.
As part of last year’s funding, P1.5 billion will be dedicated to repairing existing warehouses to ensure the preservation of palay (unhusked rice) and rice quality. The remaining P3.5 billion will be used to add 800,000 metric tons (MT) of storage capacity by next year, nearly doubling the NFA’s current capacity.
Expanding storage capacity
NFA Administrator Larry Lacson explained the new and upgraded warehouses will significantly improve the NFA’s ability to store rice and palay, enabling better management of the national rice inventory.
“This expanded capacity will help us address the current issue where our warehouse space is almost full,” Lacson said.
NFA added that while its current storage capacity stands at 1 million MT, varying rice stock quality and age often hinder full utilization.
In addition to enhancing storage capacity, the other P5 billion is for the improvement of rice mills, dryers and silos to boost processing efficiency. These will increase rice recovery rates and farmers’ earnings, as well as stabilize prices for both producers and consumers by ensuring consistent rice quality.
Boosting efficiency
These facilities will be a game-changer for the NFA, enabling us to purchase rice with moisture content above the current 14 percent requirement,” Lacson added.
NFA said such a shift will also prevent traders from manipulating moisture levels in palay to drive down prices.
The agency said warehouse repairs are also ongoing, with facilities such as the one in Malolos, Bulacan now capable of storing up to 120,000 50-kilo bags of rice. They are also scheduled to receive rice stocks during the peak of the summer harvest in April.
Lacson said several plots of land have also been donated to the NFA or made available for use through usufruct agreements for the construction of new warehouses in Mindanao and Luzon.
In time for 2027 harvest
NFA said the modernization projects are expected to be operational by the end of next year, in time for the summer harvest of 2027. The full upgrade will be across all regions to include silos in major rice-producing areas such as Cagayan Valley and Central Luzon to store rice for up to two years, compared with the usual six months to one year for bagged rice.
However, Lacson said that even with increased storage capacity, there is still need for regulatory reforms to improve the management of rice buffer stocks and regularly free up storage space for the procurement of palay.
“Ideally, one-twelfth of our buffer stocks should be disposed of each month to facilitate better reserve management,” he said.
At present, the law prohibits the NFA from selling its rice stocks to the public.
Given the recommendation of the National Price Coordinating Council, however, the Department of Agriculture (DA) declared a food security emergency, enabling the DA to release NFA rice reserves to local government units and other agencies to help control high prices of the staple.
This year, the NFA needs to purchase 545,000 MT of palay to maintain a nine-day supply and 880,000 MT to meet the new buffer stock requirement of 15 days, as stipulated under the amended Rice Tariffication Law.
