The Federation of Free Farmers (FFF) has urged the government to impose a minimum palay buying price to shield local producers from severe drops in farmgate prices brought about by lower priced imports, among other factors.
FFF Chairman Leonardo Montemayor said in a statement on Thursday, April 10, that such a move has been urgently needed as buying prices for freshly harvested palay have dropped to as low as P12 to 14 per kg in many parts of the country.
“At this rate, many farmers will end up with losses, while more efficient producers will net only about P16,000 per hectare, or P2,700 per month for six months work… If the government has imposed a maximum suggested retail price for consumers, it should also protect farmers by requiring traders to buy palay from them at a minimum price,” Montemayor said.
In pushing for the floor price scheme, the FFF said the National Food Authority (NFA) could absorb only 4 to 5 percent of total harvests due to funding, storage and other constraints. Most farmers have also been forced to sell to private traders because they could not comply with the agency’s drying and quality standards, it said.
The group said an ideal floor price would be P20 per kg for dry palay if the production cost averaged at P15 per kg. At a national average of 4.1 tons harvested per hectare, this would translate to a farmer’s net proceeds of around P3,400 per hectare each month.
Montemayor said a minimum palay-buying price could be complemented with the proposed seasonal tariff arrangement, wherein duties on rice imports would be temporarily raised during harvest periods and returned to normal levels after the harvesting of farmers’ crops.
“In the same way that we set minimum wages for labor, we must find ways to give our farmers a fair and adequate compensation for the work they do in feeding the country,” he added.
The FFF said that in other countries, rice floor price programs are operated either by government agencies or in compliance with laws requiring traders to buy farm products at a minimum price at the point of first sale.
Meanwhile, Jayson Cainglet, Samahang Industriya ng Agrikultura (SINAG) executive director, said that they have long been advocating for the imposition of such floor prices not only for rice but for other commodities like tomatoes and onions, as well.
Cainglet said floor prices would help keep farms profitable and motivate farmers to stay in the agriculture business.
However, he said floor prices should be matched with long-term solutions such as lowering the cost of production by restoring rice tariffs at higher levels to collect revenues that would be used to aid farmers.
Department of Agriculture spokesperson Arnel de Mesa said in a briefing on Thursday the agency has been studying if imposing a floor price on palay prices would be beneficial.
However, he explained that such a move would be complicated because farm gate prices of palay have always varied in areas across in the country
“According to field rice data, the national average cost to produce 1 kg of palay is P13.50. The lowest recorded is in Nueva Ecija at P11.20 to P11.30 while the most expensive is at P18. So, if that is the disparity in the cost to produce, farm gate prices in each area will be different as well,” De Mesa said.
Based on the DA’s monitoring of public markets in the National Capital Region, local well-milled rice sold for P38 to P54 per kg on Tuesday, April 8, while regular milled rice went for P32 to P48 per kg.
Imported well-milled rice was selling for P43 to P46 per kg while the price of imported regular milled rice ranged from P33 to P45 per kg.
Special-variety imported rice fetched P52 to P65 and premium rice, P44 to P55.
Special-variety local rice was selling for P50 to P65 per kg while premium rice went for P45 to P60 per kg.
