Agri chief: Increasing NFA’s buying price of palay won’t impact inflation

Agriculture Secretary Emmanuel Piñol on Thursday brushed off concerns that increasing the buying price of the National Food Authority (NFA) for paddy rice or palay will have huge inflationary effect.

"You have to understand that NFA is only buying 5 percent of the national production; it's a very little amount of the total national production, so hindi magkakaroon ng inflationary effect," Piñol said in a press conference in Manila.

The Agriculture chief said the issue of increasing NFA's buying price of palay was raised during the last Cabinet meeting, where economic managers expressed concerns that it may an inflationary impact.

Piñol said this will not have an adverse effect on rice prices since private traders are already buying palay at a much higher price than the NFA.

"Magkano ba ang bili ng NFA ngayon? P17. Magkano ang bili ng private trader? P25. Papaano magkakaroon ng inflationary effect pag tinaasan mo ng P18, e meron na ngang P25," he emphasized.

The Cabinet official said the NFA cannot compete with the private sector in buying palay from local farmers since private traders offer a much higher price.

NFA's buying price has not been changed since 2009.

Piñol said the final amount of the increase in the agency's buying price of palay is still to be determined by a technical working group comprised of the Department of Agriculture, Department of Trade and Industry, and NFA.

Apart from increasing the agency's buying price, the Agriculture chief said the DA made an agreement with the NFA to help it procure local rice.

To aid the NFA in buying rice from local farmers, Piñol said the DA will identify provinces with low palay prices, which include Kalinga, Ilocos Sur, Nueva Vizcaya, Rizal, Cavite, the entire Bicol region, Capiz, Antique, Negros Oriental, Biliran, Samar, Zamboanga, Agusan del Sur, Surigao del Sur, Tawi-Tawi, Sulu, and Basilan.

He said the DA will also put drying facilities in NFA's buying stations, which can be used by farmers for free.

NFA's clients will also be given priority in the easy access credit program for farmers of the DA and give additional incentives such as establishing a point system for farmers' cooperatives so they can get equipment or machines when they met a certain level of delivery. — BM, GMA News