NFA sees P557.3M in revenue due to higher selling price to agencies

The National Food Authority (NFA) said Wednesday it expects over half a billion pesos in revenue after it hiked its selling price of rice to the Department of Social Welfare and Development (DSWD) and other government agencies.

In a statement, Agriculture Secretary and NFA Council chairman Francisco Tiu Laurel Jr. said that the grains agency approved the increase in NFA’s selling price.

“The higher selling price agreed to by the DSWD will help not only reduce NFA losses but also give it additional resources to buy more palay from our farmers,” Tiu Laurel said, adding that the price hike will generate an additional revenue of P557.3 million for 2024.

In 2023, NFA posted a net loss of P6.19 billion as it pursued its mandate to buy palay from local farmers to build a nine-day buffer stock of about 300,000 metric tons of rice.

NFA Administrator Larry Lacson said the additional revenue would allow NFA to buy more palay from farmers, which would boost the government corporation’s rice buffer and increase farmers’ income.

“At a buying price of P28 a kilo of palay the additional revenue from our sales to DSWD will allow us to buy an additional 400,000 50-kilo bags of palay. That's easily 12,600 metric tons of incremental rice supply,” said Lacson.

“We thank the DSWD for their understanding and support of this price adjustment,” he added.

Lacson said that the selling price increase of P38 per kilo from P25 per kilo to the DSWD, other relief agencies, and LGUs will not have an impact on the market price of the national food staple.

Earlier this year, the NFA Council approved a higher buying price range of P17 to P30 a kilo from last year’s P16 to P23 a kilo to allow the grains agency to compete with private traders who have driven prices higher due to El Niño and the lingering effect of India’s rice export ban. India has since lifted the ban.

The adjustment in its palay procurement price has allowed NFA to buy around 3.5 million 50-kilo bags of palay at the end of the first half, after only procuring less than 200,000 bags prior to the NFA Council decision in June.

For this wet season, NFA plans to buy between 6.4 million and 8.7 million bags of palay.

It has sought from the Department of Budget and Management the immediate release of P9 billion of rice procurement funds, increasing its war chest to around P11 billion. — VBL, GMA Integrated News