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PIA Press Release
2008/08/21

Gov't setting up 51 mobile palay-buying stations for massive procurement

Manila (21 August) -- The National Food Authority (NFA) is setting up another 51 mobile palay-buying stations in time for the main or wet harvest season to make it more accessible for farmers to sell their produce to the agency, in line with President Arroyo's State of the Nation Address (SONA) commitments on ensuring rice sufficiency and raising rural incomes.

Sustained higher public investments in agriculture and fisheries in keeping with the President's SONA thrusts have enabled the palay subsector to grow by 4.07% over the 2001-2007 period, or double the national population growth rate of 2.04%.

Higher spending on the intervention measures of the Department of Agriculture (DA) and the NFA-part of it sourced from Mrs. Arroyo's "Katas ng VAT (Value-Added Tax" subsidy program-has enabled the government to raise national rice sufficiency from 87% in 2006 to a projected 93% this year and to pull down retail prices to as low as P32 a kilo amid the global rice price shock.

The additional mobile palay-buying stations, which will be on top of the food agency's 350 such stations scattered across paddy-growing provinces nationwide, will be located near production areas and is intended to support the NFA's intensive palay procurement program in the next four months, according to Agriculture Secretary Arthur Yap.

Many of these mobile buying stations will be established in Central Luzon, Western Visayas, Zamboanga Peninsula, Caraga and the Davao Region.

Sustained higher spending on agriculture in support of President Arroyo's SONA commitments on food security and sufficiency has led to a higher growth rate of 4.7% in the year's first semester as against 3.74% in the same period in 2007.

The higher farm growth was largely driven by the crops subsector, with palay harvests expanding 5.84% to 7.12 million metric tons and corn output growing 19.62% to 3.292 million MT. Gross value of agricultural production went up by a remarkable 23.23% during the six-month period to P576.960 billion from P468.192 billion in 2007.

Other crops also posted double-digit growth rates, namely, sugarcane at 32.19%; banana, 20.85%; and pineapple, 11.94%.

In a report to Yap, NFA Administrator Jessup Navarro said the food agency's current buying stations include 52 such centers in Southern Luzon, 46 in Northern Luzon, 35 in Central Luzon and 22 in Western Visayas.

Navarro said the NFA is likewise putting up mobile procurement teams to serve farmers in remote and far-flung areas who find it hard to deliver their produce to the agency's provincial offices.

Most of the existing buying stations are stationary and located in the agency-owned and -leased warehouses, he said.

NFA will substantially increase its procurement volume this wet season to 500,000 metric tons by buying at the per-kilo support price of P17 that was set by President Arroyo earlier this year-or almost 50% higher than the previous rate of P12-and aims to do so with such incentives as giving a cash bonanza of P1,800 for every 50 cavans of palay that farmers will sell to the food agency.

The food agency's higher procurement volume and the P1,800 cash incentive will be funded by the President's "Katas ng VAT" subsidy program.

As a result of rice subsidies expected to reach P20 billion by yearend, the Arroyo administration has been able to guarantee poor consumers a sufficient supply of the staple food at the state-subsidized rate of P18.25.

It has also been selling well-milled stocks for the benefit of middle-income consumers at higher prices of P25 and P35 a kilo to pull down the cost of commercial, leading to retail prices going down to as low as P32 a kilo from last summer's price range of P40 to P50 in certain parts of the country.

In his report to Yap, Navarro said he is optimistic that the NFA would be able to reach its 500,000-MT procurement target as a result of the food agency's higher support price and the P1,800 incentive plan.

The NFA is buying clean and dry palay with 14% moisture content anda minimum of 95% purity at P17 per kilo. President Arroyo had directed the DA and NFA to adopt this higher palay support price at the start of this year's dry crop.

"The additional incentive is intended to help farmers subsidize the cost of their farm inputs like fertilizer," Navarro said.

As an offshoot of the non-stop increase in crude oil prices, the cost of petrochemical fertilizers doubled in recent months to the range of P1,500 to P1,900 per bag. The ideal ratio for farmers to rapidly raise their harvests is to apply six fertilizer bags per hectare.

This has prompted the DA to fine-tune its intervention programs for the palay subsector in the hope of meeting its harvest target of 10 million-plus MT for the wet crop despite a reported 30% drop in fertilizer usage by farmers reeling from the prohibitive cost of this petrochemical input.

Navarro said that Cereal Procurement Funds were sent in advance to the regional and provincial NFA offices for their initial buying activities to serve farmers who were able to harvest early and want to sell their palay to the agency.

"The regional and provincial executives were also tasked to coordinate closely with the local government officials to inform them of the NFA's current palay-buying programs," he said.

Central office personnel will also be fielded to act as special disbursing officers and cashiers to complement the additional stationary buying stations and mobile procurement teams this main harvest season, he added.

Employees who will act as quality assurance officers are now undergoing training and skills development to better equip them once they are assigned in the field for the intensified palay-buying operations.

Yap said earlier that increasing the volume of palay to be purchased by NFA from farmers is part of the DA's aggressive procurement and distribution strategy, which allows the government to sell subsidized rice stocks to low-income consumers at affordable prices at this time of a global food crisis. (DA) [top]

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