Floor price under study for buying palay from farmers 

THE Department of Agriculture (DA) said it is considering setting floor prices for traders buying palay (unmilled rice) from farmers.

The scheme, modeled after practices in Indonesia and Thailand, will encourage farmers to plant rice in the next cropping season, Agriculture Assistant Secretary Arnel V. de Mesa told reporters.

“If our farmers are assured that their harvests will be sold profitably, they will be encouraged to plant more in the next cropping season,” he said.

The DA is currently tracking areas where  farmgate prices are unusually low, with traders enjoying leverage over farmers because they control milling, storage, and transport. Competition from cheaper imported rice is also forcing them to hedge against being stuck with expensive inventories of domestic rice.

Mr. De Mesa said the DA is studying the Price Act, the Anti-Agricultural Economic Sabotage Act, and other laws that could serve as the legal basis for imposing such a floor price.

The department said earlier this week that it was looking into reports that traders are paying farmers as little as P13 per kilo for their palay in Luzon.

The buying price set by the National Food Authority is between P18 and P24 per kilo for clean and dry palay.

The government projects a 24.4 million metric-ton (MMT) palay harvest this year due to favorable weather.

The volume of palay production rose to 4.7 MMT in the three months to March, from 4.69 MMT a year earlier.

The government is currently selling subsidized rice at P20 per kilo to vulnerable segments of society like the poor and persons with disabilities. Mr. De Mesa said the program will be expanded to lower middle-income families, with the government planning to observe its impact on farmgate and retail prices. — Kyle Aristophere T. Atienza