Manila: Rice farmers posted higher earnings in 2024 despite rising production costs, while the country achieved a stronger rice buffer stock, the Department of Agriculture (DA) reported Thursday.
According to Philippines News Agency, based on data from the Philippine Statistics Authority (PSA), the average farmgate price per kg of palay (unhusked rice) rose to PHP23.48 in 2024, up from PHP19.88 in 2023.
This increase resulted in a higher gross return of PHP95,906 per hectare and a net return of PHP36,211 per hectare, compared to PHP82,914 and PHP26,423, respectively, in 2023. This corresponds to a net profit-cost ratio of PHP0.61 for every kg of palay sold, higher than PHP0.47 in 2023 and PHP0.20 in 2022.
In a pre-State of the Nation Address (SONA) interview, DA spokesperson Assistant Secretary Arnel De Mesa said the Price Range Scheme (PRICERS) of the National Food Authority (NFA) had helped influence traders' prices last year. He noted that despite production drops due to the effects of El Ni±o, La Ni±a, and successive typhoons, farmers benefited from good farmgate pricing.
The NFA council issued a resolution to increase the buying price for dry and clean palay between PHP23 to PHP30. The price per kg of fresh and wet palay ranges from PHP17 to PHP23. Before this adjustment, NFA's buying price was PHP16 to PHP19 per kg for wet palay and PHP19 to PHP23 per kg for dry palay.
Farmers' income surpassed the higher cost of production last year, driven mainly by increased labor costs. According to the PSA, the average palay's production cost rose to PHP14.52 per kg last year, higher than the PHP13.54 per kg in 2023. De Mesa explained that Filipino farmers often practice payment in kind for harvesting and threshing activities, which affects labor costs as farmgate prices increase.
The government also succeeded in increasing the country's rice buffer stock through aggressive procurement efforts. The national buffer stock now stands at 450,660 metric tons (MT), equivalent to a 12-day supply, up from just one to two days before President Ferdinand Marcos Jr. took office. The target under the amended Rice Tariffication Law (RTL) is a 15-day reserve for calamities and emergencies.
Higher farmgate pricing enabled more farmers to sell to the government at profitable rates. According to NFA Administrator Larry Lacson, 94,483 farmers benefited from PRICERS since April 2024. In terms of storage, 18 out of 134 NFA warehouses subject to refurbishment were rehabilitated to optimize capacity and cater to more local farmers.
The DA supported the recently filed House Bill No. 1, the proposed Rice Industry and Consumer Empowerment (RICE) Act, which seeks to restore the regulatory powers of the NFA. Currently, the NFA can only release its rice stocks through specific programs and responses. Once enacted, the NFA may be authorized to perform market interventions to protect consumers from spiking retail prices and set a floor price to protect local farmers from low buying prices during harvest seasons.
Agriculture Secretary Francisco Tiu Laurel Jr. ordered the NFA to investigate areas with reportedly low traders' prices for possible intervention.
