LGUs urged to set floor price for gov't-purchased palay

Senator Francis “Kiko” Pangilinan called on local government units (LGU) to be more proactive in setting a floor price for government purchases of palay (unhusked rice).

This as Pangilinan works with Malacañang and the Department of Agriculture (DA) in drafting an executive order to stabilize the price of palay and increase farmers’ incomes.

Citing his recent meeting with the Union of Local Authorities of the Philippines (ULAP), Pangilinan said that he is seeking the issuance of two executive orders on the government purchases of wet and dry palay with a minimum floor price.

“So, what we intend to do—the process is by Thursday, we will finalize a working draft of the executive order (EO). But that working draft will then be presented to selected governors next week with [DA] Secretary Kiko (Laurel) and myself and the office of [Department of Agrarian Reform] Sec. Conrad,” he added.

The senator, who chairs the Senate Committee on Agriculture, Food, and Agrarian Reform, also aims to “get additional reinforcements” from LGU officials regarding their insights and comments on the possible EO that Pangilinan expects President Ferdinand R. Marcos Jr. to sign.

However, Pangilinan also made some clarifications on the concerns of the private sector that setting a floor price for wet and dry palay will affect their own processes.

“Of course, we are clarifying because there is some confusion. [They thought] this is the floor price for palay for everyone. We don’t want to intervene in the market, the private sector,” he stressed.

“This is really just for the government,” he added, pointing out that the private sector may also follow suit once the government starts buying palay.

Setting a floor price for palay will stabilize the incomes of farmers, who have been forced to sell palay for an average of P7.66 per kilo—way below the production cost of P13.51 per kilo—because of abusive traders and middlemen.

Pangilinan cited the cases of the Camarines Sur Multipurpose Cooperative, the Sorsogon LGU, and Valenzuela City.

He recalled that it was during the COVID-19 pandemic that 13 LGUs bought rice directly from the Camarines Sur Multipurpose Cooperative, raising their sales from P7 million in 2019 to P62 million by the third quarter of 2020.

In Sorsogon, traders were forced to buy palay for P23 per kilo from the previous P13 a kilo after the local government purchased it at P20 per kilo, which the senator stated proved his point that traders can pay the farmers more if there is competition with the local government itself.

He also pointed out how Valenzuela saved P15 per kilo of rice after purchasing it directly from farmers—maximizing the government’s budget, helping more of the city’s constituents, and improving the income of farmers.