Establishing a sustainable palay support price

Now that the government is finally resolute in aiding farmers via a support price mechanism for palay (unhusked rice), establishing a sustainable– not a band-aid type support price– is necessary to ensure continued support to our beleaguered farmers. Most global rice producers have been supporting, through subsidies, their rice farmers.

Not only that, the government must ensure a consistent input support program for the farmers for their seeds, fertilizers (especially homegrown biofertilizers for soil rejuvenation) and pesticides to help cushion the impact of global price spirals for these items.

To do these programs, the Department of Agriculture must validate and certify available and reliable local suppliers of farm inputs that they can include in their farm productivity programs instead of accrediting fly by night operators.

Our farmers have always been at the mercy of traders, millers and input suppliers who provide them input loans at usurious rates and tying up future output as payments, leaving farmers no alternative markets that can offer them better prices for their produce. 

It was a terrible blunder emasculating the National Food Authority (on the dictates of World Bank-International Monetary Fund) via the Rice Tariffication Law, which favored rice importers and the rich input suppliers (both here and abroad) and millers while squeezing dry the farmers who toil hard to provide food for the country.

It is good that President Marcos declared the need to set a palay floor price (which means they palay procurement should not hit rock bottom) that would enable farmers to earn better than their current miserable state.

Executive Order 100, a floor price for palay would be established along with activating mechanisms for its implementation to protect farmers from plunging farmgate prices.

The EO tasked the DA to determine, set and adjust palay floor price for government procurement based on production, prevailing market prices, reasonable margins for farmers and the welfare of both producers and consumers. 

The DA may also consider other factors, including “emergencies or calamities affecting the rice supply chain and palay production; influx of import arrivals that could dampen farmgate price of palay; sharp decline in global prices that may impact the estimated landed cost of rice; and government’s capacity to purchase palay at competitive prices and manage market intervention,” PNA reported.

“In establishing the floor price of palay, the DA shall ensure a fair return of investment to farmers on a regional level by recognizing regional variance in production costs, market conditions, and profit margin, to be reviewed and adjusted before the onset of cropping season or whenever necessary,” the EO read.

EO 100 also creates a steering committee, chaired by the DA and co-chaired by the Department of the Interior and Local Government with members from the departments of trade, agrarian reform, social welfare and development and the NFA in the setting and enforcement of the floor price.

To support post-harvest operations, government agencies and local government units (LGUs) may use public facilities—such as covered courts, multipurpose halls, gymnasiums, and other state-owned structures—as temporary palay storage when warehouses are unavailable. Coordination with LGUs is required to ensure continuity of public services, the PNA added.

The steering committee must draft guidelines on proper storage use, maintenance, and security to prevent post-harvest losses and preserve grain quality. It is also tasked to regularly monitor farmgate transactions and submit quarterly implementation and impact reports to the president, particularly on farmer incomes and rice supply stability.

Violations, such as buying palay below the set floor price, will be subject to administrative action.

Initial funding for EO100’s implementation will come from existing appropriations of member agencies and other funds identified by the Department of Budget and Management. Budget requirements for continued implementation will be included in future agency proposals, following standard budget procedures.

The President blamed the absence of a fair floor price for the volatile market prices, especially during peak harvest seasons when farmgate prices drop due to oversupply, weather conditions, or unfair trading practices.

He said the decline in palay prices threatens farmers’ livelihoods, productivity, and agricultural sustainability.

“In view of the rising production costs coupled with climate-induced production risk and the widening profit margin gap between farmgate price and retail prices, the government recognizes the urgent need to guarantee a fair and just return to farmers by setting a floor price that covers production costs and provides reasonable income while ensuring the affordability and stability of rice supply for consumers,” EO 100 stated.

Farmer groups have repeatedly sounded the alarm over plunging palay prices, urging the government to adopt a P5-per-kg. support price and return the tariff of 35 percent on imported rice.

They said the import ban has yet to lift farmgate prices, which remain between P10 and P12 per kilogram in most areas and have fallen to as low as P8 in others.

EO 100 takes effect immediately after publication in the Official Gazette or a newspaper of general circulation.