The National Food Authority (NFA) announced on Wednesday, Jan. 22, that it requires an additional funding of P9 billion to comply with the law-mandated increase in the national rice buffer stock.

NFA Administrator Larry Lacson said the agency is now obligated to maintain a buffer stock equivalent to 15 days of rice consumption, an increase from the previous nine-day requirement.

In a statement, Lacson said this comes after the recent enactment of Republic Act (RA) No. 12078, which amended the Rice Tariffication Law.

Based on the agency’s data, 37,000 metric tons (MT) of rice is the daily average for national consumption.

Adding six days to the buffer stock will require the NFA to procure about 300,000 MT of palay or unmilled rice from local farmers, with an estimated price of P23 per kilo.

“We were initially allocated a budget of P9 billion for buffer stocking this year, based on the 9-day requirement,” said Lacson.

“But the additional 6 days will necessitate an extra P9 billion for palay procurement considering that our palay price procurement per kilo increase in 2024,” he explained.

Restoring NFA’s influence

RA No. 12078 also earmarked P2 billion for the NFA’s rice procurement program, which is an excess of the collected rice tariffs under the Rice Competitiveness Enhancement Fund (RCEF) set at P30 billion.

The RCEF is a program of the Department of Agriculture (DA) that aims to modernize rice farming and support local farmers.

While an additional P2 billion for its palay procurement looks promising on paper, DA Secretary Francisco Tiu Laurel said it should ideally cover up to 20 percent—or around 4 million MT—of the country’s total domestic production.

Currently, the procurement rate remains at a minimal 3 to 4 percent.

“The NFA used to be a market maker—both a buyer and seller of rice. Now it is restricted to buffer stocking and buying rice from local rice farmers,” said Laurel, chairman of the NFA Council.

“We aim to restore its influence on palay pricing by purchasing more local rice, helping to boost Filipino farmers profitability,” he added.

Earlier, the NFA Council approved a resolution that enables the agency to sell rice to local government units (LGUs) for disaster preparedness.

Lacson said the NFA will release around 25,000 MT of rice every month, noting that this will not jeopardize the buffer stock needed to respond to emergencies or calamities.