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WHILE a floor price for government procurement of palay could serve as a benchmark to drive private traders and millers to follow suit, economists said its impact on farmers would hinge on the volume of government purchases.

This, after President Ferdinand Marcos Jr. issued Executive Order (EO) 100 which mandated the setting of a floor price for government procurement of unmilled rice as part of efforts to prop up farmgate prices which plunged to a low of P8 per kilo amid peak harvest.

“The EO 100’s floor price for government palay procurement could prompt private traders and millers to raise their offers, as it sets a reference point for the market,” University of Asia and the Pacific’s Center for Food and Agribusiness (CFA) Executive Director Marie Annette Galvez-Dacul told the BusinessMirror.

“However, its effect will depend on the extent of government buying and local market dynamics,” she added.

For Roehlano Briones, a senior research fellow at the Philippine Institute for Development Studies (PIDS), said the temporary import ban imposed on foreign rice shipments would have more impact on raising farmgate prices.

“No, [the EO 100 won’t influence private traders and millers to raise their palay buying prices] because government procurement is too small. There’s a bigger impact from the import ban,” Briones told this newspaper.

Earlier, Marcos issued an order that suspended the imports of regular and well-milled rice from September 1 to October 30, 2025.

The Department of Agriculture (DA) said the government would extend this import freeze until yearend.

Boost purchase

Meanwhile, Marcos also issued EO 101, which directed the full implementation of the Sagip Saka Act.

Under this, all government agencies, state universities, and local governments should procure food supplies directly from accredited farmer and fisherfolk cooperatives and enterprises (FFCEs).

These purchases would be exempt from standard bidding procedures under the newly enacted Government Procurement Act, which allows for faster and more direct transactions.

Agriculture Assistant Secretary Arnel de Mesa said farmers could capitalize on the government’s provision of rice processing systems (RPS) equipped with rice mills and dryers.

The DA had said that the local rice sector loses up to 16 percent of potential yield due to postharvest inefficiencies.

“Among the suggestions was to tie up the purchase of rice through EO 101 to the RPS managed by farmers. With this, they’ll be selling rice instead of palay,” De Mesa recently told reporters.

“They will earn from the additional profit margin from milling paddy to rice, which is the main source of income for traders,” he added.

The RPS is implemented by the Philippine Center for Postharvest Development and Mechanization (PhilMech) through the Rice Competitiveness Enhancement Fund (RCEF) mechanization program.

The DA has earmarked P3.3 billion to build an additional 300 drying systems nationwide by 2028 to reduce postharvest losses.

Under the first phase of RCEF, the government has established 151 RPS nationwide, 145 of which were completed under the current administration.

Currently, the DA said 118 RPS have been inaugurated, with the delivery, installation, and commissioning of the remaining 27 expected to be completed by yearend.

Source : businessmirror