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NFA sees possible savings by discontinuing palay rebagging

THE National Food Authority (NFA) said on Tuesday that it could realize major savings by no longer re-bagging procured palay (unmilled rice).

“More or less half a billion pesos could be saved by the NFA just tweaking that particular process,” Acting Administrator Larry R. Lacson said at a briefing.

He said that an NFA sack typically costs about P13 while handling costs are at P30 per bag.

The savings from no longer using sacks is roughly P130 million, while the savings in handling costs is P300 million, he added.

Mr. Lacson added that the move is still being studied, “but we’re really going in that direction.”

The NFA typically rebags the palay bought from farmers with NFA-branded sacks to store in its warehouses.

“If the specifications indicated by the farmers on their sacks are correct, there should be no problem,” he added.

According to the NFA, palay delivered by farmers is rebagged to verify that the grain within the sacks is suitable for storage.

“In reality the NFA’s product is not palay but milled rice,” Mr. Lacson added.

The NFA hopes to purchase 60% of the NFA’s requirements during the second half of the year. Its target inventory is 495 thousand MT by the end of the year, equivalent to 6.6 million bags.

Last week, Mr. Lacson said the buffer stock of rice held by the NFA was 3.37 million 50-kilogram bags as of June 13, equivalent to four days’ consumption. — Adrian H. Halili