Palay/rice trading in the Philippines: an evaluation for the rice R & D [research and development] agenda

Palay/rice trading involves procurement, transportation, storage, milling and distribution. The major problem in palay procurement was poor grain quality brought about by mixed varieties, discolored, and spotted palay and high impurities. Transportation problems were poor farm to market load truck ban and high transportation cost. Insufficient drying facilities, and nonselective and unlimited disposal of rice by the National Food Administration (NFA) made palay storage too costly in terms of time or too risky venture to the traders given the risk of undue losses, damages and unpredictability of future palay prices. Low milling recovery was the major problem of the millers. It is a result of high percentage of broken and unfilled grains, high impurities of palay and inefficiency of old rice mills. The rapid increase in the number of traders resulted to stiffer competition among traders and is being aggravated by the intervention of NFA. The rice importation and the participation of NFA in palay/rice trading had further dampened the interest of traders to go into large-scale palay/rice storage. The reduced competitiveness of local palay due to importation resulted to lower purchase price of palay traders passed on the supposed reduction of their expected profit to farmers. The importation stabilized the price and supply of rice, but it destabilized the development of the private sector in grain trading