DA seeks $500 million loan for rice post-harvest

MANILA, Philippines —  The Department of Agriculture (DA) is planning to secure as much as $500 million in loan from the Japan International Cooperation Agency (JICA) to finance a project that would reduce post-harvest losses in the rice sector and improve farmers’ income.

Agriculture Assistant Secretary Arnel de Mesa said the DA is now negotiating with JICA for the details of the prospective funding that would bankroll the construction of various rice post-harvest facilities in the country.

The project involves the construction of rice dryers, mills, warehouses and even silos that would support the operations of the National Food Authority and farmers cooperatives and associations, De Mesa said.

The DA is looking at securing between $200 million and $500 million from JICA for the project. The project is planned to start next year or in 2027.

“The project would help in reducing our post-harvest losses in rice that is estimated to be around 15 to 17 percent. It will also help in increasing our rice production and income of our farmers,” he said.

The DA spokesperson pointed out that the project is critical in expanding the operations of the NFA in light of its bigger buffer stocking mandate under the amended rice tariffication law.

The NFA is now required to keep a 15-day rice buffer stock at any given time.

Earlier this week, the NFA announced that it is investing P10 billion this year to modernize its rice warehouses and post-harvest facilities to enhance its efficiency and fulfill its buffer stocking mandate.

The program involves the construction of new rice mills, upgrading of drying facilities and expansion of warehouses, the NFA added.

The grains agency explained P1.5 billion would be dedicated to repairing its existing warehouses while P3.5 billion would be used to add 800,000 metric tons (MT) of storage capacity by next year.

At present the NFA’s current storage capacity stands at one million MT, according to the NFA. The agency is unable to maximize the full capacity because of varying rice stock quality and age, it added.

The NFA will use the remaining P5 billion of the modernization program to construct and improve rice mills, dryers and silos aimed at boosting its processing efficiency and increasing rice recovery rates.

The measures would eliminate inefficiencies in post-harvest processing and allow farmers to sell palay even at higher moisture content, removing the burden of drying it themselves, according to the NFA.

Furthermore, the upgrades would help in stabilizing prices of the staple for both farmers and consumers while ensuring consistent rice quality, the NFA added.

The NFA added that the construction of silos in major rice-producing areas such as Regions 2 and 3 would allow it to rice up to two years, far longer than its current six months to one year of storage.

The modernization projects are expected to be operational by the end of next year, in time for the dry season harvest of 2027, the NFA said.

For this year, the NFA needs to purchase 545,000 MT of palay to maintain a nine-day supply and a total of 880,000 MT to meet its 15-day buffer stocking mandate.