MANILA — Senator Francis “Kiko” Pangilinan has called on local government units (LGUs) to take a proactive role in setting a floor price for government purchases of palay (unhusked rice) as part of efforts to stabilize prices and increase farmers’ incomes.

Pangilinan said he is working with Malacañang and the Department of Agriculture (DA) to draft an executive order (EO) that will establish a minimum floor price for both wet and dry palay.

In a recent meeting with the Union of Local Authorities of the Philippines (ULAP), the senator said he aims to have the working draft of the EO finalized by Thursday. “So, what we intend to do—the process is by Thursday, we will finalize a working draft of the EO. But that working draft will then be presented to selected governors next week with (DA) Secretary Kiko (Laurel) and myself and the office of (DAR) Sec. Conrad,” he said.

The senator, who chairs the Senate Committee on Agriculture, Food, and Agrarian Reform, said he also intends to gather feedback from LGU officials on the proposed EO, which he expects President Ferdinand “Bongbong” Marcos Jr. to sign.

Pangilinan also addressed concerns from the private sector, clarifying that the proposed floor price would only apply to government purchases.

“Of course, we are clarifying because there is some confusion. Akala nung iba this is the floor price for palay for everyone. We don’t want to intervene in the market, the private sector,” he said. “This is really just for the government,” he added, noting that private traders may eventually follow suit once the government begins buying palay.

The senator said setting a floor price would help farmers earn fair compensation for their produce. Many farmers have been forced to sell palay for an average of P7.66 per kilo—far below the production cost of P13.51 per kilo—due to abusive traders and middlemen.

He cited examples from various areas that implemented local government interventions. During the COVID-19 pandemic, 13 LGUs bought rice directly from the Camarines Sur Multipurpose Cooperative, raising its sales from P7 million in 2019 to P62 million by the third quarter of 2020.

In Sorsogon, traders were pushed to raise their buying price to P23 per kilo from P13 after the local government started purchasing palay at P20 per kilo. Pangilinan said the move proved that traders could pay more when LGUs entered the market.

He also cited Valenzuela City’s initiative to buy rice directly from farmers, which helped the city save P15 per kilo while increasing farmers’ income and maximizing the local government’s budget to assist more residents.