NATIONAL FOOD AUTHORITY

La Union Branch Office

_____________________________________________________________________________________________________
Urbiztondo, San Juan, La Union, 2514 Tel. No. (072) 682-9011 Fax No. (072) 720-0072 launion@nfa.gov.ph

TITLE : INCREASING FARMER’S INCOME THROUGH THE PALLGU IN

PARTNERSHIP WITH LOCAL LEGISLATORS/LOCAL GOVERNMENT
UNITS

INTRODUCTION

The National Food Authority (NFA) is mandated to maintain sufficient rice buffer
stock to be sourced solely from local farmers. This is expressly mentioned in
Republic Act 11203 (RA 11203) under Section 8, Maintenance of Rice Buffer Stock.

In the realization of its mandate, the NFA directly buys palay from individual farmers
and farmers organizations who are registered under the Registry System for the
Basic Sectors in Agriculture (RSBSA) at a price of P19.00 per kilogram of dry and
clean palay. This is being carried out through the delivery of palay by the farmers in
buying stations strategically located across the province or through pick-up by NFA
trucks.

While the NFA has been continually inviting our farmers to sell their palay to the
Agency, higher prices from private traders lure them to sell to them instead. During
the peak months, private traders offers a per kilogram price of P20.00 to P22.00 for
clean and dry palay, hence, the preference of farmers to sell to them instead of NFA,
leaving the Agency unable to attain its target.

As a strategy to enable palay farmers to increase their income, the NFA introduced
the Palay Marketing Assistance Program for Legislators and Local Government Units
(PALLGU). The program also aims to assist Legislators and Local Government Units
(LGUs) in sourcing their palay requirements intended for their constituents. Under
this program, the Legislators or heads of LGUs shall enter into a marketing
agreement with NFA where the former will provide a premium amount which shall be
added to the existing government buying price of palay when buying the stocks of
individual farmers / Farmers’ Organizations (FOs).

AIMS AND OBJECTIVES

Overall Goal

The project will enable the palay farmers a higher income from their produce and
assists the Legislators and LGUs in sourcing their palay requirements intended for
their constituents.
 NATIONAL FOOD AUTHORITY
La Union Branch Office
_____________________________________________________________________________________________________
Urbiztondo, San Juan, La Union, 2514 Tel. No. (072) 682-9011 Fax No. (072) 720-0072 launion@nfa.gov.ph

Purpose

The partnership with the (Legislator/LGU) would entail higher buying price of palay in
the (District/Province/Municipality). This would redound to a higher attainment of
NFA’s procurement target while giving the (District/Province/Municipality) palay
stocks for their constituency. It would also give the farmers a direct marketing
support for their produce.

Specific Objectives

In order for the partnership with the (District/Province/Municipality) be successful, the

following logistical support and financial requirements are needed:

1. Letter of Intent (LOI) to signify their intention to offer a premium price for the
palay delivery of individual farmers / farmer organizations through PALLGU;

2. Memorandum of Agreement (MOA) between the Legislator / LGU Chief

Executive and NFA Regional Manager in the preferred procurement area;

3. Buying stations / pick-up points of palay from farmers;

4. Trucks for the delivery of palay from pick-up points to NFA designated
warehouse;

5. Laborers to augment NFA employees in the handling, weighing and rebagging

of palay; and,

6. Premium amount offered for every kilogram of palay which should not be less
than P1.00 per kilogram

IMPLEMENTATION PLAN

Based on SOP No. OP-AP-01-2022, dated June 29, 2022, the following shall be the
implementation strategies relative to PALLGU implementation:

1. Palay stocks with the following grade and purity shall be accepted under the
program:
 NATIONAL FOOD AUTHORITY
La Union Branch Office
_____________________________________________________________________________________________________
Urbiztondo, San Juan, La Union, 2514 Tel. No. (072) 682-9011 Fax No. (072) 720-0072 launion@nfa.gov.ph

Variety Code PD1 PD3 PW1 PW3

Moisture 14% max 14% max 14.1-30% 14.1.-30%
Content
Purity A&B A&B A&B A&B
A (95-100%)
B (90-94.9%)
Discolored and 7% max 7.1-13% 7% max 7.1-13%
Damaged
Chalky and 12% max 20% max 12% max 20% max
immature
kernels
Red kernels 5% max 10% max 5% max 10% max
PD – palay dry; PW – palay wet

2. (District/Province/Municipality) or their duly authorized representative shall

provide the NFA Branch Office where the stocks shall be procured with the
total premium amount offered in the LOI within five (5) working days after
signing of the MOA.

3. The first (District/Province/Municipality) to pay the total premium amount

offered shall be the first to be served.

4. NFA shall purchase palay from individual farmers (IF) / farmer organizations
(FO’s) through in-house procurement or mobile/pick-up procurement. The
government buying price that will be paid to the IF/FO shall be the existing
government buying price plus the premium amount that will be provided by
the Legislators / LGUs. For the year 2022, NFA’s target for palay procurement
for the (District/Province/Municipality) is at ______ bags.

5. The minimum volume to be sold by and IF/FO shall be 50 bags at 50 kg/bag.

6. Acceptance of palay stocks from IF / FO at the designated NFA warehouses

shall be properly documented using the Warehouse Stock Receipt (WSR). To
make sure that the palay procured through the PALLGU will be separated
from the regular procurement, the term PALLGU shall be indicated under the
transaction portion of the WSR and shall be stamped at the back of the said
document.

7. Payment of palay stocks shall be documented using the Purchase Receipt

(PR). The term PALLGU shall be indicated under the “nature of purchase”
portion of the PR and shall be stamped at the back of the
said document. The price of the palay, broken down into
 NATIONAL FOOD AUTHORITY
La Union Branch Office
_____________________________________________________________________________________________________
Urbiztondo, San Juan, La Union, 2514 Tel. No. (072) 682-9011 Fax No. (072) 720-0072 launion@nfa.gov.ph

NFA buying price and the premium provided by the Legislators/LGUs, shall be
reflected.

8. Palay stocks bought from the IF/FO shall be rebagged into NFA sacks
following the procedures in regular palay procurement.

9. The Legislator/LGU shall be notified of the availability of palay stocks

immediately after its acceptance at the NFA warehouse. The Legislator/LGU
shall be furnished with a photocopy of the WSR and PR, duly certified and
properly endorsed by the NFA Branch Manager, as proof of availability of
stocks.

10. If NFA is not able to procure the palay requirement of the Legislator/LGU
within the agreed period of stock availability specified in the LOI, the NFA
Branch Office shall advise the Legislator/LGU immediately after the said
period and return the premium provided by the Legislator/LGU.

ORGANIZATIONS AND PARTNERSHIPS

The implementation of the palay procurement program, particularly the PALLGU will
rely on the partnership with the following sectors:

1. Local Government Units

2. Legislators
3. Department of Agriculture
4. Office of the Provincial Agriculturist
5. Office of the Municipal Agriculturist
6. Provincial Farmers Action Council
7. Individual Farmers
8. Barangay Officials

ADVOCACY

An advocacy campaign regarding this program shall be conducted by the NFA

Branch Office to Legislators, Local Chief Executives in the province and
municipalities, individual farmers and farmer organizations. They shall be invited or
visited to discuss the benefits and features of the program. Social media and
mainstream media will also be tapped to discuss the program.
 NATIONAL FOOD AUTHORITY
La Union Branch Office
_____________________________________________________________________________________________________
Urbiztondo, San Juan, La Union, 2514 Tel. No. (072) 682-9011 Fax No. (072) 720-0072 launion@nfa.gov.ph

EVALUATION

Assessment of the project’s impact shall be conducted after the end of the program.
The strengths and weaknesses of the program will be reviewed and
recommendations to further improve its implementation in the future will be
discussed. Feedback mechanisms shall also be put into place to immediately assess
the project.

TIMELINE

Procurement season for the 2nd semester of the year starts in the last week of
September until December with spill over until the 2 nd week of February. The
program will cover the whole duration of the procurement season or until there are
palay to be procured.

BUDGET

Budgetary requirement refers to the premium to be added to the NFA buying price. It
is therefore dependent upon the targeted volume of palay to be procured and the
premium, which should not be lower than P1.00 per kilogram, to be offered by the
Legislator / LGU.