The Japan International Cooperation Agency (JICA) is extending a ¥1.7 billion grant (about ₱652 million) to establish a modern Rice Processing System (RPS) in Cauayan City, Isabela, in a move expected to cut post-harvest losses estimated at 16 percent and directly benefit at least 5,000 rice farmers.
The grant agreement was signed on February 16, 2026 by Agriculture Secretary Francisco Tiu Laurel Jr. and JICA Chief Representative Takashi Baba. The project will be implemented by the Department of Agriculture (DA) through the National Food Authority (NFA).
The facility will rise in Cauayan City, one of the top three rice-producing municipalities in Isabela. It will be equipped with high-capacity mechanical grain dryers, a multi-stage rice mill, and grain silos designed to handle larger procurement volumes more efficiently.
Government studies show that around 16 percent of rice production is lost due to poor post-harvest handling, with drying and milling accounting for the biggest share. Limited access to modern facilities in Cauayan has constrained farmers’ earnings and reduced the NFA’s ability to purchase palay during peak harvest seasons.
“This modern RPS will strengthen NFA’s mandate to maintain adequate rice buffer stocks, while reducing postharvest losses and improving grain quality. Ultimately, the grant aims to contribute to a food-secure and resilient Philippines, with empowered and prosperous farmers,” Baba said.
Agriculture Secretary Tiu Laurel said the investment will improve NFA operations and farmer incomes.
“We are strengthening NFA’s capacity to handle larger volumes of rice, reduce post-harvest losses, improve milling recovery, and deliver higher quality rice to our people,” he said.
He added that the grant “reinforces our shared goal of strengthening the Philippine agricultural sector and demonstrates the strong and long-term relationship between the Philippines and Japan.”
The Philippine government will provide counterpart funding for the construction of a warehouse and other necessary infrastructure, utilities, and personnel.
At least 5,000 rice farmers in Cauayan and nearby towns are expected to benefit from expanded participation in NFA procurement programs. With increased drying and milling capacity, the agency will be able to buy more palay at fair prices during harvest, offering farmers a more reliable institutional buyer.
NFA Administrator Larry Lacson said the agency remains committed to transparency and the prompt completion of the Rice Processing System for the benefit of farmers and consumers in Isabela.
Beyond reducing losses, the new processing hub is expected to strengthen year-round buffer stocks, reduce reliance on private drying and milling services, and help stabilize rice supply, particularly during lean months.