There is an unbelievably simple solution offered by Asia Rice Foundation chair Santiago Obien. It is to address the plight of our rice farmers who are now confronted with the recent 35-percent tariff on imports and are instead offered complicated measures.
This is specially important because more than 40 percent of our farmers will not survive this low tariff. Experts such as International Federation of Agricultural Producers vice president Raul Montemayor and PhilRice vice president Flordelis Bordey have the same position: To survive, rice farmers should produce at least four tons per hectare to bring down their average production cost significantly and immediately. This will enable them to compete with the cheap rice imports. Unfortunately, almost half of our rice farmers cannot do this now.
The Food and Beverage magazine reported: “Local farmers will be affected by the introduction of more foreign competitors. How they fare in the face of that competition will depend on the Rice Competitiveness Enhancement Fund (RCEF) that the law has put into place.”
Herein lies the problem. RCEF allocates P10 billion annually to support the rice farmers distributed as follows: 50 percent for machines, 30 percent for seeds, 10 percent for credit and 10 percent for extension. Were the appropriate rice experts and farmers consulted regarding this distribution?
Probably not enough. Commenting on the 50-percent allocation for machines and zero for fertilizers, Obien states: “Rice plants must have food to grow and produce grains. The food [or fertilizer] is missing in the law. Machines for better land preparation and harvesting will indeed reduce the cost of rice production. But reducing this cost on an average yield of 4 tons per hectare will not mean much. The yield must first be increased. This is done by providing food to the plant so that the high-yielding varieties will reach their yield potentials of 6 to 10-12 tons. Then you are competitive. The basis for this claim is the result of the long-term nutrients experience of International Rice Research Institute and Philrice Maligaya for over 50 years.”
Definitely, mechanization is good. But akin to saving a person about to die in a hospital’s Intensive Car Unit where one must take emergency measures before the long-term ones, farmers must immediately raise their yields even before the longer term and more complex solution of mechanization. When I talked to other rice experts and rice farmers about Obien’s unbelievably simple solution, they unanimously agreed. They were disappointed that that many of them were not consulted.
Other thoughts came through regarding the RCEF distribution. On the 30-percent allocation for seeds, it was calculated that the use of hybrid seeds increases average yield by 50 percent from 4 to 6 tons per ha at a seed cost of less than P6,000. But the RCEF does not support hybrid seeds. Because of our 5.7 million denuded ha and our low water tables, irrigation now often yields only the same 50-percent yield increase that the hybrids can obtain. P6,000 in hybrid seeds is far less than the minimum P300,000 in irrigation, which produces the same 50-percent increase in many areas.
The 10-percent credit allocation of P1 billion a year hardly scratches the surface to help rice farmers. Land Bank’s 2017 Annual Report states that only 7.5 percent (or P45 billion) of their loanable funds went to small farmers and fisherfolk. The RCEF’s P1-billion credit support can instead be sourced from the balance of Landbank’s loans (of P600 billion), instead of some of this balance going to nonagriculture beneficiaries. Alternatively, much of Landbank’s net profit (P16 billion for 2017) can go to rice farmers, instead of being entirely given to the government’s treasury.
With the newly elected local and national government officials, it is hoped that more consultation is done with private sector experts and stakeholders. This way, unbelievably simple but effective solutions can be implemented, instead of complicated measures that are the product of insufficient thought and inadequate private sector interaction.
The author is Agriwatch chair, former Secretary for Presidential Flagship Programs and Projects, and former undersecretary for DTI and DA. Contact him via agriwatch_phil@yahoo.com.