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Rice farm output continues slide

Area planted to palay contracted by 1.87% as of end-June this year
/ 05:09 AM September 03, 2019

The steady fall in the prices of palay has already resulted in substantial cutbacks in the crop’s production and yield during the second quarter of the year.

Based on the Philippine Statistics Authority’s (PSA) palay and corn quarterly bulletin for April to June, the country’s palay output went down to 3.85 million metric tons (MT) during the period against 4.1 million MT a year ago.

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Areas dedicated to planting palay also contracted by 1.87 percent while yield declined by 4 percent.

PSA statistician Elena Varona said in a phone interview with the Inquirer that the cut in palay output might be possibly due to several factors, including the steady fall in prices, the rates offered by traders, input costs and the effect of the rice import liberalization law.

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The report also pointed to the impact of the dry spell caused by the El Niño weather phenomenon as one of the reasons for the lower palay output during the period.

Based on the quarterly bulletin, 13 of the 16 covered regions in the report “recorded (declines) in output with substantial cutbacks,” particularly in the regions of Mimaropa (Mindoro, Marinduque, Romblon and Palawan), Bicol and Western Visayas where about 50,941 MT of palay were lost.

Of the regions, only Zamboanga Peninsula and Northern Mindanao observed increases in production.

While no agencies have categorically blamed the new rice law on why farmers were dedicating fewer lands and inputs to planting palay, farmers and industry groups who talked to the Inquirer said the policy had a huge impact.

Bulacan farmer Poncing Canquin said industry stakeholders were already bracing for the next wave of declines in palay prices as harvest season nears.

“Right now we’re selling our produce at P16 a kilo, but we’re sure that upon harvest time, especially in October when it peaks, prices are going to get lower,” he said.

As of the second week of August, the average buying price of palay was at P17.62 a kilo. This gives farmers an average profit margin of P5 for every kilo of the staple sold following the prevailing cost of producing palay at P12 a kilo.

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With lower incomes amid steady input costs, Federation of Free Farmers national manager Raul Montemayor said some farmers were forced to scrimp on implements and make do with lower yields.

Others have already shifted to growing poultry or livestock until rice prices recover.

In worst cases, farmers without capital wait out the tumbling rates and rely on informal lenders to survive.

Even rice mills across the country were reported to have closed down or have stopped milling with the steady stream of imported rice in the market, according to PHL Confederation of Grains Association Inc. president Jojie Co.

In a House hearing on Monday, industry groups urged the government to strengthen the role of the National Food Authority (NFA) by increasing its procurement budget and stabilizing its buying price to help small-holder farmers.

National Federation of Peasant Women spokesperson Cathy Estavillo said NFA’s current budget for procurement was not enough to absorb at least 10 percent of the farmers’ local palay output.

To provide immediate assistance, Agriculture Secretary William Dar and Sen. Cynthia Villar distributed loans to more than 1,000 farmers in Nueva Ecija as the Department of Agriculture launched its new loan program for farmers affected by the rice import liberalization law.

Under the program, farmers tilling one hectare of land or smaller may avail themselves of a one-time, zero-interest, no-collateral loan amounting to P15,000 payable up to eight years.

While industry groups were cynical of the move, saying that the government should have provided subsidies instead of loans, Dar said the financial assistance was very affordable for small rice farmers as they just needed to set aside P1,875 every year to pay off the loan.

The move is seen to give short-term relief to farmers who are reeling from low palay prices as they wait for the rollout of long-term projects meant to uplift the industry. Due to delays in budget disbursements, the programs may be launched during the first quarter of 2020.

The government maintained that the new rice policy was for the benefit of the industry and should be given time to materialize and improve the country’s poorest sector.

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