With not a lot of options left, smallholder farmers would have to continue planting the staple until next year despite lower prices and with fewer implements and fewer harvests.
While offering a small amount of relief, rice imports—which continue to compete with local produce—is also expected to slow down in 2019 until 2020 after hitting a record-high this year.
Based on the latest report of the United States Department of Agriculture-Foreign Agricultural Service (USDA-FAS), the Philippines is expected to pare down its rice imports by 23 percent next year to 2.4 million metric tons (MT) from this year’s 3.1 million MT.
Still, small-scale farmers are still expected to continue planting rice, with milled production and palay production expected to reach 12 million MT and 19 million MT, respectively.
“Smallholder rice farmers will continue planting rice despite low prices, while progressive rice producers will become more efficient [in the next crop year]. Although area harvested is lowered, rice production will increase by 2 percent due to favorable weather conditions, with imports expected to decline… because of adequate supply,” the report said.
Federation of Free Farmers national manager Raul Montemayor agreed with the report, noting farmers were already beginning to scrimp on the use of implements and decreasing their farm areas dedicated to palay with prices continuing to dive to record lows.
“It’s easy for the government to say that farmers can shift to planting other crops, but most of our small-scale farmers don’t have the capacity to do that. Most of them don’t know how, don’t have the capital, and don’t have access to markets where they can sell other crops other than palay,” Samahang Industriya ng Agrikultura chair Rosendo So said.
As of the last week of September, the average farm gate price of palay has sunk to an eight-year low of P15.82 a kilogram. In some areas, rates are even lower than the prevailing production cost at P12 a kilo.
“Most of our farmers do not have any choice but to continue planting, so they try to save on inputs. It’s hard to say until when the small farmers can survive, but this is the aim of the law. It’s going to be survival of the fittest,” Montemayor said.
The USDA-FAS report noted behavioral changes on the part of stakeholders and industry shifts would take time, but in the meantime, “the Philippine government is expected to intensify efforts in finding the ideal balance of subsidies to reach an acceptable pricing compromise.”
Nonetheless, the international agency said it was expecting a slight shift to other crops this year “because of the consistently low prices, with a more pronounced shift the following year,” or between 2020 until 2021.