Missing fertilizer, hybrid seeds spell disaster

With the recently imposed 35-percent tariff on rice, the missing support for fertilizer and hybrid seeds will surely spell disaster for 40 percent (or one million) of our rice farmers.

The legislated Rice Competitiveness Enhancement Fund (RCEF) allocates P10 billion annually to help our rice farmers survive this 35-percent tariff. Studies have shown that the farmer must yield at least 4 tons per hectare to survive the ensuing lower prices from cheaper imported rice. Unfortunately, a million rice farmers produce less than this. Consequently they will suffer tremendously and may even stop planting rice. This endangers our food security, especially if other countries significantly increase their export prices (as they have done before) or decide not to export enough rice to us.

While half of the RCEF is for mechanization, none of the RCEF goes to fertilizer and hybrid seeds. Mechanization is definitely commendable. But when a patient is in the hospital’s intensive care unit, he needs emergency medicine just to survive. In the same way, fertilizer and hybrid seeds are likewise emergency measures. More than the long-run benefits of cutting costs from mechanization on what today are our very low yields that make us uncompetitive, the more urgent need is increasing yields (and therefore revenue) from fertilizer and hybrid seeds.

Studies by both Philrice and the International Rice Research Institute conducted since 1967 consistently show that fertilizer is an essential component to improve rice yields. However, many of our farmers today do not use sufficient fertilizer because of cash insufficiency or ignorance. These studies demonstrate how a 6 ton-per-hectare yield drops to 3 tons without fertilizer. The P12,000 fertilizer cost (10 bags at P1,200 each) yields an additional 3 tons. Assuming P17 a kilo, the P51,000 additional revenue is more than four times the incremental P12,000 fertilizer cost.

Hybrid seeds are also essential. Consider the table above.

Because of the cheaper imported rice from the low 35-percent tariff, last year’s P21-per-kilo farm-gate price has alarmingly decreased to P15 in many areas. Assuming an optimistic average P17 price, the income of a farmer producing 4 tons per hectare is P34,000. If the price decreases to P15 as we have seen in many areas, his income will go down to P26,000. The farmer who produces only 3 tons a hectare will go from a P21,000 profit to P13,000. He will most probably stop planting.

However, if we look at the impact of hybrid seeds, the picture significantly changes. With only an additional hybrid seed cost of P6,000 per hectare, the farmer who produces the national average of 4 tons per hectare will find this profit increasing by P16,000 from P34,000 to P50,000 a hectare. In Nueva Ejica, which is a model the rest of our provinces should follow, the P6,000 additional hybrid seed cost will result in a benefit of P36,000. Is it not obvious that hybrid seeds should be promoted? And yet today, only 15 percent of our farmers use hybrid seeds. If the farm-gate price drops to P15, it will be almost necessary to do hybrid seeds just to survive. But ironically, the law specifically states that the RCEF cannot be used for this.

One million rice farmers are currently reeling from a rice disaster that should be addressed through fertilizers and hybrid seeds. The newly elected Congress and local government officials must now take action. Only in this way can the recent rice tariffication law transform from disaster to development.