By Mary Grace Padin
The Department of Agriculture (DA) is targeting to cut the cost of producing paddy rice by 22 percent to P8.50 per kilogram from the current P11 per kg in its bid to make Filipino farmers more competitive.
Agriculture Secretary Proceso J. Alcala said the government intends to do this by expanding its farm-mechanization program and improving farmers’ access to government financial institutions.
“We need to lower the cost of producing palay to P8.50 per kg so local farmers can become more competitive. This needs a lot of work, particularly in the area of farm mechanization,” Alcala said.
The DA chief said local rice farmers are capable of edging out farmers in other Southeast Asian countries as imported rice are slapped a 35-percent tariff.
“Making locally produced rice cheaper will discourage smugglers, as retail prices of Philippine rice would be on a par with rice brought into the country illegally,” Alcala said.
To encourage more farmers to go into planting rice, he said the DA wants to improve their access to government financial institutions where they can obtain production loans. Alcala said farmers who wish to avail themselves of production loans may consider tapping the DA’s “Sikat Saka,” program where farmers can borrow as much as P52,000 per hectare.
“We will also continue to give out technology and postharvest facilities needed to boost production. Market access is also important,” Alcala added. The DA chief said the government was encouraged by results of a competition dubbed as the “Palayabangan: The 10-5 challenge.” The Palayabangan aims to raise palay production to 10 metric tons (MT) per hectare at a cost of P5 per kg.
“From this challenge, we have seen some farmers reaching up to 8 MT per hectare, at a cost of only P6.50,” Alcala said.
Latest data from the Philippine Statistics Authority (PSA) showed that the cost of producing palay in the country averaged P42,061 per hectare in 2013. Cash outlays at P19,715 per hectare comprised nearly 50 percent of total production cost.
“Palay production averaged 3.5 MT per hectare. The gross value of production amounted to P58,894 per hectare, or P16.77 per kg. Returns above cash costs averaged P39,179 per hectare,” PSA said.
In 2010 a former official of the National Economic and Development Authority urged farmers to shift to planting high-value crops as planting rice is a “poverty trap.”
Apart from the high cost of inputs, farmers also have to contend with the ill effects of climate change. Last year the country’s palay output dropped by 4.31 percent to 18.15 million metric tons (MMT) from 18.97 MMT produced in 2014. The PSA said rice farms recorded lower production due to El Niño and Typhoon Lando (international code name Koppu).