Rice Trade Liberalization (Part 2)

Manila Bulletin, October 4, 2014 | Go to article overview

Rice Trade Liberalization (Part 2)


There are those who look at things the way they are, and ask why . . . I dream of things that never were, and ask why not? . . . - Robert Kennedy.

More liberal trading among nations across all products and services will bring more economic benefits in the aggregate. But as always more benefits will accrue to some; others will get less and may even be worse off. Thus, the need for safety nets for those who are left out. And time for adjustment for those who are not ready.

But can the Filipino rice farmers survive in a liberalized rice market?

Yes... Why not! Our corn farmers have learned to survive and compete with little government support. They have found new strength with GMO corn hybrids, plus most importantly, aggressive private sector support from seed companies, input suppliers and mechanization custom service providers. With more large grain centers and better shipping and transport logistics, our yellow corn animal feed sector should be even more competitive.

Our coconut farmers have survived, too, but barely. Worse we impoverished them with four coconut levies in succession in the 1970s and 1980s. The coconut levies which by now must be worth at least P70 billion are frozen in the national treasury and with the United Coconut Planters Bank (UCPB).

RICE HYBRIDS AND MECHANIZATION

The key measure of competitiveness is the cost of production of palay vis-AaAaAeA -vis the competition. We have to benchmark our cost of palay again the major exporters like Thailand and Vietnam. The latest figures (January-June 2013 harvest) of comparable high yielding rice farms in the Philippines, Thailand and Vietnam showed that the average costs of production of a kilo of palay in Philippine pesos were P10.03, P9.12 and P6.69, respectively (c/o Dr. Liza Bordey, PhilRice). And the biggest cost factor differentiating the three countries was hired labor: P19,300, P3,700 and P3,300 per hectare for the Philippines, Thailand and Vietnam, respectively.

The competitive strategy therefore is relatively straightforward: 1) dramatically raise our palay yields by widespread adoption of hybrids, and 2) gradual farm mechanization to reduce labor costs.

High yielding rice hybrids produce palay yields of 7-8 tons per hectare compared with the national average of less than four tons per hectare. Rice hybrids now occupy 200,000 hectares out of the total hectarage of 4.5 million. If we scale up hybrid rice planting to one million hectares, we will have enough rice.

Transplanting, harvesting and threshing are very labor-intensive farm operations. We can drastically reduce labor cost by use of small-sized machines which technologies are available from Japan, China and South Korea. However, we have to generate beforehand alternative, productive employment for surplus farm labor through expansion of industry and services, more agro-processing and rural enterprises and further intensification of farming itself (multiple cropping).

SUSTAINABLE MULTIPLE CROPPING

With our small average land holdings, increasing income from rice alone would not be enough. If we were to make progress in attaining Millennium Development Goal No. 1 of reducing poverty, especially in the countryside, we need to create more employment and generate greater value-added by diversification to other high value crops and more village-level processing.

Many short-season crops like tomato, pepper, eggplant, garlic, onion, legumes, melons, ampalaya, root crops like gabi and sweetpotato, even ornamentals can be grown in rotation with rice. …

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