Rice Tariffication Law (RTL), which liberalized rice importation in the Philippines and aims to make rice farmers competitive, is approaching its third year of implementation, but the country is still way behind in rice production compared to its neighboring countries.
According to policy advocacy group Action for Economic Reforms’ (AER) policy note “Taking Stock of Rice Industry Statistics post-RTL”, it stated that despite the current encouraging progress in rice production, “achieving domestic rice sector competitiveness is a far cry from short-term improvements in palay production.”
“To put things into perspective, our current yield is comparable to what Vietnam’s average yield was in the year 2000,” the policy note said.
“We can also observe that the average palay productivity, as measured by the volume of production in metric tons divided by the total area harvested for production in hectares, had rapidly increased during the 2000s from below 3 metric tons (MT) per hectare to over 3.6 MT per hectare by the end of 2010. During the 2010s, however, productivity has barely inched over 4.0 MT per hectare,” the policy note added.
In rice, Vietnam’s current average yield stands at 5 MT per hectare, while the Philippine’s average yield per hectare is 4.07 MT at a production cost of P12 per kilogram (/kg). The Department of Agriculture (DA) is targeting to increase this to national average rice yield of 6 MT per hectare at P8/kg production cost.
AER said local productivity gains can be made as the country increases the rate of irrigation and adopt more modern technologies.
Right now, lowering the cost of production is also a crucial target which the Department of Agriculture (DA) is pursuing through key interventions in the Rice Competitiveness Enhancement Fund (RCEF), where tariff collected from rice imports will be deposited.
As part of RTL, RCEF is supposed to be injected with P10 billion annually from 2019 to 2024.
Two years into the implementation of RTL, AER said the domestic rice sector’s potentials “are yet to be unlocked”.
This, according to AER, can be done through improving the data institutions of the country.
The organization surmises that this is “the first step towards better rice policy.”
“We make do with the data that is available. A general picture for the rice sector can still be made out to inform policy, while simultaneously improving the quality of the country’s data institutions moving forward,” Montesa said.