In the incoming year, we hope to see a substantial government effort to increase rice production in the country.
There have been “short-term improvements in palay production,” according to policy advocacy group Action for Economic Reforms (AER), but we are a long way from achieving “domestic rice sector competitiveness.”
The Rice Tariffication Law was enacted three years ago for the benefit of the nation’s consumers as inflation zoomed to 6.7 percent in September, 2017. The law ended quantitative restrictions on rice importations, thus allowing unlimited importations as long as 35 percent tariff was paid.
It was good for the nation’s consumers as huge quantities of rice were now imported from Vietnam and Thailand, lowering market prices. But It was bad for the nation’s rice farmers who, with their high production costs, could not complete with the cheap imports.
The other day, the AER raised anew the need to increase Philippine rice production. But it acknowledged the fact that Philippine rice famers have such high production cosfs so that they cannot compete with cheap imported rice.
The AER cited familiar statistics -- Vietnamese famers can produce five tons of rice per hectare, while Filipino farmers can produce only 4.07 tons. Vietnamese farmers can produce rice at a cost of P6.22 per kilo, while Filipino farmers now produce rice at a cost of P12.41 per kilo. With such disparity in prices, our own consumers would naturally buy imported rice from Vietnam or Thailand rather than the rice from our own Filipino farms.
The Philippines has plans for the Philippine rice industry – the Rice Competitiveness Enhancement Fund (RCEF). At the start of this year last January, Secretary of Agriculture William Dar said, “We aim that in the next six years as a result of RCEF, we will effectively reduce the average production costs of palay by P4/kg, from the current P12/kg, increase the average yield by at least two tons per hectare from the current four metric tons per hectare, and double the income of rice farmers.”
This would be achieved through four programs of RCEF, namely, (1) use of more rice farm machinery and equipment, (2) development and propagation of high-yielding rice seeds, (3) expanded credit assistance to farmers, and (4) expanded rice extension services.
Unfortunately, this six-year program suffered -- like all other programs of government -- because of the COVID-19 pandemic. This year is about to end; in a week, a new one will begin. There remains great uncertainty in this coming year because of the pandemic. but we pin great hopes on the mass vaccinations that will start around May.
The government should start resuming normal operations around that time, and we hope the Department of Agriculture will accord all possible attention and support to the RCEF program. It is a long six-year program but we look forward to it, for its success will be a major achievement for our government and for our people.