Philippine Center for Postharvest Development and Mechanization (PHilMech) is confident that with the government’s mechanization efforts, the production cost of palay will go down by more than 20 percent but by the end of 2024 yet.

Philmech Director for Applied Communications Division Aldrin Badua said that in terms of farm productivity, the government is still aiming to boost the country’s mechanization level from 2.31 horsepower per hectare to 3.31 horsepower per hectare.

“In our calculation, after six years , there will be more or less additional 1 horsepower per hectare by 2024,” Badua said in a virtual briefing Wednesday.

With higher farm productivity, he said production cost is also poised to go down from P12.41 per kilogram (/kg) to P9/kg.

At present,, the Philippines lags behind other rice producing countries in farm productivity with an agriculture mechanization level of only 2.1 horsepower per hectare. This means that more than 16 percent of the farmers' total production goes to waste due to post-harvest losses.

For rice alone, the cost of palay production here currently stands at P12.41/kg, which is way higher than the production cost of P6.22/kg in Vietnam and P8.86/kg in Thailand.

Using the Rice Competitiveness Enhancement Fund (RCEF), where tariff collected from rice imports are supposed to be deposited, the government aims to lower the cost of production in rice.

As part of Rice Tariffication Law (RTL), which liberalized rice importation in the Philippines, RCEF is supposed to be injected with P10 billion annually from 2019 to 2024. 

Of this, P5 billion goes to PhilMech so the agency can facilitate the distribution of machinery to qualified farmers’ cooperatives and associations (FCAs). 

As of Dec. 22, PhilMech already awarded P7.31 billion worth of contracts for the acquisition of various farm machines under RCEF.

Also, PHilMech has distributed to qualified FCAs farm machines worth P2.76 billion. 

The P7.31 billion represents 73 percent of the P10-billion funded allocated to PHilMech under RTL for 2019 and 2020.

PHilMech Executive Director Baldwin G. Jallorina Jr. said the agency aims to conclude the awarding of at least P8 billion worth of farm machines by the end of this year, and the remaining P2 billion within the first quarter of next year. 

This will complete the bidding of the P10 billion worth of machines covering 2019 and 2020.