THE price target of P20 per kilo of rice is feasible, as long as the National Government would be aggressive in subsidizing as much as 50 percent of the production cost of the farmers, an official of an agri-fishery-forestry cooperative said on Thursday, April 18, 2024.
Cresente Paez, chief executive officer of the Philippine Family Farmers Agriculture Fishery Forestry Cooperatives Federation (AgriCOOPh), said the high cost of rice production has made the rice expensive in the market and the P20 per kilo unachievable, as of the moment.
“It’s a question only of inputs. Kon mahal ang inputs mo, mahal rin ang produkto mo (If your inputs are costly, your products are also expensive),” Paez said in an interview on the sidelines of the AgriCOOPh’s 6th General Assembly at the Elizabeth Cebu Hotel in Cebu City last Thursday.
He said the main factors affecting the production cost are the expensive farm inputs, such as fertilizers and the high cost of human labor in the farmlands.
However, he said that the federation of cooperatives is currently striving to improve rice production in the country to achieve a price target of P20 per kilogram. President Ferdinand Marcos Jr. made a commitment during the campaign period before the 2022 elections to lower prices to as low as P20 per kilo.
He said that if the government can increase its current fertilizer subsidy and subsidize 100 percent of the mechanization efforts of farm machinery, it will also reduce labor costs.
“May subsidy na man sa fertilizer. May subsidy sila sa mechanization; may subsidy din sila sa working capital, pero hindi sa level na wide ang kanyang impact. Medyo pocket size pa siya dahil may mga organizations na hindi ready,” Paez said.
(In terms of fertilizer, there is a subsidy. They also have subsidies for mechanization and working capital, but not at a level where its impact is widespread. It’s still somewhat pocket-sized because there are organizations that are not yet ready.)
According to the Department of Agriculture’s website, among the expected benefits of using farm machinery, particularly for the farmer-beneficiaries are the reduction of cost production of rice and the reduction of postharvest losses by three to five percent through the use of appropriate and efficient postharvest machinery.
In comparison, Southeast Asian countries such as Thailand and Vietnam have programs, where their governments provide subsidized farm inputs and machinery to their rice farmers, making their production cheaper, Paez said.
Cheaper production costs mean that the farmers can reduce the price of rice.
In European countries, Paez said the government subsidy does not fall below 50 percent of the production cost, thus alleviating farmers from high farm inputs and machinery.
Paez said implementing a program similar to those in neighboring countries could reduce the country’s dependence on imported rice and enhance local production.
He said imported rice typically costs P40 per kilo or more, factoring in profits for traders and farmers in the country of origin. However, additional logistics and local profit margins further increase the price.
He said local traders sometimes buy imported rice for as low as P35 per kilo before adding profit margins.
Training
Aside from enhancing the implementation of subsidies, Paez said the government must also invest in training rice farmers in financial literacy and immerse them in commercial and enterprise aspects of farming.
He added that rice farmers in the country need to be equipped with the necessary knowledge of modern farming methods and machinery.
Founded in 2018, AgriCOOPh has around 60 cooperative members nationwide with around 875,000 individual members.
In Cebu, it has around 10 cooperative members, including the Lamac Multi-Purpose Cooperative, which has a tie-up with major stores, hotels, restaurants, and fast-food chains in supplying vegetablesand produce.