Alcala says lower production cost will stabilize rice prices

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AGRICULTURE Secretary Proceso Alcala on Wednesday said the stability of rice prices hinges on the ability of local farmers to bring down the cost of palay production to the lowest possible level.

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Alcala said their studies indicated that the cost of producing palay at P10 per kilo is significantly higher than other rice-producing countries like Thailand at P8.40 per kilo and Vietnam at P5.40 per kilo.

“We need to lower the production cost thru farming mechanization and providing our farmers post-harvest facilities for higher production. With more production, we’ll have more supply for the commercial market which would stabilize the rice prices,” Alcala said.

“We have cheap labor costs compared with other countries because the Filipino farmers do it manually. But since our farmers are doing it manually, there is higher production loss compared with other countries. The production loss offsets the cheap labor cost,” he added.

Alcala made the statements during deliberations before the Appropriations Committee in Congress, during which he presented his department’s P51.7 billion proposed budget for 2015.

To address the situation, Alcala said the Department of Agriculture (DA) will institute interventions in the next two years that aims to lower production costs and make the price of the main staple competitive.

“These interventions include increasing farm mechanization, lowering the cost of credit and improving rural infrastructure to enhance productivity, connectivity and integration of production areas to markets,” Alcala told the lawmakers.

By 2016, he said their target would be to produce 10 metric tons of palay per hectare at P5 per kilo in production cost.

The DA chief noted that the Philippines is on the right track in increasing its palay yield, citing the country’s harvest of 18.4 million metric tons of palay in 2013, the highest in Philippine history.

The target palay yield for 2014 is 19.06 million metric tons or good for 12.9 million metric tons of rice, slightly higher than the projected 2014 demand of 12.38 million metric tons of rice.

Alcala expressed confidence that the country is poised to reach 98 percent of rice self-sufficiency this year.

But party list representatives Neri Colmenares of Bayan Muna and Luz Ilagan of Gabriela expressed doubts on Alcala’s claims on rice sufficiency, “given the propensity of the government to import rice to fill up its buffer stock.”

Alcala, however, argued that the number of rice imports do not necessarily speak of the country’s rice sufficiency status because rice imports are for the buffer stock of the National Food Authority (NFA).

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