The planned lifting of the quantitative restriction (QR) on rice starting next year somehow caught me by surprise, because then Davao City Mayor Rodrigo Duterte during the presidential campaign promised to achieve self-sufficiency in domestic rice production within two years of his presidency.
Agriculture Secretary Manny Piñol has also asked for an extension of the QR by at least two years and P65 billion in funds to make the rice sector more competitive. Although I am optimistic rice production can be increased with existing technologies like hybrid seeds and mechanization, I still believe the country should primarily aim for food security and not just rice self-sufficiency.
This means that government should spend to make the country’s agriculture sector competitive in general, not only in terms of production, but also in terms of storage and transport facilities, research and development (R&D), and social safety nets.
In my column last October 27 (Food security vs food self-sufficiency) where I also discussed the 2016 Global Food Security Index (GFSI) published by The Economist Intelligence Unit, the report made it very clear that the population’s ability to purchase food, facilities to transport and store food, and even R&D for the agriculture sector are among the important factors to achieving food security. They all go hand-in-hand.
Now, how do you increase the income of farmers so they can also have the means to purchase enough food for their families? Improving paddy rice yield per hectare is one way but growing high-value crops for export is also a very viable option.
So far, the country only has two export crops that generate $1 billion ever year: coconut and banana. On the other hand, Thailand’s top farm exports include the following: natural rubber ($6.0 billion); rice ($5.4 billion); prepared fish ($3.1 billion); sugar ($2.7 billion); prepared chicken ($2.2 billion); starch ($1.3 billion); prepared shrimp ($1.2 billion); animal feed ($1.2 billion); and food preparations ($1.2 billion).
Vietnam also boasts of the following farm exports earning billions of dollars per year: coffee beans ($3.3 billion); rice ($2.9 billion); shrimps ($2.6 billion); fish fillet ($2.4 billion); cashew nuts ($2.0 billion); natural rubber ($1.7 billion); prepared shrimp ($1.6 billion); and pepper ($1.2 billion).
Don’t tell me the Philippines cannot produce the top farm exports of Thailand and Vietnam.
If more farmers shift to high-value crops and export these in raw or processed form, that would be one good step in achieving food security because farmers must have more income to purchase their own food.
Going to rice production, it might be an uphill climb for the Philippines to become as competitive as top rice exporters Thailand and Vietnam. Production of paddy (unmilled) rice in Thailand is P10 per kilo and Vietnam P7 per kg. In the Philippines, it is P11-P12 per kg.
So imposing a tariff of 35 percent on imported rice might not be enough to protect Filipino rice farmers from their Asean counterparts.
Also, Filipino rice farmers are receiving smaller and smaller shares of the value of their produce year-on-year, or just 47 percent of the wholesale price. On the other hand, rice farmers in India get 62 percent when they sell it directly from their farms, and farmers in China 94 percent.
But I am not saying the government should no longer invest in making the rice sector competitive over the two-year period of the QR’s possible extension, because the industry remains a major source of employment, income and nutrition for Filipinos, comprising some 2.5 million farmers plus several hundred thousand of farm laborers and people engaged in the supply of farm inputs and machinery, milling/processing, warehousing, transport, other farm services and related economic activities. Looking at the bigger picture, the rice industry directly and indirectly benefits close to 20 million people or 20 percent of the population.
The worst-case scenario is up to 550,000 rice farmers will be affected or left without any source of livelihood if they do not become competitive after the QR is lifted. The average yield per hectare per cropping season for paddy rice in the Philippines is 4.0 metric tons/hectare that can be increased over the next two to three years to up to 6.0 MT/ha. Among the government agencies with technologies to increase domestic rice production are the Philippine Rice Research Institute (PhilRice) and Philippine Center for Postharvest Development and Mechanization (PhilMech), both under the Department of Agriculture.
PhilRice and private seed companies have hybrid rice varieties that can yield up to 8 MT/ha and are either resistant to flooding or drought.
PhilMech has technologies for rice farming from land preparation, transplanting, harvesting and drying. Based on PhilMech studies, using a transplanter results in using 40 kgs of seeds per hectare compared to 80 kgs under the manual method. Using a transplanter can result in up to 50 percent more seedlings planted in a square meter, which can easily increase yield by up to 50 percent.
But then, spending billions of pesos just to make the country’s rice sector more productive should not be the only solution to making the country’s farming sector competitive and achieving food security for the population.
Achieving competitiveness should also include establishing storage facilities for various food products and the means to transport these to various parts of the Philippines, which is an archipelago. Also of equal importance is spending for R&D and getting proven farming technologies not only to rice farmers but also to those growing and shifting to high-value crops.
Should the QR on rice be extended for another two years, government should not waste that golden opportunity to achieve food security and not only rice self-sufficiency.