Increasing the national average palay yield and reducing production cost will help Filipino farmers survive the competition in the Asean rice market, according to the Philippine Rice Research Institute (PhilRice).
PhilRice, an attached agency of the Department of Agriculture (DA), said the Duterte administration wants to raise national average rice yield to 6 metric tons (MT) per hectare and cut production cost to P8 per kilogram.
“This target, supported by strategic government interventions in the medium term [until 2022] will make our farmers competitive and sustain the nation’s rice industry in the long run,” said Dr. Flordeliza H. Bordey, senior socioeconomist of PhilRice, in a statement.
With the Asean integration, Bordey said the Philippines is confronted with a different economic scenario so targeting rice self-sufficiency is no longer enough.
“As our commitment to the World Trade Organization, we now have to replace our quantitative restriction [QR] policy with its tariff equivalent,” she added.
Once the QR on rice is lifted, Bordey said importers can bring in rice from Asean member-countries as long as they see it profitable. She noted that the 35 percent tariff is the only protection of the Philippines.
A study undertaken by the PhilRice and the International Rice Research Institute noted that imported rice from Thailand and Vietnam will be around P31 and P27 per kilogram, respectively.
This scenario is favorable to consumers, especially for poor families who spend about a third of their income for food expenses.
However, Bordey warned that cheaper imports will also reduce the price of locally produced rice.
“This will have a negative impact on the income of our rice farmers who, at present, only produce an average of 3.87 MT/ha at a cost of P12/kg”, she said.
“This means that rice farmers, say in Nueva Ecija, who spend P48,000 per hectare on average, must have a yield of around 6,000 kg, or 6 MT, to survive the competition,” Bordey added.
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