‘PHL to see lower rice production cost by 2023’

Despite the delays in the distribution of free farm equipment to rice planters, the Department of Agriculture (DA) said the country is on track to reducing palay production cost to P8 per kilogram by 2023.

The DA said the Philippine Center for Postharvest Development and Mechanization (PhilMech) is on schedule to distribute thousands of free farm machines to rice farmers this year, including those funded by the 2019 Rice Competitiveness Enhancement Fund (RCEF).

Under the rice trade liberalization law of 2019, rice farmers are entitled to receive a guaranteed P10-billion worth of interventions annually to boost their productivity. Half of the amount is for the distribution of farm equipment.

“We will continue to boost farm mechanization to reduce production costs, enable our rice farmers produce more harvests, earn bigger incomes, and subsequently compete with their counterparts in Asean,” Agriculture Secretary William D. Dar said in a statement.

To date, PhilMech has procured and is currently distributing 2,938 farm machinery and equipment worth P2 billion to 625 RCEF-accredited farmers’ cooperatives and associations (FCAs) nationwide, the DA said.

The farm equipment were still part of the 2019 RCEF farm mechanization with the remaining P3 billion still undergoing the bidding process, which will be completed by the end of the month, PhilMech Executive Director Baldwin Jallorina said.

The P3-billion worth of farm machinery would be distributed to 1,068 FCA, according to DA.

For the 2020 RCEF farm mechanization fund, the PhilMech has already validated 2,587 FCA applicants, of which 1,259 FCAs have been shortlisted and qualified to receive 4,543 farm machineries, Jallorina said.

“With the sustained and vigorous implementation of the RCEF program, coupled with our Rice Resiliency Project [RRP], we expect Filipino rice farmers to be at par with their counterparts in the Asean, in terms of cost efficiency and productivity, in the next three years,” Dar said.

“We are confident that with appropriate interventions and assistance under RCEF and RRP, we can reduce our production cost to P8 per kilo and increase our national average yield to 6 tons per hectare, in the next three years.”

Currently, Filipino farmers spend an average of P10 on labor, seeds, fertilizers, and other inputs to produce 1 kg of palay (paddy rice), while the country’s average harvest is at 4 metric tons (MT) per hectare (ha), according to DA.

In comparison, rice farmers in Thailand and Vietnam spend P8/kg and P5/kg, respectively, to produce 1 kilo of palay, DA added.

The DA attributed the country’s high production cost to heavy reliance on manual operations from land preparation to harvesting; high cost of farm inputs, notably fertilizers; lack of irrigation; inaccessible and inadequate credit; usurious loans offered by traders; and low productivity.


The Philippine Statistics Authority (PSA) said the nationwide average farm-gate price of dry palay as of the third week of June was pegged at P18.86 per kg, 5.7 percent higher than last year’s P17.85 per kg.

However, the latest farm-gate price of dry palay was slightly lower than the previous week’s P18.96 per kg, preliminary PSA weekly price monitoring report showed.

From June 17 to June 23, the highest average farm-gate price of dry palay was recorded in the Northern Mindanao region at P20.34 per kg while the lowest average quotation was in Caraga region at P17.75 per kg, PSA data showed.

PSA report also showed that both the average wholesale and retail prices of well-milled rice registered downward movements during the reference period.

“The average wholesale price of well-milled rice plunged to P39.36 per kg or by 0.4 percent during the week from its price level of P39.53 per kg in the previous week,” it said.

“Compared with its level of P39.29 per kg during the same period of the previous year, it registered a slower annual increase of 0.2 percent.”

At the retail trade, the average price of well-milled rice dipped to P42.61 per kg, or by 0.3 percent from last week’s P42.75 per kg, PSA said. The latest average quotation was 0.7 percent lower than last year’s P42.91 per kg price level.”

The average wholesale and retail quotations of regular-milled rice also declined during the reference week, PSA said.

“The average wholesale price of regular-milled rice fell to P35.71 per kg or by 0.4 percent during the week, from its level of P35.85 per kg in the previous week,” it said.

“Meanwhile, it inched up at an annual rate of 0.9 percent from its level during the same week of the previous year of P35.4 per kg.”

PSA said the average retail price of regular-milled rice dropped slightly to P38.47 per kg from last week’s P38.52 per kg.

“It also declined at an annual rate of 0.1 percent from its level of P38.52 per kg during the same week of the previous year.”


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