THE country’s palay output in the first half grew slightly to 8.386 million metric tons (MMT) from 8.269 MMT as farmers used more “good quality” seeds provided by the government under the Rice Competitiveness Enhancement Fund (RCEF).
However, industry stakeholders and experts sounded the alarm that the impact of RCEF is yet to be seen as palay output this year was lower compared to 2018 and 2017, when additional rice production interventions like RCEF were absent.
Palay output in the January-to-June period of 2017 and 2018 was at 8.569 MMT and 8.71 MMT, respectively, Philippine Statistics Authority (PSA) data showed.
PSA data also showed that palay output in the second quarter rose by 7 percent to 4.125 MMT from 3.852 MMT recorded last year.
The Department of Agriculture (DA) attributed the recovery to farmers using more “good quality” seeds.
Industry stakeholders noted, however, that dismal palay output in the second quarter last year was due to the adverse impact of El Niño to rice farms.
Furthermore, despite initial RCEF interventions such as free high-yielding seeds, palay output in the second quarter was still lower than the 4.15 MMT recorded output in the April-to-June period of 2017, based on PSA data.
The second quarter output was just also slightly higher than the 4.09 MMT output recorded in the same period of 2018, PSA data showed.
Economist Pablito M. Villegas said the loss of about 150,000 rice harvest area last year could be a factor to the paltry performance of the rice sector in the first half.
However, Villegas pointed out that the RCEF seed interventions may have mitigated somehow the detrimental impact of the shrinkage in total harvest area.
“Producers respond to price signals and under the rice trade liberalization law palay prices were depressed last year. It adversely affected farmers’ planting intentions for the first quarter and second quarter this year,” he told the BusinessMirror.
“However, this could also be the initial impact of the RCEF seeds, the positive incremental output. Because somehow it was able to offset the dramatic decision of farmers not to plant this year,” he added.
Federation of Free Farmers (FFF) National Manager Raul Q. Montemayor echoed Villegas’s remarks that buying prices for palay are still a bigger consideration than RCEF in determining farmers’ planting intentions.
“I was also intrigued about the good performance of rain-fed areas during the first semester. I don’t think many rain-fed areas are included in the RCEF seed program, so the good performance might have been due to good weather,” Montemayor told the BusinessMirror.
“And if we analyze the first semester as a whole – not just second quarter – we performed even worse than in 2018, and only marginally better compared to 2019,” he added.
Montemayor said palay output in the first half should have been better than 2017 and 2018 production levels due to RCEF interventions. “So it seems the impact of RCEF was negligible if any,” he said.
Under the RCEF, which was created by the RTL law, rice farmers will receive P3 billion worth of high-yielding seeds for free from 2019 to 2024. Rice farmers would also receive P5 billion worth of free machinery during the period. The BusinessMirror sought comments from the DA about the matter but there was no response as of press time.
Image credits: Bernard Testa