FOLLOWING a 1.41-percent increase in palay output in the first half, the Department of Agriculture (DA) said it is confident that its full-year production target of a record 20.34 million metric tons (MMT) will be achieved.
In a statement, Agriculture Secretary William D. Dar said the recovery posted by palay production in the second quarter is a “testament” to the fact that the effects of rice trade liberalization (RTL) law “are starting to bear fruit.”
Preliminary Philippine Statistics Authority (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.
“Our second quarter palay production of 4.125 million MT is a testament that reforms being instituted under the rice tariffication law are starting to bear fruit,” Dar said.
“Barring adverse typhoons and natural disasters in the remaining months of the year, we expect a record palay output this year of 20.34 million MT, which is 8 percent higher than the 2019 production,” he added.
Dar said the local rice sector “continues to exceed expectations despite challenges and the ongoing health crisis that we are facing, including other concerns, amid these challenging times.”
“We are not complacent and, in fact, have been on our toes since last year when we assumed office,” he said.
“All [rice supply] scenarios show comfortable levels of rice supply by the end of the year, which at best would be good for 98 days, and at worst, we would still have an ending stock good for 90 days,” he added.
The BusinessMirror earlier reported that industry groups sounded the alarm that the impact of Rice Competitiveness Enhancement Fund (RCEF) is yet to be seen as palay output from January-to-June period was lower compared to 2018 and 2017, when additional rice production interventions like RCEF were absent. (https://businessmirror.com.ph/2020/08/07/h1-palay-output-up-rcef-role-debated/)
Palay output in the January-to-June period of 2017 and 2018 was at 8.569 MMT and 8.71 MMT, respectively, PSA data showed.
The DA attributed the recovery in the second quarter production 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 on 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 rice harvest area of about 150,000 hectares last year could be a factor in 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.
Jasper Emmanuel Y. Arcalas
Image credits: Bernard Testa