The chairman of the House Committee on Appropriations said implementing a mechanism called contract growing will result in stable domestic rice prices.
Ako Bicol Party-list Rep. Elizaldy Co said in a statement that contract growing will benefit both consumers and farmers because it would not only result in steady rice prices but also ensure a profitable market for farmers.
He said contract growing should involve large agricultural corporations managing vast tracts of farmland.
The lawmaker proposed that a portion of the farmers’ yield—possibly 50 percent—would be contracted at a pre-agreed price under the scheme while the remaining yield would be sold at market rates to allow farmers to still capitalize on price surges.
However, he noted that while the contracted portion of the total yield may provide a sure profit for local farmers, the remaining yield outside the contract may also result in losses.
Co said farmers would not be shortchanged under the contract growing arrangement.
“It won’t be bad [for farmers] because we can calculate how much the investment is per kilo of rice. We know that palay is only P9 maximum or P7 to P9 per kilo,” he said.
Co said local farmers have sometimes adjusted their prices to match the rates of imported rice.
Apart from the contract-growing approach, he also proposed controlling the cost of important farming inputs like fertilizers.
According to Co, farm inputs have also been subject to price manipulation, which may contribute to unstable rice prices.
Co suggested the need for targeted use of palay varieties and better irrigation, as well as increased production through solar fertigation, to help address rice supply problems in the country.
Even before the recent surge in rice prices that prompted the Marcos administration to implement price caps via Executive Order (EO) 39, Co had been advocating for the contract growing model as “a proactive solution” to stabilize the market and support local farmers.
EO 39 puts a price cap on regular milled rice at P41 and well-milled rice at P45. It took effect on September 5.
Production estimates
By the end of September, the initial palay harvest is expected to reach 2 million metric tons (MMT), and up to 3 MMT in October, for a total of 5 MMT, based on estimates by the Philippine Rice Information System (PRiSM) using satellite data as of August 14.
The figures were indicated in Agriculture Undersecretary for Rice Industry Development Leocadio Sebastian’s report to President Ferdinand R. Marcos Jr.
“In all, for the second semester, or July to December, we estimate to produce more than 11 million metric tons, and barring strong typhoons in the remaining months of the year, we hope to hit the 20-million MT level for 2023 national palay output,” Sebastian added in a statement released by the Palace.
For the month of September, Sebastian said the Philippine Rice Industry Stakeholders Movement (PRISM) has reported that the bulk of the 2.3-MMT harvest would come from 12 provinces, namely: Isabela, Cagayan, Iloilo, Nueva Ecija, North Cotabato, Leyte, Oriental Mindoro, Camarines Sur, Palawan, Bukidnon, Zamboanga del Sur, and Davao del Norte.
By end of October, most of the estimated 2.9-MMT palay yield would come from 15 provincesNueva Ecija, Pangasinan, Tarlac, Isabela, Occidental Mindoro, Cagayan, Oriental Mindoro, Palawan, Bulacan, Iloilo, Bukidnon, Agusan del Sur, Ilocos Sur, Leyte, and Camarines Sur.
