The average cost of producing palay in the Philippines rose to an all-time high of P12.42 per kilogram (kg) last year due to more expensive fuel and labor, according to the Philippine Statistics Authority (PSA).
The PSA said the country’s average palay production cost per kilogram in 2017 rose by 1.55 percent, from P12.23 per kilogram recorded in 2016.
“Production cost was higher during the wet season at P12.81 per kg than during the dry season at P11.93 per kg,” the agency said in its report, titled “Updated Production Costs and Returns of Selected Agricultural Commodities.”
Last year, the PSA said rice farmers spent about P49,745, which was 5.15 percent higher than the P47,308 they spent in 2016.
“Production cost of palay was higher during the wet season at P50,511 per hectare and lower during the dry season at P48,784 per hectare,” the PSA said.
The PSA noted that rice farmers in Davao region incurred the highest production cost at P60,686 per hectare, while those in the Autonomous Region in Muslim Mindnao spent the least at P30,580 per hectare.
Based on the computation of the BusinessMirror, rice farmers spent an additional P851 per hectare for labor in 2017.
PSA data showed that total labor costs amounted to P15,556 per hectare, 5.79 percent higher than the P14,705 per hectare cost recorded in 2016.
Of the total labor expenditure, more than half, or about P8,908, was paid in cash for hired labor, according to the PSA. The hired labor cost was 5.78 percent higher than the P8,421 per hectare
incurred in 2016.
PSA data showed that rice farmers spent 6.76 percent more for fuel and oil expenditures in 2017. Average fuel and oil costs incurred by farmers amounted to P774 per hectare, compared to the previous year’s P725 per hectare.
Rice farmers’ gross revenue in 2017 expanded by 8.2 percent to P72,957 per hectare, from P67,427 per hectare recorded in 2016, PSA data showed.
On an annual basis, their net income also rose by 15.4 percent to P23,212 per hectare.
“Farmers earned an average of P0.47 for every peso of investment in palay production,” the PSA said. “It recorded higher during the dry season cropping at P0.52 than during the wet season cropping at P0.43.”
The average farm-gate price of palay in 2017 reached P18.21 per kg, 4.48 percent higher than the P17.43 per kg recorded in 2016.
“It ranged from P18.09 per kg during the dry season to P18.33 per kg during the wet season,” the PSA said.
Data from the PSA indicated that average yield per hectare in 2017 rose by 3.54 percent to 4.006 metric tons, from the previous year’s 3.869 MT.
To make Filipino farmers competitive against their counterparts in Southeast Asia, the government is targeting to reduce the country’s average palay production cost to at least P8 per kg and hike yield to at least 6 MT per hectare.
The reduction in production cost and increase in yield are seen by the government as strategies that will allow farmers to earn despite the expected influx of cheaper rice imports due to the removal of the quantitative restriction on the staple.
In September an official of the Department of Agriculture (DA) said the country’s unmilled rice output may decline by 2.5 percent to 18.8 million metric tons, from a record high of 19.28 MMT last year, after Typhoon Ompong (international code name Mangkhut) destroyed rice crops in Northern Luzon farms.
Prior to Ompong’s onslaught, Agriculture Assistant Secretary Andrew B. Villacorta said the DA had projected that unmilled rice production in the second semester would reach 10.8 MMT.
However, based on the initial damage reports collated by the DA, around 600,000 MT of palay have been destroyed by the typhoon, according to Villacorta.