Vietnam rice or Philippine rice?
Sadly, the inevitable choice of the buying public would be Vietnam rice.
Not because of quality, as both are enticing enough for the buyers. It is their selling price – which indicates that even if the Vietnam rice is imposed a 35 percent tariff, it is a lot cheaper than the Philippine-produced rice.
“The Vietnam (milled) rice can be sold at P27.32 a kilogram, the Philippine rice at a minimum of P34.37,” a joint study by the Philippine Rice Research Institute (PhilRice) and International Rice Research Institute (IRRI), averred. “The disparity in price is mainly due to production cost, which is very high for the Philippines – almost double than that in Vietnam,” it further said.
Production cost per kilogram of palay (unhusked rice) in the country is at P12.41 while in Vietnam P6.53, the study said.
Next to the Vietnam rice, the commodity from Thailand would also appear preferable for the buyers as its production cost is only at P8.85 per kilogram. Its milled form can be sold at the Manila market at P30.89 per kilogram.
“The big chunk of the cost of producing rice in the country comes from hired labor,” says the PhilRice-IRRI study. ‘It is 37 percent of the total cost of production,” it added.
Translated into peso value, that cost for hired labor to produce one kilogram of palay in the country is P3.76. In Vietnam, only P0.46 while in Thailand, P0.66.
Next to hired labor, the other big expenses of the Filipino farmers to produce one kilogram of palay are for fertilizer (P1.94) and animal-machine-fuel-oil (P1.73). In contrast, the Vietnamese farmers spend P1.36 for fertilizer and P0.81 for the latter.
Other items contributory to the overall production expenses included pesticide, operator-family-exchange labor, irrigation, land rent, interest on capital, and incidentals.
The study, titled “Benchmarking the Philippine Rice Economy Relative to Major Rice-producing Countries in Asia”, was carried out “to provide a proper perspective on how the country can further improve its competitiveness in rice production and marketing in view of the full integration of the country to the Asean Economic Community”.
It was commissioned by the Department of Agriculture-National Rice Program and funded by the Bureau of Agricultural Research. The Food and Agriculture Organization of the United Nations and the Philippine Council for Agriculture and Fisheries participated in the study.
The documentation exhibited informed reasons why, comparatively, producing rice in the country is more expensive. Thus, they are key messages for policymakers and planners for crafting remedial measures to make the locally produced rice competitive in the liberalized market.
Localities of the study were the respective “rice bowls” of China, Indonesia, Vietnam, Thailand, India and the Philippines. In-country study was in Nueva Ecija while that in Vietnam, in Can Tho; in Thailand, SupanBuri; in Indonesia, West Java; in India, Tamil Nadu; and in China at Zhejang.
These countries were listed as belonging to the top ten producing countries in the world.
A randomly sampled 100 farmers in each of these provinces were interviewed extensively in crop year 2013-2014. Details of the study were contained in separate monographs and were later compiled into a recently published book.
Farming in Nueva Ecija
Farmer Mang Piring, in Villa Cuizon, Science City of Munoz, tills a one-hectare land. He produces palay with his sweat, sacrifice – and loans coupled with a gamble with nature and a number of other factors coming into play.
He is 58, which is the average age of the rice farmers in the province. Comparatively, he is older with his counterparts in Vietnam whose average age is 49 and also in Thailand, 55; Indonesia, 51; India, 50; and China, 54.
In the dry-season cropping in 2013, when irrigation water was released to his farm, he contracted his neighbor, who has a hand tractor, to plow, harrow and level a portion of his farm for the seedbeds. He waited for the seeds to grow and develop into 20-day old seedlings which he ensured having enough fertilizer and water and protection against rats, birds, insects and diseases.
Meanwhile, he prepared the planting area. It was plowed twice by his contracted hand tractor operator at a one-week interval, harrowed and leveled. He did dukit – or the plowing of planting areas near the small dikes that could not be reached by the hand tractor – with the use of a carabao and a plow.
Completing them, Mang Piring cleaned and fortified the dikes to make sure that no irrigation water would seep through, no rats would be able to burrow their way inside and no eel can slither through.
When everything was ready, he summoned the mambubunot ng punla to uproot, bundle and distribute the seedlings to the planting areas.
Early the next day, 25 contracted manananim started transplanting the rice seedlings. He heaved a sigh of relief when the rice planters finished the job. Half of his work was done.
His next works in his field were no less arduous. They included controlling the kuhol (golden apple snails), applying fertilizers, alternately irrigating and draining the field, weeding, and installing traps or baiting stations for rat control.
In due times, Many Piring did pest management, plants’ inspections to determine their needs and possible pest and disease infection, and grass and weed control. Then he looked forward to the fruit of his labors.
He harvested 124 cavans. From it, he subtracted the following: For the harvester, at the rate of eight cavans per hundred cavans; for thresher, 10 cavans per hundred; two for the helpers who helped bagged the grains during threshing; and for the informal lender 15 cavans for his P5,000 loan.
He set aside 15 cavans for home consumption and emergency needs.
Selling the remaining 71 cavans at P800 each, he grossed P56,800. Big enough, but upon deduction of his expenses for land preparation and crop establishment, fertilizers, pesticide-insecticide-molluscicide, irrigation service, replanting and pulling of weeds, snacks of transplanters and laborers, and kariada (hauling sacks of palay) which totaled to P21,370, he netted only P35,430.
No doubt, Mang Piring’s farming, at three and a half months per season, was labor intensive and had higher input cost.
His irrigation service fee, at P0.45 to produce one kg harvest, contributed to the production cost. In Vietnam, it was P0.08; Thailand, P0.14; Indonesia, P0.10; India, P0.12; and zero for China.
Mang Piring used transplanting of the seedlings, in Vietnam, direct seeding was employed. Mang Piring used manual harvesting and threshing, in Vietnam, harvesting and threshing were thru the use of machine.
All in all, Mang Piring spent a total of 68.7 man-day for labor from land preparation to postharvest concerns. For Vietnam, only 21.9 man-day.
Mechanization was a big factor for the shorter number of days spent by the farmers in Vietnam than those in the Philippines.
(To be concluded)
Pitch for Phl rice: Production in sufficiency and competitiveness
(Last of two parts)
Mang Piring’s total harvest from his one-hectare farm during two seasons of cropping, which was at almost ten metric tons of palay, was consistent with the documented average yield of 9.52 mt per hectare in his province.
It was very low compared to the other countries’ respective harvests.
“Nueva Ecija’s yield was second lowest among the ‘rice bowls’ in the six countries surveyed, next to India’s 8.92 mt,” Flordeliza Bordey, PhilRice deputy executive director and one of those involved in the study, said.
Vietnam had the highest average yield, at 20.59 mt. The other countries’ averages were 13.56 mt for China, 11.53 mt for Indonesia, and 10.47 mt for Thailand.
“But Vietnam practiced three croppings a year,” Bordey said. “It has the most intensive cropping system due to availability of water, use of early-maturing varieties, direct seeding, and synchronous planting,” she added.
The croppings in Vietnam were in summer-autumn, autumn-winter, and winter-spring,
In terms of margin of profit, which means subtracting the paid-out cost from the gross revenue, the Nueva Ecija farmers earned P76,240.70 from their wet and dry season croppings of rice in one year in one hectare. The Vietnamese farmers had P112,704.75 which was the second highest average net income achieved by the farmers studied in six countries.
China had the highest net income of P168,823.65. It was followed by Indonesia, P153,032.25 and Thailand, P82,055.85.
The farmers in India had the least net income at P39,393.60.
In terms of the price of the milled rice, Bordey said that the Philippines had a substantially big gross marketing margin (GMM) compared to that of Vietnam, Indonesia, and Thailand. The GMM in the country was P9.06 per kg while that in Vietnam, only P4.55 per kg. In Indonesia, it was P5.61 while in Thailand, P5.27 per kg.
The marketing costs included transportation, drying, milling, packaging, and storage.
Rice in sufficiency
Historically, the country has been experiencing a “story of recurring shortages” in palay production. As such, it fills the needed supply by importing milled rice.
Written documents indicated that the country imported rice in 1717. Since then, rice importation has become the norm yearly, except for some few years when the country achieved a marginal surplus for export.
Achieving self-sufficiency in rice has been an elusive goal in the country.
It was almost achieved though in 2013 when the country posted a record high 19 million metric tons harvest which was at 97 percent self-sufficiency level. It went down to 92 percent level in 2014, however, due to the vagaries of nature.
The country’s farmers and the government, the rice scientists said, cannot entirely be faulted for the shortfalls in rice production. Compared to the other rice-producing countries in Asia, the country is not blessed with endowments like having big deltas and vast lands suited for rice production.
The country is described as a “narrow island or peninsula with varied landscape suited for diversified agriculture”.
Agriculture Secretary Emmanuel Piñol is not setting a target year for the achievement of this “elusive goal”. But he said the government is doing its level best to provide the infrastructure and the mechanism needed to boost production.
“We recognize the pillars for improving further rice harvests in the country. They are good seeds, irrigation, mechanization, and capital,” Piñol was quoted as saying in his speeches. “We are addressing them,” he added.
He cited the establishment of a big processing center for rice seeds at PhilRice which was put up with funding from the Korean International Cooperation Agency (Koica) of the Republic of Korea. He said with better processed seeds, better yield can be expected.
He said this model of seed processing center would be established in select places in the country.
Piñol also said irrigation pumps powered by solar energy is being considered as a means for additional irrigation facility. His department, he said, has also started providing capital, thru conduits, for the farmers without the usual collateral, at low interest rate and payable after two years or “after the farmer shall have started earning from his endeavor”.
“We are working for the institutionalization of this scheme thru the enactment of a law,” Piñol said. “We are pushing for the wider use of hybrid seed which gives at least 15 percent yield advantage over inbred seeds,” he added.
Paving the pathways
Although the country is disadvantaged in geographical situation for rice farming, it is not without chances for production in sufficiency and at competitive level at that, rice scientists says.
David Dawe of FAO-UN in his treaties included in the book “Competitiveness of Philippine Rice in Asia”, gave key messages that can be considered for policy-making and planning by authorities concerned.
Foremost among them is on labor, the single most important cost of production as documented in the Nueva Ecija study, he said. One approach is to subsidize the use of farm machines which when done can produce the biggest impact on improving competitiveness.
For farmers to own machines, however, is expensive. It will be a wise move to establish assisted rental markets like those being done in other countries.
Its drawback, such as unemployment of landless workers, can be given solution by other concerned authorities.
Another approach, Dawe said, is the adoption of direct seeding technology. The refinement of agronomic management practices on this must be given attention, he added.
On the use of fertilizer, which is the most important material input, he said judicious application should be the rule. One measure is to apply more nitrogen fertilizer during the dry season cropping and less during wet season.
Bordey, on the other hand, said milling recovery should be improved. She suggested the use of varieties with similar grain length and shape and better head recovery.
“The use of hybrid rice seed for planting is one factor that can increase production. It should be done, however, in suitable areas as this type of rice seed is location-specific,” she said.
Bordey posited that research and development should be intensified in the aspect of reducing cost of production and increasing yield on the competitive level.
On giving direct subsidies on inputs, like on fertilizer, the scientists advised: “Don’t. They will not help much to increase competitiveness. They, on the other hand will be a big strain on the budget which could otherwise be given to other support services like road, health, and education.”
“The direct subsidies may also encourage overuse and as such will have large adverse environmental effects,” the scientists said.