Last Wednesday, we discussed the inevitability of the expiration of our World Trade Organization-sanctioned quantitative restrictions on the importation of rice, a device that was intended to make our palay farmers “catch up” with the competition from other countries which produce and export the staple within a free market international order. And how we remain uncompetitive despite three extensions of the QR spanning all of 22 years.
There are certain facts about palay farming and rice production that we ought to bear in mind: first, that palay farming is water-intensive. It takes 5,000 liters of water (imagine 5,000 Coke litro bottles) to produce 1 kilo of this specie of grass called palay. Without adequate irrigation, production will be niggardly.
Of the roughly 4.5 million hectares currently devoted to palay, only 1.6 million hectares are irrigated. The rest depend on rain for their water needs. And since rainfall is pronounced only during certain times of the year, rain-fed lands produce only one crop per year. Irrigated land produces two crops, or double the annual production of palay in the non-irrigated areas.
The problem is water. Vietnam, Cambodia, Thailand, even Myanmar have extensive water sources. The Mekong River, The Tonle Sap, the Chao Phrya and the Irrawady supply almost inexhaustible volumes of water for their rice paddies. We rely on narrow rivers, the best of which are the Chico and Cagayan river up north, and the Pampanga rivers and its tributaries in the central plains. If we tap them enough, the mighty Agusan River and the Rio Grande in Mindanao could yet provide additional sources of irrigation.
And so much water, this time in the form of rain which floods our paddies at the worst time (harvest), and strong winds occasioned by our typhoon-prone Eastern Visayas, Bicol and Luzon can also damage our farms extensively. On September 26, 2011 for instance, Typhoon Pepeng with its strong rains inundated Central Luzon with flash floods just two weeks before our poor farmers were scheduled to harvest their palay. In a single day, we lost a million tons of palay, or 600,000 metric tons (12 million sacks) of rice. Just one night of typhoon fury.
Then there are the seeds our farmers use. Inbred seeds are cheap but they produce on irrigated land, around 3.5 tons or 70-75 cavans of palay per hectare. That’s at most 45 sacks of rice. Hybrid seeds cost more than double, but they can produce, using modern protocols including more fertilizers, at least double, sometimes triple. In China we are told that their hybrid technology can now produce as much as 10 to 12 tons per hectare.
Why then can’t we use the same technologies? One, agrarian reform has cut down land sizes to small plots, which cannot be modernized adequately. No economies of scale. Carabao farming, at best the hand tractor, which is fuel-costly.
Two, financing. Where does the marginal farmer get the needed capital to buy equipment, seeds, fertilizers? (Thank God the DOF’s Sonny Dominguez, who used to be agriculture secretary under President Cory, scuttled the merger of Land Bank and DBP, and hopefully the Land Bank will start being a real agricultural bank, farmer-friendly, instead of acting like a huge commercial bank).
And then there is the matter of converting palay into rice. Our mills are fairly modern, especially in Luzon, but our farmers’ drying methods leave so much wastage. “Solar” drying is the norm, which means laying out the palay in the roads to dry in the sun, but where some 5 percent to 7 percent are broken or lost. (If we produce 18 million tons of palay, the drying wastage is about a million tons, or some 600,000 tons of rice, which is about 18 days of our national consumption needs).
And speaking of demand for rice, the average Filipino eats 130 kilos per year, while the average Japanese consumes 68 kilos per year. That’s a lot of carbo-loading, not good for diabetes-prone Filipinos, but then what other “lamang tiyan” do our poor have? Vegetables and fish are quite expensive as well. So the poor man’s diet is rice and dried fish, or bagoong, or in the case of urban dwellers, rice plus MSG-laced instant noodles. (Which is why so many of our poor are diabetic, with kidney problems to boot).
Two generations ago, Visayans and Mindanaoans could do with white corn grits or even balinghoy (cassava) and cardaba (bananas) for staple food. But Masagana 99 made rice affordable then, and the next generation of Visayans and Mindanaoans already got used to rice, and only rice. Now however, rice has become more expensive, and there is little demand for corn grits or the lowly kamote.
And then again, the availability of land versus the demand for food. The Philippines is all of 30 million hectares, mountains included, in 7,101 scattered islands. And it has to feed 104 million people.
Thailand, by contrast has close to 51 million hectares of land, in virtually one contiguous whole, and because of serious population management started in the 1970s, it has a population of only 66 million. Bigger land, less mouths to feed.
Vietnam’s demographics are closer to the Philippines by comparison: 33 million hectares and 91 million people. But it has the Mekong River, which is a virtual ocean compared to all our rivers combined. Because of the unlimited water carrying topsoil enriched by floodwaters coming from China and Laos, Vietnamese paddy farmers are Asia’s most efficient: 6.5 tons per hectare, almost double the Filipino average yield.
This is why National Economic and Development Authority chieftain Doc Ernie Pernia, and almost all economists, whether from the UP School of Economics or the Ateneo and De La Salle, have given up on our competitive potential in rice. As Doc Ernie says, “it’s going to be better for consumers and it’s going to exert pressure on farmers and others involved in the rice industry to not get into a vicious cycle where nothing gets done.” Neda further advocates that farmers should diversify crops and explore other “strategic” products that may be exported, that will give them better incomes” once the QR is lifted next year.
That is why they are economists. Allocating scarce resources in the most optimal way is what the science is all about. Increasing farm incomes rather than getting perpetually hooked on the “politics of rice” is what makes sense to them.
