Department of Agriculture (DA) Secretary Francisco P. Tiu Laurel Jr. underscored the DA’s plans to expand rice processing capacity while addressing concerns about possible overcapacity in the milling sector.
Through the Philippine Center for Postharvest Development and Mechanization (PhilMech), the DA is continuing to establish large-scale Rice Processing System (RPS) units equipped with modern multi-stage mills and dryers.
“More important than rated milling capacity is capacity utilization. To break even, operators need at least 63 percent capacity usage. Go below that, and you’re losing money,” Tiu Laurel said.
He noted that full capacity use often indicates monopolistic conditions, while an optimal utilization rate of 80 to 85 percent delivers efficiency gains, reduces costs, and benefits millers, farmers, and consumers alike.
Once mill operations stabilize within this optimal range, Tiu Laurel said PhilMech could gradually shift investments toward production-side equipment such as tractors and seeders. This would complement the National Food Authority (NFA), whose milling and drying capacity has been significantly reduced since the Rice Tariffication Law of 2019 scaled back its role.
Since the passage of the Rice Tariffication Law and the creation of the Rice Competitiveness Enhancement Fund (RCEF), PhilMech has built 122 RPS units nationwide, 116 of which were completed under the Marcos administration. The agency aims to reach 151 units under RCEF Phase 1, with the remaining 29 scheduled for completion within the year.
To assist smaller farming communities, PhilMech has also distributed more than 1,000 single-pass and village-type rice mills, along with over 500 stand-alone recirculating dryers.
Tiu Laurel stressed that the DA’s approach focuses on efficiency and balanced growth, ensuring that infrastructure investments are fully utilized rather than left idle.
“By focusing on smart utilization instead of unchecked expansion, we can balance supply, stabilize prices, and protect farmer incomes,” he said.
The strategy, he added, reflects a measured approach to agriculture—one that values productivity and resource stewardship over sheer scale.
