Wanted: Philippine Agriculture Investors

The Department of Agriculture Urges US Firms to Invest in Philippine Agriculture Projects

The Department of Agriculture (DA) is encouraging American companies to invest in farm-related projects that will be undertaken under the private-public partnership (PPP) program.

Agriculture Secretary Proceso J. Alcala presented before the American Chamber of Commerce (AmCham) the six farm-related projects which the government plan to implement in 2011.

“As we all are painfully aware, our government’s financial and management resources are severely limited. We, therefore, would welcome as many partners and supporters to chip in and share their bit to these programs and projects,” said Alcala in his speech at an AmCham meeting held in Makati City recently.

Alcala cited three projects, namely, the establishment of cold chain systems along four major food routes to and from Metro Manila and Cebu and the construction of rice processing and trading centers with bulk handling and logistics support in 10 major seaports nationwide.

Each cold chain system cost around P1.35 billion while grains centrals with bulk handling capacities could reach P90 million to put up.

Alcala also made a pitch for the establishment of agri-food commodity handling service facilities in railway terminals of the Southrail to allow efficient transport of goods from South Luzon to Metro Manila. The project is expected to cost P1.5 billion.

“For all these projects, possible revenue sources will come from service fees to be collected from processing, drying, storage and transport of commodities as well as sales from various production inputs,” he said.

On irrigation development, the DA chief cited the P14.4-billion Kabulnan-2 multipurpose irrigation and power project in Sultan Kudarat, the P18.5-billion Balog-Balog multipurpose project Phase Two in Tarlac, and the P15.2-billion Jalaur River multipurpose project, Stage II in Iloilo.

“For these [irrigation] projects, possible revenue sources will come from irrigation service fees and the sale of electric power,” said Alcala.

The DA chief noted that President Aquino is banking on the PPP program to “hasten infrastructure buildup to help ensure food security and sufficiency at regional levels.”

By Business Mirror


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National Rice Board Formed to Ensure Self-Sufficiency

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Major stakeholders in the rice sector, including local agriculture officers and the Regional Agriculture and Fisheries Councils under the Department of Agriculture (DA) formed an advisory board that seeks to ensure that the Philippines will be able to achieve its rice self-sufficiency target.

Dubbed as the National Rice Board (NRB), it also consists of leaders of national associations of farmers, seed growers and rice traders.

Agriculture assistant secretary Dennis B. Araullo, who also heads the national rice and corn program, swore in the members of the NRB which include Jaime Tadeo of the National Rice Farmers Council, Trinidad Domingo of Pambansang Koalisyon ng Kababaihan sa Kanayunan, Henry Lim of National Seed Network, Herculano Co of Philcongrains, Jessica Reyes-Cantos of Rice Watch and Action Network (R1), Jesusa Noveda of the League of Devolved Agriculture Personnel and a representative of the Regional Agriculture and Fisheries Council.

“We hope the board will contribute to improve transparency in the Department of Agriculture, especially in its rice program as we continue to lag behind our neighbors while our own rice farmers struggle to lift their families out of poverty,” said Tadeo.

Lim of the Davao Oriental Seed Cooperative believes that the convergence will bring to fore the real problems of the stakeholders including those of the seed industry and raise their level of participation in policy and program formulation.

Araullo said the creation of the NRB is “long overdue” because the corn sector has long established the National Corn Competitiveness Board that engages the DA on the corn program directions.

Co expressed willingness to be part of the NRB in order to promote greater coordination among stakeholders. “Hopefully, this will be the start of a partnership in order to truly see a rice-sufficient Philippines.”

The NRB was tasked to review and consolidate the stakeholders’ strategy proposals for rice sufficiency and serve as a watchdog of the DA’s rice-related program implementation.

“The DA has been hounded with so many issues, among them [such as] corruption in project implementation and the appropriateness of its programs at the ground level. We believe this cooperation will help define the right priorities of DA programs and plug the holes of government funds delivery and misuse,” said Cantos, lead convener of Rice Watch and Action Network that initiated the formation of the NRB.

Under the Rice Self Sufficiency Plan (RSSP) 2011-2016, the DA estimated that it would need some P124 billion requirement to bankroll the rice self-sufficiency initiative. Of the amount, 65 percent will go to expanding irrigated rice lands.

The estimated amount required for the RSSP also takes into account the government’s counterpart funds for foreign-assisted irrigation projects.

“Rice self sufficiency will be attained by 2013 at the earliest and 2015 at the latest,” according to the RSSP.

On average, the RSSP indicated that palay production will grow by 7.6 percent per year, from 16.2 million metric tons (MMT) in 2010 to 25.3 MMT in 2016.

By Business Mirror


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Rice Prices May Triple in 18 Months

Rice May Triple in 18 Months as Supplies Tighten, Duxton's Peter Forecasts

Rice, the staple food of more than three billion people, may as much as triple in 18 months as flooding in exporters including Thailand tightens supplies and demand climbs, according to Duxton Asset Management Pte.

“Rice will blow out the stocks,” said Ed Peter, chief executive officer, who co-founded the company last year with Managing Director Desmond Sheehy. Both worked at Deutsche Asset Management and the Deutsche Bank AG unit owns 19.9 percent of Duxton, while Peter, Sheehy and staff own the rest. Duxton, based in Singapore, invests in farmland, Asian stocks and wine.

Peter’s forecast, in an interview on Nov. 29, would put rice at more than the peak during the 2008 food crisis, which triggered social unrest in poorer states. Wheat and corn also surged that year, while record oil prices boosted fertilizer costs. Kiattisak Kanlayasirivat at Novel Commodities SA, which trades rice, said farmers can replant quickly as floods recede.

“A price increase of 10 percent to 20 percent would be considered quite a lot, not to mention double or triple,” said Kiattisak, a director at Novel Commodities’s Thai office, which handles about 1.5 million metric tons of rice a year.

Thai 100-percent grade-B white export rice, the Asian benchmark, peaked at $1,038 per ton in May 2008. The grain was at $551 last week, up 15 percent since the end of June, according to the Thai Rice Exporters Association. “Prices will triple over the next 18 months,” Peter said in the interview.

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Duxton oversees about $600 million, allocating 50 percent to farmland in Australia, Argentina, Zambia and Tanzania and about 45 percent to Vietnamese shares. Peter had headed Deutsche Asset Management for Asia Pacific, Middle East and North Africa, while Sheehy was in charge of that unit’s complex-asset team, which focuses on non-traditional investments including farms.

The most severe floods in five decades in Thailand, the top exporter, may trigger a 7 percent fall in rough-rice production, which accounts for 70 percent of its total output, the Agriculture and Cooperative Ministry has said. Crops in Vietnam and Pakistan have also been hurt by severe weather, while a typhoon cut harvests in the Philippines, the biggest importer.

Rice inventories held by the world’s five biggest exporters will likely decline next year, tightening supply, Concepcion Calpe, senior economist at the Food & Agriculture Organization, said in October. Prices were “unlikely to fall,” Calpe said.

Global production will be 697.9 million tons, 6.5 million tons smaller than previously estimated, as crops around Asia “deteriorated,” the FAO said in a report yesterday. That’s the third forecast cut since April.

Rough rice on the Chicago Board of Trade gained as much as 1.7 percent to $14.115 per 100 pounds today, extending an advance from the year’s low of $9.55, which was set on June 30. In 2008, the price peaked at $25.07 per 100 pounds.

“Rice is a long-term bet,” Duxton’s Sheehy said. Farm products including rice may outperform metals and fuel over the long term as the global population expands, Sheehy said.

By Bloomberg


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