Will Philippines Achieve Rice Self-Sufficiency?

Will DA Really Achieve Rice Self-Sufficiency?

Statistics show targets are being met but some organizations are doubtful

Agriculture Secretary Proceso Alcala is optimistic that through the National Rice Program the country will achieve rice self-sufficiency in 2013. But with only P6.181 billion allocation for the program in 2012, doubts on the possibility of rice sufficiency loom.

The proposed appropriation for the Department of Agriculture (DA) for 2012 is P61.734 billion. And of the P6.181 billion budget for the rice program, P4.533 billion will be channeled to DA’s regional offices, while P1.647 billion will be shared by the Office of the Secretary, the Bureau of Agricultural Statistics (BAS), Bureau of Soil and Water Management (BSWM), Bureau of Plant and Industry (BPI), and the Agricultural Training Institute.

In a report in Interaksyon.com, the Kilusang Magbubukid ng Pilipinas (KMP) says that of the P4.533 billion, P3.31 billion will go to Maintenance and Other Operating Expenses (MOOE), while only P1.223 will be used for capital outlay (to buy palay from rice farmers with). The P1.223 billion, according to KMP, translates to a budget of only P452.96 per rice farmer.

With this amount, Anakpawis Party list Rep. Rafael Mariano asks: “How can we achieve rice self-sufficiency in the next two years if the government allocated a very meager P452 for each of the 2.7 million rice farmers?”

The group Bantay Bigas also finds the P6.181 billion budget for the National Rice Program “unrealistic.” In a report in Testigo, a website of human rights documentation system moderated by the Ibon Foundation, Bantay Bigas spokesperson Lita Mariano suggests that “the rice program should get about 50 percent of the DA’s budget considering that rice production is the most important economic activity in the country.”

But DA’s share and the appropriation for the rice program are just approximately 3 percent and 0.34 percent, respectively of the national budget for 2012.

Compared to top rice exporters “Indonesia and Thailand who [respectively] allocates 7.6 percent and 10.4 percent of their national budget for agriculture, the Philippines’ 3-percent share is embarrassingly ridiculous considering that it is targeting [rice] self-sufficiency by 2013,” says Roman Sanchez, national president of the National Federation of Employees’ Association of the Department of Agriculture, in the Testigo report.

Alcala’s Explanation of DA’s Proposed Budget

Actually, DA’s total budget even increased by 68 percent from P38 billion in 2011. The allocation for the rice program likewise increased from P5.217 billion in 2011.

These are one of the reasons why during the budget hearing at the House of Representatives, Alcala expressed optimism that the goal of rice sufficiency will be met. He said DA’s bigger budget will boost rice production.

In an interview with The Manila Times, Alcala also dismissed the belief of agricultural sectors that the inadequacy of the budget for the National Rice Program in 2012 will hamper the achievement of rice self-sufficiency in 2013. He said the agricultural projections for 2012 have been studied and computed and are covered by a financial plan.

Alcala is also very much aware of the criticisms thrown against the rice program. Earlier, he was quoted in news reports saying “the only factor that may impede the country to hit the target is when we cast doubts on our capabilities.” He also said that despite the pessimism of some sectors, the government is determined to pursue its vision to achieve rice sufficiency.

DA’s Roadmap Toward Rice Sufficiency

In order to achieve rice sufficiency, the DA is following the Food Staples Self-sufficiency Roadmap (FSSR).

The FSSR consists of three main strategies: to increase and sustain production of grains, improve farm mechanization and reduce postharvest losses; and manage consumption.

To increase and sustain the production of grains, the DA will increase farmers’ access to high quality seeds by establishing community seed banks in each province. The Philippine Rice Research Institute will supply breeder and foundation seeds, “while the Bureau of Plant and Industry will expedite seeds certification process.”

Very importantly, the Land Bank of the Philippines, on one hand, “will provide credit assistance to seed growers.”

Another strategy to boost grains production is the research, development and promotion of appropriate technologies. To do this, PhilRice will continue to research and develop rice production technologies, “the BSWM will promote balanced fertilization, and the National Organic Agriculture Board will promote sustainable farming systems in areas with low use of inorganic fertilizer.”

Farmers’ education is also part of the strategy to increase rice harvest. To achieve this, the Agricultural Training Institute will help rice farmers by conducting community organizing and trainings in rice farming. The DA will also develop upland rice-based farming systems “to address food insecurity” in poor areas in the upland.

Another strategy to intensify palay production is to institute mechanisms that will stimulate production response from farmers. This involves increasing the domestic palay procurement of the National Food Authority (see related story) and safeguarding irrigated areas from land conversion.

Irrigation-Serviceable Areas Being Increased

The DA will also develop and maintain irrigation systems. The FSSR says “the National Irrigation Administration (NIA) will implement projects that will increase irrigation-serviceable areas.”

To improve farm mechanization and lessen postharvest losses, DA will have farmers associations send their farmer-members into training for the operation and maintenance of farm equipment and facilities. It will also provide farmers associations with multi-purpose drying pavement, flatbed dryers, and modern rice mills.

Lastly, to manage rice consumption, DA will keep per capita rice consumption at 120 kg per year. This entails promoting the consumption of unpolished rice or brown rice and reduction of table wastes. It also includes diversification of staples; by boosting the production of white corn, sweet potato, cassava and plantain their increased market supply will lower their prices.

All things considered, there’s no question that the FSSR is a well-intended program. But this roadmap is implying something.

Commenting on the FSSR, UP Economics Professor and former National Economic Development Secretary Solita Monsod writes in her Inquirer column that “unless our appetite for rice (per capita consumption) decreases, and/or our incomes increase (which cuts rice consumption because we can then afford other food), and/or our population decreases, there is not a snowball’s chance in hell of attaining rice self-sufficiency (zero imports) by 2013.”

The State of Rice Production

The DA has been following the FSSR for quite some time now and Alcala has expressed confidence on its implementation. So what has the department accomplished so far in the FSSR?

In answer to our query, Alcala says that among the things that the DA has done is to improve farmers’ access to high quality seeds. He says that because the department has discovered that majority of farmers plant ordinary seeds, it has distributed registered seeds to farmers as these yield as much as 1.2 MT to 1.5 MT per hectare compared to certified seeds.

He also says that the DA has provided farmers’ associations with dryers, hand tractors, thresher and other postharvest facilities to reduce postharvest losses, especially during the wet season.

The DA has also expanded the production of non-rice staples like cassava in provinces like Tawi-Tawi, Zamboanga and Sulu where this is the main staple.

To address food insecurity in the upland where many indigenous people dwell, Alcala says that the DA has been aggressive in boosting the production of upland rice varieties like black rice, brown rice and red rice. These are the premium type of palay that have less water requirement and have a prized aroma.

In addition, National Rice Program director Dante Delima earlier reported that as of June 10, 2011, 1,247 farmers in Regions 11 and 13 benefited from the upland rice development program as they received 72,254.50 kg of seeds from the DA.

Delima also reported that 14,538 hectares (ha) have been utilized for seed production. Of this, 13,390 ha are planted to registered seeds, while 1,135 ha to foundation seeds, and 13.30 ha to breeder seeds.

These efforts are part of DA’s goal to produce 17.45 million metric tons (MT) of palay this year and it targets to increase this in 2012 to 19.2 million MT or by 10 percent. Achieving these goals will be tantamount to 84.4 percent rice self-sufficiency in 2011 and 91.9 percent in 2012.

These targets, however, are a challenge to the DA because according to the BAS palay production dropped by 3.04 percent in 2010. Data from BAS show that the volume of palay production decreased from 16.82 million MT in 2008 to 16.26 million MT in 2009 and to only 15.77 million in 2010.

Based on the data from BAS, one reason for the production decline is the decrease in area planted to palay. Area planted and harvested decreased from 4.46 million hectares (ha) in 2008 and 4.53 million ha in 2009 to 4.36 million ha in 2010. The long dry spell in 2010 is also a factor for palay’s negative growth.

The hope for DA is that palay production has increased in the first half of 2011. According to BAS, this is because the “harvest areas expanded due to recovery from the adverse effects of the El Niño phenomenon.” Palay production is 7.58 million MT and this is “14.45 percent higher than the previous year’s level.”

Monsod says that although this is true, the production growth is still because of the increase in area planted to rice and not because of an increase in yield per hectare. “While the 2011 yield was greater than that of 2012 yield, there was no significant difference from the 2009 yield.”

Alcala strongly questions this assertion by Monsod. He says before the average yield per hectare was 3.6 MT and lately it has increased to 3.8 MT.

“So we have improved. Actually, if we could get [an average yield of] 4.2 MT/ha sa buong Pilipinas [the entire Philippines] we won’t need to import rice [anymore],” adds Alcala. “At hindi po talaga kayang biglain kasi [And it can’t really be suddenly increased because] we have to educate our farmers on appropriate technologies to improve rice productivity.”

The Importance and State of Irrigation

Besides the recovery from the dry spell due to this year’s wet summer, improved irrigation is cited by Alcala in news reports as a big factor for the promising performance of palay.

Asked how has the DA improved irrigation, Alcala says the department has a better feedback mechanism. He says he personally reaches out to farmers and irrigators’ association even in far-flung provinces to query them about their difficulties. This has helped in addressing problems in irrigation.

How important is irrigation in achieving rice self-sufficiency? Very much.

First of all, far more irrigated rice paddies are being utilized than rainfed paddies. According to BAS, the total area harvested for irrigated paddies was 3.03 million ha in 2008, 3.06 million ha in 2009, and 3.01 million ha in 2010. Yet the total area harvested for rainfed paddies was only 1.43 million ha in 2008, 1.48 million ha in 2009, and 1.35 million ha in 2010.

Second, the yield per hectare of irrigated paddy is higher than rainfed paddy. Data from BAS show that the yield of irrigated paddy was 4.14 MT/ha in 2008, 3.95 MT/ha in 2009, and 3.99 MT/ha in 2010. But the yield of rainfed rice paddy was only 2.98 MT/ha in 2008, 2.83 MT/ha in 2009, and 2.81 MT/ha in 2010.

In all, irrigated rice paddies produced 12.56 million MT of palay in 2008, 12.08 million MT in 2009, and 11.99 million MT in 2010.

Considering irrigation’s contribution to rice production, it is no surprise that the development and maintenance of irrigation systems tops the list of strategies in the FSSR. And this year, NIA needs P12,790,650 to achieve these physical targets: irrigate 27,140 ha of new areas, rehabilitate 100,680 ha, and restore 31,707 ha.

Interestingly, this year’s physical targets are higher and require less funding compared to last year’s irrigation program. Because in 2010, the financial requirement for the irrigation program was P13,599,386 to establish 3,446 ha of new irrigation systems, rehabilitate 27,139 ha, and restore 26,125 ha.

So What Has the DA Done to Improve Irrigation?

To start with, Alcala told The Manila Times that the BSWM has established small water impounds, and these short-term projects immediately benefit farmers. The small water impounds “can influence 50 ha to 200 ha of rice land” and farmers can also use these in vegetable production, especially during the dry season.

In June, NIA administrator Antonio Nangel reported to Alcala that NIA had irrigated 1.034 million ha from May 2010 to March 2011, resulting in 135 percent cropping intensity. A total of 546,363 ha are irrigated during the wet season, while 490,153 ha during the dry season.

Nangel also said that NIA irrigated 194,570 ha from July 2010 to April 2011. Of these, 10,304 ha are new areas, 150,078 are rehabilitated areas, and 34,188 are restored areas.

Nangel is also pleased to report that NIA has continued implementing 38 irrigation projects in 2010. Five of these are foreign-assisted, 23 are locally funded, 3 are inter-agency, and 7 are carry-over projects. This year, NIA implements 5 ongoing, 1 foreign-assisted, 3 inter-agency, and 5 carry-over projects.

But recently, KMP reported that doubts are being raised on this year’s P25.7 billion allocation for irrigation projects because farmers are reportedly paying for the irrigation fees, hence the budget for irrigation cannot be considered as government support.

Alcala expressed dismay about this report. He asks, how can the government maintain the irrigation systems if it cannot source funds from the farming sector. He also reminds us that irrigation projects are “usually foreign-funded projects that we have to repay.”

“Ang daling magsalita ng paninira sa pamahalaan [It’s so easy to speak ill of the government],” adds Alcala. “These people keep on saying things na para bang sila lang ang magaling [as if they are so great]. Sila po ba ay may nagawa nang maayos para sa ating mga magsasaka [Have they really done something well for our farmers?]”

By Manila Times


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P10B Philippine Agriculture Funds Drained

It was worse than the fertilizer scam.

A P10-billion fund meant to help small farmers, fisherfolk and agriculture entrepreneurs raise their skills and production was used as a cash cow of agriculture officials, politicians and businessmen “favored” by the Arroyo administration for almost a decade, officials said.

The discovery of irregularities in Acef (Agricultural Competitiveness Enhancement Fund) has led lawmakers and agriculture officials to suspend the program in January and to review its implementation.

What they saw, according to officials who checked the Acef records, was a long list of companies and beneficiaries who failed to pay back their loans.

The same officials also heard of complaints from borrowers who said that agriculture officials demanded kickbacks in exchange for loan approvals.

Agriculture Secretary Proceso Alcala said his office had received complaints from beneficiaries and those who tried to apply for the fund that former agriculture officials had asked for kickbacks in exchange for approving their loans.

Legitimate projects were also set aside in favor of proponents who have questionable projects but are willing to provide kickbacks, officials said.

“As we investigated it, we found out that the majority of those who did not pay were the ones who were complaining about the kickbacks,” Alcala said. “It was as high as 20 to 35 percent,” he noted.

A senior agriculture official also noted that the Acef executive committee was lax in approving projects. Some proponents, who promised to give commissions, were not even required to appear at the Department of Agriculture to explain their projects, the official said.

Alcala said it was the Acef management that was accused of being the recipients of bribes. “They got money out of proceeds. After the funds are released, something goes to them,” he said.

Although the reports and complaints were numerous, Alcala said it was difficult to pin down the errant officials. “Of course, these had no receipts,” he said.

Some borrowers were also reluctant to say something on record because they knew that they got the deal out of bad faith, Alcala said.

The practice of asking for commissions in exchange for loan approval was confirmed by Gregorio San Diego, president of United Broilers Raisers Association (Ubra).

Four years ago, Ubra applied as a cooperative for the Acef to build a broiler breeder facility in Pampanga. San Diego said his group was encouraged by then Secretary Arthur Yap, but when the application reached the central office of the agriculture department, it was denied.

“They asked 10 percent from us,” he said, noting that it was considered a discount. “Others were told to give 35 percent,” he added.

In the end, Ubra decided not to push through with its application, San Diego said.

Senator Francis Pangilinan, cochair of the congressional oversight Committee on Agriculture and Fisheries Modernization, and sources confirmed that some of those who applied for the fund were personalities and politicians “favored” by the past administration.

‘Lender of Last Resort’

An industry source and an agriculture official, who reviewed the project and requested anonymity because of lack of authority to discuss the matter, described the use of Acef in the last decade as “plunder.”

“This was bigger than the fertilizer scam,” the industry source said, referring to the misuse of P728 million in agriculture funds under then Undersecretary Jocelyn “Joc-Joc” Bolante.

The fund, intended to benefit farmers, was said to have been diverted to the campaign kitty of then President Gloria Macapagal-Arroyo in 2004. Bolante and former Agriculture Secretary Cito Lorenzo have been charged with plunder at the Sandiganbayan.

“This was supposed to be for agricultural enhancement but they have become the lender of last resort,” the source said, referring to Acef.

Acef, established in 1996 and funded by tariffs from agricultural products, is a funding mechanism aimed at providing financial support to the agriculture sector to increase their competitiveness in the global market.

Safety Net

The money from the taxes was supposed to be used to establish “safety nets” for agriculture sectors affected by trade liberalization.

“That was the basic tenet of Acef, but it was not followed. If it was implemented properly, say the industries were given common services, it would have made Philippine agriculture competitive. But this was not followed. Even those projects that were not aimed at competitiveness were given funding,” the industry source noted.

The fund was set up to enable farmers, fisherfolk, and cooperatives to upgrade their skills and facilities so that they can compete in an increasingly globalized agriculture market.

Loans up to P30M

Under the program, agricultural workers, cooperatives, nongovernment organizations, and local government units may take out loans ranging from P500,000 to P30 million.

Acef was supposed to have a 10-year life-span, but the agriculture department, during the term of former Secretary Yap, issued several memoranda extending the program and its scope.

Collateral Interest-Free

The program was especially designed to encourage small and medium agricultural enterprises to borrow from it as it does not demand a collateral from them and is interest-free. The lack of these requirements opened the fund to abuse and was the main reason for the low-repayment rate, officials said.

Acef contained P10.73 billion accumulated from collected tariffs from 1990 to 2010, according to the Department of Agriculture’s preliminary report as of February 2011.

During that period, the fund used P8.85 billion, mostly for grants and loans.

As of February, the agriculture department said P2.57 billion went to grants, while P5.82 billion went to loans to 299 accounts. Included in the loan portfolio was a P1-billion grant to the bankrupt Quedancor, which was supposed to be used for the agency’s training program. At about P372.78 million was used to fund scholarship programs.

Quedancor did not remit a single centavo to Acef and even borrowers who failed to pay were allowed to borrow huge sums again, officials said.

As of early 2011, only about P1.8 billion remained in Acef coffers as many of the creditors failed to pay back their loans over the years, the Department of Agriculture said.

Failure

Despite the huge amounts of money that were funneled into the fund since its creation, the credit mechanism that was supposed to improve Philippine agriculture, provide employment in the countryside and raise the income of farmers and fisherfolk failed in its vision.

In March, the technical working group on Acef said: “Available data indicate that the Acef has not been able to provide loans to the marginalized farmers and fisherfolk; but mostly to small and medium enterprises.”

In a report, the Commission on Audit (COA) said Acef was a failure. “The purpose of the program to raise farm productivity by extending credit to small farmers, fisherfolk and agricultural entrepreneurs was not achieved as manifested by the low collection rate of amortization due from the proponents. The inability of the proponents to pay the amortization is an indication that their livelihood agricultural activities did not succeed,” the report said.

Yap’s Friend

One of the borrowers who was not punctual in paying his loan was Lyndon Tan, owner of Basic Necessity, a vegetable farm in Cavite, and a friend of former Secretary Yap.

Yap, project head of the book, “The Art of Agribusiness: 111 and More Success Stories in Agri-Entrepreneurship,” cited Tan as an example of a successful Filipino farm entrepreneur.

Tan, according to a recent agriculture department audit, sells his greens to supermarkets and restaurants. He borrowed P38 million from the fund for his farm in the mid-2000s. He only paid P4 million of it.

The COA also noted that Acef was inefficient and questioned why certain companies that did not remit were still given a chance to borrow millions of pesos.

In its 2010 report, the COA said five proponents with Acef loans of P72.245 million were given additional loans of P35.659 million for the same project, even if previous loans were not yet paid.

Gemsum Marketing

The companies were identified by CAA as C and L Farms, Hi-Las Marketing Corp., Moraleda Farms, Queen’s Agro-Industrial Farms Inc. and Gemsum Marketing.

But that was just the tip of the iceberg. There were 46 proponents who got loans from 2000 to 2008 but “have not paid a single installment,” the agriculture department said. Their loans from Acef totaled P802.95 million.

Baler-Casiguran Road

Senator Edgardo Angara, a former agriculture secretary who authored the law that established the Acef, has been identified as one of the beneficiaries.

Angara’s home province Aurora received P300 million from the fund, according to an audit by the agriculture department.

Angara was cited by two sources as the one who recommended projects to the Acef committee.

The audit by the agriculture department found out that Aurora, Angara’s home province, benefited from two grants.

In 2008, the local government of Aurora received P200 million for the concreting of the Baler-Casiguran Highway.

Kilusang Magbubukid ng Pilipinas said the Baler-Casiguran Road was built to serve Angara’s Aurora Pacific Economic Zone and Freeport project.

In 2007, Aurora State University received P100 million for a project called Enhancement of Technology-Based Agribusiness Industry.

In a phone interview, Angara said he could not recall recommending the grant of P200 million for the concreting of the Baler-Casiguran road.

“Who is the source of that report? I do not recall … Why would they even use the word competitiveness for that? And why would I recommend it,” he told the Inquirer Tuesday night.

Angara said it was more likely that the P200 million came from his pork barrel.

“And if it indeed came from my pork barrel, that would not be considered irregular since it came from my (Priority Development Assistance Fund),” the senator added.

By Philippine Inquirer News


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Philippine Mango Congress Sept 28

Mango congress to focus on competitiveness of PHL fruit.

Mango growers in Mindanao are urging more production areas to be developed in the region as it is also a suitable area for growing the produce.

The viability of Mindanao, as well as strategies to increase the competitiveness of Philippine mangoes in export markets are among the highlights of this year’s 13th National Mango Congress.

The congress will kick off on Sept. 28 with the theme, “Positioning the Philippine Mango Strongly in the World Market.”

“We would like to highlight this subregion, especially Sarangani, as a viable location for off-season mango production,” said Fred Dumasis, president of the Sarangani Federation of Fruit Industry Associations Inc., lead organizer of the congress in a statement.

Luzon remains the country’s primary producer of carabao mangoes, accounting for 64 percent of production, while Mindanao accounts for 23 percent, according to the Mindanao Fruit Industry Council (MinFruit).

Dumasis said Mindanao’s contiguous production areas and agro-climatic conditions, particularly in the southern part of the region, make it an ideal location for year-round, typhoon-free mango production.

He also pointed out investment opportunities in mango industry support services, such as hot-water treatment and vapor-heat treatment plants and packing houses.

The conference will also provide updates on export-market requirements, the latest production technologies and best production practices. It will also showcase areas in Mindanao with the potential for mango production.

About 500 growers, processors, consolidators, exporters and ancillary service providers from across the country are expected to attend the congress, which will be held in the resort town of Glan in Sarangani province, an emerging mango producer and tourist destination in southern Mindanao.

Conference delegates will submit recommendations to the national government on how industry stakeholders and government agencies can work together to ensure the mango industry’s continued growth and expansion.

Japan and Hong Kong remain the biggest buyers of Philippine mangoes, accounting for 51 percent and 31 percent, respectively, of mango exports, according to a recent report of MinFruit.

Other countries where Philippine mangoes have gained a market foothold are South Korea, the United States, Singapore and China.

The National Mango Congress is supported by MinFruit, the Department of Agriculture (DA) and the US Agency for International Development (USAID).

USAID, through its Growth with Equity in Mindanao Program, has partnered with MinFruit and the DA to enhance the production methods used by fruit and vegetable farmers across Mindanao, while linking them with prospective local and foreign buyers.

By Business Mirror


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