Palay production cost slightly down in 2019

MANILA, Philippines — The cost of producing a kilo of palay (unhusked rice) in the Philippines slightly went down last year, but this is still far from making it competitive with other rice-producing regions in Southeast Asia.

In the latest report of the Philippine Statistics Authotrity (PSA), the average cost spent in palay production was estimated at P11.20 a kilo last year, slightly below the P11.81 per kilo in 2018.

Agriculture Secretary William Dar attributed the decline to the initial implementation of the Rice Tariffication Law and the Rice Competitiveness Enhancement Fund.

“This is the start of the outcomes of RCEF and other rice programs to make Filipinos more competitive,” Dar said.

The P10-billion RCEF has different components on mechanization, seeds, credit, and training extension that aim to boost productivity of farmers.

While production cost was slightly lower, this is still a far cry from the P6 a kilo production cost in Vietnam and P8/kilo in Thailand, the world’s biggest producers and exporters.

The biggest average production cost per kilo was registered in Central Visayas at P18.37, while the lowest was in the Bangsamoro region at P10.35/kilo.

Per hectare, production cost in the country was estimated at P45,302, while gross receipts of farmers averaged at P66,626.

The biggest chunk of production cost goes to hired labor at P9,411, followed by fertilizer cost at P4,308.

Other major costs were on the operator labor, share of harvesters, landowners, and threshers, and the rental value of owned land.

PSA said farmers earned an average of P0.47 for every peso invested in palay production.

At the regional level, the highest production cost was reported in the Ilocos Region at an average of P62,659 per hectare.

Apart from lower production cost, yield per hectare also improved to 4.05 metric ton from the 2018 level of 3.97 per MT.

Farmgate prices, however, dipped to P16.47 per kilo from P20.40.