Former laggards pass RP in rice production

Declining investments in irrigation system resulted in very low improvements in rice production and farm yields, higher production costs and selling price for Philippine rice.

The Asian Development Bank (ADB) noted that public investments in irrigation rose steeply between 1965 and 1976, from P2 billion to almost P12 billion. Total investments in irrigation is estimated at P40 billion. Investments peaked at over P12 billion in 1979 then gradually declined, settling at its lowest level of below P5 billion in 1985. After that period, investments were rather erratic and anemic, settling more at levels below actual spending during the food production programs of the Marcos era.

Outside of investments in irrigation, the outlays for research and development, extension services, seeds and fertilizer use management have all been going down, reaching even negative levels with the devolution of most of these services to the local government units.

Whereas in the ’70s the Philippines was the top producer of rice in Asia, it slid to fifth position in the ’90s having been surpassed even by former laggards such as Vietnam, Laos and even Myanmar, the ADB said.

Rice production in rice-consuming and producing countries of Asia between 1990 and 1999 is as follows: Indonesia with 45 million tons in 1990 increasing to 49.534 million tons in 1999; Vietnam from 19.225 million tons in 1990 to 31.394 million tons in 1999; Thailand, from 17.193 million tons in 1990 to 23.272 million tons in 1999; Myanmar, from 13.972 million tons in 1990 to 17.075 million tons in 1999 and the Philippines, from 9.885 million tons to 11.388 million tons.

Areas devoted to the crop in these countries have grown dramatically but in the Philippines the increase could not even be noticed. Areas planted to rice increased as follows: Indonesia from 10.5 million hectares in 1990 to 11.624 million hectares in 1999; Thailand from 8.79 million hectares to 10 million hectares; Vietnam from 6.028 million hectares to 7.648 million hectares; Myanmar from 4.76 million hectares to 5.458 million hectares; and the Philippines from 3.319 million hectares to 3.978 million hectares.

Interestingly, yields of farms in Asian countries have increased, though slightly for some and remained at present levels for the others except for the Philippines where yield per hectare even declined. Output has increased for Cambodia (from 1.4 tons per hectare in 1990 to 1.9 tons in 1999); Laos, from 2.3 tons to 2.9 tons per hectare; Myanmar, from 2.9 tons to 3.1 tons; Thailand from 2 tons per hectare to 2.3 tons and Vietnam, from 3.2 tons to 4.1 tons per hectare in 1999. Surprisingly, only the Philippines posted declining yields per hectare between 1990 and 1999 or from 3 tons to 2.9 tons. Thailand and Malaysia maintained their yields during the 10-year period.

Production cost for rice in the Philippines was P6.85 per kilo for the dry season crop and the P7.19 a kilo for the wet crop, or twice or thrice the production cost of competitors in the Asian region.

Domestic prices of rice, per kilo, were steady from 1992 to 1999 for Vietnam–staying at below 10 cents per kilo for the most part. For Thailand, prices changed slightly during the period stabilizing at 11 to 12 cents per kilo. But for the Philippines, domestic wholesale prices were from a low of below 40 cents per kilo in 1992 to a high of over 60 cents per kilo in 1995 tapering to 40 cents a kilo in 1998 and then inching upward to over 40 cents in 1999.

In peso terms, the wholesale prices for Vietnam reached a low of less than P3 a kilo in 1992 moving up to its highest level of almost P6 a kilo in 1998, then going down again. For Thailand, prices were from a low of below P6 a kilo in 1992, rising to slightly over P6 a kilo in 1995 then tapering off to below P5 a kilo in 1999.

But for the Philippines, domestic wholesale prices were at their lowest in 1992 at below P10 a kilo, rising steeply to almost P18 in 1996, dropping abruptly to P10 a kilo in 1998 and then going up again in 1999 to over P10 a kilo.