DA seeks lower palay production cost

MANILA, Philippines – Agriculture Secretary Alcala is urging researchers and scientists of the Philippine Rice Research Institute to lower the average production cost of palay (unmilled rice) to P9 per kilogram before 2017.

“If we can lower the cost of production to P9 per kg before 2017, we can become competitive,” he said during the 30th anniversary of Nueva Ecija-based research institution Philrice.

Upon reaching the production cost of P9 per kg, Alcala said it would be possible to enable most farmers to plant the staple at an average cost of P5 per kg.

PhilRice is already experimenting with the production of 10 metric tons per hectare at a cost of P5 per kg but a majority of farmers in the country continue to  grapple with high production cost.

“If we can keep the production cost at P5 per kg, this would be lower than the cost of production in Vietnam which is P6.53 per kg,”  Alcala said.

Data released by the Philippine Statistics Authority (PSA) show that from 2013 to 2014, the average cost of production for palay was P12.24 per kg while farmgate price averaged at P20.08 per kg.

The average production cost was higher during the wet planting season at P12.33 per kg than the dry season at P12.12 per kg.

Farmgate price was quoted higher at P20.12 per kg during the dry season than during the wet season at P20.04 per kg.

Factors affecting the cost of production of palay include the cost of planting materials, irrigation fees, land and tool rental, cost of inputs (fertilizers, pesticides, ameliorants), labor cost, transport cost, and interest on crop loans among others.

In terms of hectares, palay production in the country entailed an average cost of P48, 985 per hectare in 2013 to 2014.

Production cost was higher during the wet season at P49,407 per hectare and lower during the dry season at P48,411 per hectare.

Gross earnings during the reference period averaged at P80,360 per hectare.

Palay farmers had higher gross earnings during the dry season at P80,379 per hectare and lower during the wet season at P80,320 per hectare.

Palay farmers earned an average of P31,375 per hectare.