Subsidizing the agriculture industry is better than subsidizing farmers directly. This is the recommendation of Piedad F. Moya, IRRI economist, in her presentation during the rice R&D conference in PhilRice, Sept 3, 2014.
“The Philippines can be competitive, comes ASEAN Integration, with the right support from the national government. Something must be done to the costly production of rice in the country,” she said.
Moya and some PhilRice economists did a study evaluating rice production cost and profitability in six major rice-producing countries in Asia, including the Philippines. Dr. Flordeliza Bordey of PhilRice led the said study.
In their research, they found that farmers in China have the highest gross income at P141, 452. Government procurement program and protection price it set was a major factor for this according to them.
Thai farmers had the third highest income at P100, 289 despite being the fifth among the six countries in terms of yield owing to the high price set by their government.
The Philippines had the fourth highest gross income at 93, 902. It has the second lowest average yield in terms of productivity, and third lowest price of paddy rice. It also had the third highest production cost that contributed to the low income of farmers.
Moya explained that they observed in the other Asian countries with government intervention that the subsidy goes directly to the agriculture industry such as fertilizer and seed companies.
“In this way, every farmer benefits from the subsidy compared to giving seeds directly to them because it is difficult to track if the seeds are fairly distributed,” Moya said.
She added that the country has to manage its rice supply and demand considering the land area, population, and the weather related events.
