Yield

There was something truly odd in that session of the Pandesal Forum held last Tuesday.

A horde of rice farmers appeared at the forum dressed in business suits. Only their sunburnt skins indicated what they do for a living.

The journalists were, as usual, in their sloppy garb. We suspected immediately we had become part of a vivid theater where the medium is the message.

We were told, in the course of the forum, that the idea for the farmers to come in suits came from Dr. Henry Lim Bon Liong, chairman and CEO of top hybrid rice producer SL Agritech. The message here was: rice farming need spell poverty. Through what he calls “agri-preneurship.”

The key to bringing prosperity to rice farmers (and keep rice production viable) is to improve yields.

During the seventies, the Marcos government launched a successful program called Masagana 99 to improve farming methods and bring yields up to 99 cavans per hectare. Today, SL Agritech leads an effort to bring yields up to 300 cavans per hectare.

This is necessary. During the Masagana 99 period, our population was just 60 million and our agricultural land was more abundant. Today, with a population of about 110 million and lesser land devoted to agriculture, we need to bring yields beyond 300 cavans per hectare. This is the aim of Masagang Ani 300 that was launched earlier this week with farmer-representatives from all our regions.

Our current rice consumption is 20 million metric tons of rice. Our current rice production is 19.07 million metric tons. Matching local demand with local production, the farmers believe the gap could be closed.

Yield of over 300 cavans per hectare is not a pipe dream. A farmer from Sta. Rosa, Nueva Ecija testified at the forum that he harvests 358 cavans per hectare using hybrid SL Agritech rice varieties.

Increased yields involve many factors. New and more resistant hybrid varieties are only one factor in the equation. There are new lime-resistant hybrid varieties that make coastal rice farming possible, as one farmer from Cagayan attests.

An important factor is the economies of scale, says Dr. Tan Bon Liong. There is no need to build cooperatives as we tried (and largely failed) for many years. Instead contiguous areas may consolidate their production to make it economical to invest in farm machinery and other technologies. While they continue to own the land separately, farmers may choose to integrate their farm methods.

With its corporate resources, including technical expertise, SL Agritech is helping this process along. There is value in bringing in soil experts to determine which hybrid varieties are suitable for specific areas.

Use of fairly simple machines such as electric driers will help dramatically bring down post-harvest losses. A poor logistics system results in intolerable rates of spillage and wastage in our agriculture.

The worst case, however, is in our fisheries. It is estimated that the spoilage rate for our fishermen is about 40 percent of the catch. Because of this, fish remains in short supply even as we overfish our waters.

Militant groups might choose to lionize our municipal fishermen. But it is also true that they are the most inefficient. They need to consolidate their activities to be more efficient and collectively invest in refrigerated systems to conserve their catch. Otherwise, we overfish our waters only to lose the catch to spoilage.

Our fisheries and our farms share the same problem of poor social organization. There are numerous weaknesses in processing the catch or the harvest. Farmers are not linked directly to the market and therefore could not retain as much of the value in the chain that they might otherwise do with a little corporate sensibility.

It is a good thing for agribusinesses to be more engaged with our farms. They could even process farms waste into products of value with the help of our scientists.

For instance, our banks tend to pay penalties rather than fully implement the provisions of the Agri-Agra Law that mandates a certain portion of bank portfolios be devoted to agriculture lending. The banks say there simply are no qualified borrowers to lend to.  What this means basically is that farmers offer no collateral and lending to them pose high risks because their crop could be wiped out in a calamity.

The simple solution to this is to expand crop insurance as part of our overall resilience efforts. With insurance, farmers are able to tap credit from the banks by offering them security for the loans. When this happens, large amounts of capital will be tapped to capitalize our agriculture. The large amounts corporations have been able to raise the past weeks by tapping the corporate notes markets indicate a vast amount of liquidity out there to finance not only manufacturing but also agricultural productivity.

When rice tariffs were imposed in lieu of quantitative restrictions, some agitated militant groups protested the liberalization in rice trade because it caused a drop in palay prices. It turns out the problem was merely operational. Palay prices fell to as low as P12 per kilo in some areas only because they had high moisture content. This is a problem easily solved by mechanical driers.

Today, rice prices are at a historic low and palay prices are up to P19 per kilo, significantly above the recovery price. In turn, the huge amount (about P12 billion last year) raised from tariffs is made available to fund modernization of our farms.

Combine liberalization and hybrids and we may yet mount an agricultural revolution.