Agriculture News Analysis

Philippine rice – pipe dream vs reality

It’s hard to believe how badly wrong the Department of Agriculture (DOA) got its rice policy (D.O.A. – dead on arrival). This policy must rank among the most unrealistically ambitious strategies ever proposed by a Philippine Government ministry. Worse, though, it had the full support of outgoing president, Benigno Aquino, who had no doubt that it could be achieved.

At the end of 2011, soon-to-be-replaced Agriculture Secretary, Proceso Alcala, declared that the Philippines was on track to becoming a rice exporter by 2014. He said: “After 2013, we will be self-sufficient. By 2014, we should not import anymore. We should start exporting”. Supporting the claim, Aquino, who put the rice policy at the top of his mid-term targets, said that he was confident that the Philippines – the world’s No. 1 rice importer – would become a rice exporter during his term.

In April, Aquino, who expected the policy would do away with the country’s expensive, corruption-ridden rice-importation programme, gave ‘standby-authority’ to the National Food Authority (NFA), the procurement agency which comes directly under the Office of the President, to import half a million tons of rice – additional to the 750,000 tons which the NFA has shipped in over the past six months. The US Department of Agriculture, meanwhile, estimates that rice purchases by the Philippines, this year, could reach 2 million tons.

The government’s rice-export aspirations were based on targetting markets in the other nine Southeast Asian states which comprise the region of Asean and compete with them in world shipments. Let’s take a look at how that worked out.

In 2015, the Philippines spent US$464.5 million on rice imports, a 21.3% increase since 2011. Its top two suppliers were: Vietnam, US$223.3 million (48% came from there) and Thailand which supplied 42.4% at a cost of US4197.2 million. Meanwhile, Thailand – the world’s second largest exporter after India – collared 22.7% of global rice exports in 2015, earning the sector US$4.5 billion, while the world’s fourth largest rice shipper, Vietnam earned US$1.4 billion after snapping up 7.0% of worldwide shipments.

Philippine rice exports last year amounted to a meager US$802,000 or 0.0004% of the world rice market, putting it in 77th place on the rice-exports table. By contrast, Cambodia, 9th, which has increased its rice production by 198.7% since 2011, earned $317.9 million with a 1.6% share; Myanmar, 20th, US$101 million, 0.5%; Singapore, 25th, US$62.8 million, 0.3%; Malaysia, 31st, US$31.9 million, 0.2%; Laos 32nd, US$29.4%; Indonesia, 61st, US$2.8 million, 0.1%. The only Asean member country that sold less rice than the Philippines was Brunei which isn’t in the rice-export business.

The Philippines’ rice-production woes will figure large when incoming Agriculture Secretary, Emmanuel Piñol, scripts the policy direction for this troubled sector. In terms of challenges, the legacy he has been left is considerable. While rice self-sufficiency will remain a goal – the annual shortfall between domestic production and demand is currently around 1.8 million tons – he has estimated that it will require US$651 million to broadly rehabilitate the farm sector.

What the Philippines rice industry lacks is serious investment for irrigation technologies and agricultural water control, mechanised farming and rural infrastructure. Without these it’s hard to see how it can ever get close to reaching self-sufficiency in rice production – though it managed that in the 1970s – let alone becoming a world shipper of the product.

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