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Agriculture: low productivity and high production costs

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By Vincent Mariel P. Galang, Reporter

THE PHILIPPINE agriculture sector has always been weighed down by low productivity and high production costs, because it has long lagged in adopting technology.

“The role of technology, the role of innovation is perceived to be very crucial, critical, and catalytic in view of agricultural productivity. It’s just really sad to see that our country is lagging behind our ASEAN neighbors in a lot of global measures,” Cynthia Villegas-De Guia, planning officer and assistant head of program development division of the Bureau of Agricultural Research (BAR), told BusinessWorld in an interview.

She noted that global innovation index compiled by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO) has the Philippines scoring 31.6 points in 2018, behind ASEAN neighbors like Malaysia (43), Thailand (38), Vietnam (37.9). Among the core ASEAN countries, the Philippines was ahead of only Indonesia (29.8).

According to the total factor productivity (TFP) index, which measures agricultural productivity relative to inputs such as investment, resources, capital, and labor, the US Department of Agriculture (USDA) estimates that from 2005 to 2015, the Philippine score grew by only 0.64%, well behind the corresponding growth rates of Vietnam (2.21%), Thailand (2.16%), Indonesia (2.12%); and Malaysia (1.8%).

She said that Filipinos know the importance of technology and innovating on paper, but are behind in practical application.




“Even the R&D investment the Philippines (is behind). In 2018, among the ASEAN countries, we were at par with Indonesia at 0.1% of Gross Domestic Product (GDP),” she said, adding that the equivalent investment in Thailand, Vietnam, Japan, and South Korea go as high as 4%.

BAR, an arm of the Department of Agriculture (DA), was established to lead and coordinate the national agriculture and fisheries research and development (R&D) effort. The general appropriations act (GAA) allocation for R&D at BAR fell 0.03% to P1.175 billion in 2019.

Pag sinasabing ganito ’yung kahalagahan ng R&D pero hindi namin ma-feel kasi maliit yung budget ng national government (Even if we say that R&D is important, it can’t be felt because the budget allotted by the national government is small), and at the same time the rules and regulations that we have right now are not very in favor on the implementation of R&D. It actually hinders the creativity of researchers,” she said.

On the matter of agricultural mechanization, Rodolfo P. Estigoy, chief of the applied communications division of PhilMech, cited data from the Regional Network for Agricultural Machinery (RNAM), which found that the Thai level of mechanization in 2011 was 4.2 horsepower per hectare (hp/ha) against the Philippine level of 1.23 hp/ha. Other Asian countries, like Japan, South Korea, and China have achieved levels of mechanization of 18.87 hp/ha, 9.38 hp/ha, and 8.42 hp/ha, respectively.

BRIDGING THE GAP BETWEEN AGRICULTURE AND TECH
Given all these signs that the industry is lagging, the government and private sector have been developing ways to improve farmer incomes.

The Philippine Center of Postharvest Development and Mechanization (PhilMech) is the DA arm focused on generating and extending postharvest and mechanization technology.

“Technology can increase farm yields through the use of high yielding varieties of palay (unmilled rice). Technology can save postharvest losses, thus preserving the precious harvest of farmers. It can efficiently perform farm and on-farm operations thus reducing production cost,” Mr. Estigoy said in an e-mail.

“PhilMech believes that with the use of new technologies, specifically the rice mechanization technologies, farmers can be competitive… the production cost will be lowered and postharvest losses will be reduced, saving the would-be lost harvest of the farmers,” he added.

The cost of rice production in Philippines is currently at P12.72 per kilo, against P6.22 for Vietnam and P8.86 for Thailand.

SL Agritech Corp. Technical Consultant Frisco M. Malabanan said hybrid rice should be further tapped by rice farmers.

“I think this is the way for the Filipino rice farmers to be competitive in the world market because by adapting the new technologies, particularly in rice production, like hybrid rice, they can, of course, increase their production. They can reduce their cost of production and at the end of the day they can have a decent return on investment. Further, they can sustain their palay production,” Mr. Malabanan said in an interview.

He is also a member of the Rice Board of Rice Productivity Advocacy, Inc.

“We started this a long time ago way back in 2002, and based on the data we collected over so many years, commercial production particularly in Central Luzon and other parts of the country, the production increase on the average is more than 30% versus ordinary rice technology,” he said.

In Nueva Ecija, he said, farmers using hybrid rice on average are achieving harvests of eight metric tons (MT) annually, from four MT. During dry season, when they maximize the use of the seed, farmers are able to attain an average yield of nine to 10 MT.

Hybrid rice can cost as much as P45,000 to P55,000 per hectare in the province, but average incomes can hit P50,000 to about P100,000 per hectare, depending on the season. The comparable numbers for traditional seed are P40,000 to P45,000 per hectare, generating income of P25,000 to P30,000.

Meanwhile, BAR touted technologies for rice and corn farmers that can help them make planting and farm management decisions.

One is the Rice Crop Manager (RCM), which was launched in 2013 in collaboration with the DA, Philippine Rice Research Institute (PhilRice), and the International Rice Research Institute (IRRI). This is a location-specific tool which gives rice farmers recommendations and farming advice in a one-page printout.

The system also allows the collection of data that will help users improve the tool, while giving DA data on rice production to guide its interventions and decisions at the barangay or municipal level.

From November 2013 to November 2016, across 10 municipalities in the Philippines, yield increased by an average of 370 kilograms (kg) following recommendations from the RCM. In terms of income, there was an average increase of P4,337 per hectare per season. There was also an average increase of 24,000 MT of milled rice for every 100,000 hectares per season. Over 500,000 hectares over two rice-growing seasons, the system improved yields by about 240,000 MT of milled rice.

Corn farmers can use site-specific nutrient management (SSNM) for maize, developed in partnership with International Plant Nutrition Institute (IPNI), BAR, and the University of the Philippines Los Banos (UPLB). This tool was developed in trials from 2005 to 2015.

“It considers the timely application of fertilizers at optimal rates to fill the gap between the nutrient needs of a high-yielding crop and the nutrient supply from naturally occurring indigenous sources, including soil, crop residues, manure, and irrigation water. Further, it aims to sustain higher yields while assuring soil fertility restoration,” according to project briefing material.

“Through SSNM across 107 locations, in 2010 to 2011 the corn yield can be increased by 1.2 tons per hectare and profit by P12,00 per hectare per cropping,” Ms. Villegas-De Guia said.

With all these implemented along with other kinds of technology, Mel Coronel, president of the Nueva Ecija Rice Millers Association, said members of the association have found that work is more efficiently done compared with labor-intensive traditional methods.

Bumilis ang trabaho sa bukid compared sa tao. Mas consistent din daw ang trabahoMabigat kasi ang investment sa equipment… pero kung pag-uusapan natin yung efficiency, mas efficient ang equipment (Work is faster compared to manual labor. Work is also consistent… But investment required is a big burden. But in terms of efficiency, using equipment is more efficient),” he said through a phone interview.

BELIEF IN TECHNOLOGY
“(Technology) is a very important investment in agriculture. Digitalization is the way to go right now. Technology is a very important component of Philippine agriculture, and we believe in it,” Agriculture Secretary Emmanuel F. Piñol said in an interview.

He also hopes that by the end of the President’s term, “We should be able to maximize the employment of technology by at least 50-60% compared with current levels.”

Ms. De Guia emphasized the importance of working to achieve the common goal, to improve the lives of farmers.

“I’m hoping for… really bridging what we are seeing as a gap right now. Being proactive in addressing the missing linkages, kasi nakita na natin, gawan na natin ng paraan (because we see the problem, and it’s up to us to solve it)… instead of doing things in a fragmented and isolated manner, let’s work together,” she said.

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