Rice Sufficiency

Rice Self Sufficiency: A Vital Symbol of National Pride

Before I seriously focus on the Carabao Agro Industrialization Model, this is my last post in line with the current rice sector situation in the Philippines. So much attention has been given to rice but the same people are involved. What can the farmers then expect? Of course, the same things such as loans, seeds, fertilizer, machinery, and training are the solutions. How can the country industrialize the rice-based agriculture sector with this myopic thinking? I believe the carabao model can provide a part of the solution to the rural industrialization of the rice-growing areas of the Philippines.
Nevertheless, I owe a lot to my exposure in rice research and development at PhilRice. In fact, the turning point in my career was my involvement as the principal author of an alternative rice sector business model in 1998. I proposed the establishment of integrated rice milling districts for an organized system of rice farming, which would be supported by the establishment of the Rice Sector Investment Fund. However, I was not given the chance to further improve it. It was set aside and the Department of Agriculture embraced again its old business model because they still believed that distributing seeds, fertilizer, and machinery would be effective.

My rare opportunity directly in front of two National Scientists, Dr. Pedro Escuro and Dr. Jose Velasco, who attended our presentation to the National Academy of Science and Technology in 1998, was really inspiring. Their humility as they listened to the presentation with the hope that in their lifetime they could still see the country self-sufficient in rice really inspired me. Perhaps, if our elders now who are still taking part in the rice program are like them, who are willing to listen, we will have dynamic thinking in the sector. Instead, like what I have previously posted, we have a bunch of highly educated professionals that must be educated first because they keep on repeating what they have been doing in the last 20 years. If this will not be averted, and these people are still the ones influencing the policies and programs in the rice sector, it will be a total catastrophe in the sector. This is the reason why I am more interested in the carabao agro-industrial modernization model to look for other options.

Dr. Escuro was one of the country’s famous rice breeders for the breeding of the C-4 rice varieties. He has a very positive outlook that I gleaned from his smiles. Dr. Velasco, a big man, was known for his pioneering research in plant physiology. After the meeting, I walked with Dr. Velasco towards Taft Avenue and he just took the bus going to Cavite. A very humble national scientist. I learned later that he also finished his high school at the then Central Luzon Agricultural School in my hometown. We basically attended the same high school. Dr. Velasco and Dr. Escuro passed away without seeing their dreams for the country to be self-sufficient in rice.

Three years later after I prepared the alternative rice sector agenda, I did further consultation with farmers and colleagues in Nueva Ecija. I eventually prepared the establishment of 20 integrated rice milling districts that would use hybrid rice technology. I further fine-tuned the investment fund for the rice sector. These two business models are discussed in the last part of this post.

THE 1998 ALTERNATIVE RICE SELF-SUFFICIENCY AGENDA

Just before the 1998 Philippine National Elections, the National Academy of Science and Technology and the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development of the Department of Science and Technology (DOST-PCAARRD) asked PhilRice to prepare an alternative plan for addressing the national rice crisis. The request was made on behalf of the country’s research and development community. By taking off from the organized rice farming approach that former Secretary Roberto Sebastian initiated, I proposed an organized system of clustering rice farms into 100-200 hectare modules in rice-growing areas that would lead to the establishment of milling districts with service areas of about 15,000 hectares each. The organized farming model was inspired by PhilRice’s Barangay Integrated Pest Management. Dr. Joe Medina of UPLB taught me also that the Barangay IPM was based on Paolo Freire’s, community-based education principle. I consulted a sociologist colleague, now at the UPLB Department of Sociology, Girlie Abrigo, who provided me insights and reading materials. Raul Lara contributed too based on his experience as a rice farming systems consultant at the Aurora Integrated Area Development Project. I then expanded the model by integrating support facilities for rice milling, farm mechanization, seed production, production input, credit and crop insurance, and research and development. I was hoping the model would transform PhilRice to be financially self-sufficient government corporation and all the research and development projects of PhilRice would focus on the development of rice milling districts all over the country and even in some parts of the world.

The rice milling district is not a new business model in Nueva Ecija. In fact, the Cojuangco’s established the rice processing facility in the boundary of Munoz and Talavera, close to the railroad station, more than a century ago. I know it because my father’s rice farm is close to the area where there are still remnants of the old irrigation system. As a boy, I heard a story from our family about the hacienda because my grandfather on my mother’s side used to be a “katiwala” in the nearby hacienda. The rice farms that supply the rice for processing and with an irrigation system that is still visible today cluster around the processing center. It was a milling district model already at that time but only based on the Hacienda tenancy system.

The Rice Milling Districts Prepared in 2003

I silently prepared the proposal without consulting other PhilRice senior staff aside from Raul and Girlie; Fe Bongat provided assistance in packaging the project. Still, our Director, Dr. Santiago Obien, talked in the presentations at PCARRD and NAST.

The milling districts being envisioned in our model are composed of autonomous or semi-autonomous enterprises that would have public-private ownership arrangements but the management would be entirely private. However, these components still require polishing at that time, including the identification of strategic rice-growing areas the milling district model would be established. Furthermore, whether hybrid rice would be used was also a critical issue. I was already starting a genuine consultation involving colleagues of different specialization.

The meeting with PCARRD was held at the council’s headquarters in Los Baños. In the meeting with the National Academy of Science and Technology held in Manila, two National Scientists, Dr. Pedro Escuro and Dr. Jose Velasco, participated in the discussion. The humility and simplicity of the two National Scientists, who just listened in spite of their stature as national scientists, inspired me. Their concern though was how to implement the model on a grand scale because they wanted to see the country self-sufficient in rice at least in their lifetime. However, they did not see their dreams realized. Instead, the rice importation even tripled.

Mr. Dave Gorrez, then a consultant at PCAARD, easily understood the model. He was able to arrange an interview in the program of Ben Cruz at the PTV4 with Dr. Ric Salazar of IPB. However, Ben Cruz was not able to direct the discussion on the organized rice farming model.

My vision of a grand scale undertaking for agricultural development has been invigorated since that day the two national scientists inspired me. Another meeting with then PCARRD Executive Director, Dr. William Dar, followed. In that meeting held in Manila perhaps around the third week of May 1998, he disclosed to us that he would become the Secretary of Agriculture in the Estrada Cabinet.

Failure to Align the Rice Program with the AFMA

In the process, I was asked to join the transition team of Dr. Dar in the Department of Agriculture. Right in the first meeting of the team, I saw already an imminent misdirection. In another meeting at the Diamond Hotel presided by Senator Edgardo Angara, the Senator noticed also a disorder, and said in Tagalog, “Lahat naman tayo dito galing sa UP, huwag na tayong magpayabangan pa.”

While in the team, I reviewed the Agricultural and Fisheries Modernization Act (AFMA) and found out that the agricultural zoning and the model farms specified in the law are in accordance with the integrated area development planning approach that I was trained for. However, just within a short period after Dr. Dar assumed office, and when everybody was already confirmed in their respective positions, AFMA was slowly forgotten. In fact, there were many different interpretations of AFMA.

Before I left the team, I was the one who prepared the plan for Project La Nina because the Department of Budget and Management was not satisfied with the plan submitted to them. I prepared the plan aligned with the AFMA. The amount of 1.2 billion pesos was approved. Only two persons knew my effort. There was no La Nina but the budget underwent different slicing and even the famous National Agribusiness Corporation got involved.

The Hybrid Rice Technology as the New Hope

Ultimately, the rice program was not also aligned with the AFMA. The same old program was adopted but changing the name of the rice program was no longer attractive. However, the DA found a new savior in the entry of the Hybrid Rice. With support from the FAO and the Department of Agriculture, the hybrid rice was packaged as the hope of the rice sector of the Philippines.

While our suggestion though was to implement the hybrid rice program using the integrated rice milling district model by just focusing on Nueva Ecija first, a national program was ultimately adopted and a hybrid rice seed subsidy was introduced. The usual dole out prevailed. Since the government is the ready buyer of hybrid seed, it was attractive for companies to set up their own businesses.

The hybrid rice program was used by Gloria Macapagal Arroyo in her 2004 Presidential campaign. When she assumed office, she promised that within two years, the country would be self-sufficient in rice through the hybrid rice program. President Arroyo’s administration failed to make the hybrid rice as the savior of the country’s rice sector. President Aquino just continued the same program. In the 2011 State of the Nation Address by President Aquino, he promised that rice self-sufficiency could be attained by 2014. The promise was not attained, instead, the country has been alarmed that by the year 1915, the annual rice importation would reach 2 million metric tons. The government made an assumption that the existing government program would be adequate without taking into account that the stability of becoming self-sufficient in rice must be based on a strong structural foundation.

Current Rice Policy Pronouncement

President Duterte then promised free irrigation, stabilizing the price of rice at 15 Pesos per kilogram, and no more rice importation. These statements, however, would require careful study for implementation. For instance, the 15 Pesos price of rice would not benefit farmers because of the increasing cost of production even with free irrigation. The proposed participation of local government units in producing the rice requirement for social welfare assistance would also involve organizational and technical preparation. While creative solutions would be available, where to get the fund would be another nightmare. All of these promises did not even take off. There was also an apparent shortage and the retail price of rice went high that affected the whole country.

To get the fund for the rice program, the Duterte administration decided to open the country to the entry of imported rice for purposes of ensuring rice supply and stabilizing the price. However, the importation would be used to generate the fund for the country’s rice self-sufficiency program through the tariff to be imposed on imported rice. Instead of preparing business models that are worthy of investment, the risky rice importation that does not allow anymore the government to import rice immediately brought down the price of rice nationwide to an all-time low in the last 40 years. While the Rice Tariffication Law has already brought damage, there are no clear business models that the fund to be collected will be invested. The same seed and fertilizer distribution and outdated research and development programs are still to be embraced. The latest that involves the loan to the farmer and the allocation of budget for the procurement of rice in the coming season is not also a long term solution.

Fine-tuning the Business Models

More than 15 years ago in March 2001, I left the government service and started to embark on a career as an independent development professional. While the rice milling district model that became my passport to the Department of Agriculture did not take off, I invested time and effort to improve the model by talking to farmer organizations in Nueva Ecija and former colleagues at PhilRice. The rice program direction is Chapter 3 in my work Modernizing Philippine Agriculture published in 2003. Essentially, the alternative program has two major components. The establishment of 20 integrated rice milling districts and the establishment of the Philippine Rice Sector Investment Fund. Apparently, in the Rice Tariffication Law, the Rice Enhancement Fund will be established using the tariff to be collected. However, the proposed investment fund that supports the rice milling district would not use tariffs for funding. The plan would rely on sound business models with the private sector, farming community, and government collaboration.

Let me have a summary of the integrated rice milling district model and the investment fund that would provide the funding for the model.

The Rice Milling District Model

The integrated rice milling district model is in line with achieving national rice self-sufficiency. The business model employs an organized system of rice production, processing, and marketing. Each district serves an aggregate production area of 15,000 to 20,000 hectares, divided into production clusters of around 3,000 hectares. The center of the milling district is the integrated grains processing center managed by a private group or a cooperative. Its ownership is also multi-sectoral in character. Cooperatives, government agencies, and private corporations invest in the milling centers and the production sub-centers. Every milling center has its own seed production service, machinery pool, technical assistance service, and facilities serving as a meeting place and for training and social gathering purposes. The center provides technology transfer services to the farmers who enlist as cooperators. As cooperators, farmers are provided with production inputs such as seeds and fertilizers. The farmers are also given access to credit assistance and farm mechanization services at affordable terms. Farmers then sell their rice harvest to the integrated rice milling center.

The Rice Sector Investment Fund

Attaining rice self-sufficiency in the Philippines does not require a very comprehensive solution because there are existing physical, institutional and business infrastructure in the country that must be only explored more efficiently. What must be installed is a more focused and sustainable rice sector investment agenda because producing the total rice requirement is attainable. The most challenging task in addressing the rice sector issue is how to put together the resources into a common fund that will harmoniously contribute to improving rice production, processing, and distribution system. The rice sector investment fund for the Philippines that is being proposed will augment the existing government sector and private sector rice program initiatives in the country.

The purposes of the fund are a) to establish an investment fund that will be used in providing financial and technical assistance to the various stakeholders in the rice sector in the Philippines, which include farmers groups, businessmen, and research and development organizations, b) to transform the fund as an income-generating business infrastructure to sustain its operations and to further expand to serve wider stakeholders in the Philippine rice sector, c) to use the fund as a catalyst and vehicle in functionally integrating the various stakeholders of the rice sector in the Philippines, and d) to place the fund directly under the management by the Philippine Rice Sector Investment Fund, which is a public-private partnership organization.

The funding will be generated through a variety of approaches by primarily using existing laws and financial resources such as the Agr-Agra Law, which requires banks to allocate 25 percent of their loanable fund to the agriculture sector, sovereign and existing funds to leverage international funding, a loan through sovereign guarantee, bond issuance, and pooled financing.

The open-source investment that will promote the integrated rice milling district for hybrid rice will be the main strategy to be employed. Hybrid rice production technology will be supported because it will teach farmers the practice of more precise agriculture, aside from the higher yield potential being attained in using the technology. The integrated rice milling district will make use of an organized approach to doing business based on efficiency. Each district will serve an aggregate production area of 15,000 hectares, divided into production clusters of around 3,000 hectares. At the heart of the milling district is the integrated grains processing center that will be managed by a private group, but its ownership will be also multi-sectoral in character. Cooperatives, government agencies, and private corporations will be investing in the milling centers and the production sub-centers. Every central milling center will have its own machinery pool, technical assistance service, and facilities as a meeting place for training and social gathering purposes. The center will be providing technology transfer services to the farmers who will enlist as cooperators. As cooperators, farmers are provided with production inputs such as seeds and fertilizers and are given access to farm mechanization services at affordable terms. Farmers then sell their produce to the integrated milling center.

The fund will be governed by a Board of Trustees with representatives from the proponents of the fund, private business groups, and international funding agencies. The Board will have a secretariat for technical and administrative support services in the raising and management of the fund. It will have its satellite centers in strategic areas in the Philippines, which include Santiago City in Cagayan Valley, Science City of Munoz in Central Luzon, Naga City in the Bicol Region, Tacloban City in Eastern Visayas, Iloilo City in Panay, Bacolod City in Negros Island, Butuan City in Northern Mindanao, and Davao City in Southern Mindanao.
The target fund to be raised in the first year is 100 million $US. The capital fund will then double in the second year until the total capital fund is about 2 billion $US by the fifth year. The fund will be further sustained as the modernization of the rice industry is a continuous and dynamic process that will be capable of addressing the rice requirement of a growing Philippine population.

Concluding Note

If the same highly educated are still around and continue what they have been practicing in the last 20 years, I doubt if a pro-farmer rice sector will still emerge in the Philippines. As I stated in my other post, the carabao agro-industrialization model, which can slowly transform rice farming areas into an improved pasture, is a much better direction because there are still few highly educated in the carabao research and development. It is easier to infuse new talents.

THE CHALLENGE OF EDUCATING THE HIGHLY EDUCATED FOR NATIONAL RICE SELF-SUFFICIENCY DRIVE

Educating the highly educated role players in the country’s rice sector may be the new paradigm for addressing immediate problems as well as for the long-term development of the sector. We have only about 100 highly educated actors who play different but crucial roles in influencing the formulation of policies and programs for the country’s already long overdue national rice self-sufficiency drive. They are in the DA bureaucracy, research organizations, the academe, the print and broadcast media, nongovernment organizations, and think tank groups. Some of them have long retired but are still around. Instead of sharing wisdom, they still insert themselves and contribute the same old tricks they know. Some of them consistently oppose government programs but for a long time, they still have no solutions to offer. In fact, most of them are decent people, but in the last 20 years or more, they are doing the same things. Why do we allow the same thinking to prevail is attributed to a complexity of factors. However, there is one fact that we must all agree first. We entrust our national rice policy and programs at the hands of this bunch of highly educated.

Supposedly, because they are highly educated, they are more dynamic and open to new ideas. Although putting their acts together may be difficult because of ego, but their thinking is along with the same but narrow perspective. Even those who criticize government rice programs are unaware that they are on the same narrow road who are just there enjoying their work. Eventually, those people who have many followers, admirers, and readers of what they are writing, are the silent problems of the country’s rice sector.

Compared with the task of training the rice farmers, it is more logical, economical, and perhaps more prudent to educate the highly educated first. Once educated and already possessing the collective wisdom, eventually, they will be able to formulate the programs and policies for educating the farmers and other layers in the rice sector. Apparently, the process of educating highly educated is really very challenging.

More than 20 years passed already since the Philippines started preparation for the entry of imported rice because of the world trade agreement. However, rice importation even tripled. Clearly, we have not yet benefited from the brilliance of this bunch of highly educated experts. Perhaps they are aligned in a different direction. Like a hitter in baseball, the foot and body position, leg bend, and swing position require correction. What if we correct their respective swing positions to adjust to a particular hit required of them in a specific situation? Somebody will hit a home-run, somebody will hit consistent single, and somebody will hit for the required double when needed. I presume to educate first the highly educated with respect to their roles is a big-time solution.

What will then be the best way to educate them considering that their voices are still what we hear; they provide the best analytical minds; and they love to sensationalize issues, while our national rice self-sufficiency goal remains elusive?

Perhaps it is about time to listen to a group of a little bit educated fool like me, whose ideas are generally far away from what most of the highly educated believe so and practice.

For instance, I am against blaming the rice cartel anymore, for they have invested the needed capital and infrastructure in the rice sector for a long time. They just need to play according to the rules, the ethical rules in particular.

I also suggest not to blame the farmers anymore, for they are not being paid to think for policies and programs. They work hard and take the risk of natural and man-made damages like the drop in rice price. We have to appreciate that most of them support the program of the government at any given time anyway. In other words, most of them will follow the government except probably paying loans they believe come from the government. I presume the unpaid loans of farmers is far less than the amount regularly lost to corruption and government inefficiency.

I do not recommend blaming the politicians. What can we do if they are being elected over and over again? Furthermore, most of them do not know anything about the rice program and they are merely dependent on the highly educated for the laws and policies. For instance, the basis of the Rice Tariffication Law of Senator Villar are studies conducted by respected economists. Senator Villar cannot do it alone and certainly, there are economists who are clearly along the line of thinking of politicians like Cynthia Villar. Patriotism must be for the country first before patriotism to their professions and to the politicians and officials in power.

I do not blame the researchers, technicians, and other employees of all agencies concerned with the rice program because they are merely following orders and applying what the universities taught them. In fact, they just share and like any propaganda by the government on Facebook. I just recently saw these people changing their profile on Facebook in support of the rice farmers. Is this in support of the law that their agency supports or against?

Consequently, it is about time that we the highly educated from the other end of the spectrum, although small in number, accept the challenge of educating our peers. This is the last resort because the best way to educate is not to compete, but to show them the direction that they have been ignoring. The ecosystem of innovation will start from ourselves, the highly educated, which will trigger improvement in every part of the system that will eventually lead to the ecological balance in the country’s pro-farmer rice economy that we desire.

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