U.S. Foreign Aid, Investment, and Trade

These three areas of global concern must be inclusive. Foreign aid is about strengthening the capabilities of partner countries to become global partners of the U.S. in global trade and investment. The corn farmer in Iowa that receives a subsidy from the U.S. government must clearly understand why he receives such assistance, not only in the context of being protected by the U.S. economy but being a vital player in global trade and investment. The corn that the Iowa farmer produces is vital to attaining global food security as a feed ingredient for poultry and livestock production in countries without the land resources to grow corn. In effect, the Iowa corn farmer contributes to global food abundance. In the process, it is therefore not about competition, rather about global cooperation not seen by a corn farmer inside the U.S.

There are many more dynamic inclusive foreign aid, investment, and trade business models that every U.S. citizen must understand. Furthermore, U.S. immigration is also a treasure that can contribute to further strengthening the relationship between the immigrants’ mother country and the U.S. in the area of inclusive foreign aid, investment, and trade.

The development of the hybrid rice industry in the U.S. has a wide range of impact that is going to benefit U.S. foreign trade, agricultural collaboration, foreign aid, and global food security as a whole. This is the first project that we have chosen to illustrate the intertwined foreign aid, investment, and trade.

First, it will translate many rice farming areas and rice processing and trading infrastructure in the U.S. more productive as it generates local employment. Second, it will increase the capacity of the U.S. to contribute to the already thin global rice market as hybrid rice promotes an efficient system. Third, immigrants with special skills in rice breeding will have places the employment of their skills. Fourth, the dependence of the U.S. on imported Jazmine and Basmati rice will be locally produced for the requirements in the U.S. as demands of imported rice mostly in the cities and metropolis in the US East Coast and West Coast. Finally, such a system will contribute to stabilizing rice prices as production ventures outside the Philippines can protect the interest of local farmers and the entire Philippine population to stabilize rice supply and prices that unscrupulous traders usually take advantage of.


Enabling Environments

The PL480

The Rice Tariffication Law in the Philippines

Executive Summary

In the US, hybrid rice is grown only in  10 percent of the total rice farming areas. The establishment of commercial hybrid rice production, processing, and marketing venture coupled with seed production in the states of  California, Texas, Arkansas, and Lousiana will contribute to increasing the acreage planted to hybrid rice in the US. There will be an aggregate of  30,000  acres for every hybrid rice production district that will use existing production areas in the covered states. Every farm will use the hybrid rice seeds produced within the production program of the company.

The  objectives of the project are:

  • To engage in an integrated hybrid rice production business in California, Texas, Lousiana, and Arkansas serving 30,000 acres per production district or a total of 120,000 acres with business interests in parental and hybrid seed production,  hybrid rice production, and rice milling and trading. and
  • To market a branded Jasmine type of rice using hybrid varieties as a US-produced product both for domestic and international markets.

The strategies that the project will employ are as follows:

  • The integrated hybrid rice business will establish its own system of seed production and parental materials maintenance to ensure that farmers will receive high-quality hybrid rice seeds.  This hybrid rice seed business unit shall commercialize its own system based on technologies developed in  China, India, and the Philippines.  
  • A contract production arrangement with farmers will establish an integrated hybrid rice seed and contract growing production and marketing system. Partners will include farmers, cooperatives, and landowners.  The farmer cooperators are first assured of the supply of quality seeds of hybrid rice. Support services, which will include technology transfer and marketing,   are vital components of the contract production package. Through organized production, farmers will enter into production arrangement with the company.  Credit assistance will be making use of the existing credit programs in the area.

Hybrid Rice Corporation will be established as a management and holding corporation. It will have subsidiary operations for hybrid rice seed production,  integrated rice production,  and grains milling and marketing.

The initial investment cost in the first year of the project for every production district will be 21.8 $US million for a total of 87.2 million $USD for the entire project. The incremental requirement to meet the capital requirement in the second year will be  21.6 $US million per production district for a total of  86.4 million $US. The total cost of the project is 173.6 million $US.

The main profit centers of the integrated hybrid rice  business will be  as follows:

  • Hybrid seeds sales
  • Branded jasmine type hybrid milled rice

Global Green Hybrid Rice Corporation (GGHRC)  is a viable business venture that will further provide vigor to the rice industry in the US. The venture will generate additional jobs. Overall, it will contribute to improving the value of the rice industry in the US  by producing quality branded rice of high commercial value comparable to the Jasmine rice of Thailand.

Source: International Rice Research Institute, Philippines.

Source; International Rice Research Institute, Philippines