Ang Bayan
September 21, 2018

Cost of palay production in Kalinga

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Officials of the reactionary state have been using the high rice prices as a pretext to justify importation. However, palay farmers do not actually benefit from any increase in rice prices.

Rice prices continue to rise simultaneously with its cost of production, while farm gate prices remain low.
Kalinga is among the provinces with highest palay (unhusked rice) production in the country. Tabuk, its capital city, is known as Cordilleras rice granary. About 23,000 hectares or 37% of the total 116,000-hectare land area of the province are ricefields. Adjacent to Pinukpuk and Rizal, areas where large rivers converge towards the Chico River, the entire province produces up to 176,000 metric tons (MT) of palay every season.

Despite this, farmers fare badly in Kalinga. Overall, they spend up to P45,000 to farm a hectare of land. This includes expensive farm inputs (fertilizers, pesticides and herbicides) produced by foreign agro-chemical firms. (See table.) Machinery rentals, wages and transportation costs are also high. These are all shouldered by the farmer. Under favorable weather conditions (no typhoons and such), a farmer can generate a revenue of up to P73,893. Deducting the cost of production and the landlord’s share (P24,630) amounting to a third of the revenue, the farmer is left with a net profit of P4,508. Divided over four months, his daily income will only amount to P37.50/day, which is not enough to buy even a kilo of rice.

Extremely low profits force farmers to borrow money both needed to make ends meet for their families and to procure inputs for the next planting season. This hard-up situation is exploited by usurers who lend fertilizers and/or pesticides at high interest rates or under the “palit-palay” or land “sanla-bili” schemes.

Interest rates for fertilizer and pesticide loans can reach up to 5.7%. This amount will be deducted from the farmers’ sales. Under the “palit-palay” scheme, a P1,000 loan means an additional two cavans of palay as payment. If the farmer opts to pay the interest, the usurer charges 5-15% per month or up to 20-60% every harvest. Under the “sanla-tubos” scheme, land is valued at P50,000-60,000 and used as collateral. The farmer can reclaim the land by giving his harvest to the usurer within a certain period. Failure to raise the said amount is tantamount to the confiscation of the land by the usurer under the “sanla-bili” scheme.

In addition to this, farmers’ livelihoods in the province, especially in the Rizal plains, are endangered by land grabbing. This is true in the case of the farmlands in Hacienda Madrigal which cover the barangays of Babalag East, Babalag West, Macutay, Bolbol, San Pascual and San Quintin. Through a deed of assignment, Don Vicente Madrigal was able to transfer the title of the hacienda to Susana Realty, Inc., a company also owned by their family. Because of this, farmers have been repeatedly evicted from the said hacienda. The worst demolition happened on June 25, 2007 when nine were killed, four wounded and many illegally arrested in what has been called as the Malapiat Massacre.

Harmful policies

Almost a third of the cost of production are spent on buying foreign seeds and agro-chemical products peddled by the Department of Agriculture. These include hybrid seeds such as RC4, RC14, IR10, IR36, and IR64 among others. These seeds are from the International Rice Research Institute (IRRI) which is funded by transnational corporations such as Aventis, Bayer, Cyanamid, Monsanto at Novartis. The accumulated sales of giant companies such as Bayer, Pioneer, SL Agritech, Monsanto and Syngenta in the province alone reach up to P584 million annually.

Rising prices of petroleum products due to new taxes are also jacking up the cost of production. This year, oil prices increased on average by P12/liter.

Aside from the high cost of production, the state only provides meager agricultural services. This includes the lack of irrigation mainly in Tabuk and Pinukpuk. Water hardly reaches most parts of the said 6,180-hectare land. Despite this, the National Irrigation Administration still collects fees from peasant in the entire area even if they are not able to avail any of the said institution’s services.

AB (2018-09-21): Cost of palay production in Kalinga