Recent storms to increase cost of producing palay
The cost of producing palay (unmilled rice) could increase even if farm input prices remain unchanged as weather disturbances have slashed yields, according to Federation of Free Farmers (FFF).
“If calamities reduce yields, and costs remain basically the same, then the cost per kilo will increase, and so will the profit per kilogram,” FFF national manager Raul Montemayor said in a message to the Inquirer.
Montemayor said farm-gate prices, or the price received by farmers for selling their produce to traders, would need to go up to maintain farmers’ income despite the costs involved in producing the staple food remaining the same.
“But this may not happen if cheap imports continue to flood the market because of the reduced tariffs,” he added.
Varying across regions
In its report, the Philippine Statistics Authority (PSA) said production cost for palay averaged P13.38 per kilogram (kg) in 2023, down by 10.7 percent from P14.98 per kg the previous year.
Among the regions, Central Visayas recorded the highest production cost at P18.70 per kg while Central Luzon had the lowest at P11.60 per kg.
The PSA said average production cost per hectare amounted to P55,814 last year, a 2.7-percent increase from P54,373.
It also said Cagayan Valley had the highest cost at P72,255 per hectare while the lowest was recorded in the Bangsamoro Autonomous Region in Muslim Mindanao at P41,446 per hectare.
Meanwhile, net returns stood at P27,033. Central Luzon posted the highest net return of P50,198 per hectare, followed by Northern Mindanao with P42,413 per hectare.
The latest PSA report did not specify the earnings of palay farmers for every peso they invested. In 2022, the statistics agency said farmers earned an average of 20 centavos for every peso spent in cultivating the commodity.
The Department of Agriculture (DA) recently slashed its estimate for this year’s palay output to 19.3 million metric tons (MT), implying that the figure could decline further following the adverse impact of typhoons on the country’s agriculture production.
On the sidelines of the opening of Kadiwa ng Pangulo Expo 2024 in Pasay City held last week, Agriculture Secretary Francisco Tiu Laurel Jr. said palay production “might decrease because of the storms.”
The DA had said losses averaged 500,000 MT to 600,000 MT annually due to storms and other natural calamities.
This is not the first time the DA revised its palay output projection for 2024. In October, the agency pegged the production volume at 19.41 million MT, down by 3.1 percent from a previous projection of 20.04 million MT.
