Assessment of the rice industry in Capiz as a basis for developing an Industry Rice Cluster / Gerbe B. Dellava

Year : 2012

Number of Pages : 63 leaves

Adviser : Dr. Roger D. Posadas

Executive Summary

The study was conducted to assess the state of the rice industry in Capiz in terms of productivity and its impact on the farmers. Capiz is a province with a total land area of 2,633.2 square kilometers characterized by plains, rolling hills on the southern side and coastal and swampy areas on the northern side. It is one of the four provinces in Panay Island and the biggest island comprising Western Visayas. It has 701,664 people according to 2007 census and has a population density of 267 person/square kilometer. The province is composed of 16 municipalities and one city, the City of Roxas, its capital. Each of all the municipalities and the city has areas developed for rice land. Capiz has developed 50,000.50 hectares of riceland, 35 percent of which are irrigated. These are tilled by 44,647 farmers owning or farming an average of 1.12 hectares each. These farms are planted to rice 2.43 times every year. Capiz contributed 17.6 percent of the regional rice production and accounting 2.4 percent or 388,093 MT in 2009 of the national production. The average yield per hectare in 2009-2010 was 3.385 MT/year which means the yield was only 1.39 MT/hectare per crop. The average cropping frequency is 2.43/year (2009). The best practice was 6.1-10.3 MT/hectare according to Sebastian, Alviola and Francisco (Bridging the Rice Yield Gap in the Philippines FAO, 2000). Although the conditions were different from that of Capiz at the time the study was conducted, the message here says it can be done, and this stands as a challenge to Capiz farmers. Based on the value chain study, the production cost according to BAS was Php10.92/kg in 2009. The farm gate price for the last five years was P13.00/kg, in effect, the farmers earned a margin of Php2.08 kg only or an income of Php2,891/hectare/cropping in four months. At 1.12 hectare average farm size, each farmer earned a meager Php3,238.00 during the 4-month cropping period. It was even less at Php1,900.00 based on study by CapSU during the October 25, 2011 R&D Cluster Planning Workshop, where all costs not normally considered were accounted like the farmer's or his familities' time spent on the farm during the cropping period. The OPA's recommended farm budget were not followed due to lack of fund, thus, the farmers settled for a lower input, at Php10,978/hectare (based on interview of 40 farmers in 2012). The study revealed that the major cause of low productivity was attributed to cultural practices and partly, environmental factor. These include practices in land preparation, crop establishment especially choice of seeds and crop management. In land preparation, no soil analyses were conducted prior to fertilizer application. Fertilization was mostly based on intuition. It was not known whether the pH of soil was within the recommended level and which type and how much fertilizer was actually needed on specific soil. The lead agency in rice production in Capiz, the OPA were using the rice production protocol developed by PhilRice known as "Palay Check". This is their banner technology on rice. Even so, this protocol does not include soil analysis during land preparation. In the case of crop establishment, the selection of seed was very important. Ideally, hybrid rice seed is the best (Php3,500/bag/ha), followed by certified seeds (Php1,200-1,300/bag/ha). But due to low farm budget, the farmers settled for inbred seed which costs Php800.00 only per hectare. Another problem along with this activity is the manner of planting. The farmers are still using the manual broadcasting method where seedling is not uniform and requires three times more seeds than transplanting method or when mechanical drum seeder is used. In these methods, the distance and amount of seed or seedlings sowed are uniform and calibrated to what is necessary only. All the above factors were actually aggravated by farmers' attitude. They refuse to sustain the recommended technology taught to them. They often revert back to their old practice when the AEWs missed following them up on regular basis.

Adding to the woes of the farmers was the lack of post-harvest support facilities that will enable them to wait for a better price before disposing their produce. The four warehouses of NFA in the province were not enough to serve all the farmers' needs. In fact, it was not the farmers who benefitted most from NFA facilities, instead, it was the private traders dealing with NFA who were taking advantage of the opportunity because they have resources. In addition, the changing climate was likewise taking a toll on the farmers especially those with farms located in low lying areas. Using SWOT Analysis and Porter's Diamond Model, it was determined that the industry has the potential to be developed into a cluster. The development fronts were identified as well as the cluster players. The development fronts were : land preparation crop establishment crop management harvest-postharvest value-adding support services farm mechanization and irrigation. The key players with their roles in the cluster are described below : CapSU-shall access the available technologies and information by forming alliance with RDIs and serve as conduit for all the resources available applicable to the cluster. Under this mechanism, CapSU will act as virtual extension arm of the RDIs DA-in the national level, it is responsible for ensuring the rice sufficiency program of the country. In the provincial and municipal level, the OPA and OMA are tasked to provide the technical and logistic support to the industry to attain their committed target NIA-tasked to provide irrigation service to the cluster using both conventional and non-conventional irrigation system. Non-conventional system relates to small farm reservoir or small water impounding irrigation system NFA-price stabilization function, it also provides drying, milling and warehousing services GFIs to lessen the exposure of the farmers to usury by providing new fund portfolios designed to counter the offer by private lenders DOST provides direction and fund for the industry as well as technology generation. NGOs shall work on the social dimension of farming to prepare the farmers adopt modern technologies Private Suppliers, Traders-They fill in the gap resulting from inadequate support services provided by the government. They need to be regulated Farmers-being the most vulnerable and oppressed member of the cluster, they should be converted from mere farmers to become farmer-entrepreneurs and LGUs are responsible for local rice industry department by providing direction, funds and other resources in order to atttain the provincial production targets. Other support agencies and facilities located within the province shall be treated as direct cluster component. Thus, by assembling and concentrating direct and indirect support services in rice industry into a cluster in one geographic area, the meager industry resource can be optimized. Problems can be address at once in real time at minimum cost if these support services are located near each other.