DA to stop hybrid palay seed subsidy after 2007

The Department of Agriculture (DA) will push through with plans to eliminate its hybrid rice seed subsidy program by 2007.

"The hybrid rice seed subsidy program will no longer be extended when it expires by end 2007, the government will completely disengage itself from the program and it will be the private sector which will have full control of distributing hybrid rice seeds to farmers," said National Food Authority (NFA) Administrator Gregorio Tan Jr.

Under the five-year hybrid rice seed subsidy program, the Philippine Rice Research Institute (Philrice) which is tasked to oversee the DA’s Ginintuang Masaganang Ani (GMA) rice program last year, increased its subsidy to farmers such that farmers buy hybrid rice seeds from government at P65 per kilo or P650 per 20-kilogram (kg) bag.

Prior to this, the distribution cost to farmers was P1,250 per bag.

"It is hoped that by next year when the program expires, many more progressive farmers have adapted the hybrid rice technology and can absorb the cost of buying the seeds at real market prices, along with the costs of other inputs," said Tan.

Various seed companies have been clamoring for the scrapping of the subsidy program.

Among them, Bayer Cropscience Inc., one of the major global companies in the field of research, development and marketing of seeds, has been pressuring the DA to phase out what it called the price-distorting hybrid rice seed subsidy program to reflect the true costs of producing hybrid rice and create a level playing field for all competing seed suppliers.

"Subsidies are good to jump-start programs, but should have a clear phase out program to ensure the sustainability of programs. Increasing and maintaining the subsidy will definitely lead to market price distortion because companies not accredited by the government as hybrid rice seed supplier, have to compete with artificial pricing," said Bayer.