Farmers earned more in 2024 despite higher palay cost – PSA

MANILA, Philippines —   Rice farmers still had higher income last year despite spending more to produce a kilo of palay, thanks to higher farmgate prices that mitigated an uptick in labor costs.

On average, farmers spent P14.52 to produce a kilo of palay last year, at least seven percent more than the recorded cost of P13.54 per kilo in 2023, according to the Philippine Statistics Authority (PSA).

Despite the increase in cost, palay farmers still earned more as they received P0.61 for every kilo of palay sold last year, compared to the P0.47 net profit-cost ratio in 2023.

Cost-wise, farmers spent P59,695 on average per hectare for palay, which was 5.67 percent higher than the previous P56,491 average total cost.

Labor cost, which accounts for at least a third of palay production, drove up the increase in farmers’ total costs. PSA data showed that palay farmers spent close to P30,000 for labor, whether in cash, in kind or imputed.

The labor spending was three percent higher than the P28,378 per hectare recorded in 2023.

Furthermore, palay farmers spent more on seeds, with total costs reaching P4,316 per hectare from P3,677.

However, the increase in farmers’ gross returns last year driven by higher farmgate prices outpaced the increase in their expenditures, resulting in higher earnings on a per hectare basis.

Palay farmers, on the average, had a gross return of P95,906 per hectare, about 16 percent higher than the P82,914 in 2023.

In terms of net returns, palay farmers received P36,211 per hectare, over a third more than the P26,423 they got two years ago.

The average farmgate price of palay last year rose by 18 percent year-on-year to P23.48 per kilo from P19.88 per kilo, PSA data showed.

Philippine Chamber of Agriculture and Food Inc. president Danilo Fausto said the government should consider extending subsidies or financial assistance to farm workers to slash palay production costs.

Farm workers, who are hired by owners of the land, are not covered by the government’s current cash assistance programs or ayuda, Fausto said.

Labor costs in agriculture will continue to increase because of rising costs of living and inflationary pressures, he added.