New group bats for rice contract farming

President Arroyo has received a proposal from a newly formed agricultural company to put up contract rice farming in the country, which would increase the employment of human resources in the farm, boost productivity and food security.

In a project proposal submitted to Malacañang, the Agricultural Productivity Development Corp. (APDC), proposed to link up with local government units (LGUs), rice traders and farmers to establish contract rice farming – a registered intellectual property of APDC and 24 post harvest facilities or economic unit centers (ECUs) within the first two years and 24 centers every two years thereafter or a total of 72 centers in eight selected rice producing provinces all over the country.

Victor A. Domingo, President Assistant for Eastern Visayas, recently wrote President Arroyo about the program, which would convince farmers to go into contract rice growing using the hybrid Gloria rice and the appropriate technology to maximize productivity.

Leocadio Sebastian, executive director of Philippine Rice Research Institute (Philrice), said APDC’s program is highly commendable, adding the system will help the farmers to use modern technology and reap greater benefits from rice production.

The eight provinces that produce 40 percent of the national rice output are Cagayan, Nueva Ecija, Mindoro Occidental, Sultan Kudarat, Isabela, Tarlac, Iloilo and North Cotabato.

The Philippines, one of Asia’s largest rice importers, recently bought 400,000 tons of rice from Vietnam suppliers, who are also expected to win the bulk of the 500,000 tons sought by Manila in a tender.

At the end of a six-year period, the corporation explained, three million jobs would be created and 500,000 hectares of rice lands developed.

APDC, said each economic unit center will require about P300 million for infrastructure and equipment, which would be financed through a loan of $250 million from the Kennedy Financing Inc., a US-based financing institution, and the balance of P50 million will come from the proceeds of the issuance of eight percent preferred shares by APDC to be sold to rice traders.

"We will engage in agricultural activities that would enhance the productivity and efficiency of small-scale farmers, provide support to socialized farming, promote organic farming and employ technology compatible with the preservation of our natural resources," APDC added.

The American company has agreed to finance the planned 72 ECUs.

Furthermore, the project would generate payment of P3 million business tax yearly to each LGU, a provincial levy of P10 per 50-kilo bag of palay produced in the province, and adopt an efficient collection of irrigation fees for the National Irrigation Administration.

The project seeks to increase farmers’ productivity by 50 percent in the contract area that produces 40 percent of the national output in order to achieve 20 percent growth in four years, thus attaining self-sufficiency in rice in three years.

APDC added that it would adopt the technology endorsed by the Department of Agriculture and the Philippine Rice Research Institute, which have agreed to train the firm’s technical personnel. Philrice may also deploy experts to assist them in their operations.