LGUs eyed as guarantors in Plant Now, Pay Later scheme

MANILA, Philippines - To make the “Plant Now, Pay Later” program feasible and sustainable, SL Agritech, the country’s largest supplier of hybrid seeds to the Asian market, is forging agreements with the local government units making the LGUs guarantors of farmer-participants in paying for the seeds and fertilizers extended to them under the program.

The scheme was devised after SL Agritech experienced difficulty collecting dues from the participant-farmers in the last dry crop planting season, leaving the company with a huge inventory of collectibles.

SL launched the first partnership with LGU acting as guarantor for the loans, in Occidental Mindoro with Gov. Josephine Sato subsidizing 50 percent of the cost after the dry season harvest of 2011 and until the wet season crop. Covered by the program are 800 hectares of rice lands planted to SL’s hybrid rice seeds SL8.

Regions so far covered by the Plant Now Pay Later program are: Cordillera Autonomous Region particularly Tabuk, Kalinga; Region 3 namely Cabiao, Nueva Ecija and La Paz, Tarlac; Region 4-B particularly Naujan, Oriental Mindoro, Rizal, Palawan and Occidental Mindoro; Region 5 in Nabua, Camarines Sur; Region 6 in Villadolid, Negros Occidental and Region 8, in Dolores, Eastern Samar.

Cagayan Gov. Alvaro Antonio and Isabela Gov. Faustino Dy have both proposed to SL Agritech that farmers pay immediately half of the seeds/fertilizer cost and the other half upon harvest. This will reduce the risk to be guaranteed by the LGUs.

Last Feb. 24-25, the program was launched in Region 12in Sultan Kudarat in 17 hectares.

In an interview, SL Agritech’s chairman/CEO Henry Lim Bon Liong said ideally if the national government, through the Department of Agriculture, will encourage interested farmer-participants to plant hybrid rice in irrigated lands, this would have reduced the risk for our company to propagate the hybrid rice program.

However, DA Secretary Peoceso Alcala had shown his disinterest in the hybrid rice production program and would rather push the traditional low-yielding varieties and organic farming, leaving SL Agritech and other hybrid rice propagators with the burden to massively promote the tried-and-tested hybrid rice technology of China (which enabled it to feed its billion people and export excess grains to rice-deficient countries like the Philippines).

The country has four million hectares planted to rice but less than one million is planted to hybrid rice (with proven yields of 9 to 14 tons per hectare). The DA is not bent on extending subsidies to hybrid rice. To subsidize one million hectares the government needs P5 billion, or just a tenth of the amount used in importing the grain from Thailand, Vietnam, Cambodia, Indonesia and even China, Lim said.

SL Agritech has been exporting its hybrid rice seeds (SL 8) to neighbors like Indonesia, Thailand, Vietnam and Cambodia, a portion of which it ships back to the Philippines for use in the hybrid rice production. This is because SL Agritech can’t expand its seeds production area without entailing huge costs.

It has also lately been exporting its parental lines (F1) for seeds production to Vietnam, Indonesia and soon, Cambodia which they will in turn sell to SL Agritech to boost its stock of seeds.