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March 10, 2009

Philippines: Rice output to rise to 17.5 metric tons in 2009
The Philippine government has raised its allocation for agriculture to support the ambitious plan of rice self-sufficiency, but analysts said it remains debatable whether the increased budget can boost the rice production as expected this year and help realise the target to become self-sufficient by 2010.

The Department of Agriculture forecasts a rice production to increase by 4.4 percent to 17.5 million metric tons this year, and expects to produce nearly 20 million tons in 2010.

Rice is the country's staple and its supply a key determinant of national inflation. The shortage of rice and soaring fuel prices in early 2008 pushed June inflation rate to a 14-year high of 11.4 percent.

Rolando Dy, executive director of the Center for Food and Agribusiness at the University of Asia and the Pacific, welcomed the government's decision to increase investment in a long-neglected sector. But he didn't think that having money alone will boost rice yields.

"My concern is on project execution and leakages (due to corruption). You need some skills to monitor and supervise big irrigation projects," Dy said.

A study published by the Berlin-based Transparency International noted what a huge amount of government money for irrigation were lost to corruption in the Philippines.

"An investigation by a local anti-corruption group into an irrigation project found that, although 165 million pesos (about $3.4 million) had been spent, there was no sign of a reservoir, dam or an irrigation system. Another inquiry found evidence that officials had committed construction infractions," said the anti-corruption watchdog.

It is never too much to emphasize the role of irrigation, especially in a country which has been importing one million to two million metric tons of rice each year -- equivalent to ten percent of its total consumption -- just to feed its growing population.

Analysts said rice importation isn't the best way to attain food security. The global rice market is thin with only seven percent of harvested rice traded. Exporters like Thailand and Vietnam also have rice-eating populations and will not hesitate to stop exports to protect their domestic consumers.

But the country's geographical limitations (i.e. it's an archipelagic country with a limited land base and is located at a typhoon belt) and the neglect of the farming sector over the years has made the Philippines the world's biggest rice importer.

Data from the World Bank and the Asian Development Bank indicated that in 2000 to 2004, Thailand, the world's biggest rice exporter, spent 7.3 percent of total public sector on the agriculture sector. In contrast, the Philippines could spare only half that ratio for its agriculture sector.

Interestingly, it's the current global economic crisis that led to bigger investment in agriculture. Philippine economic planners, in their attempt to cushion the impact of the crisis, decided to raise the allocation of several government agencies, providing emergency employment opportunities for retrenched workers.

The Department of Agriculture, which received a 25.4 billion pesos (about $520 million) budget last year, will be allotted 42.6 billion pesos (about $870 million) this year. About 40 percent of this year's budget will go to irrigation, according to Philippine Agriculture Secretary Arthur C. Yap.

"We believe that an aggressive rural infrastructure program is a vital component of our plan to inoculate the economy from the impact of a global recession. This is viewed not only from the point of view of job creation but from that of food security as well," Yap said in an economic briefing.

Building new infrastructure, such as dams, is expected to create jobs and a key component of the Philippine government's stimulus package.

Jessica Reyes-Cantos, lead convenor of the advocacy group Rice Watch and Action Network said instead of constructing new dams, it's more efficient to just repair and rehabilitate existing ones.

"It will take a long time before farmers can benefit from new dams," she said.

University of Asia and the Pacific professor Rolando Dy said that a certain portion of the budget should be used for watershed development. "What's the use of completed irrigation facilities if there's no water supply?" he said.

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