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Rice and Corn Production Status and Outlook

Food security and agriculture productivity is a perennial concern of the government due to its on-going offensive against poverty. The annual output of rice and corn, being the country’s staple food, is regularly monitored by the Department of Agriculture (DA) through the Sub-Committee on Cereals (SCC). The SCC is composed of different DA Bureau, input suppliers (machinery, fertilizers, etc.), financial institutions, farmer organizations and other government entities mandated to ensure the availability of food supply. It regularly meets to discuss food security issues, monitor production and bottleneck areas, and formulate action plans to resolve problems arising from their areas of concern.

Last February 26, 2004 RBAP attended the SCC meeting at the NAFC Conference Room at the Department of Agriculture in Diliman, Quezon City. The participation of RBAP in this and similar discussions is essential as it provides RBAP and its members first-hand access to information about the current condition of the agriculture sector – the major client base of the rural banking industry.

PAG-ASA reported that the February 2004 weather situation of the country is neither too hot nor too cold. The weather condition is affected by the Northeast Monsoon, the tail end of cold front, easterly wave and ITCZ, with one tropical cyclone named TD Ambo last February 14, 2004. Rainfall distribution is less than 100 mm over the western section and 100-300 mm for the rest of the country.

Furthermore, PAG-ASA projected that for the month of March, the weather condition and rainfall level will almost be the same as the previous month except for an expected 300 mm rainfall over the provinces of Surigao and Northern part of Davao Oriental. Temperature range is likely to range from:

* 20-32 degrees Celcius – Luzon
* 23-31 degrees Celcius – Visayas and
* 23-32 degrees Celcius – Mindanao

The Bureau of Agricultural Statistics reported on the previous (2003) and projected (2004) rice and corn production. The 2003 rice production is 13.4 million MT – higher by 1.7% than 2002. Corn production in 2003 reached 4.6 million MT- 6.9% higher than the 2002 record. These increases are mainly due to the wider use of hybrid and certified seeds, proper fertilizer and input application, favorable weather and lesser incidents of pest and disease infestation.

For the first half of 2004, palay and corn crops production are expected to continue on their upward trend. Most of the increase are expected to come from Western Visayas, Socksargen, Cagayan Valley, Central Luzon and ARMM due to the expansion of would-be harvest areas for the quarter, the Quick-Turn-Around program of the government and adequate rainfall in non-irrigated areas.

The representative of the National Food Authority said that “that despite the recorded increase in production of rice and corn, the government will still import additional supplies because the current inventory is still insufficient relative to the 27 MT requirement per day”. Total approved imports is 810,000 MT and the first 500,000 MT importation has arrived last February 16, 2004.

The Bureau of Soil and Water Management presented statistics on water supply for both irrigable and non-irrigable areas. It was reported that water supply is still adequate to meet the projected demands (agriculture, industrial, commercial and residential) with the current average water availability of 4,500 cu.m. per capita and 3,200 cu.m. by 2025. However, rapid population growth, urbanization and industrialization has put pressure on the availability of water supply and has caused a number of groundwater depletion, which resulted in salt water intrusion in some urban areas like Manila, Cavite, Iloilo and Cebu. To address the above problems, the following were recommended: (i) to improve and optimize the irrigation systems; (ii) to conduct capacity-building among water users in the organization and management of irrigation systems; (iii) to develop and adopt appropriate water saving farming practices and technologies; and (iv) to promote high producing crops with higher yield per unit water use.

Finally, the special issue on ASEAN-China Free Trade Agreement (FTA) was discussed. The FTA’s negotiation will commence on March 12, 2004. Under Art. 1 to Art. 8 of the FTA, a progressive elimination of tariff on all agricultural products will be proposed. However, the Philippines will try to recommend for a zero tariff on all products (not limited to agricultural products only). Being one of the first six ASEAN members, the Philippines is expected to have tariff free products (specified in Art. 1 to 8 of the FTA) by 2010.