By Sosimo MA. Pablico, PhilRice

The government subsidy for hybrid rice production is now about to end, but members of the Davao Oriental Seed Producers Cooperative [DOSEPCO] in Banaybanay, Davao Oriental remain as aggressive as before in producing the much needed seeds of the public hybrid Mestizo 1.

In contrast, members of other cooperatives have greatly reduced their area for AxR production, as they are stymied by the gradual phase out of the subsidy, which ends in 2007 wet season as dictated by the Philippine Medium Term Development Plan.

For many of the innovators and early adopters, all the prospects from hybrid rice seed production are almost gone already, as the government is about to completely abolish the subsidy. According to Ginintuang Masaganang Ani national rice coordinator Dr. Frisco Malabanan, the Department of Agriculture will already provide other productivity-enhancing and cost-reducing interventions after the subsidy is phased out..

The gradual phase out of the subsidy actually started in 2004 wet season when the government first reduced the subsidy to Php1,750 per bag. The producers’ cooperatives were required to sell their seeds to the farmers at Php650 a bag [20 kg each] so that their income per bag was still P2,400.

During the 2005-2006 dry season [November to April], the subsidy was reduced further to Php1,100 a bag. This was further trimmed to Php1,000 last season – 2006 wet season. However, they were given the option to increase their selling price to farmers.

After enjoying total subsidy from the government [through PhilRice], which bought and sold their seeds to the farmers, their immediate reaction was one of resistance. They were afraid that they would not be able to sell their harvest and, hence, many of them greatly reduced their area for hybrid rice seed production or totally stopped producing the much needed seeds and reverted to inbred seed production.

Undaunted

In Banaybanay and Lupon, Davao Oriental, however, members of the DOSEPCO [Davao Oriental Seed Producers Cooperative are undaunted by the impending abolition of the price subsidy for hybrid rice seeds. Incidentally, DOSEPCO is headed by Henry Lim [not the owner of SL Agritech], a Pangasinan-born Ilocano with a business acumen who now resides in Lupon where he cultivates 10 ha for hybrid seed production.

While it is true that the members’ total 515 ha for the production of Mestizo 1 and Mestizo 3 seeds in 2004 dry season was drastically reduced to 295 ha in the following wet season, the total area in 2004 wet season was even more than the area planted during the 2003 dry and wet seasons [203 ha and 237 ha, respectively].

The truth is that DOSEPCO members planted a much greater area in 2004 dry season because they were told that this was the last time for the government to buy their produce at Php2,400 a bag. Thus, they wanted to take advantage of the last opportunity to be completely cuddled by the government.

Thereafter, DOSEPCO members maintained their previous area for hybrid rice seed production as follows: 2005 dry season, 241 ha; 2005 wet season, 280 ha; 2006 dry season, 211 ha.

Lim promised to himself that despite the change in government policy, DOSEPCO is not going to suffer from any setback provided the members [only 17] give him their total support. He attends meetings of production clusters, makes it a point to talk to the regional directors and rice production coordinators, and negotiate for the delivery of seeds to their respective territories.

He gives his contact numbers to almost everybody whom he meets, hoping that one of these days the fellow would call him asking for hybrid seed supply. In the Visayas, he travels regularly to Regions VII [Bohol, Negros Oriental, Cebu and Siquijor] and Region VIII [Biliran, Northern Samar, Eastern Samar, Leyte, Southern Leyte].

Henry said his approach is very effective, as he gets to know right away the seed needs of the various production clusters. At the same time, he gets first hand feedback on the performance of their seeds.

He added that those who have bought hybrid rice seeds from DOSEPCO spread the good words about their seeds to other farmers who would eventually contact the coop office. DOSEPCO gets orders even at the middle of the season and so they immediately deliver the seeds that were not sold at the start of the season.
Otherwise, new orders would be served after the harvest.

Indeed, Henry’s strategy has been very effective as shown by the coop’s volume of sales. For instance, in 2005 dry season DOSEPCO delivered to seven regions a total 10,162 bags worth Php24.3888 million as follows: Region VI, 200 bags; Region VII, 1,250 bags; Region VIII, 3,375 bags; Region IX, 500 bags; Region XI [Davao], 3,000 bags; Region XII, 437 bags; and Region XIII, 1,400 bags.

Deliveries made in 2005 wet season to six regions even increased by more than 60 percent to 16,829 bags worth P40.3896 million as follows: Region VII, 1,350 bags; Region VIII, 5,200 bags; Region IX, 1,200 bags; Region XI, 3,083 bags; Region XII, 1,746 bags; and Region XIII, 4,250 bags.

Asked about their selling price with the gradual phase out of the subsidy, Henry said they were selling briskly at Php1,300 per bag in the 2006 dry season and Php1,400 per bag in the 2006 wet season. With the partial subsidy, the members are still getting a total Php2,400 per bag.

However, they can no longer increase the selling price beyond Php1,400 per bag after the complete phase out of the subsidy next year, knowing fully well that farmers will no longer be able to afford a much higher price.

On the other hand, the members could not also afford to sell their seeds at only Php1,400 a bag. Thus, they decided that the coop should also engage in hybrid seed production so that the harvest would serve as their buffer in the marketing of seeds without sacrificing the profit of individual growers.

Henry said that for the previous wet season alone, DOSEPCO rented 43 ha for hybrid seed production. The rental is Php25,000 a hectare plus real estate tax and irrigation fees. Henry projected that if the coop gains Php30,000 a hectare from this venture, it would have Php1.29 million as a buffer per season and, therefore, the members will remain confident and bullish in producing the seeds of the public hybrids.