Tuesday, April 08, 2008

"Rice crisis": this palay seeds subsidy could be counterproductive!

Government is set to give a P1,500 subsidy per bag of hybrid rice during the wet season (May-Oct) this year supposedly to boost rice production. Hmmm, sounds good at the surface, but I have this feeling this subsidy might actually stunt the growth of the rice seed industry in the long run, an industry that you need to nurture if we want to have a vibrant rice industry. How?

One effect is corruption. Under the government’s rice subsidy program, farmers only pay about half the price or P1100 per bag per hectare for a hybrid seeds that’s supposedly would cost P2,600 since the government, through the Department of Agriculture, provides the subsidy amounting to P1500 per bag per hectare. So farmers get cheaper seeds, right?

Yes, but it doesn’t follow that the seeds will be there when he needs it. Why?

This is how the whole thing works: the seeds are distributed by the municipal agricultural officers (MAO). They also serve as conduit of the government subsidy amounting to P1500 per bag. Once the farmers give the “farmers equity” or his payment for the seeds that comes from his pocket to the MAO, he gets the seeds, and the seeds producers/suppliers then collects the payment—P1100 from the farmer and P1500 subsidy per bag from the government through the MAO/LGU—totaling P2600 per bag per hectare.

But in reality, many of these MAOs, once they got the cash both from the farmers or the money from government subsidy simply keep the money. That's why I heard anyway from lots of seeds producers all over the country. And sometimes, the subsidy money is not there so the seed producers ended up collecting nothing. Many of the seed producers these days still have collectibles worth millions of pesos from the MAO/LGUs from the last crop. Now, they are being requested to provide the seeds again for a government programs that has not been up to date in payments. Do you think they will deliver the seeds this time? Your guess is as good as mine.

This subsidy program is so complicated that it’s so prone to corruption!

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