Harvest Time
DOSEPCO, a model in hybrid rice subsidy abolition
By Sosimo Ma. Pablico
Even as the subsidy for hybrid rice production is now about to end, 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.
Unlike other growers who have greatly reduced their area for AxR production, DOSEPCO members are not stymied by the ultimate phase out of the subsidy in 2007 wet season as dictated by the Philippine Medium Term Development Plan.
The gradual phase out of the subsidy started in 2004 wet season when the government first reduced the P2,400 subsidy to P1,750 per bag. The producers’ cooperatives were required to sell their seeds to the farmers at P650 a bag [20 kg each] so that their income per bag was still P2,400.
The subsidy was reduced further to P1,100 a bag in 2005-2006 dry season [November to April], and further trimmed to P1,000 in 2006 wet season. However, producers were given the option to increase their selling price to farmers.
Other growers were afraid 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.
DOSEPCO members have 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.
DOSEPCO chairman Henry Lim (not the owner of SL Agritech), an Ilocano with a business acumen from Pangasinan, said DOSEPCO is not going to suffer from any setback provided its 17 members 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, and 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.
Indeed, Henry’s strategy has been very effective as shown by the coop’s sales volume. In 2005 dry season alone, DOSEPCO delivered to seven regions a total 10,162 bags worth P24.39 million. Deliveries made in 2005 wet season to six regions even increased by more than 60 percent to 16,829 bags worth P40.39 million
Despite the gradual phase out of the subsidy, Henry said they were selling briskly at P1,300 per bag in the 2006 dry season and P1,400 per bag in the 2006 wet season. With the partial subsidy, the members are still getting a total P2,400 per bag.
DOSEPCO members, however, can no longer increase the selling price beyond P1,400 per bag after the complete phase out of the subsidy in 2007, 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 P1,400 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 P25,000 a hectare plus real estate tax and irrigation fees.
Henry projected that if the coop gains P30,000 a hectare from this venture, it would have P1.29 million as a buffer per season and, therefore, the members will remain confident and bullish in producing the seeds of the public hybrids.
(For past columns, click http://sundaypunch.prepys.com/archives/category/opinion/harvest-time/)
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