Private rice sector pressed DA to partner with private enterprises in P10B rice fund implementation, buy farmers’ palay at all costs

Most modern integrated rice complex in Alang Alang, Leyte

May 23, 2019

For any questions or interview requests, please contact 0929-715-8669, 0917-1026734; Growth Publishing for PCAFI)

The private rice sector has pressed the Department of Agriculture (DA) to partner with private enterprises on the implementation of the P10 billion Rice Fund and to unequivocally buy farmers’ palay as a commitment to local rice industry despite liberalization.

   Enterprises participating under a Philippine Chamber of Agriculture & Food Inc. (PCAFI) forum asserted the private sector’s role in the effective implementation of the Rice Competitiveness Enhancement Fund (RCEF) as government may fail to properly implement it.

   In a PCAFI dialogue with DA Undersecretary (Operations) Ariel T. Cayanan,  Chen Yi Agventures, a company that built the most modern rice processing plant in Alang Alang, Leyte. asked DA to allow participation in 4 subsectors of rice operations.

   These are mechanization, seeds distribution, lending and extension – where the private sector has expertise in.

   The Federation of Central Luzon Farmers’ Cooperatives (FCLFC) also pressed DA to buy farmers’ palay—at a price based on quality offered, rather than reject these as rice farmers had disappointedly experienced.

   The proposal of Chen Yi Agventures has been filed earlier with DA Secretary Emmanuel F. Pinol.

   “As one from the private sector, we’re very grateful for Secretary Pinol’s  help.  He loves our program. He said we will work together to help implement the Rice Fund,” said a Chen Yi Agventures entrepreneur. “Our proposal is with the DA. We discussed it at length with Secretary Pinol.  And it’s not a new dialogue.”

DA Secretary Emmanuel Pinol with Chen Yi Agventures investor  

Providing these services (seeds supply, mechanization, lending, training & extension) on a large scale to farmers needs private enterprise.

   “Implementation is something the government is not good at. But the private sector can teach farmers how to plant seeds and monitor these daily.  It can own and maintain the machines, and teach farmers how to use these,” said the Chen Yi entrepreneur.

   “Merely giving machines away to farmers is not the solution. The problem DA encountered is farmers just abandon or sell the machines because they don’t know how to use these.”

   Chen Yi stressed the importance of raising rice farmers’ productivity.

   “That rice price will go down due to the rice tariffication law is only one concern. The most basic question is not whether price will go down, but that the yield of farmers remains low.  Even if palay price goes up, farmers’ income is low.”

   “Their ability to get out of poverty is not dependent on price of rice, but on productivity. You think it’s not relevant, it’s very important.  Productivity is what the Rice Fund should address.”

   Chenyi put in P1.7 billion investment in a highly-mechanized, integrated rice plant in Leyte which uses the most advanced technology in Visayas and Mindanao. Its operation is from planting seeds to planting rice, harvesting,  drying-processing, and distribution.

   The program’s target is to lower production cost from P14 per kilo to P6 per kilo, competitive to Thailand and Vietnam.  That uplifts Filipino farmers out of poverty through a contract farming scheme.

   “We want Filipino farmers to experience how it is to have money in their hands. French farmers are so successful in making a lot of money. They have comfortable living because France is taking care of its farmers. Farming is abt food security,”  said Patrick Renucci, Chen Yi French investor, said earlier on national television.

   “France has changed its farming system a long time ago while the Philippines is so behind.  That’s why we believe we have to change how people are framing because food is so important.”

  PCAFI President Danilo V. Fausto said during the dialogue that DA has to beef up capability to implement RCEP considering the present limited budget and capable staff it has.

   DA-Philmech (Phil. Center for Postharvest Devt. & Mechanization) hardly has people and equipment to carry out distribution of P5 billion RCEF fund. 

   “Even Amtech (Agricultural Machinery Testing Evaluation Center)  under the University of the Philippines’ Los Banos is not capable of such supporting that huge task of testing machines to support the RCEP mechanization program,” said Fausto.

PCAFI President Danilo V. Fausto

   Amtech is the agency tasked to test quality of imported machines.  However, even its legal mandate is questionable in order to support DA.

   FCLFC Chairman Simeon T. Sioson also said during the PCAFI dialogue that poor rice farmers in Central Luzon have experienced several rejections from the DA-National Food Authority (NFA) when they sell their palay. 

   NFA had claimed that it buys farmers’ palay at a higher price when dried with a 14% moisture content, but still buy their produce if it’s not dried, only at a lower price.

   However, Sioson said, Central Luzon farmers were compelled to dry their palay after initial NFA rejections. However, when moisture content went below 12%, NFA also rejected them.

   It is unfair to poor Filipino rice farmers that NFA buys Vietnamese and Thai rice at whatever quality they’re in. 

   Even if these are old, long-stocked rice that need spraying for pesticide and bad smell, these are accepted by NFA, Sioson said, while rejecting newly-harvested rice from local farmers.

   Also, Sioson said government still owes farmers in Central Luzon payment for accepted palay—instead of lending to farmers.

Farmer-leader Simeon T. Sioson on Maunlad na Agrikultura

   “Magsasaka po kami ng San Miguel, Bulacan.  Hindi po kami nababayaran ng NFA mula sa mga palay na ibinenta naming. May mga recibo po kami—bago pa mag halalan.  Meron pa nga po na may 10 araw na ngayon, hindi pa nababayaran.  Sana po mabigyan ng sapat at tuloy tuloy na pondo sa Bulacan.” (Growth Publishing for PCAFI)


  1. DA Sec. Emmanuel Pinol with Chenyi Agventures investors
  2. Chenyi’s integrated rice processing complex, Alang Alang, Leyte
  3. PCAFI President Danilo V. Fausto
  4. Farmer-leader Simeon T. Sioson


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