Price Stabilization Program for Rice and Corn
Isabela Province is one of the biggest corn and rice producing provinces in the Philippines. But, only big traders and middlemen were benefiting and not the farmers who were the real producers. This prompted the provincial government to launch the Price Stabilization Program for Rice and Corn, a partnership between the Provincial Government of Isabela and the National Food Authority.
Beginning in October 2005, a portion of Isabela’s Economic Development Fund was used to subsidize rice and corn production in the province. A sum of PhP2.00 per kilo is added to the support price of the NFA for corn and rice. To promote the program, the provincial government conducted advocacy campaigns and the holding of a buyers-sellers forum. A Memorandum of Agreement between the Local Government Unit and the National Food Authority was also executed. To increase public awareness and acceptance of the project, the local government undertook print and broadcast information drives at the barangay and municipal level, organized meetings and briefings and launched advocacy campaigns.
The price stabilization program helped Isabela’s grains farmers fetch higher prices for their products. It also made the governor very popular among her constituents. Contrary to earlier expectations that the program would not sit well with Isabela’s businessmen and traders, most have actually welcomed the project. When market prices are competitive, the provincial government bids out the stocks of rice and corn to interested traders or businessmen. The income derived from the sale goes back to the provincial fund and is subsequently channeled to help even more farmers for the next harvest season.
So far, the provincial government invested PhP4.5 million and earned a net profit of PhP450,000. While the total funds of the NFA and the provincial government would not suffice to cover all the products of Isabela’s farmers, it is ensuring leverage alongside big traders and middlemen for them to tow the prevailing support price since they are no longer the sole buyers of the staple produce. The governor has even allowed traders from other parts of the country (like Bulacan, Batangas, and Pangasinan), to buy Isabela’s rice and corn harvests and directly negotiate with the farmers. The program actually managed to influence the traders’ prices to go up that the farmers resumed selling to them. As far as the provincial government of Isabela is concerned, the fewer farmers going to NFA, the better.
So far, the program has benefitted 87,500 rice farmers and 85,086 corn producers. The provincial government is set to expand and improve the project in order to serve even more farmers. It plans to make more agricultural facilities available, such as trucks to haul products especially from the remote and inaccessible barangays. It also plans to improve farm-to-market roads and drying facilities as well as to promote the use of organic fertilizers and integrated pest management. This would encourage farmers to produce more as they are ensured of better prices for their products. Meanwhile, the NFA is mulling suggestions to relax its strict standards on moisture content and purity. National and regional officials of the NFA say that other provinces have expressed the desire to have similar programs for their farmers after learning about its success in Isabela.
Price subsidy programs, in general, do not work. But maybe, localities like Isabela, where political will and the support of farmers and traders are present, could make the price support program work.