Thursday, October 15, 2015

15th October,2015 Daily Exclusive ORYZA Rice E-Newsletter by Riceplus Magazine

Oryza Overnight Recap – Chicago Rough Rice Futures Hammered Once Again Overnight as Sellers Follow-through on Yesterday’s Action; Soy and Corn Supported After Yesterday’s Rally

Chicago rough rice futures for Nov delivery are currently noted 20 cents per cwt (about $4 per ton) lower at $12.395 per cwt (about $273 per ton) ahead of early floor trading in Chicago. The other grains are seen trading with mixed results overnight; soybeans are currently seen trading about 0.4% higher, wheat is listed about 0.1% lower and corn is currently noted 0.4% higher.
U.S. stock index futures pointed to a slightly higher open on Wednesday amid earnings from big name financial companies and some top-tier data releases that will be closely watched by investors for hints on the strength of the U.S. economy. Earnings could be a particular challenge for stocks this quarter, with analysts expecting a 4.8% decline in S&P 500 profits, according to Thomson Reuters. So far, there's been a trickle of reports, but the season gains momentum Wednesday with results from the major financials and others. On the data front U.S. retail sales barely rose in September as cheaper gasoline weighed on service station receipts, while producer prices posted their biggest decline in 8 months. August business inventories data are also due at 10:00 a.m. and the U.S. Federal Reserve's latest Beige Book at 2:00 p.m. Chinese inflation data, released overnight also weighed on sentiment, cooling more than expected last month, adding to concerns about the health of the world's second-biggest economy. The weak data weighed on Asian and European stocks, with major indices in Europe falling in the region of 1% in mid-morning London trade. Gold is currently trading about 0.7% higher, crude oil is seen trading about 0.6% lower, and the U.S. dollar is currently trading about 0.5% lower at 8:15am Chicago time. 

California Rice Growers Estimate 2015 Output to Fall 8% y/y to 1.55 Million Tons

Oct 14, 2015

Californian rice growers, who are midway through this year's harvest are expecting the state's rice output to decline to around 1.55 million tons, down about 8% from around 1.68 million tons in 2014, according to Capital Press.
The decline in output may be attributed to a decline on acreage as well as yields. Californian farmers planted rice in about 148,000 hectares of land compared to about 172,400 hectares last year due to water shortages. The state is enduring the fourth year of drought, which has led to a significant decline in water levels in most of the reservoirs.
The yields are also expected to decline to about 7 tons per hectare, down from about 7.22 tons per hectare last year.
Meanwhile, water shortages are likely to impact migratory bird habitat this winter, according to the state's Farm Bureau. Californian farmers normally create about 120,000 hectares of managed wetlands during the rice-growing season. But last year they could create only 40,000 hectares of wetlands. This year, the Bureau expects them to create about 20,000 hectares.
Most of the rice growers are expecting prices to increase. If prices don't increase they are concerned that their margins would suffer severely.
California is the second largest rice producing state in the U.S. after Arkansas and typically contributes to about 25% of the total rice grown in the U.S. annually. The state's rice sector employs about 25,000 people grows medium-grain rice and most of the rice grown here is exported.
Currently, export prices of the U.S. medium grain rice stand at around $835 per ton, down about 9% from around $915 per ton at the beginning of this year.

Indonesia Will Decide on Rice Imports after November 2015, Says Minister

Oct 14, 2015

Indonesia, which has signed purchase contracts with Vietnam and Thailand to import rice in case of a need, will decide about the imports in November at the earliest or in December, according to Reuters.
The Coordinating Minister for Economic Affairs told reporters that the decision would be taken after looking at the harvests, which will continue till the end of October 2015.
"We have reached agreements with Vietnam and Thailand. Based on the agreements, Indonesia will decide on the time of the imports. When we put forth a request, they need a month to dispatch," he was quoted.
Though the Agriculture Minister has been saying that the agency has about 1.7 million tons of stocks and they are sufficient till the end of the year, increasing rice prices have become a cause of concern. "The price of rice has increased by 10 percent over the last two months. It indicates that the stocks are decreasing," the Minister said.
Indonesian rice production is likely to be impacted by a drought-inducing El Nino phenomenon, which is expected ti be stronger than that than that experienced in the 1997-1998 period.

Oryza Afternoon Recap - Chicago Rough Rice Futures Continue to Crater on Lack of Action in Cash Market; Grains Reverse Course as Traders Book Profits Following Yesterday's Rally

Oct 15, 2015

Chicago rough rice futures for Nov delivery settled 45 cents per cwt (about $10 per ton) lower at $12.145 per cwt (about $268 per ton). The other grains finished the day in the red as well; Soybeans closed about 0.4% lower at $9.1050 per bushel; wheat finished about 2.1% lower at $5.0825 per bushel, and corn finished the day about 1.4% lower at $3.7900 per bushel.
U.S. stocks traded mixed Wednesday as investors digested earnings reports and economic data. U.S. retail sales barely rose in September as cheaper gasoline weighed on service station receipts, while producer prices posted their biggest decline in 8 months. August business inventories remained unchanged while economists expected a 0.1% increase. The U.S. Federal Reserve's latest Beige Book is scheduled for release at 2:00 p.m. Overseas, equities were lower after weaker-than-expected Chinese inflation data added to concerns about the health of the world's second-biggest economy. In early afternoon trade, the Dow Jones Industrial Average declined 99 points, or 0.58%, at 16,983. The S&P 500 traded down 3 points, or 0.15%, at 2,000, with consumer staples leading four sectors lower and materials the greatest advancer. The Nasdaq traded up 8 points, or 0.16%, at 4,804. Gold is trading about 0.1% higher, crude oil is seen trading about 0.1% higher, and the U.S. dollar is seen trading about 0.1% lower about  1:15pm Chicago time.
Tuesday, there were 2,084 contracts traded, up from 765 contracts traded on Monday. Open interest – the number of contracts outstanding – on Tuesday decreased by 2221 contracts to 12,471.

Nigeria to Collaborate with Brazil to Develop Rice Sector, Boost Production

Oct 14, 2015

The governments of Nigeria and Brazil have decided to work together to enhance agricultural research in Nigeria as well as boost food production and security in the country, according to local sources.
The Permanent Secretary of Nigeria's Agriculture Ministry told local sources that the collaboration would enhance investment in agricultural research in the country. He noted that they are keen on transforming the working structure of Agricultural Research Council of Nigeria (ARCN) on the lines of its Brazilian counterpart.
The work plan especially involves the development of the rice sector, which seeks to achieve self-sufficiency in production. The Ministry is keen on borrowing ideas from Brazil to achieve the task. The collaboration would particularly seek to improve rice cooperatives, rice value chain, rice milling equipment and agribusiness activities.
"The partnership would see Ni­geria attains self-sufficiency in agricultural production with the application of technology, to im­prove its economy, said the Vice President of Nigerian-Brazilian Chamber of Commerce & Industry.
Brazil has also reportedly offered to export rice to Nigeria and has sought the government to relax the barriers on rice importation. However, the Nigerian Investment Promotion Commission (NIPC) Executive Secretary noted that Nigeria is seeking Brazil's support in improving the quality and quantity of rice production in the country as Nigeria itself is a major market.
“We want to borrow a leaf from Brazil to be a major pro­ducer, consumer and be the net exporter in the areas where we have the comparative advantage," she said.
A trade delegation from Brazil that visited Nigeria early this week noted that Brazil's investments in Nigeria would focus on rice production, housing, and waste recycling.

Thailand Cancels Sales of 345,472 Tons of Rice from Previous Auction

Oct 14, 2015

The government of Thailand has cancelled sales of around 345,472 tons of stockpiles rice made in the auction conducted on September 29, 2015, because prices have increased since the auction, Reuters quoted the Commerce Minister.
Thailand will retain sales of around 100,000 tons made to four bidders, according to the Permanent Secretary for Commerce. She told reporters that sales made to about twelve bidders are cancelled due to low prices offered.
This is the seventh auction this year and eleventh one after the military government took over in May 2014. . It sold around 4.56 million tons of stockpiled rice raising around 48.6 billion baht (around $1.36 billion) in the ten auctions conducted since it took over in May 2014.
The military government still holds 13.5 million tons of rice in its stockpiles.
Export quotes of Thai 5% broken rice have been increasing over the past few weeks due to increasing demand from the Philippines and other importing nations. They stand at around $360 per ton, up about $10 per ton from the end of September.

TPP Ensures Gradual Elimination of Rice Import Tariffs in Member Countries

Oct 14, 2015

The Trans-Pacific Partnership (TPP) deal finalized last week has reportedly ensured that tariffs on rice imports will eventually be eliminated by the member countries in the next ten years, according to a statement by the USDA.
Japan, Malaysia, Vietnam and the U.S. have agreed to alter or gradually remove tariffs on rice imports.
Japan, which has been adamant on increasing duty-free rice imports from the U.S. has agreed to initially allow 50,000 tons of duty-free rice imports from the U.S. and gradually increase up to 70,000 tons by thirteenth year. Japan will reportedly increase imports from the U.S. by 2,000 tons from the fourth year of the agreement. Japan will also modify its quota administration to enhance the transparency and effectiveness of the new country specific quota (CSQ). It has also agreed to immediately eliminate its 36 yen per kilogram (12.7% ad valorem equivalent) tariff on other animal feeds, containing rice.
Malaysia will eliminate tariffs on rice, currently ranging from 15-40%, in ten years and lock in tariffs on rice products at zero percent.
Vietnam will eliminate its tariffs on rice, which are currently at 40% with immediate effect. It will also eliminate its tariffs on rice products, currently as high as 35%, in eight years or before.
The U.S. will eliminate tariffs on rice products, currently as high as 11.2%, in zero to 15 years.
Vietnam Plans to Develop National Rice Brand Based on Jasmine Rice Type
Oct 14, 2015
The Vietnam Food Association (VFA) is planning to develop a national brand for Vietnam's rice based on the jasmine type, local sources quoted the Chairman of the VFA.
He told local sources that they selected the jasmine rice type because the fragrant rice exports of the country have increased significantly in recent years. The proportion of fragrant rice exports in the country's total rice exports has reportedly increased to 26% in the first nine months of 2015 from a meagre 3% in 2007. Price of fragrant rice also has consistently increased to current $600 per ton from about $460 per ton in the past.
The VFA Chairman noted that building a national brand would take time. They need to invest in large-scale fields for fragrant rice production to secure stable supply, he said. The VFA is planning to collaborate with a number of corporate partners to develp such fields.
Vietnam exported about 4.35 million tons of rice in January 1 - September 30, 2015, down about 9% from about 4.8 million tons of rice exported in first nine months of 2014, according to data from the VFA. The average rice export price so far in this year stands at about $420.77 per ton (FOB), down about 2.6% per ton from about $432 per ton recorded during same last year.
Export quotes for Vietnam 5% rice have increased during the past month due to new demand from the Philippines. They currently stand at around $355 per ton, up about 9% from around $325 per ton last month. However, they are still 19% lower from their year-ago level of around $440 per ton.

Thailand Rice Sellers Alter Some of Their Quotes Today; Other Asian Quotes Remain Unchanged

Oct 14, 2015

Thailand rice sellers lowered their quotes for 100% rice and 5% broken rice varieties by about $5 per ton each to around $365 - $375 per ton and $355 - $365 per ton respectively. They increased their quoted for Hom Mali rice by about $5 per ton to around $815 - $820 per ton. Other Asian rice sellers kept their quotes unchanged.
5% Broken Rice
Thailand 5% rice is indicated at around $355 - $365 per ton about $5 per ton premium on Vietnam 5% rice shown at around $350 - $360 per ton. India 5% rice is indicated at around $355 - $365 per ton, about $50 per ton premium on Pakistan 5% rice shown at around $305 - $315 per ton.
25% Broken Rice
Thailand 25% rice is indicated at around $330 - $340 per ton, about 5% discount on Vietnam 25% rice shown at around $335- $345 per ton. India 25% rice is indicated at around $315 - $325 per ton, about $35 per ton premium on Pakistan 25% rice shown at around $280 - $290 per ton.
Parboiled Rice
Thailand parboiled rice is indicated at around $365 - $375 per ton. India parboiled rice is indicated at around $335- $345 per ton, about $70 per ton discount to Pakistan parboiled rice last shown at around $405 - $415 per ton.                            
100% Broken Rice
Thailand broken rice, A1 Super is indicated at around $305 - $315 per ton, at par with Vietnam 100% broken rice shown at around $305 - $315 per ton. India's 100% broken rice is shown at around $300 - $310 per ton, about $25 per ton premium on Pakistan broken sortexed rice shown at around $275 - $285 per ton.

South Korea's 2015 Rice Output May Increase Slightly on Better Yields, Says Ministry

Oct 14, 2015

South Korea's rice production is estimated to increase about 0.4% to around 4.258 million tons, basis milled, in 2015 from around 4.241 million tons in 2014 due to higher yields, local sources quoted the Ministry of Agriculture, Food and Rural Affairs.
"Overall output is expected to increase marginally as the average yield from each unit area of 10 hectares is predicted to rise," the Ministry was quoted. "Favorable weather conditions from June onward and almost no crop damage caused by parasites and typhoons are raising expectations of better yields this year," it added.
Based on data from the Statistics Korea, the Ministry noted that the country's average yield is estimated to increase to around 5.33 tons per hectare this year, up about 2.5% from around 5.2 tons per hectare last year. The paddy rice acreage in the country has declined to around 799,344 hectares, down about 2% from around 815,506 hectares, according to the Ministry.
The Ministry noted that it is planning to introduce measures for stabilizing market prices of rice. Some of these measures include encouraging private processing units to buy more rice, strengthening monitoring of imported rice and regulating the country's stockpile.
The country's current rice reserves stand at around 1.32 million tons. The Ministry is expecting the demand for rice at around 3.97 million tons in 2016. The government is currently facing the challenge of falling consumption and increasing stocks.
The government opened its rice import market starting January 1, 2015 and decided to impose tariffs of 513% on rice imports over and above its mandatory rice imports of 408,700 tons under the World Trade Organization (WTO) minimum market access (MMA) quota.
Global Rice Quotes
October 15th, 2015
Long grain white rice - high quality
Thailand 100% B grade   370-380                ↑
Vietnam 5% broken        355-365                ↑
India 5% broken               355-365                ↔
Pakistan 5% broken        305-315                ↔
Myanmar 5% broken      415-425                ↔
Cambodia 5% broken     415-425                ↔
U.S. 4% broken                 490-510                ↔
Uruguay 5% broken        535-545                ↔
Argentina 5% broken     530-540                ↔
Long grain white rice - low quality
Thailand 25% broken      330-340                ↔
Vietnam 25% broken      335-345                ↔
Pakistan 25% broken      280-290                ↔
Cambodia 25% broken   400-410                ↔
India 25% broken             315-325                ↔
U.S. 15% broken               500-510                ↔
Long grain parboiled rice
Thailand parboiled 100% stxd     365-375                ↔
Pakistan parboiled 5% broken stxd          405-415                ↔
India parboiled 5% broken stxd                 335-345                ↔
U.S. parboiled 4% broken             590-610                ↔
Brazil parboiled 5% broken          545-555                ↔
Uruguay parboiled 5% broken    NQ         ↔
Long grain fragrant rice
Thailand Hommali 92%   820-830                ↑
Vietnam Jasmine             465-475                ↔
India basmati 2% broken              NQ         ↔
Pakistan basmati 2% broken       NQ         ↔
Cambodia Phka Mails     830-840                ↔
Thailand A1 Super            305-315                ↔
Vietnam 100% broken   305-315                ↔
Pakistan 100% broken stxd          275-285                ↔
Cambodia A1 Super        355-365                ↔
India 100% broken stxd                 300-310                ↔
Egypt medium grain brokens      NQ         ↔
U.S. pet food     330-340                ↔
Brazil half grain NQ         ↔

All prices USD per ton, FOB vessel,

14th October,2015 Daily GLobal Regional & Local news by Ricpelus Magazine

News Headlines ...
·         Brazil seeks review of rice importation policy
·         Rice bull market getting sticky
·         S. Korea's rice output to edge up 0.4 pct this year
·         Indonesia to import rice to counter El Nino-induced drought
·         More rice imports eyedas strong El Niño lingers
·         APEDA Commodity News from India
·         USARiceOutlook Contest:  Week One 
·         CCC Announces Prevailing World Market Prices
·         CME Group/Closing Rough Rice Futures  
·         Rice growers midway through drought-diminished harvest
·         Large-scale grant awarded for organic rice study
·         FG to ban rice importation next 2 years
·         Rice Domestication Traced Back to 6300 BCE
·         Punjab’s move to reimpose taxes on basmati procurement upsets traders
·         Uttam demands release of water from Nagarjuna Sagar
·         Vietnam's 5-pct broken rice hits $360/T on Manila demand
·         Philippines needs block farms, less farmers–experts

News Detail...

Brazil seeks review of rice importation policy

Posted By: OLUFEMI ADEOSUNon: October 14, 2015
Brazilian Ambassador to Nigeria, Mr. Elvado Silva Junior, has made a strong case to Federal Government on the need to remove the barriers on rice importation, adding that doing so would boost Nigeria’s food security for its teeming pop­ulation.Junior, who led a delegation of 20 companies to Nigerian In­vestment Promotion Commis­sion (NIPC) in Abuja, said that Brazil was keen on exporting its quality rice to Nigeria.The Envoy said: “The main target of Brazilian investors is on rice importation. We wish to bring our high quality rice to Nigeria and we will appreci­ate if the Nigerian Government can relax its barriers on rice importation. Brazil is desirous of offering its rice to Nigeria as a continental proportions and the cutting-edge technology em­ployed in industrial processes.
”“Brazil has a highly qualified and innovative rice industry that boasts a high technological stan­dard, with a focus on exclusive and efficient service to the most demanding requirements of in­ternational food supply. Brazil­ian companies offer expressive flexibility in meeting specific needs sought by consumers from different countries, based on lo­gistical and consumption char­acteristics”, he added.In her remarks, the NIPC’s Ex­ecutive-Secretary, Mrs Uju Has­san-Baba noted that Brazil had a lot to offer Nigeria in terms of technological transfer and inno­vation, adding that Nigeria is a major market itself.“We want to borrow a leaf from Brazil to be a major pro­ducer, consumer and be the net exporter in the areas where we have comparative advantage.
“The NIPC has remained in the vanguard for enhancing Ni­geria’s business climate having reestablished its role as the pivot and flagship of investment pro­motion and facilitation in Nige­ria, the Commission now enjoys tremendous goodwill, recogni­tion and respect from various stakeholders”, Baba added.The Vice President of Nigeri­an-Brazilian Chamber of Com­merce &Industry, Mr Ladan Jubril expressed optimism that the partnership would see Ni­geria attains self-sufficiency in agricultural production with the application of technology, to im­prove its economy.Jubril said the Federal Gov­ernment was making serious efforts aimed at liberalizing in­vestors’ entry and at strength­ening protections for foreign investment, promote openness and generally made investment environments more favourable for inward Foreign Direct Invest­ment.The trade volume between Ni­geria and Brazil was $12million in 2014, with Nigeria’s export value to Brazil totalling $8mil­lion compared to Brazil’s exports valued at $4 million to Nigeria

Rice bull market getting sticky

Chief Investment Officer / ACIES Asset Management Switzerland

Rice has been one of the very best performers in the agricultural sector since early summer. While the rest of the sector kept declining, this one market made a real trend turnaround and spent the past four months moving up. In the face of a sectoral bear market, this strength has been remarkable.
Weekly rough rice futures continuation:

Create your own charts with SaxoTraderGO click here to learn more
Source: CSI Data

Do you see those tiny red bars by the end? Those are the current, ongoing pullback. This appears to be a completely normal correction after a strong rally. Such pullbacks are usually high-probability entry points, given a sufficient trend strength to begin with.
Daily rough rice futures continuation:
Source: CSI Data

In the daily chart you can see how this is the second time in this bull phase that we've experienced a pullback. 
The previous one triggered an identical buy signal and now we're attempting to pull the same rabbit out of the hat. 

Last time ended well, and we have good probabilities this time around as well.

Management and risk description

Buy on current levels in the November rice future, RRX5. At this point, the overwhelming part of the open interest is in this month. Set a fixed stop and target in the market from the start, for a known risk and potential reward.

Rough rice dashboard:

As you can see in the dashboard, the rice market remains in contango but it's not steep enough to really matter. The volatility is on normal levels and the long term trend is intact.


Entry: buy on current weakness, around $12.40.

Stop: firm stop at $11.93.

Target: take profits at $13.34.

Time horizon: around two weeks.

November rough rice futures contract:

Source: ThomsonReuters

— Edited by Michael McKenna

For more on commodities click here.

Non-independent investment research disclaimer applies. 
Read more

S. Korea's rice output to edge up 0.4 pct this year

2015/10/14 13:46
 (ATTN: ADDS more details in para 10)
SEJONG, Oct. 14 (Yonhap) -- South Korea's rice production is expected to rise slightly in 2015 from last year due to greater yield per cultivated land, the agriculture ministry said Wednesday.The country's rice output is forecast to reach 4.258 million tons, up 0.4 percent from 4.241 million tons harvested in 2014, according to the Ministry of Agriculture, Food and Rural Affairs."Overall output is expected to increase marginally as the average yield from each unit area of 10 hectares is predicted to rise," the ministry said, citing related data from Statistics Korea.For this year, each 10 hectares of cultivated paddy should yield 533 kilograms of rice, up 2.5 percent from 520 kilograms tallied for last year, it said.The forecast yield is significantly higher than the 496 kilograms per 10 hectares which has been the average for the past few years.
A farmer harvests rice at a paddy in Yangyang, Gangwon Province, on Sept. 2, 2015. (Yonhap file photo)
The increase comes despite a drop in the number of paddies growing rice this year. Last year, farmers raised rice on 815,506 hectares of land, while for this year the areas used fell 2 percent to 799,344 hectares."Favorable weather conditions from June onward and almost no crop damage caused by parasites and typhoons are raising expectations of better yields this year," the ministry said.While less arable land caused output to fall steadily until 2012, there were small and steady gains in output in 2013 and last year.The ministry said the government plans to come up with measures to stabilize market prices of the staple grain.
 These will include getting private rice processing plants to buy up more grain, strengthen monitoring of imported rice and regulate the country's rice stockpile.At present, the state's rice reserve stands at 1.32 million tons with policymakers predicting demand for the staple grain to reach around 3.97 million tons for the whole of 2016. This can lead to more rice being held in silos and not being consumed, which translates into more costs for the government.The country maintains a sizable rice reserve to deal with emergencies and sudden fluctuations in global grain prices.Asia's fourth-largest economy is self-sufficient when it comes to growing enough rice to feed its 50 million citizens, although it imports almost all other farm produce from abroad to meet demand.


Indonesia to import rice to counter El Nino-induced drought


Rabu, 14 Oktober 2015 21:26 WIB |
Jakarta (ANTARA News) - The government is preparing to import rice due to the El Nino-induced drought, stated Coordinating Minister for Economic Affairs Darmin Nasution.
"We have reached agreements with Vietnam and Thailand. Based on the agreements, Indonesia will decide on the time of the imports. When we put forth a request, they need a month to dispatch," Minister Nasution affirmed here, Tuesday.He quoted the Meteorology, Climatology and Geophysics Agencys forecast that the current El Nino might be stronger than that experienced in the 1997-1998 period when Indonesia was forced to import tons of rice.Indonesia is reeling under the impacts of the El Nino phenomenon as the rice stocks have dwindled, and the rice supply to regions is limited, thereby leading to a hike in the price of the commodity.
 "The price of rice has increased by 10 percent over the last two months. It indicates that the stocks are decreasing," he noted.
The government has decided to import rice as the countrys stocks currently reach 1.7 million tons. Due to the prevailing weather conditions, the government plans to distribute 13th and 14th rice rations this year to the poor."We will wait until December, or November at the earliest, as rice harvests will still be carried out in October," Nasution noted.In the meantime, in September 2015, Agriculture Minister Amran Sulaiman had stated that the ongoing drought would not affect the nations rice supply and made assurance that the government did not need to import rice."Rice stocks are secure for the next six months. State-owned Logistics Board (Bulog) has 1.7 million tons of rice in stock," the minister said after witnessing a rice harvest in Mekarsari Village, Banyusari Sub-district, Karawang District, West Java, in September.According to Amran, if rice production is boosted every year, Indonesia would become self-sufficient in the next three years.In order to boost rice production, the minister said the government had also signed a cooperation agreement with the Bogor-based Institute of Agriculture (IPB) to plant new varieties of rice.(*)
More rice imports eyedas strong El Niño lingers
MANILA-- The Philippines is eyeing to increase the volume of rice imports to 1.5 million metric tons in the first half of 2016 to boost buffer stocks and keep local prices stable, as the adverse effect of El Niño continues to intensify, a government press release said.Socioeconomic Planning Secretary Arsenio Balisacan said the inter-agency El Niño Task Force will propose an additional 1 million MT of rice imports to President Benigno Aquino III probably within this week.“We have more or less indicative figures… For 2016, we have an already approved provision of 500,000 MT for the first quarter but based on our analysis of the current data, we may need to increase or import another 1 million MT to maintain a 45-day buffer stock,” Balisacan said.
He said the expected increase in rice imports assumed that the El Niño will be as intense as those in the 1997 to 1998 phenomenon that, along with the Asian financial crisis, reduced the country's agricultural output by 25 percent.Balisacan said El Niño will peak starting December until February and its impact is expected to last until June next year.“That's (rice imports) what we proposed. It's going to be deliberated on by the NFA (National Food Authority) council and it is not yet decided… These are indicative numbers, they can change, these will undergo a series of validation,” he added.Balisacan said the El Niño Task Force hopes to bring in about 1 million MT of rice next year, which includes those under the minimum access volume (MAV) private sector rice importation scheme.
The remaining volume of rice imports may be brought in by the NFA directly.“Learning from the (past) El Niño (events), learning from the 2013-2014 (experience), we have to make sure that we have adequate supply; and timely importation is crucial. Because what we want to avoid is that domestic prices are shooting up while world prices is still relatively stable,” he said.For 2015, Balisacan said the country expects to bring in 850,000 MT of rice by the fourth quarter, bringing total imports to over 1.9 million MT this year.
Already 840,000 MT of rice arrived in the country in the first semester, and an additional 232,000 MT in the third quarter.“Some provinces will be affected much longer than the others. There are 66 provinces that would suffer severe drought,” he noted.Citing the state weather bureau, Balisacan said there are already seven provinces experiencing drought including the provinces of Quirino, Aurora, Quezon, Bohol, Siquijor, Camiguin and Misamis Oriental.“This month or next, probably about 16 provinces will be affected. And by the time we reach second quarter of next year, we will already have 66 provinces. It's quite significant and that excludes Metro Manila,” he added.*PNA

APEDA Commodity News from India

International Benchmark Price
Price on: 13-10-2015
Benchmark Indicators Name
Chinese first grade granules, CFR NW Europe (USD/t)
Chinese Grade A dehydrated flakes, CFR NW Europe (USD/t)
Chinese powdered, CFR NW Europe (USD/t)
Chinese sliced, CIF NW Europe (USD/t)
Chinese whole, CIF NW Europe (USD/t)
Indian Cochin, CIF NW Europe (USD/t)
Guar Gum Powder
Indian 100 mesh 3500 cps, FOB Kandla (USD/t)
Indian 200 mesh 3500 cps basis, FOB Kandla (USD/t)
Indian 200 mesh 5000 cps, FOB Kandla (USD/t)
For more info
Market Watch
Commodity-wise, Market-wise Daily Price on 13-10-2015
Domestic Prices
Unit Price : Rs per Qty
Market Center
Min Price
Max Price
Haliyala (Karnataka)
Koraput (Orissa)
Divai (Uttar Pradesh)
Amloh (Punjab)
Dehgam (Gujarat)
Siyana (Uttar Pradesh)
Manjeri (Kerala)
Jagraon (Punjab)
Mechua (West Bengal)
Palayam (Kerala)
Shillong (Meghalaya)
Pune (Maharashtra)
For more info
Rs per 100 No
Price on 13-10-2015
Market Center
Other International Prices
Unit Price : US$ per package
Price on 13-10-2015
Market Center
Onions Dry
Package: 50 lb sacks
Package: 30 1-lb film bags
Baby Peeled
Baby Peeled
Baby Peeled
Package: cartons tray pack
Red Delicious
Red Delicious
Red Delicious


Think Rice with the Gerard family from Cape Girardeau, Missouri

ARLINGTON, VA -- Fields of gold extending into the horizon, combines rolling across vast acres of farm land, and diverse wildlife drifting in and out of view among swaying stalks of rice -- these characteristic signs of harvest are familiar to rice farmers, but are foreign to most Americans who are far removed from the agricultural industry.  Most people don't even realize rice is grown here!  During the recent harvest, pictures and videos from farmers in all six rice-producing states flooded social media sites, and with consumers' increasing interest in understanding where and how their food is grown, USA Rice saw an educational opportunity to use these images to provide an exclusive glimpse into the world of rice farming in the United States during National Rice Month.

 USA Rice compiled images of harvest submitted by members and shared them on Facebook, Twitter, and Instagram to help consumers visualize the journey of rice from farm to table.  This effort was aided by a new initiative that put the spotlight on a different rice farmer each week.  The "Meet Your Rice Farmer" posts shared fun facts about the farmer, including a favorite family rice recipe.

 "Social media provides the public with a unique opportunity to gain an inside perspective on what life is like on a rice farm just by scrolling through pictures using their smart phone," said Michael Klein, USA Rice vice president of communications and marketing.  "A fleeting glance at an image of a family on their farm has the ability to resonate with consumers, who will hopefully make the connection that the people who grow their food are also their friends, family, and neighbors."

 During National Rice Month, USA Rice additionally shared graphics highlighting the nutritional benefits of rice and the economic contribution rice farmers make to the agricultural industry.  All graphics were accompanied by text reinforcing the many positive attributes of the rice industry and encouraged consumers to continue supporting U.S. rice farmers.If you have any pictures from this year's rice season that you would like to share on USA Rice's social media platforms, please email


Contact:  Colleen Klemczewski (703) 236-1446


USARiceOutlook Contest:  Week One  

Tweeting? Farming? Or both! 
ARLINGTON, VA -- Mark Isbell, a rice farmer from Little Rock, Arkansas is the first finalist selected in the #USARiceOutlook social media contest.  A weekly winner will be announced every Wednesday until November 4, and will be in the running for the grand prize of a free registration to USA Rice's Outlook Conference in New OrleansDecember 9-11.

For contest eligibility, participants can retweet or share USA Rice's posts about the Outlook Conference, or they can create their own original content using the hashtag #USARiceOutlook.  Members can share what they are looking forward to most at Outlook, which speaker they are most excited about, their favorite part about New Orleans, etc. Creativity is encouraged!
 "I'm really excited to see USA Rice using Twitter to create a stronger community within the rice industry while also reaching out to consumers around the world," said Isbell, a recent graduate of the Rice Leadership Program.  "Many may not realize what a strong agricultural community there is on Twitter, and how this simple tool gives us a way to not only hear and see what is going on around the world, but to speak back, even from the seat of a tractor.  I encourage everyone to participate in the conversation."
 Follow @usaricenews on Twitter for more exciting updates about the 2015 USA Rice Conference and remember to tweet us using #USARiceOutlook!

Contact:  Colleen Klemczewski (703) 23601446

CCC Announces Prevailing World Market Prices 
WASHINGTON, DC -- The Department of Agriculture's Commodity Credit Corporationtoday announced the following prevailing world market prices of milled and rough rice, adjusted for U.S. milling yields and location, and the resulting marketing loan gain (MLG) and loan deficiency payment (LDP) rates applicable to the 2015 crop, which will become effective today at 7:00 a.m., Eastern Time (ET).  Prices are unchanged from the previous announcement.

World Price

Milled Value ($/cwt)
Rough ($/cwt)
Rough ($/cwt)
Long Grain
Medium/Short Grain

This week's prevailing world market prices and MLG/LDP rates are based on the following U.S. milling yields and the corresponding loan rates:

U.S. Milling Yields
Loan Rate
Long Grain
Medium/Short Grain

The next program announcement is scheduled for
 October 21, 2015.    

CME Group/Closing Rough Rice Futures   
CME Group (Prelim):  Closing Rough Rice Futures for October 14 
Net Change

November 2015
 - $0.450
January 2016
- $0.455
March 2016
- $0.445
May 2016
- $0.350
July 2016
- $0.280
September 2016
- $0.245
November 2016
- $0.245


Rice growers midway through drought-diminished harvest

Published:October 13, 2015 3:20PM
Worker Virgilio Chavez harvests rice in a field just east of Willows, Calif., on Oct. 12. California’s rice acreage is diminished this year because of the drought, but growers say they’re seeing decent yields and quality from the rice that was planted.Rice growers are about halfway through their harvest of a drought-diminished crop, as some acreage had to be left unplanted because of water shortages. From the rice that was planted, growers are reporting decent yields and quality.

WILLIAMS, Calif. — Rice growers in California are midway through a harvest that will be shorter than usual for the many who fallowed portions of their acreage because of the drought.Growers report decent yields and quality from the rice that’s in the ground — plantings they say total roughly 370,000 acres statewide, a steep drop from the 431,000 acres of rice harvested last year.Among those already winding down their harvests is Leo LaGrande, a Williams area farmer who left one-quarter of his land bare.“It’s probably going to be a short season for everyone,” LaGrande said. “A lot of acreage was left out because of water cutbacks.”California rice growers are expected to produce 34.1 million hundredweight, down 8 percent from last year, the National Agricultural Statistics Service predicts. The yield forecast was 6,300 pounds per acre, down 3 percent from 2014.Rice was one of several field crops in California showing sharp acreage declines because of the drought, according to NASS. Harvested acreage of corn in the Golden State is estimated at 65,000, down 32 percent from a year ago, NASS reported.

Early this spring, farmers told the agency they’d be seeding rice on 408,000 acres, but an updated field crop report in July estimated that rice acreage in California would top out at 385,000.Water availability for growers has varied widely. Some irrigation districts will have water available until Nov. 1, while others have had their diversions curtailed, leaving some water users to rely more heavily on groundwater where it is available, the California Farm Bureau Federation reported.Marysville area grower Charley Mathews had enough water this year to plant all his fields, and he said his yields have been good.“I’m about halfway” through harvest, said Mathews, a member of the USA Rice Federation’s executive committee. “There’s a few (growers) finishing, but there’s still quite a bit out there.”
Willows, Calif., grower Larry Maben also managed to get all of his fields planted, he said..“Most of the people around here had to leave some out,” Maben said. “A lot of people have already finished with harvest, and a lot are close to being finished. I’m a little over halfway. … We’re progressing.
“Most of the people are saying they’ve got a really good crop,” he said. “To me it looks like it’s a little bit off. It’s just the variability.”Water shortages will likely diminish migratory bird habitat this winter, as ducks and other species typically rest on water that’s been put on fields for crop decomposition, the state Farm Bureau notes. While California farmers typically create about 300,000 acres of managed wetlands, last year they created only about 100,000 acres and this year it could be as low as 50,000, according to the CFBF.
Last year, favorable yields and more widespread sales of rice straw for animal feed and erosion control helped offset losses of acres for growers, but many are hoping that prices for rice improve in the coming months so they can continue to make ends meet.“It’s going to be an interesting year to see how the market responds,” LaGrande said. “If the market responds to less acres, the price would hedge to the north, but there are driving factors keeping it down. There’s competition from the South and world supplies are up. It’s going to be a challenge.“If the price can’t move … what you’re going to see from the banks next year is a request of more skin in the game from everyone,” he said. “The margins to start with aren’t big. It’s going to get tougher, there’s no doubt about it.”

Large-scale grant awarded for organic rice study

The Organic Center to serve as the study's outreach partner to scientists, organic sector


WASHINGTON, Oct. 14, 2015 /PRNewswire-USNewswire/ -- The Organic Center is pleased to announce that a research team it is collaborating with has been awarded an important research grant from the U.S. Department of Agriculture (USDA) to advance organic rice production in the United States. The grant is funded by USDA's Organic Agriculture Research and Extension Initiative (OREI).The grant – worth $555,000 – will help increase organic rice production in the southern regions of the U.S. through the development of economically viable organic practices. The grant, which was officially announced on Tuesday by the USDA, will go to researchers at Texas A&M AgriLife Research & Extension Center at Beaumont, Texas A&M University's Department of Soil and Crop Sciences, USDA's ARS Dale Bumpers National Rice Research Center, University of Arkansas Rice Research and Extension Center, University of Arkansas at Pine Bluff Department of Agriculture, and The Organic Center.

The Center's role in the project will be to communicate the findings of the research to the scientific community, organic growers and organic industry members."We are thrilled to be involved with this important project," said Dr. Jessica Shade, Director of Science Programs at The Organic Center. "There is a critical need for information on organic rice systems to help expand production and meet the demand of this high-value market."

Organic rice practices tailored for the Southern U.S.

This first phase of a three-year project will develop a multi-disciplinary approach to developing Integrated Pest Management strategies for organic rice production in the Southern United States. The popularity of organic rice has skyrocketed in the past 20 years. Organic rice acreage in the U.S. has increased almost six-fold since 1995, with up to half of the acreage in the South. Despite this rapid expansion, however, domestic rice production has not kept up with market demand, and imports of foreign organic rice have risen.One of the reasons why organic rice acreage is not expanding more rapidly is a lack of knowledge about tools that best support organic rice production. Rice is grown in a unique flooded system, and research being done specific to rice systems focuses solely on conventional production.This project will address these issues by developing economically viable organic rice production practices for the Southern U.S. that will allow producers to grow organic rice more sustainably and profitably in the South.

This regional integrated organic rice project involves nine researchers from two of the country's major rice-growing states – Texasand Arkansas–and combines expertise in plant pathology (Dr. Xin-Gen [Shane] Zhou of Texas A&M ), breeding/genetics (Dr. Anna McClung of USDA's Agricultural Research Service), nutrient management (Dr. Fugen Dou of Texas A&M), economics (Dr. Bradley Watkins of the University of Arkansas- Fayetteville), weed science (Dr. Muthu Bagavathiannan of Texas A&M), entomology (Dr. Mo Way of Texas A&M ), agronomy/crop science (Dr. Bihu Huang of  University of Arkansas-Pine Bluff), agronomy/soil science (Dr. Sixte Ntamatungiro of University of Arkansas-Pine Bluff), and outreach communications (Dr. Shade of The Organic Center).

Overall, the research team will devote approximately 80% of their time on research and 20% on extension."Results from this project will empower growers to make informed choices on inputs that will result in sound pest management, higher and more consistent yields, improved milling and grain quality, and enhanced soil quality," said Todd Linsky, chairman of the Board of Trustees for The Organic Center. "This will help the market for domestically produced organic rice to continue to expand, and will sustain rural communities in areas where conventional rice acreage has been decreasing."

The Organic Center at work

In addition to the rice project, The Center now is collaborating in several other critical research projects, including the comparison of soil health on organic and conventional farms and seeking organic solutions to citrus greening. Earlier this year, it released an important report on the benefit of organic farming practices to pollinator populations.The news of the grant award came the week after members of The Organic Center's Board of Trustees gathered at the University of California, Berkeley, for the group's annual retreat to receive scientific briefings on the collaborative research The Center is a part of and to discuss future research priorities of The Center.For more information on The Organic Center and the science behind organic food and farming, visit
The Organic Center's mission is to convene credible, evidence-based science on the health and environmental benefits of organic food and farming and to communicate the findings to the public. The Center is an independent non-profit 501(c)(3) research and education organization operating under the administrative auspices of the Organic Trade Association.

SOURCE The Organic Center

FG to ban rice importation next 2 years

October 14,
By Levinus Nwabughiogu

ABUJA – Federal government Wednesday said it has plans to stop the importation of rice in the next two years, however stating that the policy would not be enforced until it has developed local industries to produce maximally for local consumption.The plan was communicated to State House Correspondents by Zamfara State Governor and Chairman of Nigerian Governors Forum, Alhaji Abdulaziz Yari after a joint meeting with the Vice President, Yemi Osinbajo, the Governor, Central Bank of Nigeria, CBN, Mr. Godwin Emefiele and permanent secretaries of federal ministries at the presidential villa, Abuja.
Yari stated that with the emerging political will power of the present government and the availability of arable land, Nigeria can sustain itself with rice production.He regretted that so much money had gone into rice importation which he said could be produced locally.
“The meeting was on the new policy on agriculture and food sustainability. We discussed how we can boost rice production in Nigeria and start thinking about how we are going to put policy in place on how rice importation will be banned in the country.“We have the potential. We have the human resources. We have the arable land to grow rice. In the next two years, we will not need to bring rice from outside Nigeria. We are going to ban it.“It is only in Nigeria, a country of millions of people, that there is no food security. We discussed the policy with the relevant permanent secretaries and CBN governor.
“The policy is going to be in place and we gave our commitment that we are ready to support the government policy in ensuring that Nigeria becomes self-sufficient in food production in the next two years.“Nigeria is currently a major importer of rice. Now, the political will is in place to stop it. We in about nine states are going to be seriously engaged in massive rice production.“We are hoping that in the next two years, rice importation into Nigeria will be banned. We are committed and the political will is in place”, Governir Yari said.

Punjab’s move to reimpose taxes on basmati procurement upsets traders

Gurpreet Singh Nibber, Hindustan Times, Chandigarh
Updated: Oct 15, 2015 00:03 IST

The Punjab government’s decision to reimpose 7% taxes on basmati procurement has not gone down well with traders. (HT Photo )

The Punjab government’s decision to reimpose 7% taxes on basmati procurement has not gone down well with traders.The taxes being collected by the state mandi board with effect from October 1 include 2% market fee, 2% rural development fund and 3% Punjab infrastructure development fund (PIDF). Traders say this move has made things worse for the rice industry in the state, which is already passing through an unprecedented phase of decline.Ravinder Singh Cheema, vice-chairman of the Punjab Mandi Board, said the government had no option but to reimpose the taxes as about 80% of the crop coming in the mandis of Tarn Taran, Ferozepur, Gurdaspur and Amritsar during the kharif marketing season was basmati, adding that the tax waiver meant no income for the market committees. “We want to support our local offices also,” Cheema added.

The mandi board supervises the procurement of foodgrains in more than 1,700 grain markets of the state. The revenue generated from procurement is used on rural development and the upkeep of mandis.According to top government functionaries, the tax waiver had led to a benefit of Rs 1,000 per quintal, but it was favouring importers, especially from Gulf countries, who purchased basmati from Punjab traders.

However, the waiver of 5% purchase tax would continue. Also, the waiver of 2% market fee, 2% rural development fund and 3% PIDF would continue for mega projects in which Rs 10 crore or more have been invested in rice shelling and processing mills. There are 15 such set-ups in Punjab which shell and trade about 25% of the basmati.Ashok Sethi, director, Punjab Rice Millers and Exporters Association, said the 1509 variety of basmati had poor cooking quality and higher percentage of breakage, leading to near-boycott of this variety. “We tried to convince farmers, but they failed to understand that the industry was not in favour of the 1509 variety after its failure during the 2014-15 kharif season,” he added.

In the current season, a total of 7-8 lakh tonnes of the 1509 variety have arrived in mandis of the state so far. The prices of this variety fell to Rs 1,200-1,300 per quintal, forcing the government to offer minimum support price of Rs 1,450 per quintal on paddy.Sethi said the export policy announced by the central government recently had not enthused the rice industry and its failure to issue a notification to allow 3% interest benefit on export bank limits, after its lapse for more than 15 months, had got the thumbs-down from exporters.
He demanded that the state government and the Centre protect the agro processing industry in Punjab by offering concessions and incentives through the bailout package and reduced bank lending.

Uttam demands release of water from Nagarjuna Sagar

Hyderabad, Oct 14 (INN): Telangana Pradesh Congress Committee president N. Uttam Kumar Reddy demanded that the State Government immediately release water from the Nagarjuna Sagar Left Canal.Addressing a press conference at Gandhi Bhavan on Wednesday, Uttam Kumar Reddy said standing crops, spread across one lakh acres of land, would be lost if water is not released on immediate basis. He said several farmers have ended their lives due to adverse seasonal conditions and therefore, immediate steps need to be taken to protect others from losing their crops. He threatened that the Congress party would launch mass agitation if water was not released from Nagarjuna Sagar Left Canal.Uttam Kumar Reddy also said that nearly 3,000 rice mills were on the verge of closure which would snatch livelihood of about 10 lakh people. He said that the rice mills were badly hit due to low cultivation and consequently drop in exports. He demanded that the State and Central Governments immediately announce some bailout package for rice millers.


Rice Domestication Traced Back to 6300 BCE

Posted By: Daryl WorthingtonPosted date: October 14, 2015

A study by scientists from Peking University and University College London has provided an outline of the development of rice cultivation in central China between the seventh and first millennium BCE.Zhenhua Deng, Ling Qin and Yu Gao, from the School of Archaeology and Museology at Peking University, and Alison Ruth Weisskopf and Dorian Q. Fuller from the Institute of Archaeology at UCL, focused on the Baligang site in Nanyang Basin, in what is now Central China. A Neolithic site on the Northern tributary of the Yangtze River, Baligang provides a long arhaeobotanical sequence from the seventh to the first millennium BCE, offering insight into the development of rice and millet agriculture in the region.
Published in the open access journal Plos One, the study has the potential to clear up some long held ambiguities about the origins of farming practices in the region which is now China. Archaeologists generally agree that the prehistoric agricultural history of the region can be divided into two traditions: a northern one based on the cultivation of millet, and one centred around the Middle and Lower Yangtze basin based on rice.The relationship between these two agricultural traditions is less transparent however, as the study explains, “Some have argued for a single origin, with either rice agriculture spreading north and encouraging millet domestication, or early millet farming in the north spreading south and kick-starting millet cultivation. Others have argued for more than (one) independent center of millet domestication across north China, unconnected to Middle and Lower Yangtze basin rice domestication episodes.
”For their study, the scientists collected flotation samples from pits and cultural layers during excavation seasons in 2004 and 2007. In total, 1700 litres of soil from 123 samples were floated in a flotation tank at the site, before plant remains were collected through sieves with 0.3 mm mesh. Following drying, samples from the 2004 study were sent for analysis at UCL’s facilities, while the 2007 samples were analysed at Peking University.Selected seed and crop specimens were then chosen for direct radio carbon dating using Accelerated Mass Spectrometry (AMS), which was combined with other data to form a chronology for the history of rice cultivation in the Baligang region. “Over the course of excavations, the chronology was initially based on material cultural affiliation. Fifteen dates were carried out on wood charcoal in support of this. In addition 18 radiocarbon dates were direct AMS dates on identified seed remains recovered from the archaeobotanical samples described in this paper.”Thanks to the broad chronological scope of the data extracted from Baligang, the authors of the study have been able to construct a detailed picture of subsistence farming strategies in the region.
 They have confirmed, based on morphological characteristics of the rice, that rice had been domesticated in the region before 6300 BCE, although a lack of evolution in grain shape suggests that the people there were still a long way off from forming an agricultural economy.The researchers have put together a broad overview of rice cultivation in the region around Baligang during the Neolithic period and beyond. “Baligang provides a long sequence that registers many of the key trends in the Neolithic agriculture of central China.
” The effects of cultural factors have been charted, showing how the development of agricultural economies progressed in China. “As a response to cultural changes, crop assemblages varied in different periods along with the interaction between north and south China, with more millets grown in periods under the cultural influence of the north.”Nevertheless, as is so often the case and as the authors of the study confirm, their results still leave a host of questions unanswered. “The tantalizing new evidence for domestication of rice at Baligang site before 6300 BC require data from other sites and periods to be put into an evolutionary trajectory from rice gathering to domestication.”
For more information:
Image courtesy of Wikimedia Commons user: Jialiang Gao

Vietnam's 5-pct broken rice hits $360/T on Manila demand

Wed Oct 14, 2015 3:37am GMT

HANOI Oct 14 (Reuters) - Vietnam's 5-percent broken rice jumped to $360 a tonne on Wednesday, the highest since July 15, after the Philippines said it was studying a proposal to purchase 1 million tonnes more rice, traders said.Rice prices in Vietnam, the world's third-largest exporter of the grain, have recovered from their eight-year lows hit in late August, but the gain this week may prevent foreign buyers from signing company-to-company deals, traders said."Exporters are also reluctant to sell now, expecting further price gains," a trader at a foreign firm in Ho Chi Minh City said. (Reporting by Ho Binh Minh; Editing by Joseph Radford)

Philippines needs block farms, less farmers–experts

by  - 
INCREASING food production to feed more than 100 million Filipinos has become more challenging due to changing weather patterns, as well as the continuous conversion of farm lands. The Philippine Rice Research Institute (PhilRice) said it doesn’t help that farmers also have to deal with the “inherent disadvantages” of the Philippines.
In Photo: Manuel Chase M. Castaño III, science research analyst, Be RICEponsible Campaign; Dr. Calixto M. Protacio, executive director, DA- PhilRice; Jaime Manalo, head, Development Communications Division; and Dr. Santiago Obien, special technical assistant to the National Rice Program, during the BM Coffee Club Forum.
As rice is the staple food of Filipinos, farmers are under pressure to expand rice output every year. Paddy-rice output needs to keep pace with population growth, pegged at nearly 2 percent annually.According to the Philippine Statistics Authority (PSA), the country’s population increased at the rate of 1.9 percent annually, on the average, during the period 2000 to 2010.

This means that there were two persons added per year for every 100 persons in the population.Meanwhile, annual per-capita consumption of rice was pegged by the PSA at 114.27 kilograms. This means that each Filipino consumes about 2.2 kg of rice per week.Because of the importance of rice to the Filipinos’ diet, the Philippines has 2.6 million hectares of land devoted to rice. The average farm size is at 1.04 hectares, while harvest area is at 4.7 million hectares.Dr. Santiago R. Obien, senior technical adviser of the Department of Agriculture’s (DA) National Rice Program, said farmers’ adoption of technological innovations would help them become more productive.One such technology is hybrid-rice seeds, which would allow farmers to grow more rice and consequently earn more. The country’s hybrid-rice varieties, Obien said, are the best outside of China, as yield could average 8 to 10 tons per hectare, and can reach up to 12 tons.“As a farmer’s yield increases, his cost of production decreases. This would allow farmers to increase their profits,” Obien told reporters and editors during a forum, dubbed as the BM Coffee Club, held recently in Makati City.
Economies of scale
PhilRice Executive Director Calixto M. Protacio and Obien both agree that there should be farm areas consolidated and managed by fewer farmers to again make farming a “financially appealing and viable venture.”
In economically advanced countries, Obien said only about 3 percent of the total population are farmers. Korean farmers in 1960 used to make up 53 percent of their population. Now, there are only 16 percent of these farmers, and they are rich.Obien also noted that the number of farmers in Thailand is also declining, as many of them are being recruited by factories. Some of these farmers ask their neighbors to take care of their farms.“If one farmer has 4 hectares of land and two of his friends who also have 4 hectares each go into other industries and ask him to cultivate their land, that farmer now has 12 hectares to harvest. With bigger land, that farmer can now buy a tractor and a [vehicle]. It just shows that we need less farmers to be rich,” Obien said.
For his part, Protacio said there is a need to achieve economies of scale for farmers to make them more productive and competitive. He said farmers with a small land cannot afford to adopt innovations to make farming efficient and increase their output.
“Clustering, or land consolidation, is good. You have to establish economies of scale. In a way, the idea is to go back to the concept of landlords. We are looking at this as a rural-transformation idea. We found that to be able to become a millionaire, a farmer has to have at least 20 hectares of land,” he said.
In their study, “The Size Distribution of Farms and International Productivity Differences” published in 2011, Tasso Adamopoulos and Diego Restuccia focused on the differences in average farm sizes among countries. They found that the average farm size for poor countries is 1.6 hectares, while rich countries have an average farm size of 54.1 hectares.
“Richer countries have fewer small farms and more large farms than poorer countries. In the poorest countries, over 90 percent of farms are small and almost none of the farms are large; whereas in the richest countries, small farms account for about 30 percent of farms and large farms for nearly 40 percent,” the study read.
A recent study by Krishna H. Koirala and Ashok K. Mishra of the Louisiana State University and Samarendy Mohanty of the International Rice Research Institute, titled “Impact of Land Ownership on Productivity and Efficiency of Rice Farmers: A Simulated Maximum Likelihood Approach,” revealed that a 1-percent increase in farm size could result in an increase in the value of rice production by about 0.4 percent.
CARP’s woes
The Philippine government, nonetheless, still has a commitment to grant landless farmers and farm workers ownership of agricultural lands by the end of the Aquino administration. Farm lands are becoming more fragmented into smaller areas as they are being turned over to small farmers.
Republic Act (RA) 6657, or the Comprehensive Agrarian Reform Law, was enacted by President Corazon Aquino in 1988, authorizing the Department of Agrarian Reform (DAR) to undertake the distribution of an estimated 7.8 million hectares of agricultural lands.
The law was aimed to promote social justice and to establish “owner cultivatorship” of economic-size farms as the basis of Philippine agriculture.
“To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farm workers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands,” RA 6657 stated.
However, Obien said the government has failed to follow the distribution of land with the provision of farm inputs and machineries. He said the Comprehensive Agrarian Reform Program (CARP) of the government has not served as a plan for productivity.
“It [CARP] was simply a social-justice system. That’s the problem. It should not have been that way. It should have been a systematic program so that farmers can become more productive,” Obien said.
“The government, upon the release of the land, should have also provided the farmers with machineries, facilities, inputs and electricity, among others, so that they can be progressive. The Japanese call it land reformation, not land reform. However, nothing was given to our farmers,” he added.
Protacio said the initial idea for the CARP was for cooperatives to take over the farmlands and consolidate them into large units. He said, however, that because of the individualistic nature of Filipinos, it did not work.
In 1996 the Philippine Institute for Development Studies (PIDS) also published a study, titled “Issues in Revitalizing the Philippine Sugar Industry.” The study revealed that the sugar industry had to contend with declining productivity.
“Implementing the land-transfer scheme of CARP had been slow due to the government’s administrative and financial constraints. And then there is the strong opposition from the landowners. Nonland-transfer schemes, which include land lease or rental, profit sharing and corporate stock distribution, have proven to be unattractive to landowners,” the study read.
“Such delay and uncertainties discourage CARP farmer-owners to invest in farm improvements, lower collateral value of agricultural land, and reduce credit flow to agriculture. In the end, low productivity becomes inevitable,” it added.
A study published by the International Society for Southeast Asian Agricultural Sciences (ISSAAS), titled “Farm Size and Its Effect on the Productive Efficiency of Sugarcane Farms in Central Negros,” showed that average optimum land size should be around 41 hectares, which is lower than the optimum size (50 hectares) stated in the report of the Presidential Task Force on the Sugar Industry.
“[Big farms] are also the more favored in terms of technology and access to information and extension services. Modernization of farm practices can improve productive efficiency, however, this is difficult to achieve at present due to the limited financial capability of the farmers,” the report read.
To boost the productivity of sugarcane farms, the Sugar Regulatory Administration (SRA) rolled out a program, which sought to consolidate small farms into larger areas while still preserving individual ownership of the land, in 2012.
“Block farming is the consolidation of the management of small farms of less than 5 hectares, into a bigger but contiguous unit of at least 30 hectares for purposes of improving farm productivity, while individual ownership is preserved,” SRA Administrator Ma. Regina Martin said in a statement.
Data from the SRA showed that about 85 percent of the sugarcane farms in the country have areas of 5 hectares or below. The SRA said this is due to the natural course of land subdivision by inheritance, sale and the CARP.
According to the SRA, sugarcane is a plantation crop and its cost efficiency is best achieved through bigger farm sizes of at least 30 hectares. However, with the implementation of the CARP, farm sizes were fragmented into small land holdings of less than 5 hectares, wherein farm owners could no longer take advantage of economies of scale.
Present land owners also do not have the financial capability to provide farm inputs, which results in low productivity, the SRA said.
Since its implementation in 2012, SRA said the 19 pilot block farms have registered an average increase of 29 percent in farm productivity in crop year 2013 and 2014. Sugar production in the pilot farms in that crop year reached 65.29 tons cane per hectare, as compared to 50.78 tons cane per hectare recorded in 2012.
This increase in productivity translated to an estimated average increase of farmers’ income by P39,815 per hectare, at 1.96 50-kilogram per tons cane (LKG/TC) and a composite price of P1,400 per LKG-bag of raw sugar.
Aside from consolidating small farms into an aggregate of at least 30 hectares—through agrarian reform beneficiaries organizations—the SRA also offers coached and guided farm management, technical assistance and capacity building for the farmers in a block farm. The DA also provides irrigation systems, farm-to-market roads and farm inputs necessary for the production of sugarcane.
The program has now become one of the main programs under RA 10659, or the Sugar Industry Act of 2015. The SRA said there are 130 block farms that have enrolled for accreditation to date, with a total area of about 7,000 hectares.
Protacio said the SRA’s block farming scheme could also be adopted by other sectors.
Agriculture Secretary Proceso J. Alcala, for his part, said the DA has also put up block farms for the rice sector. He said, however, that it has not been as successful as the program rolled out for sugarcane farmers.
“What’s important is we integrate our palay farmers. We have partnered with the DAR in implementing block farming in some areas,” Alcala said.
“Agrarian-reform communities should have been created long ago. They should have started block farming long ago. Block farms have the advantage because they have all these tools and resources to use so that they can be progressive,” Obien said.
Image Credits: Nonoy Lacza