Press Release
October 28, 2008

Zubiri: Take out the middlemen in the rice industry

"Take out the middleman," said Senator Zubiri yesterday referring to the rice industry during the Senate hearing on the proposed 2009 budget of the Department of Agriculture chaired by Senator Edgardo J. Angara.

Zubiri said "there are superior ways to help farmers aside from the National Food Authority palay / rice buying scheme at high price and selling it palugi. In the short term, that stabilizes the price but it does not address the root cause of low farmers' income and artificially high retail prices."

"We should up the ante on government intervention that will directly make farmers self-reliant and increase their incomes for the long term. Even as we subsidize seedlings and fertilizers while expanding irrigated areas and repairing damaged facilities, we should stop the activities of middlemen that harm the farmers' livelihood."

Zubiri said "farmers in Thailand and Korea are not dependent on middlemen and thus enjoy the good prices that their crops command. They control the planting, processing and marketing of their own produce. They have bonded into big cooperatives and thus are not at the mercy of middlemen, traders and millers."

He noted that "millers resist to mill more as they wait for prices to increase. Likewise, traders hold on to stocks to push down supply which will cause prices to spike again. Even without high fertilizer prices, these moves along by traders and millers can cause prices to soar."

Zubiri said that as a Congressman, he has funded the purchase of rice mills at P2 to 4 Million each for the use of rice farmers. "Their earnings increased. We can do that nationwide and satisfy the needs of farmers as well as consumers. That will also prevent the NFA from incurring losses if it sticks to just palay buying."

The NFA buys palay (wet) at P13-14 per kilo and P17 per kilo (dry) which is higher than the average farmgate price of P10.50 per kilo.

It was noted that farmers harvest additional eight cavans per hectare just with the addition of one hand pump to irrigate their field.

During a recent travel in Central Luzon, Zubiri noted that "farmers continue to burn rice stalks which pollutes the air and wastes the rice stalks, a valuable resource, which can be turned into fertilizer."

He also pressed Agriculture Secretary Arturo Yap to strengthen the DA's program for organic agriculture wherein the use of expensive synthetic fertilizers, pesticides and other inputs will be reduced. Secretary Yap replied the DA was into promotion of balanced fertilization. Their extension program will be directed to 2,500 farmers.

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