By Jasper Y. Arcalas, Feb. 1, 2017
SUBSIDIZING farmers’ irrigation fees may not be the lucrative answer in boosting farm productivity as irrigation is only a small part of the total cost of production, according to a high-ranking government official.
Undersecretary Maia Chiara Halmen Reina A. Valdez of the Office of the Cabinet Secretary said farmers may benefit more if the government would lessen the cost of other production inputs, such as fertilizers and seeds, rather than subsidizing irrigation.
“Irrigation is only 3 percent of the cost of palay production,” Valdez told the BusinessMirror. “I mean, if you’re going to scrutinize it, in what aspect of their production do they need help the most and would benefit them more?”
Valdez explained that irrigation is paid at a fixed cost.
“It [irrigation] is being paid based on the total farming hectarage,” she said. “Maybe the challenge lies in the cost of inputs and the technique farmers employ in planting and postharvest periods.”
In 2015 a Filipino rice farmer spent an average total cost of P47,470 per hectare, or about P12.18 per kilogram of palay, according to the latest data from the Philippine Statistics Authority (PSA). Of the total costs, P21,167 is paid in cash by farmers, while the remaining is comprised of expenses paid in kind and other imputed costs, PSA data showed.
PSA data also showed that a Filipino farmer spent about an average of P578 for irrigation fees per hectare. Of the total amount, P434 is paid in cash, accounting to about 2.2 percent of a farmer’s average cash costs in palay production.
PSA data further revealed that in terms of cash costs, famers paid the most in terms of hired labor, amounting to P8,632 per hectare, followed by fertilizers (P4,531 per hectare) and seeds (P1,354 per hectare).
“So, we should really take into consideration those things. I mean, it’s fine to have free ISF [irrigation service fees], but we have to see if the mechanism would be really acceptable to our farmers this year,” Valdez said. She cited the case of the ISF during the administration of former President Joseph E. Estrada when it was abolished in 1998. The ISF was later revived when the National Irrigation Administration (Nia) adopted a socialized irrigation fee system.
Last October the Senate approved the additional P2.3-billion budget for NIA to subsidize the agency’s ISF collection, particularly the salaries and expenses of employees in the NIA and irrigators’ associations (IAs). The additional allocation is on top of the P36.36-billion budget of the agency under the proposed General Appropriations Act (GAA) of 2017.
In an interview with reporters last December, NIA Administrator Peter Tiu Laviña said the agency is still studying and crafting the final guidelines and policies for the implementation of the government’s “free irrigation” starting this year.
Laviña disclosed that some IAs have raised concerns about the implementation of free irrigation as they benefit from the incentives in maintaining the operations of the irrigation systems.
Laviña noted that as along as the NIA charter has not been amended, the agency will continue to rely on the national government, through the GAA to cover up for all the losses from not collecting ISFs.
At present, the House of the Representatives has formed a technical working group to consolidate all the house bills filed in relation to the amendment of the NIA charter to streamline and materialize the government’s plan of providing free irrigation by creating a National Irrigation Development Program.
Under Republic Act 360, or the NIA charter, the agency is mandated to collect ISFs from farmers as payment for irrigation water delivered by the agency. The agency attached to the Office of the President uses the money for the operation and maintenance of irrigation systems in the country.
Agriculture Secretary Emmanuel F. Piñol earlier said that, with the implementation of free irrigation, cost of palay production would be reduced to P8 per kilogram.