BM2205

Names Section Date

ACTIVITY
Rice production cost in PH higher than neighbors’
By Ronnel W. Domingo | 06 October 2016

(1) The Food and Agriculture Organization (FAO) said prices of major food commodities were back on long-
term downtrend following price spikes of 2008-2012.
(2) In the meantime, domestic prices of rice in the Philippines remained relatively high compared to prices in
neighboring countries as the country moved toward a more open trade regime for the staple grain.
(3) Industry figures show that the cost of producing palay in the Philippines was around P10-P12 per kilo,
while farmers in Vietnam grow them at P6.50 a kilo and in Thailand and India at about P9 a kilo.
(4) The FAO called for targeted safety nets to encourage small-scale farmers to continue producing while
ensuring that food remained affordable to consumers.
(5) “Low food prices reduce the incomes of farmers, especially poor family farmers who produce staple food
in the developing countries,” FAO director general Jose Graziano da Silva said in a statement.
(6) “This cut in the flow of cash into rural communities also reduces the incentives for new investments in
production, infrastructure and services,” Graziano da Silva said.
(7) He said that globally, food prices were believed to be back to their long-term downward trend in real
terms, as supply growth outpaces demand, following a prolonged period of volatility in food markets.
(8) Graziano da Silva said open trade could contribute to global food security and better nutrition, although
openness to trade could also bring risks.
(9) He said the elimination of agricultural export subsidies that affect prices in global markets could be a way
to improve trade and help small farmers in developing countries.
(10) The FAO chief said strengthening targeted social protection programs such as food vouchers was key to
make farming more rewarding to producers and still affordable for consumers.
(11) In the Agricultural Outlook report issued jointly with the Organization for Economic Co-operation and
Development, the FAO noted that mainly because of climate change, it was highly probable that “some
abrupt price surges may occur” over the next 10 years.
Answer the following questions:
1. What are the determinants of supply that were mentioned in the article? (The number on every
paragraph of the article can be used for reference during the discussion.)
2. Would each determinant increase or decrease the supply of palay? Explain.
Rubric for grading:
CRITERIA POINTS
Students could identify portions of the article that show 5
determinants of supply.
Students could explain if the determinant would increase or 5
decrease the supply.
Each member of the group was able to participate in their 5
groups’ summary (individual score).
TOTAL 15

Reference:
Domingo, R.W. (2016). Rice production cost in PH higher than neighbors’. Inquirer.net.
http://business.inquirer.net/216139/rice-production-cost-ph-higher-neighbors

06 Activity 2 *Property of STI

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