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Due to higher wage rates and expensive fertilizer, the average palay production cost in the Philippines last year went up to ₱12 per kilogram territory and went back to a 7-year high.
In 2021, the average cost of producing one kilogram of palay increased to ₱12.02 from a previous ₱11.50. This is a 4.52% increase caused by higher costs of hired labor and fertilizer according to data from the Philippine Statistics Authority (PSA).
This was the highest palay production cost since 2014 with a recorded ₱12.33 per kg then, ultimately reversing the rice sector’s gains from the yearly ₱10 billion Rice Competitiveness Enhancement Fund (RCEF) which was implemented in 2019.
PSA’s data showed that the average cost per hectare of palay last 2021 breached a record high of ₱49,920 which is an increase of 6.15% compared to 2020’s figure of ₱47,027.
For cash costs, which account for almost half of the total costs, this went up to ₱24, 258 per hectare.
Data from PSA shows that costs for fertilizer recorded the highest growth rate with 31% as it hit a 12-year high of ₱5,019 per hectare.
With this, palay farmers spent ₱10,794 per hectare for hired labor last 2021. This figure is 5.4% higher than 2020’s numbers of ₱10, 241. According to PSA data, this was the highest recorded labor cost.
Data also from PSA shows that the gross revenues of farmers last 2021 were at ₱69,600 compared to 2020’s ₱68,519. This would mean that the net income of Filipino rice farmers decreased by 8.43% year-on-year to ₱19,680 per hectare, which is an 8-year low.
Source: Business Mirror
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