Agri Econ 15: Why do Thailand and Vietnam Produce More Rice than the PH?

The new Administrator of the National Food Authority (NFA) and a friend, fellow UP  alumni, Renan Dalisay, shared in his fb wall photos of his recent visit to IRRI including meeting IRRI Dep. Dir. General Bruce Tolentino. Then he added,

Like many of you, i could not resist asking why other countries like Vietnam and Thailand, who learned the technology of rice planting in IRRI, are now way, way ahead of the Philippines in the area of rice production. The reply was simple and forthright, they walk their talk.

Dr. Bruce Tolentino's presentations earlier should have answered such question -- why Vietnam and Thailand have high rice output than PH. Here are two charts from some of his recent presentations.

1. Thailand has about 11 million hectares of rice land, Vietnam nearly 8 million hectares, vs. only less than 5 M hectares for the PH.

2. The term Thailand and Vietnam are "way ahead of the PH in rice production" is true on absolute rice output, but not for Thailand in average productivity per hectare.

Another chart from Bruce T.

3. TH and VN are on mainland SE Asia. PH is far out and detached from the mainland. Them in the mainland have Mekong River, Ton Le Sap River, other huge rivers that provide huge irrigation. They also have wide flat lands suitable for rice farming.

And I will  add these additional factors:

4. VN and TH perhaps have only about 1/5 of the number of typhoons per year as those entering PH. On average, about 20 typhoons enter the PH, about half just pass nearby while another half make actual landfalls and cause more damages and crop losses.

5. VN and TH are done with their agrarian reform (AR) and forced land redistribution; the PH is not done yet, after 43 years of implementation, starting only in 1972 Marcos' land reform, not counting earlier land reform programs. No timetable, seemingly forever AR means endless uncertainty in agribusiness. Large scale rice farming is not possible because of potential political backlash.

6. Thailand has only about 65 M population, the PH has 100 M people (as of last year).

7. Subsidies to rice farmers, it is also being done in the PH. Tractors and water pumps, farm roads and irrigation, seeds and credit support, etc., these subsidies are given by the PH national government to small rice farmers. LGUs have their own subsidies too. 

The answer to Renan's question is often outside of politics and governments. Geography and nature provide the clue who should specialize on rice production, who should specialize in tourism, etc.

The cost  of production can always be lowered through technology and biotech. But  crop losses due to frequent typhoons, especially in the current  period of global cooling -- more rains, more flood -- losses cannot be easily controlled or minimized.

If the PH government should insist on rice "self-sufficiency", then it should allow corporate, large scale rice farming. Economies of scale, tapping lots of plant scientists and geneticists, will greatly improve PH rice output.

What is wrong with selling cheap rice from Thailand, Vietnam and Cambodia? Do people glorify expensive rice via rice protectionism, rice QR and rice tariff? Then turn around and lambast the government, lambast anyone else, why PH rice prices are high?

The quick solution to  more rice supply in the  PH is through free trade, Abolish  rice protectionism, even  NFA monopoly in rice importation and  licensing of  importers. Allow those cheap rice from Th and Vietnam, and Cambodia, to be sold here cheaply too.
-----------

See also:
Agri Econ 11: Protecting Land Properties by the Poor in India, April 22, 2014
Agri Econ 12: Presentation at WASWAC-BSWM Seminar, May 13, 2014
Agri Econ 13: What and Where to Plant, Nature vs. Government Planning, June 24, 2014 
Agri Econ 14: NO to Further Extension of Agrarian Reform, July 03, 2014

Agri Econ 13: What and Where to Plant, Nature vs. Government Planning

Rice trade liberalization, not rice protectionism and "anti-smuggling" campaigns, is a better alternative for the Philippines, Indonesia, Malaysia and other countries. What to plant where, nature itself provides the clue.

This is a good report from the International Rice Research Institute (IRRI), Rice self-sufficiency: A question ofgeography? It observed that

In theory, the reasons why the exporting countries might have more rice area per person could be that their land is more suited to growing rice (as opposed to other crops), cropping intensity (the number of crops planted per unit of agricultural area) is greater, more land is used for agriculture, or more land is available per person (low population density).  

Empirically, the proportion of total crop land devoted to rice, which is a measure of the suitability of land for growing rice, explains rice production per person across countries almost perfectly (the R2 of a simple linear regression is 0.92; see Fig. 1). Thus, the importers are all to the lower left of the figure, while the exporters are to the upper right.

Some folks would say, “My grandfather was a farmer, my father was a farmer, therefore I should be a farmer too."  

Yes, but while one's grandfather and father were rice farmers, he can be a vegetable farmer, or chicken or goat farmer. Very often, governments waste resources, like forcing rice "self-sufficiency" policy and compromising other policies and taxpayers' money. The endless agrarian reform (only 2-3 years in Japan, S. Korea, Taiwan) that is now 42 years, counting only from 1972 Marcos' agrarian reform, is mainly premised on encouraging or forcing rice self-sufficiency. That IRRI paper should help douse cold water in the minds of the rice protectionist groups. 

An American friend based in Iloilo, Bruce Hall, made a good observation early this year. He wrote,

Why is rice smuggling even a crime? Food should be a cheap as possible. If that means that I buy my rice from a poor farmer a thousand miles away in another country rather than hundreds of miles away, so be it. What is important is that food is cheaper so that the poor can afford to eat. Already 1/3 of Filipino children are underweight or under-height.

Another good article, from the Philippine Rice Research Institute (PhilRice) last January 14, 2014,  PhilRice Calls for Rice Competitiveness toCurb Smuggling

According to the two PhilRice economists, domestic price of rice was up to 75% higher than average global rice prices in 2000. The gap reduced in 2008, but price differential widened again to around 30% in 2012 mainly due to higher import tariffs (of about 50% beyond quantitative restrictions quota) and higher production costs... 

The economists say that Free Trade Agreements with ASEAN countries next year will force the government to reduce trade barriers which in turn will minimize rice smuggling in to the Philippines.

It's good that some government researchers are mindful not to keep punishing us average rice consumers with government-created expensive rice policy.

If global food production must double within 4 decades or so while the land area for agri cultivation generally remains the same, then productivity must increase 2x. More science, more genetic modification, more free enterprise will be needed. Chart from WEF.

Meanwhile, this policy of retaining quantitative restrictions (QR) for rice is wrong. See the news report today here.

I think the Philippines is the ONLY member-country of WTO that retains the QR. All other rice importing countries have converted their QRs into tariff. Even socialist China shun QR for their rice imports. And socialist Vietnam enjoys free trade of rice and other agri commodities. 

And this report last week.

(IRRI) last year said that global rice prices have been spiraling downward last year due to the excess production in major exporting countries like Thailand and India." Yet PH rice prices last year jumped. Rice protectionism is wrong. I wonder why a Liberal government still entertains protectionist policy. 

I think it is National Food Authority (NFA) protectionism and bureaucratism that is at the root of this expensive rice problem when rice prices should be going down. Of course the never-ending agrarian reform and dislike of corporate rice farming also contributes to the problem.

----------------

See also:
Agri Econ 9: On Agrarian Reform and Agri Credit, April 29, 2013
Agri Econ 10: On Rice Price Spikes, September 29, 2013
Agri Econ 11: Protecting Land Properties by the Poor in India, April 22, 2014
Agri Econ 12: Presentation at WASWAC-BSWM Seminar, May 13, 2014

On IPR abolition 16: Debate with Teddy Boy Locsin

Patent, copyright, trademark, other forms of intellectual property rights (IPR) remain a thorny issue among many people who either (a) want social or state ownership of many things, physical or intellectual, or (b) consider that all ideas are similar so that both mediocre/idiotic and bright ideas should not enjoy any form of property rights protection.

Yesterday, I debated Teddy Boy Locsin on twitter. He is a former Congressman, former Presidential Spokesperson (Pres. Cory's time), media personality. He is also a fellow columnist in www.interaksyon.com but he's definitely more famous than a newbie like me, that's why he has more than 23,000 twitter followers.

The subject is about a new rice variety developed by some rice scientists and the gene has been transferred to the International Rice Research Institute (IRRI) in Los Banos, Philippines.

It is not clear from the news report if it was IRRI scientists themselves, or other scientists from other countries or private biotech companies, that developed that new rice seed variety. See the full news report below. These tweets were posted from around 7:20am to 8:28am yesterday.
------------

InterAksyon ‏@interaksyon
Gene breakthrough could boost rice yields by 20 percent http://www.interaksyon.com/article/41177/gene-breakthrough-could-boost-rice-yields-by-20-percent

Teddy Locsin Jr. ‏@teddyboylocsin
@interaksyon Is it patented?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon Most revolutionary seed varieties (rice, corn, tomato,..) patented. Inventors spend years & big money for R&D

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon That's their claim.

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon If its not costly to develop revolutionary seed varieties, politicians etc shd cheaply do R&D, give seeds free

InterAksyon ‏@interaksyon
@teddyboylocsin @Noysky Good question. Let's ask IRRI. Research seems attributed to them. Does @RiceResearch patent?

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon Not when seed companies sue right and left, even on seed varieties native to the place that they patented.

Teddy Locsin Jr. ‏@teddyboylocsin
@interaksyon @Noysky @RiceResearch If IRRI has patent, then it is out our pockets and in our pockets again, so okay. IRRI is ours right?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon Local seed drought resistant but low yield. Biotech makes drought resistant + high yield, value added, patented

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch June 2011 abt 112,000+ diff rice varieties in IRRI seedbank, mostly patnted? http://funwithgovernment.blogspot.com/2011/06/on-intellectual-property-abolition-part_14.html

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch I hope IRRI is ours or does it do research and Monsanto steals it?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch I think biotech like Monsanto, PhilRice do own R&D, patent them, IRRI get sampls for its genebank

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch o crap

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Most bleeding hearts hate patent, IPR. They want freebies for other people's toil & hard research

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch I hardly qualify as a bleeding heart as I am usually heartless.

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch Um, where's the hard research by Monsanto when the work is done by Pinoys in IRRI?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Great. Some heartless people hate patent & IPR, want freebies from other people's toil & hard R&D

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch And the heartless are the best kind in a fight for proper compensation for intellectual property use.

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Right, IPR like patents shd be properly respected & compensated. Disrespect IPR encourge copycat

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Interaksyon article posted has zero mention of Monsanto. Not all rice R&D are done by IRRI
--------

Today, IRRI replied to the tweets and here are the exchanges, posted around 8:15 to 9:30am today:

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon Thanks for the great conversation! FYI IRRI does not hold any patents - we share all our new...

Teddy Locsin Jr. ‏@teddyboylocsin
@RiceResearch @Noysky @interaksyon Poor you. You do the work, the whites get the money. There is a reason why we are brown.

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon For more about who funds our research see http://bit.ly/T0Hmlg

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon We work all across the world to share our research to benefit as many farmers as we can :-)

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon Here's how we share the rice varieties and info from International Rice Genebank http://bit.ly/O9OSsm

Nonoy Oplas ‏@Noysky
@teddyboylocsin @RiceResearch @interaksyon Rice gene patents owned by PhilRice, UPLB, Syngenta, Bayer... They all share these to IRRI, good.

Nonoy Oplas ‏@Noysky
@RiceResearch @teddyboylocsin @interaksyon 113,000+ rice genes at IRRI genebank, thx to biotech & patent sys, more varieties are invented.

On IPR Abolition 9: Seed Patent and Explosion of Seed Varieties

One of the pet peeves of the anti-IPR groups and individuals, particularly the socialists and some anarchists, is the patenting of seeds -- rice, corn, eggplant, tomato, many other vegetables and crops. The usual arguments given are that (a) IPRs create monopoly, (b) ideas are non-scarce, there is no competition when one person will use an idea discovered or invented by another person. See my earlier discussion, On intellectual property abolition, Part 8.

Let me give the example of the most important crop in the Philippines and many other countries, rice. The International Rice Research Institute (IRRI) has more than 112,000 different types of rice in its genebank. See the International Rice Genebank (IRG). And aside from IRRI, there are many other rice research institutions worldwide -- academic, national governments, NGOs, etc. -- that keep their own rice genebank too. See also the long List of rice varieties in many countries, from wikipedia.

Let us take the more than 112,000 different rice varieties in the IRRI genebank alone. I do not know how many of them were "natural" or "organic" varieties, and how many were products of biotechnology to develop certain properties, like drought resistant, flood resistant, resistant to certain insects, pests and microbes, and so on. And those rice varieties are patented. Modern science has allowed rice farmers, from small scale to corporate farmers, to develop high-yielding varieties with shorter harvest period.

If people are wondering why the population alarmism of "millions will starve to death" created by Thomas Malthus in the 18th century, to Paul Ehrlich in the 60s to 70s did not happen despite the continued rise in global population, the quick answer is rising productivity due to modern science and biotechnology. And the IPR system of seed patenting provides additional incentives to private corporations, private research institutes, even some public research institutes, to spend huge amount of money and engage the brightest minds in agricultural science, biotechnology, biochemistry and related fields.

So, as the number of rice varieties keep expanding worldwide, who has the monopoly of important rice seeds? IRRI? The UN? Is there a single corporation, or cabal of corporations, that monopolize all those 112,000+ seeds? Was anyone disallowed or disenfranchised from developing or inventing his/their own new rice variety?

Here are two examples of those more modern, more high yielding rice varieties introduced in the Philippines. I saw them in a rice farming village in Pangasinan. The farmers that I talked to said these seeds are expensive, P1,350 for a 5-kilos sack Pioneer hybrid rice seed (middle), and P600 for a 3-kilos pack of Agriseeds. But they have heard a lot and saw examples of their neighboring farmers who harvested about 2x the already high yielding variety that they were using for many years now.

I am not a rice farmer, so I do not know the difference in properties of these new seed varieties with the older varieties. I just took photos of the packaging. Here are the other side of those 2 varieties above.

The embrace -- and risk-taking -- of small scale farmers of more expensive, patented rice seeds, but will significantly increase their harvest and income, is a good sign. The goal of farmers is simple: higher harvest, higher income.

Plant patent is 20 years from the date a patent was applied. I do not know if seed patent has the same procedure as drug patent. For the latter, the various clinical trials and other R&D eat up 10 to 13 years of the 20 years drug patent so that the actual marketing and higher price period is only 7 to 10 years.

Once the plant or seed patent expires, other seed developers, corporate or academic or NGOs, can use the off-patent seed variety for propagation to more farmers. The rest of humanity benefits from the expensive research, the risk-taking, trial and error efforts by the innovator companies and scientists.

The continued demonization of the IPR system and the individuals, entrepreneurs and companies who seek IPR protection because they already spent huge amount of resources for the expensive and risky R&D work to develop ever more high yielding seed varieties, from rice to corn to vegetables and fruits, is often driven by emotion and not reason. When socialists attack those innovator corporations, it is understandable because socialists simply hate private corporations who make profit, because there is "labor exploitation" involved, because there is "price gouging of consumers" involved. That is why they advocate the forcible take over and ownership of all means of production by the state.

When other free marketers however, attack private companies and individuals that seek IPR protection after they spent on expensive R&D and want to make high profit someday, there is inconsistency in their advocacy of the free enterprise system. If they hate private ownership of inventions, if they want more socialized, more collective, more communal ownership of inventions, to my mind, that position is closer to socialism.
----

Related articles:

1. Should intellectual property rights be abolished? (22 pages)
2. Population alarmism and Paul Ehrlich