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Article: Commodity Profile: Region VI - 21 Oct 2007

Region VI is comprised of the island of Panay, the province of Negros Occidental and the island of Guimaras.  Panay island is composed of 4 provinces; Aklan, Antique, Capiz, and Iloilo. There are a total of 16 cities, 116 municipalities and 4,048 barangays in the region.  The city of Iloilo is the regional center of trade, industry, education, culture and government.  Other important cities in the region were Bacolod and Roxas City.  Region 6 is subdivided into 18 congressional districts.  The provinces of Aklan, Antique, and Guimaras each represents one district; Capiz is composed of two districts; Iloilo with five districts; Negros Occidental 6 districts; and the cities of Iloilo and Bacolod are distinct congressional districts.

Commodities being traded are:

   Rice, mongo, peanut, eggplant, mango, tomato, coffee, banana (saba), calamansi (Philippine lemon), pineapple, papaya, and tobacco.



Rice (Oryza sativa L.) is the most important cereal crop in the Philippines and is the staple food of over 70 million Filipinos.  It contributes about 35% to the total calorie intake of Filipinos. Cultivated rice or “palay” is an annual grass with round, pointed culms, flat leaves and terminal panicles.  The grain is ripened ovary.  When it matures, 90-100% of the filled spikelets turns yellow. Though there are several varieties of palay that are available, the most common are the IR-64 and IR-36 varieties.  IR-64 is the preferred variety because it is high yielding (about 5.3 mt/ha.) and pest-resistant.  Moreover, it has good eating quality (i.e. soft and can be digested easily).  It grows to 105 cm. high, taller than the IR-36 variety which stands at 85 cm. only.  It is less susceptible to birds and crows. 

About 88% is used as food, 4% for processing, 2% for seeds and 6% goes to feeds and waste.  The per capita consumption averages at 93 kg/year.  

Palay growers till an average farm plot of 0.5 – 3.0 hectares.  Most farmers lease the land they till.  Sharecropping is the dominant practice where the landowner gets 1/6 of the total harvest.  Farmers normally practice crop protection.  Rainfed areas can support only 1-2 croppings a year (usually rice – mongo) while irrigated areas can support 3 croppings a year (rice – rice – mongo/watermelon) or a combination thereof.  Upland areas, on the other hand, merely have one cropping season which accounts for the low volume of upland rice available in the market.  
 Farmers usually require production loans from informal sources such as agents or traders.  The preference for informal sources lies in their accessibility to borrowers, precision of production and consumption loans and acceptance of repayments in kind.  Interest charges range from 6% to 10% for a period of and payable within 3 to 6 months.  Production loans cover the inputs and labor expenses of the farmer.  Harvested palay is often sold to the trader/financier who deducts the total loan from the proceeds of the harvest.  Some traders/financiers allow farmers to settle their loans.     

Palay is classified according to its moisture content, as follows:“Oga” – dry or ready to mill w/ moisture content of 14%.   “Lay-ang” – semi-dry palay with moisture content of 15-18%. “Labtong” – newly threshed palay with moisture content of more than 18%.   “Bahay” – fermented palay, which is dried and threshed three days after harvesting.    

Traders encourage farmers to plant the preferred IR-64 or IR-36 varieties.  Due to the demand of these varieties, and the credit tie-up and patronage, farmers often have no option but to follow the traders advice. Across rice types, a price difference of P0.50 – P1.00 / kg. exists, with ready-to-mill  fetching the highest price.  Palay is packed in sacks averaging 40-42 kgs. each.   For wholesale transactions a minimum volume of 1 sack holds. Rice on the other hand, is classified according to the cropping season.  Quality as a sub-classification is also considered. “bag-o” – recent cropping season’s harvest further classified into: Superwhite – very white grains; polished rice with more head rice and fewer broken grains; considered first class rice.  

Good or regular white – not as white as superwhite; has less head grains and a higher percentage of broken grains; considered second class rice. “Bahay” – yellowish and fermented grains; considered as third class rice. “Laon” -  last cropping or the previous season’s harvest.  It has dirty – white grains and has no sub-classification.  It is more expensive than the “bag-o” since it becomes puffy when cooked making it a favorite among budget-conscious consumers; a price difference of P0.50 – P1.00 / kg. exists between “bag-o” and “laon” rice.  

Upland varieties such as Malido, BE-3, Azucena etc. are also sold in the market and are classified as such, whether in palay or in rice form.  Buyers’ preferences actually vary, depending on the income bracket and the occasion.  Fancy varieties are preferred by upper income consumers.  Consumers at the lower end of the income scale may also buy fancy rice during special occasions like fiesta celebrations.  During such occasions, fancy rice is usually used as an enhancer or aromatic agent and mixed with regular rice. Individuals and families who have low incomes prefer to buy the lower priced “bahay” rice or NFA rice. The middle and upper income classes buy Superwhite or regular rice.  Traders ship this type of rice to Manila and other demand centers. Rice is packed in sacks averaging 48-50 kg. per sack.  Rice traded by sack in wholesale transactions and by ganta or kilograms in retail transactions.  

Cropping pattern of palay/rice has changed with the weather conditions.  Peak harvest used to commence in August but now it is from September to October, which is also corresponds to the peak trading months.  The lean supply months are from November to January and May to August.  December is a peak trading month.  Traders thus store enough supply from the first and second cropping to ensure supply during lean production months. Palay prices are inversely proportional to supply.  Prices normally decline as the harvest begins and vice versa.  Rice prices, nonetheless, remain stable.  During lean production months, however, rice prices surge and fluctuate regularly. 

Supply and demand factors influence rice traders, by withholding their stocks rice hoarders can control the prices. Retailers based their retail selling prices on their procurement price.A price difference of P5.00 – 10.00/ cavan exists between fancy rice and the IR-series.  A P15.00 – P20.00 price difference per cavan occurs between wet and dry palay.  Due to artificial shortage in supply for the previous years, rice prices soared to P1,200.00 / sack.  Under normal condition palay is sold at only P6.80/kg. Factors that may contribute to price differences across locations are:location and distance from buyers; volume of traders; and capacity to produce  

Market Flow
Producer/Farmer ---> Middlemen/Wholesaler ---> Retailer ---> Consumers
Producer/Farmer ---> Retailer --> Consumer
Producer/Farmer ---> Consumer Western Visayas 2002 Rice Production

Provinces Area Harvested (ha.)Production (MT)
Negros Occ.

Average yield is 2.95 mt; IRR - 3.36mt; RF - 2.53 mt

 Source: Bureau of Agricultural Statistics, Region 6, Iloilo City           

Taken from the Region VI Agribusiness Profile, Department of Agriculture 

Posted By: PhilCTTIS Data Center 
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