Land Bank To Lend At 6% Per Annum For Rice Production

Rice production is cheaper when mechanized.

The proponent of a novel rice land consolidation scheme will soon be able to borrow money from Land Bank at the hitherto unheard of interest rate of 6% per annum for rice production.

This is possible by lending the money direct to a company that is engaged in mechanized rice production. The private company is the Agri-Tech Integrated Services Company (ATISCO), a satellite firm of Yazaki-Torres Manufacturing, Inc. based in Calamba City, Laguna.

Korean farm machinery at the ATISCO farm.
Dante Delima, chief operating officer of ATISCO.

Right now, ATISCO is providing services to rice farmers in Mindoro under a scheme where the farmer can engage ATISCO in land preparation for a fee, mechanical rice transplanting, harvesting by machine, and then buying the palay at a rate better than the prevailing market price. As per their experience in the last four cropping seasons, the farmers were able to increase their net income per hectare to P27,000 compared to their previous net income of P18,000 per hectare by engaging the services of ATISCO..

Under the memorandum of agreement between ATISCO and Land Bank, the collaboration will involve the planting of rice on 500 hectares in the towns of Bansud and Bongabon in Oriental Mindoro. No, the 500 hectares which belong to landowners with at least three hectares each, will not necessarily be contiguous. They could be clusters of at least 20 irrigated hectares so that it is possible to mechanize rice production, according to Dante Delima, chief operating officer of ATISCO.

ATISCO will execute a management contract with the landowners so that the company takes full control of operating the consolidated farm lands. The agreement would be for five years, renewable for another five years. Through the financing of Land Bank, ATISCO will take care of every expense in producing rice on the 500 hectares, including seeds, fertilizers and other inputs.

The landowner will not do anything, except perhaps monitor the developments in the consolidated lands. The landowner is assured of P5 per kilo of fresh palay produced at an average of 4.5 tons per hectare. This means that he will get P22,500 per hectare per cropping. If the yield is lower than 4.5 tons, ATISCO will still give the landowner P22,500 per hectare. If the yield is higher, say 6 tons per hectare, the landowner will then get P30,000 per hectare.

Mechanical rice transplanter does the job fast and at less cost.

Based on its experience, Delima said they have already figured out that they could produce polished rice at P27 per kilo. And they can sell the rice at P36 per kilo for a margin of P9 per kilo. The rice produced could be absorbed by the canteen of Yazaki Torres which has more than 10,000 employees. In case, the production exceeds the requirements of Yazaki Torres, they are targeting the locators at the nearby Philippine Economic Zone Authority (PEZA).

ATISCO could also derive additional income from its rice milling operations. The rice bran could be sold as ingredient for livestock feed. The rice hull could be turned into carbonized rice hull. And the rice straw could be baled for feeding to cattle and other farm animals.

Delima is also looking at planting mungo after harvest of rice. The company will take care of all the expenses. But the landowners who would like to do the harvesting will get half of the harvest as their share. ATISCO is not only interested in the seeds. Mungo, being a legume, can enrich the fertilizty of the farm.

Delima does not expect the project to take off immediately. Land Bank will still have a lot to in social preparation in the targeted communities. They will have to conduct consultations and explain the scheme so that the farmers will understand what the project is all about. Of course, the local government officials will be involved in the social preparation of the project.

Malou Bautista and Dante Delima pose with small farm tractors at the Urban Agri trade show at the Mall of Asia.
In the meantime, while waiting for the actual start of the consolidation project, ATISCO will already put in place its machinery in the target areas. The farmers may then engage the services of ATISCO in land preparation, planting and harvesting of their rice crops. That will assure them of the capability of ATISCO in doing what it promises it can do.

Now, you might say. Why canโ€™t the small farmers enjoy the 6% annual interest that Land Bank is giving ATISCO? That is because the funds are coursed through the cooperatives who have to charge service fees and other charges. In the case of ATISCO, the bank is directly transacting business with a rice producer.

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