Agriculture Secretary Francisco Tiu Laurel Jr. bared a plan to increase the capacity utilization of Rice Processing Systems (RPS) in the country despite concerns about the possible overcapacity in the milling sector.
RPS refers to a set of rice facilities that aim to help boost the income of local palay farmers, funded under the Rice Competitiveness Enhancement Fund (RCEF) following the Rice Tariffication Law (RTL).
In a statement on Tuesday, he said capacity utilization is “more important” than rated milling capacity.
Tiu Laurel said a higher utilization rate will benefit players within the rice value chain, even the buyers of the country’s staple.
“Our target utilization rate is 80 to 85 percent. That’s where efficiency improves, costs go down, and all parties —millers, farmers, and consumers—benefit, provided other costs hold steady,” he said.
To date, operators need to hit at least 63 percent capacity usage to “break even,” Tiu Laurel said.
“Go below that, and you’re losing money,” he added.
The agriculture chief disclosed this target as he sought an increase in RPS through the Philippine Center for Postharvest Development and Mechanization’s (PhilMech) expansion of large-scale RPS.
To date, the PhilMech has established 122 out of the 151 target RPS units equipped with state-of-the-art multi-stage rice mills and recirculating dryers.
Of the 122 established RPS, 116 were completed under the Marcos administration.
The PhilMech aims to accomplish the remaining 29 within the year. (PNA)