PALAY - Grain of Life

 PALAY - Grain of Life

Rice (genus Oryza) is a plant in the family of herbs which is a major source of food for more than half the population of people in the world. It is the third largest grain crop, after corn and wheat .

In the past months rice is very expensive here in the Philippines. Government was under fire for its failure to regulate the supply and price of rice. If news is to be believed, government agencies in charge claimed that there is more than enough supply of rice in our warehouses. The country even exported tons of rice overseas!

But why is Rice or Palay Price continue to be high notwithstanding the claim of the government that it is otherwise?

I made my own research and what is more patriotic way but to engage in palay/rice trading myself to determine once and for all which is which.

I am a banker not a farmer so imagine how difficult it is for me to engage in the business. 

In my interview with the farmers, a capitalization of $600 or P30,000 is needed for every hectare of land for farming inclusive of the seeds and the fertilizers. Normally, the farmers for some reasons do not have that amount of capital. What will they do is they will borrow fertilizers from the store or borrow capital from a financer normally at 3% per month for a palay period of 120 days at most. The Palay will then be sold to the financer at a much lower price than the market. Income from palay farming is good but it is seasonal. Depending on the demand for palay, the income can really be good if not better.

There are two seasons worth remembering in planting palay:

a. ending normally in September

b. ending normally in March

Understandably, these seasons will mark the beginning of buying palay.

PLANTING SEASON:

1. Land preparation

2. Application of organic fertilizer

3. Application of Molouscide (pangkahol)

4. Application of Herbicide (pangdamo)

5. Application of Insecticide

6. Application of Fertilizer

7. Application of Insecticide

8. Application of Fungicide

9. Application of Fertilizer 

These cycle must carefully and heartfully be applied so palay will be ready for human consumption. Cycle normally lasts to 98 days to 120 days at most.

BUYING SEASON:

As in regular business the we have to know the expenses to be incurred to know if we are really earning.

Cost 

1. Milling - P85 per sack

2. Sack - 11 per sack

3. Measurement of Darak - .10 per kilo

4. Drying (Diesel) - 65 per sack (P40 per sack if ordinary Dryer)

5. Arrangement - 2 per sack

Total P163.10

=====

SELLING TIME:

It is now time for selling but first we should determine the "Recovery" meaning how many kg of palay is needed to fill up a 50kg of rice or 1 cavan of rice.

The formula will be:

let x be the recovery.

x = no. of kg of palay bought/no. of cavans of palay milled

x = 2042/18 cavans and 44 kilos

x = 2042/18.88

x = 108.15 kg needed to complete a cavan of rice

====

To determine the Selling Price (SP ) of a cavan the formula will be:

SP = (Recovery x Cost of Palay bought per Kg) + Total Costs - Other Income (By-products)

= (108.15 x 19.50) + 163.10

= 2,108.93 + 163.10

SP = P 2,272.03

=======

This means that the SP should not be lower than P2,300 per cavan (with consideration of course on the amount earned from by-products).

This also means that the cost of palay bought which was P19.50 was very expensive unless there is a predetermined computation that the seller was willing to shoulder due to previous commitments.

Further, the buyer of palay grains should monitor the prices of the Ricemill which ideally should be less than P1.00.

The question of why the prices of rice is high is still due to the rule of "Supply and Demand". Wether the supply is controlled by some sectors to appear that there is artificial shortage is another question (Which I would like to believe). This is aside from the fact that this is the time of the year where harvesting is affected by continous rains brought about by typhoons.