The Department of Agriculture (DA) may revise a policy that increased hybrid rice seed subsidy from P1,200 to P1,750 per hectare which will burden the government financially, cause price distortion killing commercial seed growers, and threaten sustainability of government's rice sufficiency program.

Agriculture Secretary Arthur C. Yap said the DA will review the seed subsidy of the Philippine Rice Research Institute (PRRI) for farmers as the increased subsidy may cause price distortion in the market.

Yap said that the increase in farmers' seed subsidy may adversely impact seed growers since they would have to compete with government which is selling the seeds to farmers at a low price that they can never match.

He said this situation is similar to the National Food Authority's (NFA) function of supporting unmilled rice price. If NFA's buying price is low, then rice price in the market will not stabilize, and farmers will not have the chance to sell their rice at a price attractive to them.

Yap admitted, though, that some subsidy for hybrid rice farmers are presently needed to boost government's rice sufficiency program as the Philippines still imported a huge one million metric tons for 2004.

"We're trying to be self-reliant. We'll do what it takes to be food-secure," he said, adding that DA will find out if the increase in subsidy is aimed to offset farmers' increased cost for fertilizer.

Hybrid rice seed actually costs P2,400 per 20-kilo bag in the market.

An official of the International Rice Research Institute (IRRI) said that other countries that have successfully adopted a hybrid rice commercialization program such as China and India have not extended their seed subsidy program too long. The program, he said, will only succeed if the private sector plays a major investment role in a private sector-friendly environment.

Among the commercial seed growers in the country are Monsanto, SL Agritech Corp., Bayer CropsScience, and Syngenta.