Farm Machines Help Cut Rice Production Costs

By Zac B. Sarian

Did you know a company that employs modern farm machines can cut rice production costs to R7 per kilo of freshly harvested palay?

The company is the Agri-Tech Integrated Services Company (ATISCO) which is a subsidiary of the Yazaki Torres Manufacturing Company with about 14,000 employees, based in Calamba City, Laguna.

On Sept. 8-10, 2016, ATISCO and its sponsors held its First Harvest Festival at its Farm 2, Brgy. Talaga, Tanauan City. The event featured a demonstration of the capabilities of Branson tractor from Korea using various land preparation equipment like the rotavator, disc plow, levee maker, and buck hoe.

At the same time, the visitors saw for themselves the performance of various vegetable varieties and other high value crops planted by participating seed companies, which included Allied Botanical Corporation, Bayer Vegetable Seeds, and East-West Seed. The seed companies planted their favorite varieties so the farmers could see for themselves how hybrids fared under the conditions prevailing in Tanauan City, particularly at ATISCO’s Farm 2.

ATISCO is pioneering a farming concept that starts with the production of various crops that are used by a captive market. The captive market consists of the 14,000 strong employees of Yazaki Torres Manufacturing Company in Calamba, Laguna.

It is a strategy that is unlikely to fail because the ingredients of success are all there. There are the improved technologies of production coupled with a sure market for the products produced
by ATISCO, which is an independent satellite company of Yazaki.

And what are the products that ATISCO is focusing on? One is rice. For this purpose, it has set up operations in Oriental Mindoro, where it has adopted a scheme in which the company provides the technology and financing so the rice farmers will make money. Under the scheme, ATISCO acquired farm machines to reduce the cost of producing rice. These include Branson tractors from Korea and its attachments, like a plow, rotavator, rice planter, rice harvester, and efficient compact mills to polish the grains.

The rice produced, for a start, is supplied to the Yazaki canteen, which uses two tons of rice a week. In addition to that, rice is also sold through ATISCO’s market within the Yazaki compound, where the employees can buy their household requirements at prices lower than those items of similar quality in the market outside.

How do the farmers make money? Here is how.

The Lee Hwa compact machine has a high recovery rate of as much as 68 percent.

The farmers become contract growers of ATISCO. For instance, if the farmer has a two-hectare farm, ATISCO will buy the harvest at an agreed price of P15 per kilo of freshly harvested palay. The farmer is likely to make a profit because the cost of production is reduced compared to the cost usually incurred by the farmer using the old system. The reduced cost is due to the use of farm machines, particularly those supplied by FIT Corea which represents, in the Philippines, the members of the Korean Agricultural Machinery Industry Cooperative.

The ATISCO system is like this. If farmers agree to become contract growers and they do not have the money, they can avail themselves of a P42,000 loan per hectare at 1% interest a month from Bangko Makiling. The loan covers the cost of land preparation, fertilizers and pesticides, harvesting, and technical guidance by ATISCO.

As per actual experience in the past three seasons, the hybrid varieties that were planted yielded an average of 6 tons per hectare worth P90,000. That’s more than double the cost of production, so the farmer really makes money. After deducting the loan and the cost of money, the farmer is richer by about P40,000 per hectare in a growing cycle of four months.

The cost of production, according to Delima, is just around P7 per kilo whereas the selling price is P15 per kilo. And that is the reason why more farmers have become contract growers of
ATISCO. In the first season in 2014, there were only 45 hectares covered. But by the second cropping in 2015, the number of farmers increased to cover 70 hectares. And by the third cropping in 2016, all of a sudden, the covered area increased to 300 hectares cultivated by 150 farmers from four towns in Oriental Mindoro.

With the big production, Delima is not worried about marketing their rice. He said that there are more than a hundred big companies that are operating in the nearby Export Processing Zone. They are all potential customers.

Arnel de Mesa, OIC regional director of DA in Calabarzon, posing with new pepper variety being tried at the ATISCO Farm 2.

Meanwhile, ATISCO is producing the vegetables required by the Yazaki canteen and the market within the compound where the employees can buy their household requirements. Among the vegetables most needed by the canteen are squash, upo, sitao, ampalaya, papaya, and cucumber. These are mainly produced at the moment at ATISCO Farm 2.

One purpose of the harvest festival on September 8-10, however, was to encourage the farmers around Tanauan to open their minds to the possibility of making money by growing vegetables. Farm 2 is being prepared to become a vegetable production training center. The objective is to make the farmers to become vegetable contract growers in the same way that they have rice contract growers.

ATISCO was organized only in December 2014 but by the looks of it, it is going to be a big winner. There are big possibilities. For instance, it could be a model that could be organized to produce rice for the National Food Authority. Instead of buying rice from Vietnam or Thailand, NFA could be supplied by ATISCO or some similar groups. NFA would buy the rice produced at a pre-agreed price like what ATISCO is paying its contract growers today.

For more information, visit Agri-Tech Integrated Services Corp (ATISCO).

This appeared in Agriculture Monthly’s October 2016 issue.