BACKGROUND

The Korea International Cooperation Agency (KOICA) organized the Korean Implementation Survey Team which visited the Philippines on September 11-16, 2005 to work out details of the construction of a Modern Integrated Rice Processing and Milling Complex (RPC) in Aurora Province.

The team had series of discussions with the Department of Agriculture (DA) and the Provincial Government of Aurora (PGA) with respect to the desirable measures to be undertaken by the Republic Governments of Korea and the Philippines for the successful implementation of the project.

As a result of the discussions, representatives of the Republic of Korea, the Department of Agriculture, and the Provincial Government of Aurora signed the Records of Discussion on the 15th day of September 2005 defining the Terms of Reference of the project.

The Memorandum of Agreement (MOA) for project operation was formally signed by and between the PGA and the DA during the groundbreaking ceremony held on March 9, 2006.

PROJECT BRIEF

Project Title: Construction of Modern Integrated Rice Processing and Milling Complex in the Philippines
Executing Agency: Department of Agriculture
Collaborating Agency: Provincial Government of Aurora
Project Site/Location: Brgy. Reserva, Baler, Aurora Province
Project Duration: 16 months (Sept. 2005– Dec. 2006)
Donor: Korea International Cooperation Agency

Total Project Cost : US $ 2.6 million
    KOICA Grant : US $ 2.3 million
    GOP Counterpart : US $ 0.3 million

Project Objectives:

Contribute to raising the farmers’ income standard by establishing the Modern Integrated Rice Processing and Milling Complex RPC equipped with efficient and affordable drying, milling, and processing facilities of rice in the Province of Aurora to reduce post- harvest losses and to produce high-quality milled rice;

Modernize rice production facilities and enhance the international competitiveness of rice produce in the Philippines modeled after this rice processing and milling complex (RPC) project; and

Strengthen the relationship and cooperation between the Governments of the Philippines and Korea.

Project Description

This project involves the establishment of a rice processing complex (RPC) at Barangay Reserva, Baler, Aurora. It is equipped with state-of-the-art post-harvest facilities coupled with scientific mechanized rice production technologies to produce high quality rice. The complex therefore functions as a “One-Stop Service Center” that provides services such as training; leasing of large farming machine; continuous drying, storing and milling; purchasing of wet paddy rice; and selling of high quality milled rice.

This grant from the Korean Government includes the construction of RPC; provision of farm equipment and machinery; dispatch of experts to provide technical advice on the implementation of the Project; and technical and managerial training. The details of which are as follows:

A. Plant Brief

    Area : 11,150 sq. m. (100 m x 115.5 m)

    Building
    a. RPC Plant Building
        a.1 Rice Processing Complex
        a.2 Storage House
    b. Auxiliary Building
        b.1 Warehouse and Office
        b.2 Generator House
        b.3 Guardhouse
    c. Building Structure
    Steel framed structure with walls of insulated panels.

B. Equipment Provided

High quality rice facilities
    a. 5 units Re-circulating Dryer with
Capacity of 9,200 tons per year (14% w.b.)
    b. Milling Machines with Capacity of 2.5 tons per hour (14% w.b.)
    c. Storage Capacity: 1,100 tons per year (16% w.b.)
    d. Percent Milled Rice Recovery:60-65% (under normal conditions
Electric Generator (450 KW) - 1 set
Tractor (70 Hp) - 2 units
Combine Harvester - 3 units
Truck (4.5 – 5 tons) - 1 unit
Fork lift (2 tons) - 1 unit
Conveyor Belt - 1 unit
Moisture meter - 50 sets

PROJECT BENEFITS

A. Incentives of farmer cooperatives to enter into contract with RPC:

  1. Lower interest rate (market rate vs informal rate) or a total savings of PhP 2,700 per hectare per season.

  2. Patronage incentive of 50 centavos per kilo or an increase income of PhP 2,000 per hectare per season.

  3. Increased yield from 3.5 metric ton per hectare to 4.0 metric tons per hectare which will result to an increased income of PhP 5,000 per hectare per season.

  4. Provision of crop insurance with insurance premium of Php 1,000/ha/season.

Total estimated incentive per farmer:
PhP 14,550 per hectare per season or PhP 29,100 per hectare per year

Number of farmers directly participating:
868 farmers per season or 1,736 farmers per year

Total increase in farmers’ income:
PhP 25.2 million per year

Annual cash flow available for remittance to LGU:
PhP 12.72 million per year

B. Employment/Labor Cost Generation

Direct Labor Cost : PhP 3.0 million per year
Indirect Labor Cost : PhP 1.14 million per year

C. Reduction in Post-harvest Losses

Reduction of post-harvest losses:
= PhP 23.0 million per year

Effect of mechanical drying:
= PhP 3.12 million per year

Increased Milling Recovery:
= PhP20.24 million per year

Note: Modern Rice Mill: 65 % milling recovery
Old Rice Mill : 55 % milling recovery

D. Increase Quality of Milled Rice (Premium vs Ordinary)

Total Increase in the price of premium rice per year against ordinary rice:
= PhP 9.2 million per year

E. Indirect Benefits from RPC

    - easy access to post-harvest facility in the central towns of Aurora.

    - assured post-harvest drying facility even during inclement weather condition.

    - stable farm gate price of paddy rice within the influence area of the RPC.

    - showcase of post-harvest technology in the Philippines.