Pioneer Hi-Bred to expand hybrid rice and corn seed programs in Philippines

The expansion program of hybrid rice and corn seeds producer American-owned Pioneer Hi-Bred Philippines Inc. to provide hybrid seeds requirements to Luzon farmers led the seven new projects worth over P3 billion approved by the Board of Investments (BoI) last week.

Board of Investments executive director Lucita P. Reyes told reporters that Pioneer Hi-Bred has proposed to expand in Tarlac with P960 million in new investments.

Pioneer Hi-Bred has an existing operation in Polomolok, South Cotabato since 1989 and been supplying hybrid rice and corn seeds for the Visayas and Mindanao farmers. Commercial operation is set to start in March 2012. This is the first project of the company that was registered with the BoI.

Part of the expansion is a seed processing in Hacienda Luisita Industrial Park in San Miguel, Tarlac, which will employ 435 people.

The company has already entered into contract growing agreement with a total of 6,912 contract growers in Tarlac including landowners and farmers for the seed production. The company requires a total of 4,147 hectares of land for the production of grand parent rice and corn seeds that would be supplied to local farmers.

The American firm plans to produce 2,563 metric tons of rice seeds and 4,147 MT of corn and 849 MT of by-products for a total of 7,559 MT total production. All revenues generated from the sale of by-products like discarded/non-viable rice seeds and corn seeds, may be eligible for income tax holiday. Under non-Pioneer status, an enterprise may be eligible for four year ITH.

Based on its assumptions, a contract grower can earn at least P20,000 per cropping cycle. There are two cropping cycles in a year for rice production.

The company said that its hybrid rice seeds would yield between 11 to 14 MT per hectare as against the ordinary rice seeds of 5 MT per hectare.

Yields of its hybrid white and yellow corn seeds are also projected at between 8 and 11 MT per hectare versus 2 MT per hectare for ordinary corn.

"This is a big boost to farmers,” Reyes said.

The BoI also said that the National Food Authority (NFA) has endorsed the expansion project, which was approved on a Pioneer status with non-Pioneer incentives.

Likewise, NFA did not oppose to the Pioneer project, notwithstanding that it is a primarily foreign-owned corporation. As such, the enterprise was required to submit proof of investments to maintain its Pioneer status and registration to the BoI on or before the last day of one-year period from registration, otherwise it should be automatically cancelled.

Executive Order 858 or the Eight Regular Foreign Investment Negative List provides that full foreign participation in the culture, production, milling, processing – of rice and corn – is allowed provided that within the 30-year period from start of operation, the foreign investor shall divest a minimum of 60 percent of their equity to Filipino investors.

Pioneer Hi-Bred is the second hybrid rice seeds producer registered with the BoI, the first being the wholly-owned Filipino SL Agrictech Corporation, which has a 40-hectare farm in Sta. Cruz, Laguna producing several hybrid rice parental lines.

Starting modestly with land provided by the provincial government of Laguna in October 1999, SLAC initiated the development of several hybrid rice parental lines which were later transferred to a 40-hectare farm in Sta. Cruz, Laguna that now houses the research and breeding complex of the company.

So far, the company has six hybrid rice varieties under its SL8 Series. Its Jasponica (brown rice) and Miponica (premium grade) are gaining popularity.

The SL8 variety has the potential of producing 14 tons a hectare of premium grade rice as against 3-4 tons of traditional rice.

Now, SLAC has an R & D facility in Sta. Cruz, Laguna. It has also a hybrid rice seed production base in a 187-hectare farm in Banay-Banay Davao Oriental, which has been expanded to 1,500 hectares.

The company has invested at least P500 million for this hybrid rice production, Lim said.