![]() ![]() Rice farms in the Philippines are covered by the agrarian reform law, and the law has effectively dismantled the feudal landlord and tenant relationship, where the landlord owns the land and the farmer is a sharecropper. To illustrate the rice business, let us analyze the case of a typical Filipino rice farmer and private sector processing enterprise. Big business has shied away from the rice processing business in countries like the Philippines, and therefore public sector research has to provide the small entrepreneurs with the technology. This uncertainty provides little incentive for the private entrepreneurs to invest in more efficient processing technologies. Meanwhile the government's policy is to import cheap rice for consumers, maintain a high local farm gate price for paddy, and leave the processing sector to the market forces. The consumers demand a steady supply of good quality rice products at reasonable prices, the farmers want the highest prices for their harvest, and the processors and traders have to make a living in between. This supply and demand system is however often distorted by political policy. The farm production sector supplies the raw material to the processors. It has been shown that the consumers have their preferences, which the processors seek to satisfy. Many researchers have little appreciation of the rice industry as a business. Lack of understanding of the rice industry as a business.
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