The impacts of research on Philippine rice production

This is a comprehensive study of the impacts of research and development in Philippine rice production. I examined the sources of rice production growth in the Philippines from 1996 to 2007 by estimating a translog production function using a generalized instrumental variable estimator. Using a production framework, I analyzed the contributions of conventional and non-conventional inputs, and residual total factor productivity to the production growth. Higher output growth was observed during wet and dry seasons of 2001-2006 and 2002-2007 compared to that of 1996-2001 and 1997-2002. Results indicate that non-conventional inputs such as irrigation, adoption of hybrid and third generation modern inbred varieties, attendance at rice production training sessions, use of high quality seed, and machine ownership were the main sources of production growth in these periods. Using a cost framework, I measured the contributions of public investments in R&D, extension, production subsidy, and irrigation in reducing the cost of rice production in the Philippines. I used the shadow share as a measure of marginal return to public investments in determining the need for further investments. I also decomposed the growth in total factor productivity of rice into scale economy, improvement in capacity utilization due to public investments, and rate of technical change. Results indicate that R&D has generated cost-savings and has improved productivity of rice. This implies that further investment in rice R&D is essential. I also found that investment in production subsidy is counterproductive which supports its phase-out. I also found inefficiencies in extension and irrigation investments. This suggests that reforms in the current extension system and a reorientation of the irrigation development strategies should be implemented in order to reap the potential benefits from these investments. Finally, I used the CERES-Rice simulation model of the Decision Support System for Agrotechnology Transfer in investigating the nature of shift in individual rice supply when a hybrid rice variety was adopted. Using the DSSAT model, I determined the yield responses of hybrid and inbred rice varieties to different levels of nitrogen, potassium, and water applications. I estimated hybrid and inbred yield response functions using the DSSAT-generated yield data. Using the estimated coefficients, I recovered the profit-maximizing demands for nitrogen, potassium and water. Then, I derived the supply functions of hybrid and inbred rice by substituting these profit-maximizing demands back to the yield response functions. Results show that adopting the hybrid rice variety would lead to a pivotal and divergent shift in the individual supply. While far from being used in an aggregate scale, the method presented is a step toward a better measurement of benefits from adopting a specific technology and returns to R&D in general