Chapter 1

THE PROBLEM

INTRODUCTION

Palay or rice is one of the staple crops grown globally, especially in Asia.

It is an essential food source, providing essential nutrients and energy to billions

of people worldwide. The price of palay grains plays a critical role in shaping the

livelihoods and economic well-being of farmers on a global scale. Farmers rely

heavily on the income they generate from selling their rice crops, and the

decreasing price of palay grains has meant a decrease in their income.

The decreasing price of palay grains has become a significant concern for

farmers nationwide. The decreasing of palay grains are a result of several

factors, including the influx of imported rice and the oversupply of local harvests.

The decreasing price of palay grains have been devastating to farmers. Some

farmers are even forced to abandon their fields, leading to a decrease in the

country’s rice production.

This decrease in palay grains price is also caused by various factors,

primarily due to oversupply and importation of cheaper rice from other countries.

Moreover, the decreasing price of palay grains has also led to a decline in the

number of people interested in farming. With lower incomes, farmers are

discouraged from continuing to cultivate their lands, and they choose to seek

other means of income.

 When the price of palay grains decreases, farmers suffer from lower

revenues, which affects their livelihood. They are unable to purchase fertilizers,

machinery, and other necessary inputs to improve their farming techniques and

increase their yield. This further leads to a decline in the quality of their crops and

affects their entire supply chain.

Palay farmers strive hard to achieve an optimal harvest every season, but

with the current situatio, they are facing a major economic downturn. The farmers

are struggling to make enough profit to cover their expenses and are forced to

sell their harvest at lower prices.

This results in a decrease in the number of people practicing agriculture,

which may ultimately lead to a shortage of food supply. It is a domino effect that

put a significant strain on the farmers’ income, which in turn affects their

livelihoods and families. It also affects the overall economy as it impacts the

livelihoods of those who depend on farming for their income that can lead to an

increase in poverty rates and slower economic growth.

It is crucial that government agencies and organizations work together to

provide necessary support and assistance to the farmers, especially during these

difficult times. They should focus on implementing policies that help to stabilize

the price of palay grains and find viable solutions to help farmers increase their

income. It is a problem that requires immediate attention, farmers nationwide are

struggling to earn a decent living and the government must take action to

address the issue and ensure the sustainability of the agricultural sector.

As the innovation of agricultural system in the Philippines grow and evolve

into a new and more time lessening method agriculturists decided to use

agricultural machinery to help farmers plant their crop's,grow and harvest

them,but there are still some farmers who can't afford to pay the rent or buy this

machineries such as Tractors and Harvester's.

Some farmers who doesn't have their own farmland that's why they still need

to pay the rent in order to grow their crop's but the problem is instead of you

getting the whole sale's of your product you need to still divide it to pay the rent of

the land. Since some farmers can't afford to pay the rent because of their

financial status sometimes their rice grains eventually just go to waste because if

they can't pay the rent of land they can't plant their palay grains it is also the

same problem in renting the agricultural machineries some of our farmers still

prefer to use the old method of planting, growing and harvesting their crop's

since they can't afford to pay the rent.

The sudden change of weather where farmers are worried because when el

niño phenomenona,and la niña happens all of their crops will eventually die, but

there is this one phenomenona where farmers really are devastated after what

will happen next is the typhoon like what did the typhoon paeng affects the

production of goods in our country all of the newly planted palay grains drowned

because the heavy rain's and strong wind.According to the NDRRMC, the lives of

109,489 farmers were disrupted when Paeng ravaged the Philippines late last
October 29, 2022 The volume of production loss was at 184.029 metric tons, with

121,287.655 hectares of crop area affected.

The amount of bills farmers pay to buy fertilizers, pesticides and medicine to

avoid pest infestation. The decreasing amount of palay grains greatly affects the

farmers whole sale of their rice crops, instead of getting the whole profit they get

from selling their crops it becomes divided due to rent expenses.

Despite of the farmers financial status they still manage to rent Tractors and

Harvester's for easy farming because instead of using "makina" and "carabao" in

cultivating their land what they use is tractor,and on harvesting they use this old

method and machine called threshing machine for turn the palay into grains but

for some reason farmers nowadays use Harvester's because of its 2 in 1 purpose

it can Harvest and sort rice grains from the palay itself.

The agricultural sector plays a vital role in the economic development of many

countries, particularly in rural areas. In the Philippines, the farming community

heavily relies on the production of palay grains, also known as rice, as a primary

source of income. However, recent years have witnessed a significant decrease

in the price of palay grains, raising concerns about its impact on the farmers of

Sto. Domingo, Nabua, Camarines Sur.

This research aims to investigate the effects of the declining price of palay

grains on the farmers in this specific region. By understanding the challenges

faced by these farmers, policymakers and stakeholders can develop strategies

and interventions to help mitigate the negative consequences and improve the

livelihoods of the farming community.

The study will explore various aspects such as the economic, social, and

psychological impacts on the farmers. It will examine how the decreasing price

affects their income, profitability, and overall financial stability. Additionally, the

research will delve into the social implications, such as changes in the farmers'

quality of life, their access to basic necessities, and the potential migration of

individuals seeking alternative livelihoods.

Furthermore, the study will address the psychological effects on the farmers,

such as stress, anxiety, and feelings of uncertainty caused by the uncertain

market conditions. It will also investigate the coping mechanisms employed by

the farmers to navigate through these challenges and identify potential

opportunities for diversification and income generation.

The outcomes of this research will contribute to the existing body of

knowledge on the impact of decreasing palay grain prices on farmers in rural

areas. The findings will provide valuable insights for policymakers, agricultural

organizations, and other stakeholders to design effective policies, programs, and

interventions that can support the farmers in Sto. Domingo, Nabua, Camarines

Sur, and similar regions facing similar challenges.

In conclusion, this research aims to shed light on the effects of the declining

price of palay grains on the farmers of Sto. Domingo, Nabua, Camarines Sur. By

understanding these effects, stakeholders can work towards creating a

sustainable and supportive environment for the farming community, ensuring

their welfare and contributing to the overall agricultural development of the

region.

Theoretical Framework

This research is anchored in the Law of Supply and Demand and The Rice

Theory of Culture.

Law of Supply and Demand (2022), states that the law of supply and

demand is a theory that explains how prices are determined by the relationship

between supply and demand. If supply exceeds demand, prices fall, and vice

versa. It is based on the laws of supply and demand, indicating that a free market

will eventually reach equilibrium where supply and demand intersect.

The law of supply and demand explains how the relationship between supply

and demand impacts prices. High prices lead to items remaining on shelves,

while low prices encourage purchases, resulting in less profitability.

The law of supply suggests a positive correlation between pricing and

supply. As prices rise, suppliers increase production as revenue exceeds

production costs. This leads to new suppliers entering the market. For instance,

lithium prices have risen due to electric vehicle sales, prompting mining

companies to expand production. The law of supply can also apply locally, like

when promoters maximize supply for a concert, leading to increased demand for

secondhand tickets.
 The law of demand states that rising prices decrease demand, leading to

less purchase. For instance, high prices for a famous musician's concert may

discourage customers from making a purchase, resulting in empty seats and

potential resale of tickets.

The equilibrium price is the point where supply and demand meet, where

suppliers produce enough to satisfy demand. Balancing supply and demand is

complex, as factors like production costs and supply chain problems can affect

pricing, affecting the overall market.

There are 4 Basic Laws of Supply and Demand. The law of supply and

demand predicts four ways that changes in either demand or supply will drive

changes in pricing: Prices fall when supply increases and demand remains

constant. If supply increases without a change in demand, a surplus usually

occurs. This can happen for many reasons, including surges in productivity. To

move excess stock, especially if there's a pending expiration date, suppliers tend

to lower prices to try to boost demand. Prices fall when demand decreases and

supply remains constant. A surplus can also occur when customers want less of

a good or service, even without a change in supply. The effect is the same: lower

prices. Prices rise when supply decreases and demand remains constant. If

supply drops, shortages occur. In that situation, customers are often willing to

pay higher prices to get the goods and services they want. Supply constraints

can occur for many reasons, including supply chain problems. If the problem is

temporary, prices tend to return to their baseline once supply is restored.

 Prices rise when demand increases and supply remains constant. A

shortage can occur if the demand for a product increases but the supply doesn't

— or if demand increases faster than production can ramp up. When supply

eventually catches up with demand, prices tend to stabilize.

This theory proves that supply and demand are both keys to

understanding the economy because they reflect the prices and quantities of

consumer goods and services within an economy.

In The Rice Theory of Culture (2022), implies that the idea that rice farming

societies developed into more interdependent, tight cultures in response to the

demands of the plant. Farming in general is an interdependent subsistence style,

but traditional paddy rice farming was starkly different from other major crops like

wheat, corn, and potatoes. Paddy rice required twice as much labor per hectare

as wheat farming. Farmers responded by creating customs to share labor. Paddy

rice also depended on irrigation systems to food and drain the fields. Once

farmers controlled water, they now had to coordinate how much water each

farmer got, when to food their fields, and how to divide the labor for repairing the

canals. This created a tight society, where people depended on each other, and

individual farmers had less freedom of movement.

Moreover, paddy rice differs from other crops due to labor and irrigation, as

well as its unique growth conditions, wet climate, hotter areas, and denser

populations, which are explored in the article.

 Furthermore, the high labor demands and irrigation systems of traditional

paddy rice farming knit farmers together in interdependent social networks.

Societies with a history of rice farming are now more interdependent and think

more holistically than nearby areas with a history of wheat farming.

With the theories that is stated above, the researchers we’re able to develop

their own theory which is the Farmer’s Mechanism Theory. The researchers

believe that there are coping mechanisms that can use to overcome the effects

of decreasing price of palay grains to the farmers.

The Farmer’s Mechanism Theory, focused on the effects of decreasing

price of palay grains to the farmers, and how they can cope with those effects. It

is based on the varieties of methods to cope with the effects, problems, and

uncertainties associated with rice farming. Farmer’s Mechanism Theory will be

manage through seeking social support from the community and government

agencies, or utilizing traditional knoeledge and methods for cultivation. The

theory emphasizes the importance of understanding the unique challenges faced

by farmers and developing strategies to support their resilience in the face of

adversity.

Conceptual Framework

The conceptual paradigm is presented in Figure 2, which serves as the research

guide for the study. The researchers used the systems approach which shows

the interplay in the three important element: input, process, and output.
 Input. It includes the profile of the farmers from Sto. Domingo Nabua,

Camarines Sur, effects of decreasing price of palay grains to the farmers and the

problems that the farmers encountered.

Process. It consists of identifying the profile of the respondents,

analyzing the effects of decreasing price of palay grains and enumerating the

problems that the farmers encountered.

Output. Project PALAY (Production and Assistance on the Livelihood

and Agricultural Yielding) intends to give knowledge and understanding about the

different agricultural methods of farming and also give them insights on how to

cope with the problems that they are facing throughout the farming season.

Output. Project PALAY will be conducted through conducting seminars

and wokshops open for all the farmers of Sto. Domingo Nabua, Camarines Sur.

The project PALAY will help the farmers clearly understand and help them

improve their farming strategies and techniques.

The feedback loop consists of the information about the proposed

Project PALAY (Production and Assistance on the Livelihood and Agricultural

Yielding) that when actualized would give additional features to the Input and

Process components of the framework of the study. There would be enough

understanding in enhancing and developing the farming strategies and

techniques of the farmers.

 The feedback may also contribute to a better farming system and

workplace for farmers in terms of enough skills and abilities as it will improve

their working strategy through the help of Project TRAITS.

Statement of the Problem

This study aims to determine the effects of decreasing price of palay grains

to the farmers of Sto. Domingo Nabua, Camarines Sur.

Specifically it aims to answer the following questions:

1. What is the profile of the farmers from Sto. Domingo Nabua, Camarines Sur in

terms of: a.) age; b.) sex; c.) civil status; d.) family income?

2. What are the effects of decreasing price of palay grains to the farmers?

3. What are the problems encountered by the farmers?