A retail price of $0.34 per kilogram of milled rice was too low to incentivize farmers to increase production beyond subsistence to commercial levels. So in 2009, the government had put in place a Local Purchase Program (LPP), administered by the MTCI, to supply rice to the Ministry of Education’s school feeding program. MTCI purchased rice directly from local producers, offering a price of $0.45 per kilogram of paddy (equal to $0.70 per kilogram of milled rice). The LPP purchased locally produced rice at that uniform price regardless of its quality. There were no standards or grades.

The LPP had its own problems, however—payment delays, distribution chain inefficiencies, lack of quality controls, and inadequate marketing of the program to farmers. Some rice producers in the program reportedly were not paid for up to three months. Since MTCI contracted third-party companies to undertake the purchasing, there was also no guarantee of the price actually paid to farmers. Anecdotally, some farmers were opting to sell to firms at a farm-gate price lower than that guaranteed by MTCI for the sake of being paid up front.

Distribution inefficiencies. The payment delays appeared due in part to poor logistics. MTCI hired contractors to collect paddy from the farm gate, transport it to MTCI warehouses for storage and milling in Tibar (near the capital, Dili), and then delivered the milled rice to the Ministry of Education (MoE) for distribution to schools under the MoE’s school feeding program. The contractors did not get paid until they delivered the rice to the MTCI warehouse, and some of them reportedly did not pay the farmers until they returned to the farm three months later. What’s more, 4,000 MT had reached the schools in 2009, but only 2,000 MT in 2010.

Inadequate marketing. The government recognized that one way to make existing rice supplies go further was to encourage consumption of alternative staples as well as income generation through the sale of various cash crops. So the LPP extended to crops other than rice—including maize, soybean, mungbean, red beans, string beans, turmeric and ginger. But many farmers seemed unaware of the government’s support for these other crops. Anecdotally, farmers would opt to grow a second crop of rice within a year—even though second-crop yields typically achieved only 60-70 percent of the first yield—because they knew the government would buy rice. Though unintended, it seemed that LPP was contributing to the entrenchment of a rice monoculture in TL.

Even with these challenges, however, Prime Minister Gusmão and his team of agricultural advisors decided it was crucial to help Timor-Leste graduate from its considerable reliance on the global rice market. For one thing, global rice prices were rising. For another, increased domestic rice production was integral to the broader national goals of self-sufficiency, food security, economic growth, peace and stability. Launched in July 2011, the long-awaited Strategic Development Plan announced a new policy of rice self-sufficiency by 2020. Now the policy team would have to make that possible.