Rice farmers see P60 billion loss under tariffication bill

MANILA, Philippines — Local farmers are poised to lose P60 billion every year with the Senate’s version of the rice tariffication bill, a much higher value than the supposed fund to be allocated to improve their competitiveness, a farmers group said.

The Federation of Free Farmers (FFF) has decried the mangling of the Rice Competitiveness Enhancement Fund (RCEF) to help farmers adjust to competition once the quantitative restrictions on rice imports are removed.

FFF national manager Raul Montemayor said the rice fund would not be able to offset the loss in income of farmers resulting from the entry of large volumes of cheap imported rice.

“With an annual palay output of about 19 million metric tons, of which two-thirds are sold in the market, every one peso decline in palay prices will mean P12.7 billion in losses to rice farmers,” Montemayor said.

The National Economic and Development Authority even projected that rice prices will decline by at least P17 per kilogram which will mean an equivalent P4.50 per kilo decline in the price of palay.

“Rice farmers, therefore, stand to lose nearly P60 billion every year. And the P10 billion rice fund is very small compared to these potential losses,” he said.

“The Senate bill has not even provided for any other meaningful safeguard to protect rice farmers from a sudden decline in prices. NFA’s price to support program for farmers will be effectively curtailed because the agency will just focus on buffer stocking,” Montemayor added.

The farmers group also warned that the use of the RCEF could easily be politicized under the provisions of the Senate bill.

“Even LGUs will be allowed to receive grants for machineries and farm equipment and compete for the funds with farmers. Only P10 billion from import tariff collections will automatically go into the RCEF,” Montemayor said.

“Congress will decide how to use any excess tariff collection through the annual budget. This could open the door for politicians to dip their fingers into the RCEF for their pet projects of constituencies,” he added.

Furthermore, the group noted several defects in the Senate bill’s provisions on the RCEF including the pre-allocation of the RCEF for various programs, while requiring the Department of Agriculture to complete the rice roadmap 180 days after the passage of the law.

“Logically, the government should first complete a long-term development plan for the rice industry before it allocates the funds and resources to support the plan. The Senate has also allocated the RCEF directly to several line agencies of the DA and other departments, thereby bypassing the DA secretary,” FFF secretary general Dioscoro Granada said.

“And yet, the bill states that the DA secretary will be responsible and accountable for the RCEF. The senators preserved the prerogative of Congress to oversee fund usage, alter the allocation of funds, and have the final say in how the funds will be used ever year. Maybe they should just place the DA under the Senate,” he added.

Last week, the Senate passed Senate Bill 1998 on third reading after its approval was certified as urgent by President Duterte.