Much-delayed funds out

After six months of delay, Filipino farmers are getting more funds aimed at financing projects that will hopefully improve their competitiveness amid increasing rice imports, declining palay prices, and the shift from quantitative import restrictions to tariffs.

The Department of Budget and Management has finally released additional funds for the Rice Competitive Enhancement Fund (RCEF), a safety net mechanism created by the Rice Tariffication Law (RTL) aimed at helping local farmers cope with the liberalized entry of imported rice into the country.

Around P2.038 billion was released by the Department of Budget and Management to be used by the Philippine Rice Research Institute (PhilRice) for the seed component of the RCEF.

Under the program, PhilRice will develop, propagate, and promote inbred rice seeds. Mandated to promote high-quality inbred rice seeds to about two million farmers in 57 provinces, PhilRice will also enhance farmers’ skill and knowledge on rice production. Government is hoping that the seed component of RCEF will contribute in increasing yield to up to six tons per hectare in high-yielding provinces and five tons in medium-yielding provinces by 2024. The program also aims to lower production cost by 30 percent, reduce postharvest losses to 12 percent, and trim down marketing cost by P1 per kilo.

Though PhilRice was expecting P3 billion, or a shortfall of P962 million, PhilRice deputy executive director Flordeliza Bordey said they are ready to start implementing the program this month until December.

It will be recalled that the Philippines lifted its quantitative restrictions on imported rice as part of the country’s obligation to the World Trade Organization (WTO). For 22 years, WTO had allowed the Philippines to limit the entry of rice imports as the country prepares its farmers for international competition. The WTO had granted several extensions for special treatment on rice until it expired in June 2017, thus, the passage of the RTL.

With the RCEF, she said PhilRice can now afford to hire and train a new generation of rice specialists to help rice farmers become competitive.

Under the RTL, farmers are promised a yearly P10-billion RCEF budget for six years to be sourced from tariffs on private rice importations, after the law removed the rice import quotas and replaced them with import duties.

Sen. Cynthia Villar, who chairs the Senate committee on agriculture and food, said the money is needed to jumpstart the programs enumerated in the law aimed to make the domestic rice industry more competitive.

Villar said the committee in the exercise of its oversight function will make sure that the funds are allocated for the intended purpose, as she emphasized that whether or not the Bureau of Customs is able to collect the required amount, the farmers will be getting P10 billion a year.

Meanwhile, the Department of Agriculture-Agricultural Credit Policy Council (DA-ACPC) and the Land Bank of the Philippines have started the release of an additional P1 billion as recovery assistance for rice farmers affected by falling palay prices.

Agriculture Secretary William Dar said this was on top of an existing P1.5 billion financial allocation under the Survival and Recovery Assistance Program (SURE Aid) for rice planters.

Dar said that with P2.5 billion for the SURE Aid Program, rice production should improve and help 70,000 more farmers cope with the impact of the RTL, in addition to the 100,000 farmers that have already received assistance.

But with the program targetting 600,000 small farmers nationwide, Dar said the DA will look for other sources of funds to cover all small farmers.

The DA has also started this month the bidding for the mechanization component of the RTL in order to make farmers more productive and competitive starting next year.

Under the law on the RCEF, each farmer from a total of 947 rice-producing towns all over the country will be receiving P5 million worth of farm equipment and machinery. The aid machinery may be used for land preparation, crop establishment, harvesting and threshing as well as for drying and milling.

The respective local governments will be tasked with the maintenance of the equipment in the absence of farmer associations in the area. 

The National Food Authority (NFA), on the other hand, has announced that the agency continues to buy palay from farmers even if it still has four million bags of imported rice in its warehouses.

The RTL requires NFA to maintain a 15 to 30-day buffer stock of rice based on a national daily consumption requirement (DCR) of 651,860 bags.

During the lean months of July to September, more farmers are selling to the NFA to take advantage of its higher buying price and incentives.

NFA administrator Judy Carol Dansal said their procurement operation is a year-round activity and their field personnel are always ready to receive palay deliveries from farmers through more than 300 buying stations strategically located across the country.

The NFA currently buys palay at P17 per kilogram support price plus P3 per kilo buffer stocking incentive, 20 centavos per kilo drying incentive, 20 centavos per kilo delivery incentive, and 30 centavos per kilo as cooperative development incentive fee (CDIF) or a total of  P20.70 per kilo for farmer cooperatives and P20.40 per kilo for individual farmers.

From January to Aug. 22 this year, the NFA had already bought 5.9 million bags of palay, exceeding its target of 5.3 million by 11 percent. The total volume is already 41 percent of the agency’s 14.46 million bags target for the year.

Based on the country’s palay harvest calendar, 30 percent of total annual production comes from the summer harvest between March and May while 70 percent comes from the main harvest from October to December.

Dansal said that this early, NFA is already preparing for aggressive palay buying starting October, although the agency continues to entertain farmers selling their stocks from sporadic harvests in between the summer and main cropping seasons.

Amid the rice tariff system, the NFA in Calapan City, Oriental Mindoro, continues to procure palay even during the off-season palay harvest month. Assistant provincial manager Norma Harina said more farmers are now selling their harvest to NFA at P20.40 per kilo. An incentive of 30 centavos per kilo is given to members of accredited farmer’s organizations if the quality of their palay meets the standards set by NFA, she added.

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