NINE MONTHS into implementation of Rice Tariffication Law, tariff collections stood at P12.3 billion as of December last year, breaching the P10-billion target that will be allotted for agriculture development programs, according to the Department of Finance (DoF).
Finance Secretary Carlos G. Dominguez III said the excess of the P10-billion earmarked for the Rice Competitiveness Enhancement Fund (RCEF) will be used to finance the government’s cash assistance programs for farmers badly hit by the plummeting farmgate price of palay or unmilled rice.
“[The law should be viewed as an] opportunity to revolutionize the agriculture sector and help farmers become more competitive in the global economy,” Mr. Dominguez was quoted as saying in a statement on Friday.
He said with RCEF in place, the country can catch up on the “long-delayed modernization of the agriculture sector” and help lift small farmers from rural poverty.
RCEF will be used to fund the modernization programs for the sector and directly provide farmers access to cheap credit, high-quality seeds, agricultural machinery and training on farm mechanization.
Aside from the zero-interest credit program and other low-interest loans, the Department of Agriculture (DA) launched the Rice Farmer Financial Assistance (RFFA) Program to aid 600,000 affected rice farmers with one-time cash grants of P5,000.
Last year’s easing inflation rate, which averaged at 2.5% against the 5.2% print in 2018, was largely attributed to falling rice prices due to the influx of supply when the law lifted the quantitative restrictions on imports and replaced with a 35%-tariff.
Large volumes of imported rice flooded the local market, causing farmgate prices of locally produced palay to plummet to an eight-year low in October and has even reached single-digit levels in some areas. However, the statistics agency reported that a gradual recovery was observed in December.
Prior to the implementation of law, the DoF said the National Food Authority (NFA) was the agency tasked to regulate private rice imports.
From 2005 to 2015 alone, the NFA had a total of P187 billion in tax subsidies or an annual subsidy of P19 billion during the ten-year period as it was the top importer of the staple back then, it said. — B.M. Laforga