Cash-for-rice is costly, inefficient – AER

Published October 23, 2019, 12:00 AM

by manilabulletin_admin

By Madelaine Miraflor

The proposal of lawmakers to convert the rice subsidy under the government’s conditional cash transfer (CCT) program is not only “costly and inefficient”, but will also not have a direct impact to farmers, Action for Economic Reforms (AER) said.

Action for Economic Reforms (Facebook)
Action for Economic Reforms (Facebook)

AER’s statement came as House of Committee on Agriculture and Food discussed House Joint Resolution (HJR) 16 and House Resolution (HRR) 322, which authorizes the use of rice subsidy as provided in the General Appropriations Act (GAA) for the purchase of palay from farmers, mandating government agencies, in coordination with National Food Authority (NFA) and the Department of Agriculture (DA) to directly purchase palay from the local farmers and distribute rice as subsidy instead of cash.

This follows the statement of Senator Cynthia Villar, urging the Department of Social Welfare and Development (DSWD) to revisit proposals to tap the government’s conditional cash transfer (CCT) program to help local farmers cope with the liberalization of rice importation.

Under the CCT program, beneficiaries are entitled to a 20-kilo rice subsidy per month in a form of cash. The rice subsidy per household stands at P600 per month.

“The proposal to convert part of the conditional cash transfer (CCT) subsidy for rice into actual rice is inefficient and costly. The administrative cost is large, and the money from such could be better spent to directly help farmers,” AER President Jessica Reyes-Cantos said.

“Appropriate amendments to the wording of the resolution should, therefore, be made, should our comments merit the Committee’s kind consideration. Our organization is most willing to work with the Committee in drafting the final wording of the resolution If the Committee so desires,” she added.

During the first week of October, farm-gate price of palay continued to fall. To be specific, the average farmgate price of palay declined by 28.8 percent to P15.56 per kilogram (/kg) from the P21.86/kg during the same period last year.

The non-stop decline in the price of palay is being blamed to the implementation of Rice Tariffication Law or Republic Act (RA) 11203, which allowed the free-flowing entry of imported rice into the country.

Just recently, instead of imposing special safeguard duty on rice imports – which basically means increasing the tariff – the government decided to just give a one-time cash assistance to rice farmers.

Under Section 10 of Republic Act 11203 (Rice Tarrification Law), “in order to protect the Philippine rice industry from extreme price fluctuations, special safeguard duty on rice shall be imposed.”