Excess rice tariffs should go straight to beleaguered farmers

Published November 17, 2019, 3:11 PM

by Martin Sadongdong & Antonio Colina

By Ellson Quismorio

A House leader is set to file this week a measure which would al­low the government to tap all rice import tariff collections in excess of the P10-billion Rice Competitiveness Enhancement Fund (RCEF) to set up a special emergency fund for farmers affected by falling farm gate prices of the staple food following its recent market deregulation.

Camarines Sur Rep. Luis Raymund Villafuerte (Facebook / MANILA BULLETIN)
Deputy Speaker and Camarines Sur Rep. Luis Raymund Villafuerte

Deputy Speaker Camarines Sur 2nd district Rep. LRay Villafuerte said he will file a joint resolution to provide congres­sional authorization for an immediate special fund to enable the Department of Agriculture (DA) to distribute direct cash transfers to small farmers to help them cope with low prices of palay (unhusked rice) this main harvest season.

The plunging farm gate prices have been attributed to Republic Act (RA) 11203, the Rice Tariffication Law (RTL). Implemented last March, the law did away with the old quantitative restric­tions on imported rice in exchange for tariffs.

The RCEF, a component of RA 11203 that’s been packaged as an aid mecha­nism for local farmers, is made possible via the collected tariffs.

The low prices of palay — reported to be less than P10 a kilo in some provinces–have resulted in “huge income losses for rice farmers and the industry, which is now estimated at around P50 billion at current prices,” Villafuerte said.

To modernize the farm sector and make local palay growers globally com­petitive, RA 11203 provides for the cre­ation of the RCEF, which shall have an annual appropriation of P10 billion over the next six years, to be sourced from the tariff revenues collected by the Bureau of Customs (BOC) from rice imports.

Villafuerte noted that since the law took effect in March up to end-October this year, BOC collections from rice im­port tariffs have already reached P11.4 billion, or an excess of P1.4 billion in rev­enues supposedly earmarked for RCEF.

The excess amount plus subsequent BOC collections till the yearend should be channeled, he said, to his proposed Rice Farmer Financial Assistance (RFFA) pro­gram to finance a cash transfer system for palay farmers—similar to the cash subsidies that low-income households and other vulnerable sectors are now getting separately from the social pro­tection initiatives of various government agencies.

“Rather than wait for excess amount to be appropriated under the national budget for the following year when this was collected, the Congress should act now and do its share in helping our distraught rice farmers survive this tem­porary drop in palay farm gate prices and transition to the new rice tariffication regime,” Villafuerte said.

Under Section 13 of the RTL, the excess of P10 billion for RCEF shall be earmarked by Congress for RFFA, titling of agricultural rice land, expanded crop insurance program on rice, and crop diversification program, “and included in the General Appropriations Act (GAA) of the following year.”

“There is an urgent need to imme­diately set-up the Rice Farmer Financial Assistance as a supplementary and transitional safety measure to serve as compensation to rice farmers who are farming two hectares and below for the reduction or loss of their farm income arising from the tariffication of the quantitative import restrictions on rice,” Villafuerte said.

The deputy speaker said that owing to the urgency of providing financial succor to the country’s beleaguered rice farm­ers, the National Treasury can declare the import tariff collections beyond the P10-billion RCEF as excess or surplus income, which Congress can then au­thorize to be funneled into the proposed RFFA program.

Villafuerte said the passage of his proposed joint resolution, which will undergo the same process as that of a bill, will have the full force and effect of a law once approved by both the House and the Senate.

Under RA 11203, the P10-billion RCEF shall be allocated as follows: 50 percent or P5 billion for the procurement of rice farm machinery and equipment to be dis­tributed as grant in kind to eligible farm­ers associations, rice cooperatives, and local government units for the purpose of improving farm mechanization; 30 percent or P3 billion for the development, propagation, and promotion of high-quality rice seeds; 10 percent or P1 billion for expanded rice credit assistance with minimal interest rates; and 10 percent or P1 billion for rice extension services.

Villafuerte said the amount of P10 billion was appropriated for RCEF under the unprogrammed appropriations of the 2019 GAA. Since the law’s effec­tivity, the DA has been rolling out the mandated interventions as prescribed by RA 11203.

There are 2.5 million rice farmers in the country.