By Chino S.Leyco
Revenue windfall from the rice tariffication law will fund the two-year unconditional cash transfer (UCT) program for small farmers affected by falling palay farm-gate prices, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III said the first P10 billion rice tariff collection is automatically set aside to fund the Rice Competitiveness Enhancement Fund (RCEF) as mandated by law.
But the excess rice import tariffs collected by the Bureau of Customs will be used for the ₱6 billion UCT program for rice farmers tilling two hectares and below, Dominguez said.
To recall, the DOF had reported that Customs already collected ₱11.4 billion from the importation of Filipino staple food at end-October this year.
“The ₱10 billion is already fixed, it already has an allocation (for RCEF). The excess will be part of the ₱6 billion that will be allocated for two years for the farmers,” Dominguez said.
Agriculture Secretary William Dar earlier announced the rollout of the UCT program, which he said would cover an initial ₱3 billion this year and another ₱3 billion in 2020.
Dar said the funds would be sourced from the excess tariffs from rice imports, which will also be used to support crop insurance and crop diversification programs that will benefit farmers.
Dominguez told reporters he was informed by Dar that the Department of Agriculture already has a list of the farmers who will benefit from the UCTs.
Republic Act (RA) No. 11203 or the Rice Tariffication Law (RTL) imposes a minimum 35 percent tariff on rice imports in lieu of quantitative restrictions (QRs).
The law, which liberalized rice imports, has stabilized the supply and price of the Filipino food staple in the retail market, but has led to declining palay farmgate prices in certain rice producing areas.
Earlier, Dominguez said the RTL will be fully implemented by the Duterte administration as it pursues measures to stamp out smuggling and hoarding by unscrupulous rice traders.
The finance chief also believes the declining farm gate prices of palay was just temporary, noting it was among the “transition challenges” arising from the newly deregulated market.
On top of UCTs, the government is also granting interest-free, easy-to-pay loans to affected farmers.
Dominguez, who was the agriculture chief during the first Aquino administration, pointed out that in only seven months since it was implemented, the RTL has netted tariff revenue of ₱11.4 billion, which is already beyond the ₱10 billion earmarked per year for RCEF.
With over P11 billion in import tariffs this early, the government “has ample means to do even more to make our agricultural production more efficient,” Dominguez said.
Rice tariffication, Dominguez said, should be viewed as an “opportunity to revolutionize the agriculture sector and help farmers become more competitive in the global economy.”