RCEF to help rice farmers lower production cost

Published January 29, 2020, 12:00 AM

by manilabulletin_admin

By Madelaine B. Miraflor

As the government boasted of the declining retail price of rice, farmers suffering from low palay prices were also subsequently promised a significantly lower production cost though it will not happen anytime soon.

Agriculture Secretary William Dar said that with the help of Rice Competitiveness Enhancement Fund (RCEF), which is where all the tariff collected from imported rice should go, the cost of producing rice in the Philippines should significantly go down in the future.

To be exact, he wants it down by more than 60 percent from 12 per kilogram (/kg) to ₱4/kg by 2026.

“We aim that on the next six years as a result of RCEF, we will effectively reduce the average production cost of palay by ₱4/kg, from the current ₱12/kg, increase the average yield by at least two tons per hectare from the current four metric tons per hectare, and double the income of rice farmers,” Dar said.

Right now, the cost of palay production palay in the Philippines stands at ₱12.72 per kilo, which is higher than the production cost of ₱6.22 per kilo in Vietnam and ₱8.86 per kilo in Thailand.

And because the price of locally produced rice is expensive, the Philippine government passed the Rice Tariffication Law (RTL) last year, which allowed the unlimited entry of cheaper imported rice and at the same time pulled down palay prices but to the detriment of Filipino farmers.

During the first week of January, the average farmgate price of palay went down by 20.9 percent from its level of 19.95 per kilogram last year to 15.79/kg, a data from the Philippine Statistics Authority (PSA) showed.

Week-on-week, this is a 1.0 percent improvement from a price level of ₱15.63/kg.

The estimate as of last year was that rice farmers already lost ₱62 billion due to flood of rice imports, which means palay prices went down but the cost of producing rice didn’t.

But, Dar said in a statement that “as consumers enjoy affordable rice”, the government will “all the more” pursue the efficient implementation of the four component programs of the RCEF.

As part of the Republic Act 11203 or the RTL, RCEF is supposed to be injected with P10 billion annually from 2019 to 2024 or a period of six years.
Dar said that the four RCEF major components are in full swing, which include the provision of farm machinery, quality seeds, credit, package of technology and training.

For instance, the DA’s Philippine Rice Research Institute (DA-PhilRice) has so far obligated a total of ₱2.56 billion for seeds and distributed 893,433 bags of seeds worth ₱552.6 million to thousands of farmers in 557 out of 798 municipalities nationwide.