DA yet to obligate, disburse 65% of RCEF for this year

Published July 27, 2020, 1:15 PM

by Madelaine B. Miraflor

Seven months into 2020 and the Department of Agriculture (DA) is yet to obligate and disburse 65 percent, or nearly P10 billion, of this year’s Rice Competitiveness Enhancement Fund (RCEF), the tariff collected from rice imports and is supposed to help lower the production cost of Filipino rice farmers.

Based on data obtained from the Department of Agriculture (DA), RCEF has P15 billion that must be disbursed within this year, which included the P5-billion allotment for mechanization that weren’t touched last year due to bureaucratic issues.  

Hence, of this P15 billion, P10 billion is now supposed to go to mechanization, while P3 billion, as usual, will go to seed distribution. The rest would be for the provision of credit and extension services for rice farmers.

However, as of July 24, only P4.65 billion of the P15 billion has been obligated, while P606.8 million has been disbursed, of which P574 million was disbursed for seeds distribution, the same data showed.  

To recall, one of the conditions of the Rice Tariffication Law (RTL) or Republic Act (RA) 11203, which allowed unlimited rice importation in the country, is for the Philippine government to help Filipino rice farmers become more competitive by giving them access to free seeds and modern farm equipment to be funded by RCEF.

On top of the rice import tariff, RCEF is supposed to be injected with P10 billion annually from 2019 to 2024.

As the DA fell short in RCEF distribution, Federation of Free Farmers (FFF) National Manager Raul Montemayor is also looking for the excess in the rice import tariffs for 2019, which he said stood about P3 billion and should have been appropriated by Congress.  

Based on RA 11203, if the annual tariff revenues from rice importation exceeded P10 billion in any given year, the excess tariff revenues shall be earmarked by Congress and included in the General Appropriations Act (GAA) of the following year.

“In 2019, I understand total tariff collections was about P13 billion, so the extra P3 billion should be appropriated by Congress this year for additional support programs such as crop insurance, diversification, land titling, etc. I don’t think this has been done yet. And of course there is the issue of undervaluation of imports and lost tariff collections, which we estimate at P3 billion since 2019,” Montemayor told Business Bulletin.

Montemayor thinks that if tariff collections for rice importation will exceed again for this year, it will still take a long time for the government to release it and distribute it to farmers.

“For the tariff collections in 2019 in excess of P10 billion, BoC will first have to finalize its computations and then Congress will have to appropriate the money. If tariff collections exceed P10 billion again this year, the excess will also be appropriated by Congress. But we have to wait until the end of the year and up to early next year for BoC to determine the exact surplus before Congress can appropriate the money,” Montemayor said.

“If there are unused RCEF funds in a given year, it is not a problem because the money just stays in the fund. But for the excess over P10 billion that is appropriated every year, the money has to be spent during the year otherwise it will be lost. It may take until 2022 before we can use this excess tariff from 2019 and 2020,” he added.

Nevertheless, Montemayor said the DA is already slowly catching up in terms of the release of RCEF, especially with the rice seed distribution component.  
In a statement, the DA said it is on track in providing rice farmers appropriate machinery and equipment under RCEF.  

The agency said that to date, Philippine Center for Postharvest Development and Mechanization (PhilMech) has already procured and is currently distributing 2,938 farm machinery and equipment worth P2 billion to 625 RCEF-accredited farmers’ cooperatives and associations (FCAs) nationwide.

The second batch of 4,996 units worth P3 billion is under a bidding process and expected to be completed by July 31, 2020, according to PhilMech Director Baldwin Jallorina.

Thereafter, the farm machines and equipment will be given to the second batch of 1,068 FCAs.

Jallorina also said that PhilMech has to date validate 2,587 FCA applicants, of which 1,259 FCAs have been shortlisted and qualified to receive 4,543 farm machineries.