The one-time financial assistance that the Senate directed the Department of Agriculture (DA) to provide to rice farmers amid the declining prices of palay would not be enough, a group of rice farmers said.
Federation of Free Farmers (FFF) National Manager Raul Montemayor said rice farmers have lost an average of P10,000 per hectare in the ongoing cropping season due to severely depressed palay prices.
This was his response to the joint resolution recently passed by the Senate Committees on Agriculture and Agrarian Reform, which ordered the DA to appropriate some P3 billion in tariffs from rice imports through the 2021 national budget for cash aid to rice farmers.
Under the Rice Tariffication Law (RTL), which allowed unlimited rice importation in the Philippines, tariff collections in excess of P10 billion per year can be used for additional support to farmers, including cash transfers.
FFF, however, noted that the proposed appropriation would only provide P5,000 per farmer if distributed to some 600,000 farmers tilling one hectare or less.
If the actual number of qualified farmers is raised to 1.1 million, the subsidy would only amount to about P2,700 per farmer.
Either proposal will be unfair to equally affected rice farmers tilling larger areas, the farmers' group said.
Instead, Montemayor said the government could keep palay prices stable by temporarily imposing safeguard duties or additional tariffs on imported rice.
“The government allowed unlimited rice imports, resulting in low palay prices. Now, it will spend P3 billion to partially offset farmers’ losses. If it had instead imposed additional duties on imports, palay prices would not have dropped too much, there would have been no need for cash aid to farmers, and the government might have even earned extra revenues from the safeguard duties,” said Montemayor.
Under the Section 10 of RTL or Republic Act (RA) 11203, in order to protect the Philippine rice industry from sudden or extreme price fluctuations, a special safeguard duty on rice shall be imposed in accordance with Safeguard Measures Act.
R.A. 8800 or the Safeguard Measures Act, on the other hand, allows additional safeguard duties on top of regular tariffs in case an import surge is shown to be harmful to local farmers.
“Safeguard duties will not be inflationary as claimed by the DA, because they will be applied only when there is already a proven oversupply in the market. They can be removed once the situation stabilizes,” said Montemayor.
Agriculture Secretary William Dar is not keen on slapping additional tariff on rice imports, and has repeatedly appealed for public understanding about the "short-term" effects of RTL to palay prices.
However, he promised to look for other solutions to the plea of the farmers like asking the National Food Authority (NFA), which buys palay at P19 per kilogram (/kg) to boost the government's buffer stock, to intensify its palay procurement.
Instead of cash aid, the FFF proposed that existing funds from the Rice Competitiveness Enhancement Fund (RCEF) and extra tariff collections be re-focused to address current problems of farmers.
It noted that half of farmers receiving free seeds under the RCEF had already been using certified seeds in the past, and that many were seeking other types of support that were not available under RCEF.
Numerous farmers have also questioned the DA’s promotion of seed varieties like NSIC Rc222, which is of poor quality and are being shunned by traders.
“Also, the P5 billion annual fund for mechanization is not moving well, and it might be more practical at this time to preserve job opportunities for farm laborers instead of displacing them with machines," Montemayor said.
"Moreover, the P1 billion budget for extension and training could be realigned, considering that farmers cannot attend training activities due to COVID-related restrictions. The P1 billion for credit could be better used for interest rate subsidies or loan guarantee programs, instead of direct loans which will benefit only 20,000 farmers,” he added.