PHilMech starts task of agriculture modernization with funds from RTL

Published December 27, 2020, 7:30 AM

by Madelaine B. Miraflor

Year 2020 should be remembered as a busy year for Philippine Center for Postharvest Development and Mechanization (PHilMech) having been given one of the hardest tasks in the agriculture sector: modernize rice farming.           


But thanks to Rice Tariffication Law’s (RTL) Rice Competitiveness Enhancement Fund (RCEF), PhilMech is now in the process of distributing P2 billion worth of farm machineries to farmer cooperatives and associations (FCAs) across the country.

The RTL or Republic Act 11203 allocates P5 billion to PHilMech annually for the distribution of various farm machines at no cost to qualified FCAs. This should be inclusive of the training of the farmer-beneficiaries on how to manage and maintain their machines.            

The P5 billion will be sourced from the tariffs on rice imports deposited to RCEF, which will be automatically injected with P10-billion funding from 2019 to 2024.           

 For this year, PhilMech has P10-billion worth of RCEF money because it wasn’t able to procure last year or during the first year of RTL’s implementation.

Of this, P2 billion have already been used to bid out and purchase farm equipment. PhilMech also completed another auction and awarding for P5 billion worth of machineries.

Farm workers thresh rice during a harvest, in the barangay of Palattao, in Naguilian, Isabela province, the Philippines. (Photographer: Nana Buxani/Bloomberg file photo)

For the remaining P3-billion worth of equipment, the bidding process already started as well, and PhilMech is hoping to award supply contracts by the end of this year.  

 “Despite the varying degrees of quarantines in the Philippines, PHilMech continues to distribute as a form of grant various farm machines under the RCEF-Mechanization Program,”  said PHilMech Executive Director Baldwin G. Jallorina Jr.

“This has not been easy as farm machine suppliers also have a hard time moving and delivering their inventory of machines to qualified FCAs because of the quarantines,” he added.

 As of December 2, PHilMech has distributed 2,210 units of farm machines since it started delivering various farm equipment in June this year.

The farm machines delivered as of December 2 include: 631 four-wheel tractors, 365 hand tractors, 397 floating tillers, 52 precision seeders, 136 walk behind transplanters, 122 riding type transplanters,126 reapers, 367 combine harvesters; and 14 mobile rice mills.

 The agency still has 13,698 units of agricultural equipment to distribute, which also form part of the completed bidding for the P10 billion worth of machines for 2019 and 2020. In the coming months, PHilMech is set to distribute more mobile rice mills. 

Jallorina said that with the possible loosening of quarantine restrictions in the first or second quarter next year as a vaccine for Covid-19 is expected to be available in the Philippines, PHilMech can step up the distribution of farm machines nationwide.

The agency’s latest major distribution took place in Nueva Ecija where it awarded farm machines worth P469.40 million to 139 FCAs.

In his keynote speech during the distribution of the farm machines there, Jallorina encouraged the representatives of the FCAs to take good care of their machines and show the youth that farming is no longer a back-breaking work because of mechanization.

Communication materials were also distributed to each FCA so they can set up an info hub in their respective offices that will cater to the information needs of their members about the mechanization program and on rice farming.

In October, Jallorina said that to reduce the country’s dependence on imported machineries, PHilMech is hoping that it could develop the local prototype for foreign rice equipment being bought using RCEF.

At present, 28 percent of machinery bought using RCEF money is imported from countries like China, Japan, India, and Thailand.

Jallorina said the agency is targeting to localize all rice farm equipment being bought using RCEF in six years.

“We are hoping for that,” Jallorina told reporters. “I think we can do it”.

When asked if PhilMech has enough manpower to develop a local prototype for each of these farm equipment, Jallorina said yes, adding that the agency, composed of 126 regular employees and 59 contracted staff, has enough budget for it under its regular fund.  

There are currently more than 1,000 FCAs across 900 provinces that are already qualified beneficiaries of RCEF’s mechanization component.

An FCA is required to have members with minimum combined landholdings of about 50 hectares. 

RCEF is the Philippine government’s top compromise for allowing unlimited rice importation in the country under RTL.

 Aside from mechanization, RCEF is also supposed to fund seed distribution (P3 billion), farm extension services (P1 billion), credit for farmers (P1 billion).

In October, amid the declining price of locally produced palay, the Philippine government was in full force in defending RTL.

Four government agencies – the Department of Agriculture (DA), National Economic and Development Authority (NEDA), Department of Finance (DOF), and Department of Trade and Industry (DTI) – particularly conducted a virtual webinar about RTL and asked for public understanding about the “short-term” effects of the law, including the decline in the price of palay.

Subsequently, representatives of these agencies in the webinar – Agriculture Secretary William Dar, Trade Undersecretary Ruth Castello, Acting Socioeconomic Planning Secretary Karl Kendrick Chua, and Finance Assistance Secretary Antonio Lambino 2nd – said the law is working but it will still take time to realize its full benefits to the farmers and entire rice industry.

Chua particularly said RTL is a “game changer” and “pro-consumer”, and that while the large volume of imported rice that entered the country last year resulted in the decline of the price of palay, “farm-gate prices have quickly recovered”.  

He said the decline in prices is just one of the “short-term effects of the reform” and that without the law, things could be worse for poor families during the pandemic as they will have to be exposed to expensive rice.

For his part, Dar said RTL, through RCEF, the collection of rice import tariff already had “emerging outcomes”, including the increase in palay production last year and the increase in the average yield of rice farmers, who already benefited from RCEF through the provision of free high quality seeds.