Three years since the implementation of the Rice Tariffication Law (RTL), the Philippine Center for Postharvest Development and Mechanization (PHilMech), the government agency tasked to mechanize the local rice sector, has only spent merely 6 percent of its total allocation under the Rice Competitiveness Enhancement Fund (RCEF).
Figures from the Department of Agriculture (DA) showed that of PhilMech’s total authorized appropriation of P15 billion from 2019 to 2021, its notice of cash allocation (NCA) as of August of this year only stood at P11.31 billion, while the agency only obligated P8.64 billion.
Disbursement also stood at P859.68 million only, which is merely 6 percent of the agency’s total RCEF appropriation and nearly 10 percent of the obligated fund.
As part of the implementation of RTL or RA 11203, and in exchange for allowing the entry of more imported rice into the country, the Philippine government is mandated to make it up to Filipino rice farmers and help them become more competitive by giving them access to free seeds and modern farm equipment.
Such assistance should be provided through the RCEF, which is funded from tariff on imported rice. RA 11203 ordered that from 2019 to 2024, RCEF should receive a yearly allocation of P10 billion, of which P5 billion should go directly to PhilMech.
As of September, PhiMech already procured 15,858 technologies, which is 78.78 percent of the agency’s target of 20,129 technologies. Of this, 13,441 technologies were delivered and distributed.
PhilMech’s mechanization efforts should be able to help lower the production cost of rice farmers from P12.41 per kilogram (/kg) to P9/kg.
It is more expensive to produce rice in the Philippines than in most countries in Southeast Asia. In Vietnam, for instance, the cost to produce rice only stood at P6.22/kg, while it is around P8.8/kg in Thailand.
Unfortunately for Filipino rice farmers, the farm-gate price of palay has also been on a downtrend amid the peak of the harvest season and the continuous entry of imported rice.
In September, palay prices dipped below the production cost in some parts of the country, based on the earlier survey of the Federation of Free Farmers (FFF). To be more specific, palay prices in Pangasinan, Tarlac, Mindoro Occidental, Negros Occidental, Zamboanga Sibugay, Davao del Norte and South Cotabato have gone down to P10/kg to P15/kg.
Earlier data from the Philippine Statistics Authority (PSA) also showed that despite low rice inventory across the country, farmgate price of palay from January to June fell year-on-year from P17.42/kg to P16.94/kg.