State-owned lenders Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) have facilitated the distribution of over P8.2 billion in aid for farmers, as part of the Department of Agriculture’s (DA) Rice Farmers Financial Assistance Program under the Rice Tariffication Law (RTL).
The aid comes in P5,000 tranches for direct and unconditional cash aid to over one million qualified small palay farmers between 2019 to 2021, based on DA data.
Under Republic Act 11203 or the RTL, rice import tariffs in excess of the P10 billion earmarked annually for the Rice Competitiveness Enhancement Fund (RCEF) could be used to provide financial assistance to palay growers, among other possible options.
The law also mandated that all rice tariffs in excess of P10 billion must be used solely for financial assistance until 2024 to farmers each tilling 2 hectares (ha) or below.
“The Rice Tariffication Law has achieved its dual goal of bringing down retail rice prices while helping farmers improve productivity through the Rice Competitiveness Enhancement Fund,” said Carlos Dominguez III, Department of Finance (DOF) secretary.
In 2019 when the implementation of the RTL began, the Bureau of Customs (BOC) certified an excess in rice tariff collection of about P2.135 billion.
“This amount rose to P5.5 billion in excess collections in 2020 and to P8.9 billion in 2021, when the BOC was able to collect P18.9 billion from rice shipments entering the country,” Dominguez said.
From March 2019 to 2021, the BOC collected a total of P46.6 billion in rice import duties.
DA data showed that since the implementation of RCEF, more than one million rice farmers have received over 8.7 million bags of certified inbred rice seeds which are proven to be higher yielding than traditional home-saved seeds.
Over 830,000 ha of palay farms nationwide are now yielding more grains than before, according to the DA.
“With RCEF, 950,000 farmers now enjoy access to 19,542 units of farm machinery equipment,” it added.
Over 90,000 farmers have also benefited from 4,978 batches of training sessions, while 14,459 specialists, trainers and extension intermediaries have received training on palay farming.
The DA also said 220 farm schools have been established since the RCEF’s implementation, bringing the total to 470.
It added that 49,649 rice farmers have accessed over P1.5 billion worth of loans from the Landbank and DBP as part of the credit component of RCEF.
The DOF said the windfall of financial resources for agricultural modernization under the RTL is a complete reversal of the P11 billion average annual tax subsidies that the government provided for over a decade to the National Food Authority (NFA), which used to monopolize rice importations.
“With RTL, the role of the NFA has been limited to ensuring emergency rice stocks which are exclusively procured from local palay growers,” the DOF said.
The RTL was signed on February 14, 2019, to replace rice import quantitative restrictions with tariffs.
The DOF said the RTL has lowered prices of rice by about P7 per kilogram to an average of P39 per kilo today, compared to its cost in 2018 when it peaked to around P47 per kilo. (Ruelle Castro, Malaya Business Insight)