Gov’t asked to support palay at 21 per kilo, suspend VAT, excise on fuel

FILE PHOTO: During harvest season, rice farmers are usually up before daybreak to collect and store dried “palay” for hulling and milling. Farmers like this woman in Balungao, Pangasinan, now face a threat from imported agricultural products that will flow into the country under the new free trade pact among nations in the Asia-Pacific. RICHARD BALONGLONG

MANILA, Philippines — Two agricultural groups on Tuesday appealed to the government to set support price of palay at P21 per kilo and to suspend the excise and 12-percent value-added tax (VAT) on fuel products.

Rosendo So, chairman of the Samahang Industriya ng Agrikultura (Sinag) and Abono Partylist, said in a statement these suggestions will help alleviate the plight of farmers amid the continuous increase in oil prices.

“Almost five pesos per kilo (P5/kilo) of palay has been raised in the production cost of farmers in the last two harvests. Cost of production was P14-15/kilo last year; today it is at P19/ kilo,” So pointed out.

He lamented that the unprecedented increase in fuel prices has also affected hog and poultry raisers and fisherfolk since oil is used not only for transportation of agriculture products but also for production.

“Last year, we called for the suspension of excise tax and 12% VAT on fuel. Instead, three million metric tons of imported rice and 400 plus million kilos of imported pork were the Department of Agriculture’s response to the industry’s plea,” he said.

“Worst of all, even though imports of rice, pork, chicken, fish, and vegetables are plentiful; the market price did not go down. Even more so!” he added.

According to So, suspending excise tax and VAT on fuel for at least three months would reduce fuel prices by at least P7 to P8 per liter.

So further suggested that the government revoke executive orders that lowered the tariff on imported rice, pork, and chicken to offset the losses from their proposal to suspend taxes on fuel for three months.

“The suspension of VAT and excise tax on fuel is a big help so that the cost of production of farmers does not increase and eventually, the prices of our staple foods—rice, corn, vegetables, pork, chicken and fish—do not increase either,” he explained.

So also stressed that fuel subsidies proposed by the Department of Agriculture will not lower production costs.

“Rice farmers are now harvesting, we are asking the government, through the National Food Authority to buy the palay at P21/kilo so that the farmers can earn an income; they just break even at P19/kilo,” So added.

“Diesel prices are expected to hit Php 62-65/liter this week; farm inputs and incidental expenses across the different stages of farm production will increase further. We really hope that this time, this government will finally listen to the agriculture sector,” he concluded.

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