Farmers’ woes seen to persist despite extended aid

RICE composite image from Inquirer file/stock photos

MANILA, Philippines—The government expressed confidence that extending the life of the Rice Competitiveness Awareness Fund (RCEF) to 2031 would open access to resources for farmers.

But is this enough?

RCEF was first introduced in 2019, when Republic Act (RA) 11203, or the law on rice liberalization, was signed. The law replaced the ceiling on volume on imported rice with tariffs of 35 percent to 40 percent.

The tariffs on imported rice are then used by the government to fund RCEF and provide “even more assistance to farmers with excess tariff revenues.”

READ: Revised rice tariff law triples farmers’ support fund to P30B

RCEF was initially given P10 billion yearly to provide farmers with equipment, high-quality seeds, credit lines and training programs.

According to a study published in the International Journal of Economics, the law resulted in a 52 percent increase in the income of recipients, while non-recipients took losses of up to 19 percent.

READ: Arguments to repeal rice tariffication: Prices still high but farmers poorer

The problem, however, is that the tariff on imported rice was brought down to 15 percent in July, as President Ferdinand Marcos Jr. issued Executive Order 62 in a bid to bring down the retail price of the grain.

Lagging

With the extension of RCEF through RA 12078, which amended RA 11203, the government said that the program will now be given P30 billion a year “to make the rice industry even more competitive.”

READ: Marcos OKs RCEF extension, VAT refund for foreign tourists

But even with the law, which somehow brought down the retail price of rice for consumers, a retired professor of crop science at UP Los Baños stressed that the law on rice liberalization did not benefit most farmers.

GRAPHIC: Ed Lustan/INQUIRER.net

Teodoro Mendoza pointed out to INQUIRER.net that even with RCEF, farmers are still struggling because their palay is sold at low prices even when production cost is high.

READ: Higher production costs, low gov’t buying price add to rice crisis specter

According to data from the Philippine Rice Research Institute (PRRI) and the Philippine Statistics Authority, (PSA) dry palay was sold for P19.88 a kilo in 2023, while the production cost was P13.38 a kilo.

GRAPHIC: Ed Lustan/INQUIRER.net

“[RCEF] did not materially improve their welfare, especially regarding credit. It did not liberate them from loan sharks that charge usurious interest rates,” he said.

RELATED STORY: Rice Tariffication Law amendment to temper rice prices

Mendoza previously stressed that farmers will eventually lose interest in tilling their land and increasing their yield, pointing out that a lot of them was already calling for a “respectable income.”

P30 billion ‘not enough’

Marcos said as RCEF was set to expire, “it became clear that we needed to extend and strengthen the program,” pointing out that “it will enable us to do much more for our farmers.”

This, as out of the P30 billion a year, P15 billion will be allocated for extension and training programs, financial assistance, credit programs, soil improvement, and provision of solar-powered irrigation systems.

Some P9 billion will go to farm mechanization while P6 billion will be allocated for the development and distribution of high-quality seeds.

But as pointed out by Mendoza, even with the increase in RCEF funds, P30 billion will still not be significant “if distributed among farmers equitably.”

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He explained that on credit, if the line will only be P3 billion, at P40,000 loan for every hectare, a P2 billion increase from the original P1 billion will only cover 50,000 more farmers who have one hectare each.

“What will be more meaningful is for the Land Bank of the Philippines to resume its credit services to the farmers, which is the basis for its creation,” Mendoza said.

Rice wastage

As pointed out by Malacañang, the new law will also help lower post-harvest losses by preventing 375,000 metric tons (MT) of milled rice from being wasted yearly.

GRAPHIC: Ed Lustan/INQUIRER.net

This, it said, could help “feed an additional 3.4 million Filipinos each year for the next six years, maintaining food security and rice accessibility to all.”

READ: Rice imports: Group says PH farmers, consumers both lose

Mendoza, however, said that “wastage is a complex issue.”

He explained that field rice wastage is “difficult,” stressing that even with mechanical harvesters, unrecovered rice will range from 10 percent to 12 percent.

“At 50 percent of the 20 million MT harvested, this translates to 10 million MT. At 10 percent unrecovered, this is 1 million MT of palay or 640,000 MT of rice,” Mendoza said.

This is still higher than the 340,000 MT, which the government said is preventable, and even if harvesting losses will only be five percent, the wastage will still be 640,000 MT for the 20 million harvested palay.

RELATED STORY: Bill seeks to extend life of rice tariff funds