DOF: Rice tariff windfall to fund farmers’ subsidy program

Revenue windfall from the rice tariffication law will fund the two-year unconditional cash transfer (UCT) program for small farmers affected by falling palay farmgate prices, the Department of Finance (DOF) said.

Finance Secretary Carlos G. Dominguez III said the first P10 billion rice tariff collection is automatically set aside to fund the Rice Competitiveness Enhancement Fund (RCEF) as mandated by law.

But the excess rice import tariffs collected by the Bureau of Customs will be used for the ₱6 billion UCT program for rice farmers tilling two hectares and below, Dominguez said.

To recall, the DOF had reported that Customs already collected ₱11.4 billion from the importation of Filipino staple food at endOctober this year.

“The ₱10 billion is already fixed, it already has an allocation (for RCEF). The excess will be part of the ₱6 billion that will be allocated for two years for the farmers,” Dominguez said.

Agriculture Secretary William Dar earlier announced the rollout of the UCT program, which he said would cover an initial ₱3 billion this year and another ₱3 billion in 2020.

Dar said the funds would be sourced from the excess tariffs from rice imports, which will also be used to support crop insurance and crop diversification programs that will benefit farmers.

Dominguez told reporters he was informed by Dar that the Department of Agriculture already has a list of the farmers who will benefit from the UCTs.

Republic Act (RA) No. 11203 or the Rice Tariffication Law (RTL) imposes a minimum 35 percent tariff on rice imports in lieu of quantitative restrictions (QRs).

The law, which liberalized rice imports, has stabilized the supply and price of the Filipino food staple in the retail market, but has led to declining palay farmgate prices in certain rice producing areas.

Earlier, Dominguez said the RTL will be fully implemented by the Duterte administration as it pursues measures to stamp out smuggling and hoarding by unscrupulous rice traders.

The finance chief also believes the declining farm gate prices of palay was just temporary, noting it was among the "transition challenges” arising from the newly deregulated market.