House panel finds significant underspending in RCEF budget

A HOUSE COMMITTEE has found significant underspending in the Rice Competitiveness Enhancement Fund (RCEF), with about P1.3 billion in spending accounted for out of the program’s P10-billion budget in the first year of the Rice Tariffication Law.

The spending levels were disclosed to the House Committee on Agriculture and Food’s rice subcommittee by the Department of Agriculture (DA) Monday.

Assistant Secretary Dr. Andrew B. Villacorta told the subcommittee that the P1.3 billion worth of RCEF funds was spent on seed and equipment.

RCEF is a component of the Rice Tariffication Law signed in February 2019. It receives P10 billion a year from rice import tariffs in order to finance the modernization of the rice industry. Authorized spending items are purchases of equipment, seed and fertilizer, as well as training and access to credit.

The Rice Tariffication Law, or Republic Act 11203, removes the restrictions on rice import volumes. Starting in March 2019, importers were instead charged a 35% tariff on imported grain from Southeast Asia.

Competition from cheap grain imports softened the market for domestically-grown rice, depressing farmer incomes.

The law stripped the National Food Authority (NFA) of its importing functions and limited its operations to domestic procurement of palay, or unmilled rice, after a shortage in subsidized NFA rice stocks in late 2018 triggered an inflation crisis.

The NFA pays farmers a support price of P19 per kilogram. However, the NFA does not have sufficient funds or storage to buy the entire harvest, leaving farmers to accept price offers in the single digits in some places from private traders.

Representative Josephine Ramirez-Sato of Occidental Mindoro said relief measures for farmers should include regular subsidies.

“Before the passage of the Rice Tariffication Law, wala talaga tayong institutionalized and regular subsidies given to the farmers, kaya hindi talaga tayo magiging competitive sa Vietnam or Thailand. Every planting season, nagaabang ang mga farmers (We have no institutionalized subsidies for farmers, which holds back our competitiveness compared with Vietnam or Thailand. Rice farmers are left hanging every planting season),” Ms. Ramirez-Sato said.

Agriculture Secretary William D. Dar said RCEF-funded operations include 245 technical briefings, the distribution of various training materials, and 14,595 scholarship grants.

Land Bank of the Philippines (LANDBANK) released P459.63 million worth of loans to 2,469 farmers and 19 cooperatives. —