DA gets P5-B to cushion impact of rice import liberalization
Budget Secretary Benjamin E. Diokno said that PHP5 billion has already been released under the 2018 national budget to protect farmers from the possible adverse effects of the lifting of the Minimum Access Volume (MAV) on rice.
Last December 2018, a Special Allotment Release Order (SARO) amounting to PHP5 billion was released to the Department of Agriculture (DA) for the National Rice Program, the administration's economic team announced in a joint statement on Thursday.
This program is complementary to the Rice Tariffication Law’s Rice Competitiveness Enhancement Fund, or RCEF, a PHP10-billion fund that will help farmers transition to a new rice regime.
According to Diokno, “we are listening very carefully to the concerns of our farmers. Some are worried that the RCEF is an unprogrammed fund, which can only be released once there is excess revenue. We will make sure that a minimum of PHP10 billion is made available for the RCEF per year in farmer support programs even if tariff collections are less than expected.”
“PHP5 billion was released in December 2018 to help protect farmers through the National Rice Program. Another PHP10 billion will be released through the RCEF once excess revenue collection is realized from the tariffs on rice imports,” National Economic Development Authority (NEDA) Secretary Ernesto M. Pernia said.
RCEF will be used to provide farmers tools and equipment, assistance in the production, promotion, and distribution of certified rice seeds, upgrading of post-harvest storage facilities, credit assistance, irrigation support, and R&D support.
“The RCEF will ensure that protection will go to farmers through direct support programs. We will make certain that affected farmers will receive proper and adequate support as they transition to a new regime. We will also establish transparency and grievance mechanisms for this purpose,” said Pernia.
The Rice Tariffication Law was signed and approved by President Duterte last February 14. The law, which seeks to liberalize the importation of rice, is expected to lower retail prices of rice, help lower inflation by 0.5 to 0.7 percentage points this year, and improve farmers’ incomes, productivity and competitiveness.
According to Finance Secretary Carlos G. Dominguez III, “On economic impact, liberalizing the rice sector could also translate into upgrades from credit rating agencies, thus lower borrowing costs for the country, besides making it more attractive to investors.”