Agriculture Secretary Francisco Tiu Laurel, Jr. supports the proposed extension of the Rice Tariffication Law subject to modifications that will ensure optimum impact on modernizing agriculture, enhancing farm productivity and improving rice farmers’ competitiveness and income.
“Definitely, I think it should be extended. But there should be adjustments so we can adapt to the times,” Tiu Laurel said.
The agriculture chief said one of the adjustments he wants is the allocation of funds exceeding P10 billion to be set aside for farm and other inputs.
“Last year, total tariff collection reached P29 billion,” the agriculture head noted.
“The allocation for improving farmers’ competitiveness should be increased.”
He said the allocation for improving farmers’ competitiveness should be increased.
“Projects to be funded should include postharvest facilities that could significantly increase rice recovery for every kilo of palay by as much as 15 percent. This is also envisioned to lower import volumes,” Tiu Laurel added.
“Less wastage means more income for our rice farmers,” he pointed out.
Republic Act 11203, or the Rice Tariffication Act, effectively deregulated the rice industry by removing the power of the National Food Authority to trade in the national food staple. It also limited its function to ensure buffer stocks for calamities and disasters.
The law, however, appropriated tariffs paid by private rice importers to the Rice Competitiveness Enhancement Fund, or Rice Fund, with P10 billion set aside for mechanization and farm input support. The balance is distributed to small rice farmers as financial assistance that expires next year.
Rep. Rosanna Vergara, from the largest rice producing province of Nueva Ecija, has filed a bill seeking to extend RCEF by another six years.
Senator Cynthia Villar, chairwoman of the Senate Committee on Agriculture also backs an RTL extension.
The US Department of Agriculture has lowered the estimated rice import of the Philippines this year to 3.9 million metric tons, down from the initial 4.1 million project, after the Philippine Statistics Authority forecasted higher rice output in the first quarter.
Tiu Laurel said the revised USDA projection is reasonable given the impact of El Nino on production, and the potential gain if La Nina would bring the right amount of rain to irrigate rice fields.
“Four million metric tons of rice imports is a worst case scenario given El Nino,” he said.
Aside from a higher Rice Fund budget for mechanization and postharvest facilities, Tiu Laurel said the new law should allow for annual review on fund allocation to maximize farm productivity.
“We need to review the funding allocation every year and put it where it is most needed.”
“We need to review the funding allocation every year and put it where it is most needed. If we mechanize this year and it’s sufficient, we could allot the funds somewhere else,” he said.
In earlier discussions with DA officials, Tiu Laurel also noted the need to allow DA or NFA to regain its ability to influence rice prices in the market and not be limited to buying rice from local farmers for buffer stocking.
Until the passage of the law in 2019, the NFA is allowed to import rice and sell them through authorized dealers to influence the market price of rice—a commodity that weighs heavily in the consumer basket that determines inflation.
High prices of rice has kept inflation elevated and officials expect the situation to linger until July, keeping the Bangko Sentral ng Pilipinas from lowering interest rates.
