The Federation of Free Farmers (FFF) welcomed the signing last month of a law that will provide direct cash assistance to rice farmers but said this aid is not enough to cover for losses suffered by the sector due to excessive rice imports.
Republic Act No. 11598 also known as the Cash Assistance for Filipino Farmers Act, mandates the Department of Agriculture (DA) to provide cash transfers to rice farmers tilling two hectares or less until 2024 with funds to be sourced from imported rice tariff collections in excess of P10 billion per year.
The law did not specify a fixed amount of cash assistance as the fund will depend on excess rice tariff collections.
The FFF, citing data from the Philippine Statistics Authority, said rice farmers lost an average of P6,000 per hectare harvested in 2019 and 2020 due to the drop in farm gate prices following the enactment of the Rice Tariffication Law (RTL) in March 2019 and the entry of a large volume of imported rice.
“Assuming a farmer has two hectares and harvested two times in a year, his losses in 2019 and 2020 would total P24,000. Last year, the DA started giving cash assistance of only P5,000 per farmer, using some P7 billion in excess tariff collections in 2019 and 2020. This is equivalent to only 20 percent of the farmers’ losses during the two-year period,” said Raul Montemayor, FFF national manager.
Montemayor said the cash transfer program is discriminatory since it excludes farmers tilling more than two hectares who are not necessarily better off since they too have been affected by the drop in palay prices.
FFF added future cash transfers to each of the 1.5 million eligible rice farmers is estimated at P3,000 annually, assuming excess tariff collections would average at P5 billion a year.
Montemayor said the amount is not enough to offset the higher farm production costs resulting from the recent spike in fertilizer prices alongside the continued decline of palay prices.
The FFF also noted that under the RTL, excess rice tariff collections are used to support other key programs such as crop insurance and crop diversification which may now be left unfunded.
“These programs can provide more significant, cost-effective and longer-lasting benefits to rice farmers who have to grapple with recurrent typhoons and price fluctuations. However, they will now lose their funding, because RA 11589 allocates all excess tariffs exclusively to cash transfers,” Montemayor warned.
The FFF reiterated its call for the DA to avail of trade remedies, such as safeguard duties to prevent supply gluts due to excessive imports which it said is the primary cause of the fall in palay prices.
“It does not make sense for the DA to entice farmers with seed and fertilizer subsidies to increase their production while at the same time allowing excessive importation. This is a recipe for disaster. It will only cause a supply glut and plunging palay prices which the DA will now try to offset partially through cash transfers. Why not just manage the inflow of imports so that palay prices will not fall drastically and then use the excess tariffs for other critical programs, aside from cash transfers,” Montemayor added.
FFF said the DA refused to implement safeguard duties and instead suspended the issuance of rice import clearances from time to time despite the absence of quarantine risks which may have been violating both rules of the World Trade Organization and local laws.
