MALACAÑANG on Monday told farmers that they will have to bear with the drop in farm-gate prices of unmilled rice, at least until the government releases the entire amount of a fund that will bankroll interventions for the rice sector.
Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo made the pronouncement when asked what the government intends to do to help farmers who may incur losses due to the recent drop in the farm-gate price of palay.
Farmers and other rice industry stakeholders said the average farm-gate price of unmilled rice had dropped to P14 per kilogram, from P20 per kg. With the signing into law of the rice tariffication bill and the start of the harvest season, Philippine Farmers Advisory Board Chairman Edwin Y. Paraluman said farm-gate prices could decline further.
“There is a P10-billion fund under the law. So that P10 billion fund can be used [to help farmers cope with the drop in prices],” Panelo said in a news briefing on Monday.
Dubbed the Rice Competitiveness Enhancement Fund (RCEF), the money will be used for farm equipment, rice seed development propagation and promotion, and for credit assistance.
However, the RCEF will not be immediately available as the rice liberalization law states that it “will be automatically credited to the Special Account in General Fund of the National Treasury that will be in place within 90 days upon effectivity of this Act.”
Budget Secretary Benjamin E. Diokno also told the BusinessMirror that the government has released P5 billion of the RCEF from the 2018 budget but the remaining P5 billion is included in the proposed 2019 budget, which has yet to be approved by the President.
“The rice tariffication law is a game-changing measure, which will alter the agricultural policy environment. We support the RCEF,” Diokno told the BusinessMirror via SMS.
The Palace said the three-month wait for the RCEF is “just a short time” compared to the time it took to enact the measure which removed the quantitative restriction (QR) on rice.
Panelo also said Malacañang will welcome any legal challenge to the law. He issued the statement after farmers’ groups said they may seek a court restraining order if the implementing rules of the new law would cause more harm to the sector.
Paraluman said one “questionable” item in the law is the provision that effectively overrode Presidential Decree 4, or the National Food Authority Charter, without amending the said measure.
He also said rice industry stakeholders were not consulted by the Senate about the bill. The new law was largely based on the Senate version of measure.
President Duterte signed into law on Thursday the rice tariffication measure, which opened up the country’s rice market with the removal of caps on imports and the conversion of the QR into tariffs.
Government economists estimate prices of rice will go down by P4 to P7 per kilo once the bill is enacted. However, farmers expressed apprehension that the influx of cheap rice could “kill” the domestic rice industry.