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House panel OKs bid to allow rice subsidies to be used to buy palay

In file photo: A farmer uses a hand tractor to plow a rice field before planting palay seedlings In Tanay, Rizal.

THE House Committee on Agriculture and Food on Wednesday approved a substitute joint resolution urging Congress to authorize the use of the rice subsidies of government agencies for the procurement of palay from Filipino farmers.

Quezon Rep. Wilfrido Mark Enverga, the panel chairman, said the unnumbered joint resolution will be transmitted to the plenary when session resumes on November 4.

Enverga also said his committee will ask President Duterte to certify the joint resolution as urgent for its smooth approval.

The unnumbered joint resolution substituted House Joint Resolution 16 and House Resolution 322 filed by Deputy Speaker for Finance Luis Raymund Villafuerte, and Majority Leader Martin Romualdez and Tingog Sinarangan Party-list Rep. Yedda Romualdez, respectively.

The joint resolution urged the Department of Social Welfare and Development (DSWD), Department of the Interior and Local Government (DILG), Department of National Defense (DND), Department of Transportation (DOTr), and the Department of Environment and Natural Resources (DENR), in coordination with the National Food Authority (NFA) and the Department of Agriculture (DA) to directly buy back palay of the local farmers for the Rice Subsidy Program instead of cash.

The resolution said the NFA had reported having 209,525.15 metric tons of imported rice in custody as of August 22, 2019. It procured
locally 5,864,007 bags of palay at 50 kilos per bag or 293,200.35 MT.

Currently, the resolution said the warehouse of NFA is already full, noting that the problem of oversupply is expected to worsen from September to October, the peak palay harvest season.

Under the 2019 budget, the total allocation for rice subsidies amounts to P33.9 billion for rice subsidies.

For his part, Romualdez, author of the resolution, said bulk of the subsidy is given to the beneficiaries of the DSWD’s 4Ps. He said the 4Ps grants the beneficiaries rice subsidy in the form of financial assistance of P600 per month, equivalent to 20 kilos of rice.  Earlier, the DSWD said P6.97 billion remained undisbursed under the rice subsidy program.

Moreover, Romualdez also pointed to P 2.89-billion rice subsidy programs for military uniformed personnel, such as the provision of 20 kilos of rice per month, in the form of financial assistance, to the uniformed personnel of the Philippine Army, Philippine Air Force, Philippine Navy, Philippine Coast Guard, Philippine National Police, Bureau of Jail Management and Penology, and the Bureau of Fire Protection.

In February 2019, Republic Act 11203 entitled, “An Act Liberalizing the Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative Import Restriction on Rice, and for Other Purposes” was enacted to help support the local rice industry specifically by creating a Rice Competitiveness Enhancement Fund.

Romualdez said, however, that despite the efforts made by the government to protect the local rice industry, large stocks of imported rice have depressed the buying price of local palay to levels way below the cost production.

Deputy Speaker for Finance Luis Raymund Villafuerte, another author of the resolution, said the government can purchase unmilled rice from local farmers, and convert them to rice for distribution to the 4Ps beneficiary-families rather than give the subsidies as  cash grants to target low-income households of the DSWD’s 4Ps.

‘Inefficient and costly’

In its position paper submitted to the House Committee on Agriculture and Food, Action for Economic Reforms (AER) President Jessica Reyes-Cantos recognized the necessity and urgency of government procurement of palay to help farmers affected by falling prices.

However, Cantos said the proposal to convert part of the CCT subsidy for rice into actual rice is inefficient and costly.

“The administrative cost is large, and the money from such could be better spent to directly help farmers. The poor anyhow will still be buying rice, rice being the main content of the food basket. The better way is to make the government-procured rice accessible (physically and financially) in the markets of the poor communities,” she said.

Cantos also recommended including in the joint resolution the utilization of rice tariff collections in excess of P10 billion for cash transfers for 2019 and 2020.

“The amount that is needed to effectively address the fall in palay prices is between P4.9 billion and P7.7 billion assuming a cash transfer of P5,000 or P7,000 each,” she said.

Cantos, citing the Philippine Statistics Authority (PSA) and Registry System for Basic Sectors in Agriculture (RSBSA) 2012 data, said there are about 1.5 million rice farmers cultivating lands 2 hectares and below. Bulacan, Maguindanao, Pampanga, Sarangani and North Cotabato are the top provinces where palay buying price is below P17 per kilo.

“To align the cash transfers with the rice tariffication law’s objective of enhancing farmers’ productivity, the transfers will be given to qualified farmers who will till the land and make it productive.  They should commit to associating themselves with existing organizations or organizing themselves. This is necessary for the consolidation and scaling up to achieve efficiency and productivity gains as the Rice Competitiveness Enhancement Fund (RCEF) programs aim for scale economies,” she said.

Also, Cantos said the NFA must dispose of rice in warehouses immediately even if sold at below market prices to cut losses from perishable rice and further lowering the prices for poor consumers.

“It also solves the logistical problem of procuring more rice as it provides more storage capacity,” she said.

Image credits: Bernard Testa



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