DA has P5B in initial funding pending generation of revenue for RCEF
THE Department of Agriculture (DA) has been advanced P5 billion from the re-enacted 2018 Budget pending the generation of revenue to finance the Rice Competitive Enhancement Fund (RCEF), with another P5 billion from the RCEF proper expected by the third quarter, the National Economic and Development Authority (NEDA) said Monday.
“Mayroon nang napaunang P5 billion (The first P5 billion has been released). About P1 billion out of that has to be given to the farmers. DA is now trying to allocate some parts of it to the various agencies who are supposed to receive the RCEF,” Mercedita A. Sombilla, NEDA Assistant Secretary, said in a briefing in Intramuros.
The Department of Budget and Management (DBM) has said that it has released P5 billion to the DA. However, the DBM also said that the RCEF itself must await the generation of funds from tariffs imposed on imported rice.
RCEF is intended to help cushion the blow on domestic farmers from the liberalization of rice imports and hopes to increase the rate of farm mechanization, access to seed, farmer training and financing, among others.
“Kinakausap na namin ang DA (We’ve spoken to the DA). As much as possible, (it needs to) find measures to allocate some money to PhilMech, PhilRice, and to the training institutes which should be receiving money from RCEF,” Ms. Sombilla said, referring to agencies promoting farm mechanization and rice-growing best practices.
“The additional funds will come third quarter,” according to Ms. Sombilla.
Ms. Sombilla said that the guidelines on how to use the funds are currently being prepared and will soon be rolled out.
The Rice Tariffication Law hopes to bring down the price of rice by bringing in cheaper foreign grain more freely, with the competition potentially affecting farmer incomes. RCEF hopes to make them more productive a few years after the gats are opened to more imports.
Rice prices have been trending down in anticipation of competition from cheaper foreign rice, contributing to the decline in inflation in the first quarter, the Bangko Sentral ng Pilipinas (BSP) has said.
According to Ms. Sombilla, the implementation of the law will also reduce the market share of rice supplied by the National Food Authority (NFA). The NFA has been relegated to maintaining a buffer stock from rice procured from domestic farmers at P20.70 per kilo.
“Targeted na ‘yung beneficiaries, hindi na nationwide (The beneficiaries will be more targeted, and low-cost NFA rice will no longer be available nationwide). Rice might sell for P32 to P34 [per kilo]. The targets will really be poor households. I don’t think we will allow NFA to put it out at a price where they fully cover their costs, but we can probably put it out at a lower price, but subsidized,” Ms. Sombilla said.
Asked how much the government is willing to subsidize, Ms. Sombilla said around P2 to P3 per kilo.
“These are just rough estimates. What we’re trying to do is to get the NFA to sell it at a price na ‘di sila lugi (that will not cause them to lose money),” Ms. Sombilla said.
She added that the targeting process for selling subsidized rice will take in factors like poverty and vulnerability to calamities. “It’s going to be several factors. We have to study,” Ms. Sombilla said.
Ms. Sombilla said that import shipments are assumed for planning purposes to take 28 days at the most. — Reicelene Joy N. Ignacio