Home Topic Agriculture RICE TRADE LIBERALIZATION | RCEF cannot protect farmers

RICE TRADE LIBERALIZATION | RCEF cannot protect farmers


READ FIRST PART: PH never learns from its mistakes

Despite flaunting safeguards and allocated funds to protect the local rice industry, the government is now busy looking for means to mask the negative effects of Republic Act No. 11203 or the Rice Trade Liberalization Law (RTL). Palay (unhusked rice) prices are hitting record low barely a year of its implementation.

Stakeholder of the rice industry raised this scenario years before the enactment of the law. The Kilusang Magbubukid ng Pilipinas (KMP) opined this would destroy the livelihood of Filipino farmers and local production. Local millers echoed the same concern on the removal of quantitative restrictions (QRs).

Each passing day, news of plummeting palay prices are coming out on the print, broadcast and social media. Reports all over Luzon pegged costs at P10.50-P14.00 per kilo, with stories of prices going as low as P7.00 per kilo in Central Luzon.

Then Agriculture chief Manny Piñol even claimed that the impact on local palay industry is temporary and denied that it was the cause of price drop during the period. He and other government officials relied on P10 billion Rice Competitiveness Enhancement Fund (RCEF) as a guarantee for farmers affected by the new trade policy.

However, the former secretary called for the review of the law days before leaving his post. He also blamed Duterte’s economic manager for the rapid downfall of palay prices that he attributed to the implementation of the rice tariffication law.

Meanwhile, Senator Cynthia Villar, the sponsor of the law and head of the Senate Committee on Agriculture, blamed the sluggish implementation of the law for the problem. According to her, the slow disbursement of the RCEF is causing the problem.

Solidarity of Peasants Against Exploitation (Stop Exploitation) disputed her claim

“Contrary to what the government wants the people to believe, the government is properly implementing the law. This is the reason we are losing thousands each day and bound to loss billion if the law remains,” said Stop Exploitation chairperson Antonino Pugyao in Ilocano.

According to him, even if the government regularly allots and releases the RCEF, it still cannot protect the farmers from the deluge of rice imports and the destructive effects of trade liberalization. He added that other earmarked funds set for agriculture development and farmer’s welfare in the current economic and political set-up failed.

RCEF not enough

Nestor Dizon, president of the Ilocos Sur Federated Irrigators Association said the amount is not enough. He criticized the bulk allocation of funds to government entities.

“They should have given larger amount for the loans, those that farmers can immediately avail and use,” he said in Ilocano.

According to Dizon, small farmers who are the most affected will have fewer benefits. He explained that even the loan facility requires collateral like land or equipment, which tenant farmers usually lack.

“Our main problem is the high cost of production. We need capital and subsidies. They should prioritize budget for loans because the P1 billion is not enough,” he lamented.

Earmarked from the collected tariffs from rice imports, RCEF intends to finance program that would make the domestic rice production competitive. Allocations of the P10 billion RCEF are as follows:

  • Fifty (50) percent going to the Philippine Center for Postharvest Development and Mechanization (PHilMech) that will provide equipment and machinery to farmers. PhilM111ech is an agency attached to the Department of Agriculture (DA) tasked to develop the agricultural mechanization and post-harvest technologies.
  • Thirty (30) percent going to Philippine Rice Research Institute (PhilRice), a government corporation that is also under the supervision of the DA. Allocated fund to the institution is for the research, development, promotion, and production of certified rice seeds.
  • Ten (10) percent of the RCEF will finance training and services of PhilMech, Agricultural Training Institute (ATI), and the Technical Education and Skills Development Authority (TESDA) on modern farming techniques for farmers.
  • Ten (10) percent will be available to farmers in the form of credit facility with minimal interest rates and with minimum collateral requirements under the management of the Land Bank of the Philippines and the Development Bank of the Philippines.

Sonny Africa of IBON Foundation pointed out the P10 billion (US$200 million) cannot match the agricultural subsidies received by farmers in other Southeast Asian countries.

According to him, Vietnam and Thailand provide US$1.1 billion and US$4.4 billion respectively making their rice so cheap to import. He also stressed that RCEF will only be for 6 years compared to decades of support that rice farmers receive in Vietnam, Thailand, India, Japan, the US and elsewhere.

Bound to fail

“No amount of earmarked funds can lift Philippine agriculture. The Agriculture Competitiveness Enhancement Fund (ACEF) failed to protect farmers and local production from agricultural imports. RCEF is no different,” said Andres Wailan of Alyansa ti Pesante iti Taeng Kordilyera (APIT-TAKO).

According to him, ACEF failed to provide the needed support to prevent the bankruptcy of many farmers in the Cordillera after imported semi-temperate vegetables flooded the local market.

Advocacy group Bantay Bigas has the same misgivings.

Cathy Estavillo, the group’s spokesperson, said RCEF would primarily benefit landlords and big rice traders. He also anticipates that like the ACEF, the rice fund will line the pockets of corrupt officials. A report by ABS-CBN in 2014 disclosed corruption of the fund during the term of former President Gloria Arroyo.

Pugyao agrees with the sentiments of Wailan and Estavillo. Earlier, Stop Exploitation also tagged RCEF as another “milking” cow for politicians and bureaucrats.

“Take, for example, the local government shares from the tobacco excise tax intended to uplift the lives of tobacco farmers. In reality, it only served to further political dynasties in tobacco-producing provinces,” he said.

According to him, despite the billions of funds received by local governments, tobacco farmers remain poor and dependent on loans and the contract-growing program of tobacco companies. He noted that politicians use farmers to create laws that provide special funds for their pet projects and commissions.

Republic Act Nos. 7171 and 8240 allocate 15% of the collected tax from tobacco products to provinces producing the crops. The former is for Virginia tobacco products, and the latter is for products derived from Burley and Native tobaccos. Last June, the budget department released the share of local government amounting to P15.81 billion.

Besides ACEF and the LGU share from tobacco tax, farmers also have narratives on the failure of the Social Amelioration Program (SAP) in the sugar industry and the coco levy fund. # nordis.net

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