The rice sector may get at least P27 billion in government assistance, or nearly half of the Department of Agriculture’s (DA) P60.6-billion budget for 2018, once Congress approves the tariffication of the staple.
Removing the quantitative restriction (QR) on rice by amending Republic Act (RA) 8178 would allow the government to generate P27 billion annually, according to a paper published by the Philippine Institute for Development Studies (Pids).
The Pids paper noted that the projected revenues would come from the importation of some 2.2 million metric tons (MMT) of rice at 35-percent tariff. Purchases of imported rice are expected to increase once the government removes the QR.
Under a substitute bill approved recently by the technical working group created by the House Committee on Agriculture and Food, duties collected from importing the staple would form the rice competitiveness enhancement fund, or Rice Fund.
“The Rice Fund shall consist of all duties collected from the importation of rice under this act and shall be automatically credited to a special account in the general fund of the national treasury: provided that fund release shall not be subject to any ceiling by the Department of Budget and Management [DBM],” the substitute bill read, a copy of which was obtained by the BusinessMirror.
The Rice Fund shall be channeled to six components: rice endowment fund, farm equipment/mechanization grants, rice-crop finance, postharvest development, rice scholarships and vocational education and research and development.
“Up to 20 percent of the Rice Fund collected from the effectivity of this act from the applicable rates of duty for all rice importations shall be utilized for the establishment of a permanent rice-endowment fund, which shall be preserved as a capital fund and not expended, and which will be prudently invested, and its profits and earnings reinvested and any savings at the end of the year shall also accrue to the rice endowment fund,” it read.
The substitute bill also noted that 20 percent of the Rice Fund shall be made available as grants to farmers and cooperatives in the form of farming machinery. Tractors, harvesters, millers, reapers and other related farming equipment would be given to farmers to increase their productivity.
“Up to 20 percent of the Rice Fund shall be used for a special program of the crop loans, farm inputs, crop insurance, loan guarantees and other financial assistance to farmers and farm workers included in the registry system for basic sector in agriculture, including related technical assistance and support, which shall be established and administered by the DA,” the substitute bill read.
Another 20 percent of the Rice Fund will be allocated for postharvest facilities, logistics, storage, transportation facilities and infrastructure projects.
As for the remaining 20 percent, 10 percent will be used to fund rice farmers’s education, scholarships, technical and vocational training of farmers and their dependents. The remaining 10 percent will be channeled to the government’s research and development program on rice.
“The congressional oversight committee on agricultural and fisheries modernization shall conduct a periodic review of the use of the Rice Fund,” the substitute bill read.
It indicated that the fund will be disbursed by the DBM to the DA and that the Agriculture secretary would administer the fund.
“The DA, in consultation with the Philippine Council for Agriculture and Fisheries, shall promulgate the policies and guidelines necessary for the planning, administration, coordination and monitoring of the utilization of the Rice Fund,” it read.
The programs that will be supported by the Rice Fund will only complement the existing initiatives rolled out by the DA for the rice farmers, according to the substitute bill.
“Any remaining balance at the date of expiration of the collection of duties for the Rice Fund shall not revert to the general fund but shall continue to be used for the purpose for which it was collected and set aside,” it read.
The DA, together with other relevant agencies, will be tasked to craft a Rice Industry Roadmap that will serve as a “backbone” of the sector’s development.
“Upon the enactment of this Act, the DA, together with relevant agencies, shall be given a maximum of 180 days to finalize the rice road map to restructure the government’s delivery of support services for the sector,” it read.
“As part of this road map, a five-year rice program shall be implemented to provide alternative livelihood for those who will be affected by the shift in the import policy. The road map shall be based on the following principles: rice industry; farmers’ profitability, support covering the whole value chain and technology-oriented, location, situation and farmer-specific support services,” it added.
House Committee on Agriculture and Food Chairman Party-list Rep. Jose T. Panganiban Jr. of Anac-IP earlier told the BusinessMirror that they plan to approve the bill on third and final reading before the end of the year.
Removing the quantitative restriction (QR) on rice by amending Republic Act (RA) 8178 would allow the government to generate P27 billion annually, according to a paper published by the Philippine Institute for Development Studies (Pids).
The Pids paper noted that the projected revenues would come from the importation of some 2.2 million metric tons (MMT) of rice at 35-percent tariff. Purchases of imported rice are expected to increase once the government removes the QR.
Under a substitute bill approved recently by the technical working group created by the House Committee on Agriculture and Food, duties collected from importing the staple would form the rice competitiveness enhancement fund, or Rice Fund.
“The Rice Fund shall consist of all duties collected from the importation of rice under this act and shall be automatically credited to a special account in the general fund of the national treasury: provided that fund release shall not be subject to any ceiling by the Department of Budget and Management [DBM],” the substitute bill read, a copy of which was obtained by the BusinessMirror.
The Rice Fund shall be channeled to six components: rice endowment fund, farm equipment/mechanization grants, rice-crop finance, postharvest development, rice scholarships and vocational education and research and development.
“Up to 20 percent of the Rice Fund collected from the effectivity of this act from the applicable rates of duty for all rice importations shall be utilized for the establishment of a permanent rice-endowment fund, which shall be preserved as a capital fund and not expended, and which will be prudently invested, and its profits and earnings reinvested and any savings at the end of the year shall also accrue to the rice endowment fund,” it read.
The substitute bill also noted that 20 percent of the Rice Fund shall be made available as grants to farmers and cooperatives in the form of farming machinery. Tractors, harvesters, millers, reapers and other related farming equipment would be given to farmers to increase their productivity.
“Up to 20 percent of the Rice Fund shall be used for a special program of the crop loans, farm inputs, crop insurance, loan guarantees and other financial assistance to farmers and farm workers included in the registry system for basic sector in agriculture, including related technical assistance and support, which shall be established and administered by the DA,” the substitute bill read.
Another 20 percent of the Rice Fund will be allocated for postharvest facilities, logistics, storage, transportation facilities and infrastructure projects.
As for the remaining 20 percent, 10 percent will be used to fund rice farmers’s education, scholarships, technical and vocational training of farmers and their dependents. The remaining 10 percent will be channeled to the government’s research and development program on rice.
“The congressional oversight committee on agricultural and fisheries modernization shall conduct a periodic review of the use of the Rice Fund,” the substitute bill read.
It indicated that the fund will be disbursed by the DBM to the DA and that the Agriculture secretary would administer the fund.
“The DA, in consultation with the Philippine Council for Agriculture and Fisheries, shall promulgate the policies and guidelines necessary for the planning, administration, coordination and monitoring of the utilization of the Rice Fund,” it read.
The programs that will be supported by the Rice Fund will only complement the existing initiatives rolled out by the DA for the rice farmers, according to the substitute bill.
“Any remaining balance at the date of expiration of the collection of duties for the Rice Fund shall not revert to the general fund but shall continue to be used for the purpose for which it was collected and set aside,” it read.
The DA, together with other relevant agencies, will be tasked to craft a Rice Industry Roadmap that will serve as a “backbone” of the sector’s development.
“Upon the enactment of this Act, the DA, together with relevant agencies, shall be given a maximum of 180 days to finalize the rice road map to restructure the government’s delivery of support services for the sector,” it read.
“As part of this road map, a five-year rice program shall be implemented to provide alternative livelihood for those who will be affected by the shift in the import policy. The road map shall be based on the following principles: rice industry; farmers’ profitability, support covering the whole value chain and technology-oriented, location, situation and farmer-specific support services,” it added.
House Committee on Agriculture and Food Chairman Party-list Rep. Jose T. Panganiban Jr. of Anac-IP earlier told the BusinessMirror that they plan to approve the bill on third and final reading before the end of the year.
