Scrapping of irrigation fees eyed to help farmers

Rice farmers who till irrigated farms may be in for a windfall in the coming months as the incoming Duterte administration is considering to scrap irrigation fees to help lower cost of rice production.

This is according to Emmanuel F. Piñol, whom President-elect Rodrigo Duterte designated as his alter ego at the Department of Agriculture.

“This is a commitment of the Duterte administration,” Piñol told reporters. “We’re still working out whether we can do it this year or next year, but definitely (it will be happening) in 2017.”

Asked whether the new administration is also planning to provide other subsidies to farmers, the incoming agriculture chief said he would not call free irrigation fees and other support as “subsidies,” saying the Philippines was a signatory to international agreements that were against the provision of subsidies.

However, Agriculture Undersecretary Siegfredo Serrano clarified that under the rules of the World Trade Organization, the government could provide subsidies worth up to 10 percent of the gross value of the produce.

“We are not prohibited from giving subsidies,” Serrano said.

In May, Assistant Agriculture Secretary Edilberto de Luna said the domestic rice industry might be exposed to shocks associated with increased market competition brought about by tariff reduction or removal as curbs on rice importation were due to expire in June 2017.

De Luna, who is also director of the National Rice Program, said that while farmers in Thailand and Vietnam could produce palay at an equivalent of P6.50 per kilo, Filipino farmers were producing at an average of P11 per kilo.

He said the influx of imports might drive milled rice prices down, which could discourage farmers to continue planting in the succeeding crop seasons.

Asked what needed to be done given such risks, De Luna said this would be up to the incoming team that would run the agriculture department under the new administration.

“Personally, I think we should opt for support for farmers—whether partial or full—in terms of seed procurement, irrigation expenses and crop insurance coverage,” he said, adding that farmers in neighboring countries benefit from such subsidies.

In 2014, the WTO’s  highest-level decision-making body gave the green light for the Philippines to keep milled rice import curbs—which should have expired in 2012—over the succeeding three years.

With the WTO’s nod, the Philippines raised its import volume to at least 805,200 tons yearly from 350,000 tons in 2012.

Without the quantitative restrictions (QR), any volume of rice may enter the country, possibly still subject to ordinary customs duties or none at all—instead of the current 35-percent levy.

But the QR was intended to insulate or protect local farmers from the flood of imported rice that may be cheaper because locally grown crops cost high.