The government collected at least P12.3 billion in tariffs from rice importation in 2019, exceeding the P10-billion mark in funds to be spent on programs for farmers hurt by lifting of import restrictions, the Department of Finance (DOF) said.
In a statement on Friday (Jan. 10), the DOF said the additional revenues from the implementation of the Rice Tariffication law since March 2019 surpassed the amount to be allotted to the annual Rice Competitiveness Enhancement Fund (RCEF).
RCEF was aimed at modernizing the agriculture sector and equipping farmers with modern technologies, easier access to cheap credit, high-quality seeds, and new skills.
Under the law rice imported from Asean countries would be charged 35 percent tariff. If the imports do not exceed 350,000 metric tons and are from countries outside Asean, a 40 percent tariff is charged.
Imports that exceed 350,000 metric tons and are from non-Asean countries are charged 180 percent tariff.
Funds in excess of P10 billion, or the amount allotted for RCEF, would be used to give cash aid to farmers in areas where prices of unhusked rice fell sharply as a result of cheaper imports.
The Department of Agriculture (DA) had launched the rice farmer financial assistance (RFFA) program which gives cash grants of P5,000 each to an estimated 600,000 farmers hurt by lower farm gate prices.
The DA is also offering a zero-interest credit program for rice farmers and low-interest loans for local government units which they can use to buy local crops “at above prevailing farm gate prices,” said Finance Secretary Carlos Dominguez III.
Freer importation of rice was expected to also narrow subsidies to the state-run National Food Authority (NFA), which had been regulating importation prior to the Rice Tariffication law.
The law stripped the NFA of commercial functions and regulatory powers. What’s left of its mandate is to make sure there’s buffer stock of rice for emergencies.
Finance Undersecretary Gil S. Beltran, DOF chief economist, said subsidies to the NFA had reached P187 billion from 2005 to 2015 or an average of P19 billion per year.
Beltran said the NFA had been losing P11 billion a year prior to the Rice Tariffication law. Now, the government earned P11 billion in “less than a year, a complete reversal of the average of P11 billion it has been losing every year,” he said.
Aside from giving the government additional revenue, the law also helped bring down rice retail prices by P8 per kilogram, which helped bring down inflation to the 2-4 percent range.