Lawmakers urged to address cause of low palay prices

MANILA, Philippines — Local farmers are calling on lawmakers to address the root cause of declining palay (unhusked rice) prices instead of just providing cash aid which will not solve their problem in the long-run.

The Federation of Free Farmers (FFF) has expressed reservations over a proposal to use excess rice tariff collections exclusively for cash aid for farmers in line with the Rice Tariffication Law.

The Senate recently passed a bill that allocates all rice taxes in excess of P10 billion every year as cash aid to rice farmers tilling one hectare and below.

The move aims to help farmers cope with declining prices of palay as a consequence of the deluge in cheap rice imports, as well as the effects of the pandemic.

“The senators were responsible for the drop in palay prices, when they passed the RTL without first preparing our farmers and putting in the proper safeguards. Now they want to appear as heroes by giving small sums of money to farmers affected by their law,” FFF national manager Raul Montemayor said.

“They should instead amend the law so that it will stop harming farmers,” he said.

The FFF said the proposal is highly discriminatory, considering that farmers tilling more than one hectare were also affected by low prices and the COVID-19 crisis.

Montemayor said farmers working on larger farms could have lost two or three times more than smaller producers if farm gate prices fell below production costs and they were also hit by calamities and were not exempted from the pandemic.

Further, the group noted that the proposal deviated from the original intent of the RTL which provided that excess taxes could be used not only for cash aid but also for crop diversification programs, crop insurance, and titling of lands.

“The problems and needs of farmers may change over time, but the Senate has reserved the excess tariff revenues exclusively for cash aid all the way to 2024,” Montemayor said.

“Even then, the money is actually very small and may add up to only P3,000 to P5,000 per farmer per year, whereas farmers’ losses from depressed prices alone could average P20,000 per hectare annually,” he said.

The FFF has proposed that funding for the cash subsidy be temporarily augmented by idle funds of the P10 billion-Rice Competitiveness Enhancement Fund, which is earmarked for farm mechanization, seed distribution, credit and farm extension under the law.