Gov't agencies to bankroll RFFA if revenue declines due to import tariff cut — Enverga

The government will tap national agencies to bankroll the Rice Farmers Financial Assistance (RFFA) if the expected decline in revenues as a result of the tariff cut on imported rice materializes, Quezon Rep. Mark Enverga said on Monday.

Enverga, the chairperson of the House Committee on Agriculture and Food, said there are programs intended for farmers lodged under various agencies, including the Department of Social Welfare and Development (DSWD), that could contribute to the government's effort to assist rice farmers through financial aid.

The RFFA is an unconditional financial assistance to farmers funded by excess tariff collection from rice importations.

"I know currently the President through the DSWD has a program that finances our local farmers," said Enverga in an interview. "So, I guess there could be a means wherein we could adjust the budget of the DSWD in terms of financial aid to farmers as well."

Rice farmers are poised to lose approximately P43 billion as a result of the government's decision to slash the tariff on rice imports to 15 percent from 35 percent until 2028 in a bid to shrink the cost of the staple grain while supporting domestic production through tariff cover.

Farmers' groups fear that the markets will be flooded with cheaper imported rice, leaving local farmers struggling to compete with foreign suppliers with no option other than to sell their yields at a bargain price.

Former Agriculture Secretary, now Federation of Free Farmers chairperson, Leonardo Montemayor, projected that the cost of rice would remain around P50 pesos per kilo even if the tariff is reduced to 15 percent.

The Department of Finance projected that the government could lose up to P22 billion in revenues this year from rice tariff reduction, drastically higher than its initial estimation of P10 billion.

Last month, the House of Representatives passed House Bill 10381, which seeks to amend the Rice Tariffication Law (RTL). Among the salient provisions under the bill is to increase the current P10 billion base amount of the RCEF to P15 billion.

The current RCEF, or the Rice Fund, sets aside P10 billion a year from tariff collection on rice import to fund farm mechanization, provision of better seeds, and training on new farming technologies, with the excess collection allotted to the RFFA.

According to Enverga, the Bureau of Customs' tariff collection on rice imports in the first five months of 2024 already reached P21 billion, more than enough to cover the proposed higher RFFA.

"We expect this to increase further and this would be the budget, the means to support the program for the upcoming 2025 fiscal year's budget for the RCEF," he said.

Under the House version, Enverga said that in the event that the country falls short in its collection to finance the P15 billion core programs, the national government will subsidize the difference and the balance in order to ensure that local rice farmers would get the entire P15 billion RCEF program.