Sponsorship Speech of Senator Cynthia A. Villar for Rice Tariffication Law or Republic Act (RA) No. 11203, Extension and Amendment
August 13, 2024
Sponsorship Speech of Senator Cynthia A. Villar
for Rice Tariffication Law or Republic Act (RA) No. 11203,
Extension and Amendment
13 August 2024
Mr. President, esteemed colleagues:
A pleasant day to you all.
Today, I am happy to stand before you to sponsor the Extension and Amendment of Rice Tariffication Law or Republic Act No. 11203 that created the Rice Competitiveness Enhancement Fund or RCEF from tariff collected on imported rice.
It is contained in Committee Report Number 282 entitled, AN ACT AMENDING REPUBLIC ACT NO. 8178 OR THE AGRICULTURAL TARIFFICATION ACT OF 1996," AS AMENDED BY REPUBLIC ACT NO. 11203.
Enacted in 2019, the RTL lifted quantitative restrictions on rice and introduced tariffs to protect local rice producers. The RTL ensured that farmers directly benefit from the liberalization of rice trading by providing P10 billion a year to the RCEF or the RICE FUND up to 2024.
The RCEF provided P5 billion for the free distribution of farm machinery and equipment, P3 billion for free distribution of high quality inbred certified seeds, and P1 billion for credit support and another P1 billion for training of rice farmers.
The collections in excess of the P10 billion funds go to the Rice Farmer Financial Assistance or RFFA under RA 11598. This law took effect on March 5, 2019 and will also expire in 2024. It is to compensate the projected reduction or loss of farm income arising from the tariffication of quantitative import restrictions on rice. The excess tariff collection from rice importations in 2022 amounted to PhP12 billion. The RFFA beneficiaries are farmers tilling two hectares and are registered in the Registry System for Basic Sectors in Agriculture or RSBSA, which as of June 2024, totaled 2.5 M or 91.0 percent of all rice farmers (2.8 M).
In the Senate there are five (5) bills filed on the same topic, and four (4) resolutions.
1. SN. 642 by Senator Marcos amending Republic Act No. 8178 or the Agricultural Tariffication Act of 1996 and proposing the expansion of the functions of the national rice buffer to cover both natural catastrophes and commodity crisis, among others;
2. SN. 1203 by Senator Padilla expanding the purpose of the RCEF from P10Billion to P15Billion annually and earmarking 10% to scholarship, health and other similar benefits;
3. SN. 2601, which I filed extending the RCEF until 2031, including the Financial Assistance to Rice Farmers, and allocating a portion of the fund for Small Water Impounding Projects, and Composting Facilities for Organic Fertilizer;
4. SN. 2672 by Senator Padilla proposing the restoration of the price stabilization and supply regulation functions of the National Food Authority (NFA) and the creation of the Rice Industry Development Program Management Office;
5. SN. 2708 by Senator Marcos proposing the importation of rice by the Department of Agriculture (DA) for price stabilization purposes;
6. Senate Resolution 503 by Senator Loren Legarda, to conduct an inquiry in aid of legislation on the implementation of the RCEF;
7. Senate Resolution 956, by Senator Risa Hontiveros, for a consultative and comprehensive review of the implementation of RTL;
8. Senate Resolution 1024 by Senator Padilla to conduct an inquiry in aid of legislation on the surging costs of rice in the market; and
9. Senate Resolution 1028 by Senator Padilla to conduct an inquiry in aid of legislation on the failure of the government to effectively communicate policies and relevant implementing details of laws that are targeted to support our local farmers and cushion the effects of the RTL.
On May 14, 2024, the Senate Panel convened CONGRESSIONAL OVERSIGHT COMMITTEE ON AGRICULTURAL AND FISHERIES MODERNIZATION [COCAFM] in the Senate, with the various implementing agencies and stakeholders including nationwide representatives of farmer cooperatives and associations. On June 13, 2024, the first public hearing was conducted in the Senate by the Senate Committee on Agriculture, Food and Agrarian Reform, again with the RCEF implementing agencies and another set of farmer's cooperatives and associations.
On June 28, 2024 a focus group discussion (FGD) was hosted by the ATI, Regional Office in Region 2, Malasin, San Mateo, and Isabela with rice farmer's associations/cooperatives of Isabela, Kalinga and Ifugao.
On June 29, 2024 AM, another focus group discussion (FGD) was conducted at the Phil Rice Headquarters Munoz City, Nueva Ecija with seed growers coops and rice farmer's beneficiaries of the seed program from Region 3, in attendance.
In the afternoon of the same day, another focus group discussion (FGD) was conducted at PhilMech Training Hall, Maligaya, Science City of Munoz, Nueva Ecija which was attended by rice farmer-beneficiaries.
The second RTL Hearing was conducted at the Senate in July 4, where the results of the FGDs were reported and upon the request of other farmer coops and associations who requested that they be heard on the RCEF and provide recommendations on how to improve the same.
The Joint Meeting of the COCAFM panels of both Houses of Congress was held on August 1, 2024, in the Senate on the RCEF Extension and Amendment again with a new set of farmer's coops and associations in attendance.
The consultation and discussion with stakeholders and fellow lawmakers are substantial and the sentiments of the stakeholders with 181 farmers groups is a resounding request that the law be extended with amendments. The Rice Tariffication Act amends the Agricultural Tariffication Act of 1996 (RA 8178).
ACCOMPLISHMENT:
1. PhilMech
a. PhilMech Distribution: 26,425 Machines and Equipment for Production and Harvesting 1,226 Post harvest facilities or a total of 27,651 vs. Target of 30,108 or 92%. Number of Beneficiaries: 6,575 Farmers' Coops and Associations, 388 LGUs.
2. PhilRice :
• Consecutive record-breaking palay production.
2018 - 19.06 MMT
2019 - 18.81 MMT*
2020 - 19.29 MMT
2021 - 19.96 MMT
2022 - 19.76 MMT
2023 - 20.06 MMT
The 2019 baseline date was used because the funds for seed distribution arrived only in September 2020.
• Per PSA data, in 2019, there was an adverse effect brought about by El Niño / dry spell in rice production areas, namely, Cagayan Valley, Ilocos Region, CALABARZON, MIMAROPA Region, Western Visayas, Central Visayas, Zamboanga Peninsula, Northern Mindanao, and SOCCSKSARGEN.
(Source: Performance of Philippine Agriculture, January to March 2019, Philippine Statistics Authority. Link can be accessed at: https://pcaf.da.gov.ph/wp-content/uploads/2019/05/PAR_January-to-March-2019-compressed.pdf)
• In 2022, there was a slight decrease in palay production from 19.96 MMT to 19.76 MMT caused by the surge in the cost of fertilizers and typhoons like Typhoon "Karding" that affected the rice producing areas, such as Bataan, Zambales. Tarlac, Pampanga, Nueva Ecija, Bulacan, Aurora, Rizal, and a portion of Quezon) (Source: Philippine Daily Inquirer published on 02 January 2023. Link can be accessed at https://business.inquirer.net/380416/local-rice-output-likely-declined-in-22-as-costs-soared
• Organized and empowered seed producer's cooperatives that supplies to PhilRice high quality inbred certified rice seeds for distribution.
• Dry season unit cost of producing a kilo of palay by end of 2023 is down by 10% or less than P1.58 pesos per kilo or in absolute amount from P15.42 down to P13.84.
• During wet season production cost is lower by 3% or P14.92. Farmers have higher income per hectare in 2023 vs. 2019 or 107% increase during the dry season. During the wet season, in 2019 average income per hectare is P14, 974. Vs. P26, 035 in 2023 or 74% increase.
We benchmarked our competitiveness in the cost of seeds and mechanization, and the average cost of production is 12.41 per kg of fresh palay. The data is based in a study by PIDS using Nueva Ecija as to represent the Philippines versus Vietnam at 6.53 per kg.
In 2019, at the start of the RCEP program with PhilRice, the cost of seeds is 0.79. In 2023, the cost of seeds is 0.62. There is a decrease of .17 or 22% in the cost of seeds.
Based on the study, the cost of fertilizer at the time is 1.94. In the Philippines in 2019, the cost of fertilizer is 1.08. In 2023, the cost of fertilizer is 2.45. But despite such increase in cost of fertilizer, the average income of rice farmer has increased to 74% per ha or Php26, 035.
(we can insert our insistence and justification on organic fertilizer production through FCAs because of this)
EXTENSION COMPONENT
Training of Rice Specialist and Rice Mechanization Specialist covering all regions: 4,967 specialists Topics include
a. High Quality in bred rice and seeds and farm mechanization
b. Refresher Course on Training of Trainers
c. TOT on Pest and Nutrient Mgmt.
Physical Accomplishment:
Rice Specialist Training Course: 19 batches with 634 participants or 113% of target (560);
TOT 164 batches with 4,937 participants and graduated 4,333 or 87%;
Farmers on FFS and Pest and Nutrient Management: 136 batches with target 4,080 participants but actually graduated 4,188 pax or 103 percent
3. LOANS
Land bank Received: P2.641.98 B
Disbursed: P2.552.09
Disbursement Rate: 97%
Direct Borrowers
Rice Farmers: 15,421 (98%)
Cooperatives: 273 (1.74%)
Total Accounts: 15,694
DBP Received: P3B
Disbursed: P2.199
Rate: 73.33%
Direct Borrowers
Rice Farmers: 33
Coops/Asso.: 36
Training and Extension
4. EXTENSION
TESDA Training Activities:
1. Training of Farmers
a. Farmers Field School on Inbred Rice Seeds, Seeds Certification and Farm Mechanization
b. Rice Machinery Operations NCII
c. Drying and Milling Plant Servicing
d. Service Motorcycle/small engine servicing
e. Agro entrepreneurship NCII and NC III
f. Pests and Nutrient Management
g. Digital Agriculture Course
Financial Accomplishment. Allocation vs. Disbursement
2019: 73.92%
2020: 88.74%
2021: 96.97%
2022:97.42%
2023:96.69%
2024 as of May 14, 16.38% or 86.69%
Total Enrolled in all courses:
From 2019 to April 2024: 309,278 approved slots of which 239,959 graduated or 86.86%
Profile: by sex: 53.8% female and 46.2% Male;
By Age:
31-59 yrs. old: 62.7%
18-30 yrs. old: 24.9%
60 and above: 12.4%
AGRICULTURAL TRAINING INSTITUTE
Amount Received: P600M Disbursed: P479M or 86%
For FY 2024 as of June 30, a total of 53 trainings were conducted with 1,371 participants trained. Of these, there were 44 batches of Training of Trainers (TOT) which catered to 1,196 trainees; 26 trainings for other extension intermediaries with 605 participants; and 7 specialized trainings/activities with 196 participants.
1. Training of Other Extension Intermediaries
a. For potential Seed Production and Cert'n for Potential Seed Growers
b. For Seed Inspectors
c. For Seed Analysts
d. For Agripreneurship Training of GAP Certification
PHILMECH: Allocation from 2019-2024: P557M disbursed P526.4M or 95%. They were able to train 17,554 farmers trained in 931 batches of training.
PHILRICE: Received P515M, utilized P468M or 90.96% served 4,238 farmers.
RA 11598 OR THE FINANCIAL ASSISTANCE TO RICE FARMERS TILLING TWO HECTARES AND BELOW (P5, 000), passed in 2021 until 2024.
Disbursement:
Land Bank - (they only participated in 2021) they received P2.1B and disbursed P1.68B, and served 330,340 farmers or 78.90% of their fund.
DBP - received P27B and disbursed P20.2B serving an average of 1.3 M farmers from 2021-2023 or 81.57% of their fund. As of 2024 they were able to received P19.9B with no disbursement yet as of today. (they said the schedule is in September 2024.
Salient Features of the new bill:
1. Extension for another six years or until 2031.
2. Total Amount Covered: P30B sourced from tariff on imported rice any deficiency shall be supplemented by the GAA.
3. Strengthening the DA - Bureau of Plant Industry Regulatory Functions including registration and data basing of all grains warehouses.
4. Empowering the DA Secretary to respond to a declaration of rice food shortage and extraordinary increase of rice prices, where the DA can sell through government agencies such hospitals and jails and KADIWA outlets and replenish through procurement of locally produced rice from farmers and farmers' coop.
5. DA to import when no available locally produced rice. And it shall designate an importing authority except the NFA, the proceeds of sale shall revert to the buffer fund.
6. Disposal of aging stock with NFA shall be 4 week before expiration.
7. The President can prohibit further importation or specify the volume to be imported during excessive supply of both imported and locally produced rice in the market, for a specific period and volume.
8. Creation of the Program Management Office that will monitor both the RCEF and the National Rice Program.
9. Engage the services of an independent and Mid-term and End Term Evaluation of the RCEF to assess the performance the result of which to be submitted and discussed with the COCAFM.
Distribution of the Fund
| Rice Farm Machineries and Equipment | Php9B |
| High Quality Inbred Rice Seeds, Propagation, Distribution and Promotion | Php6B |
| Financial Assistance to Rice Farmers tilling 2 hectares and below (2.4M farmers) | Php8B |
| Expanded Rice Credit Assistance | Php2B |
|
Training and Extension a. TESDA for farm schools- Php1B |
Php2.2B |
| Solar-Powered Water Irrigation or Water Impounding Irrigation Project | Php1.4B |
| Composting Facilities for Biodegradable Wastes | Php1.4B |
| TOTAL | 30B |
That would be all Mr. President, esteemed colleagues.
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