By  Jovee Marie de la Cruz, November 29 2018; Business Mirror


Image Credit to Business World

THE House of Representatives on Wednesday endorsed for President Duterte’s signature the rice tariffication bill and the coco levy trust fund bill after it ratified the bicameral committee reports on the two measures.

Camarines Sur Rep. Luis Raymund F. Villafuerte Jr. said the Rice Competitiveness Enhancement Fund (RCEF) under the rice tariffication bill will help boost farm productivity and partly address the tight rural credit crunch that has today ballooned to P367 billion.

Villafuerte noted that only 10 percent of its P10-billion allocation, or P1 billion, would be set aside for credit to farmers and cooperatives. But, he said, this would in some way help farmers gain access to lending facilities that were denied them by the banking sector despite a law requiring banks to allot a specific portion of their credit facilities to the agriculture sector.

“That’s only P1 billion offered at preferential lending rates to farmers and cooperatives. But alongside the other features of the RCEF, the agriculture sector would finally get the assistance it needs to directly provide palay farmers the facilities they need to boost their incomes and make them competitive,” he said in a statement.

The bicameral conference committee report on the rice tariffication bill aims to replace quantitative restrictions on (QR) rice imports with tariffs and remove unnecessary government intervention in the rice market. Villafuerte, one of the authors of the bill, said he believes that the measure, which was certified by President Duterte as an urgent and a priority measure, would boost farm productivity and help rein in inflation.

Under the bicameral panel-approved measure, the RCEF will have a minimum annual allocation of P10 billion for six years, and tariff revenues from rice imports in excess of P10 billion shall be appropriated by Congress for the farm sector, based on a menu of programs in the rice tariffication law.

The proposed fund will be allocated as follows: 50 percent for grants to farmers’ associations, registered rice cooperatives, and local government units in the form of rice equipment, to be implemented by the Philippine Center for Postharvest Development and Mechanization (PhilMech); and 30 percent for the development, propagation and promotion of inbred rice seeds to rice farmers and organizations, to be implemented by the Philippine Rice Research Institute (PhilRice).

The 10 percent will be in the form of credit at preferential rates to rice farmers and cooperatives to be managed by the Land Bank of the Philippines and the Development Bank of the Philippines; while the remaining 10 percent is for extension services to teach rice farmers modern methods of farming, seed production and farm mechanization, to be administered by PhilMech, PhilRice, the Agricultural Training Institute and the Technical Education and Skills Development Authority.

Villafuerte said the amount allocated for low-interest credit to farmers appears to be small compared to the credit gap in the agricultural sector that now stands at P367 billion based on Bangko Sentral ng Pilipinas data.

“Lack of credit is one reason for the stunted growth of our agricultural sector,” Villafuerte said. “The BSP should find ways to crack the whip on banks for being stingy in extending credit to farmers.”

Coco levy

The House also endorsed to the President the proposed Coconut Farmers and Industry Development Act, which guarantees the utilization of the coco-levy fund for the benefit of all coconut farmers.

The levy refers to a 40-year-old tax on coconut farmers, the resulting fund of which was supposed to be used to develop the coconut industry.

In September, the House overwhelmingly voted on third and final reading on House Bill 5745, which sets up the Coconut Farmers And Industry Development Trust Fund.

Then Davao City representative and now Cabinet Secretary Karlo Alexei B. Nograles, one of the authors of the measure, said the expected signing of the law would institutionalize the needed mechanism for the “prudent and proper management” of the coco-levy funds.

The bill mandates the creation of the Coconut Farmers and Industry Development Trust Fund, which shall consist of the trust principal and the trust income. It provides that no portion of the trust fund shall accrue to the general fund of the national government.

The bill tasks the Presidential Commission on Good Government (PCGG) to conduct a complete accounting and inventory of all coconut-levy assets.

Also, the Commission on Audit (COA) is mandated to audit the inventory of the coco- levy assets prepared by the PCGG and to submit to the Coconut Famers and Industry Trust Fund Committee the initial audit report within 120 days upon completion.