Villar pushes for P10-billion rice farmers’ subsidy

Ralf Rivas
Villar pushes for P10-billion rice farmers’ subsidy
Senator Cynthia Villar says she won't agree to rice tariffication if farmers would not get subsidies

MANILA, Philippines – Senate agriculture and food committee chairperson Cynthia Villar is pushing for a P10-billion subsidy for local rice farmers along with the proposal to lift import quotas and slap tariffs on rice imports.

Villar said local farmers need subsidies to compete with cheap rice from abroad.

“I won’t agree na mag-liberalize ng market tapos walang subsidy…. Talo ang farmer,” Villar said on Wednesday, August 15.

(I won’t agree to a liberalized market without subsidies…. Local farmers would lose.)

The Senate version of the bill which was filed by Villar includes the creation of a rice competitiveness enhancement fund (RCEF), where collected taxes from rice imports would fund programs for farmers.

However, she admitted that it would take a long time before farmers could benefit from the funds, hence the proposed subsidy.

The senator said the P10-billion subsidy must be included in the annual budget of the national government until money from the RCEF would suffice to support the rice sector. 

This provision under Villar’s Senate bill is in contrast with the House of Representatives’ version, which only plans to subsidize farmers for a maximum of 5 years.

Farmers’ groups oppose freeing the market for more rice imports, insisting that imports would not bring prices down.

The Philippine Statistics Authority reported that rice inflation rose to 5% in July despite the arrival of rice imports from Thailand and Vietnam. (READ: Rice imports fail to tame inflation in July 2018)

Local farmers produce rice at P12 a kilo. This is almost double the cost of Vietnam’s P6.50 per kilo and also higher than Thailand’s P9.

The Department of Agriculture previously said it is working on bringing down the production cost of local farmers through various programs and upgrading farming techniques.

The National Economic and Development Authority (NEDA) estimated that rice tariffication would bring down prices for regular milled rice to P30 per kilo, P4.30 less than the prevailing price.

NEDA also said a typical family of 5 would save over P2,000 a year if the measure is implemented.

Socioeconomic Planning Secretary Ernesto Pernia reiterated that rice tariffication and a free market would stabilize rice prices. –

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.