No cash transfers, just loans for rice farmers

MANILA, Philippines – As palay farmgate prices reportedly drop to as low as P7 per kilo in some areas, small farmers hurt by the rice tariffication law will not be receiving conditional cash transfers from the government. 

However, they may avail of zero-interest loans, according to the Department of Agriculture (DA).

The DA launched on Monday, September 2, its Expanded Survival and Recovery Assistance Program for Rice Farmers (SURE Aid) in Nueva Ecija.

Agriculture Secretary William Dar led the distribution of some 1,000 cash cards containing P15,000. The amount is readily available for them to withdraw and is payable in 8 years with no interest.

The DA allocated P1.5 billion under the Agricultural Credit Policy Council (ACPC) and is administered by the Land Bank of the Philippines. 

Senator Cynthia Villar said in a briefing on the matter on Tuesday, September 3, that the payment period for the loan essentially operates like a doleout, since it has no interest and rejects inflation factors.

Dar said in a DZMM interview that the DA does not have the money to shell out conditional cash transfers to farmers tending to small rice fields.

Think tank Action for Economic Reforms (AER) said that while the loan program will not be enough to cover some 60,000 farmers who own less than one hectare, it is a good start.

"We hope that unconditional cash transfer can be provided for those which will not be covered by the ACPC loan. Let us not forget in the narrative the remaining 500,000 small farm owners who are also suffering from the worsening situation in our market," AER president Jessica Reyes Cantos said. 

As stated in the law, P10 billion of the total collection from tariffs will be allocated for seeds, mechanization, and the extension component of the program. P1 billion will be for the credit facility for farmers.

Laurence Go, a researcher of AER, believes that the Department of Social Welfare and Development is the only agency that can implement the proposed unconditional cash transfer.

Meanwhile, Socioeconomic Planning Undersecretary Mercedita Sombilla said that the unconditional cash transfer provision was not put in the rice tariffication law, since the essence of the measure is to liberalize trade and let market forces play out.

"We have been giving loans for decades and it's not effective. With the law, we are doing a different approach to help the agriculture sector," Sombilla said.

Farmers are having a hard time competing with cheap rice imports because producing rice in the Philippines costs around P12 per kilo. The production cost of countries like Vietnam and Thailand is less than half of that. – Rappler.com

Ralf Rivas

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

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