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PHilMech identifies projects for financing from P10-B RCEF

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By Madelaine B. Miraflor

The Philippine Center for Postharvest Development and Mechanization (PHilMech) has already identified the mechanization projects and programs to be funded by the P10-billion Rice Competitiveness Enhancement Fund (RCEF).

Republic Act (RA) 11203 or the Rice Tariffication Law stipulates the creation of the RCEF that would be funded by rice tariff collections. As part of the law, RCEF will be first injected with P10 billion annually from 2019 to 2024 or a period of six years.

Of the P10 billion, P5 billion will be allocated for mechanization of the local rice sector, P3 billion for provision of high-yielding in bred rice seeds, P1 billion for credit support, and P1 billion for extension support and education of rice farmers.

“With the formal launching of the projects and programs under RCEF, we at PHilMech welcome the opportunity to spearhead the modernization of the country’s rice industry through mechanization,” said PHilMech Director IV Dr. Baldwin G. Jallorina.

PHilMech’s target is for the agency to be able to distribute 200 sets of modern equipment across the country every year using the fund. The agency had also set 57 priority areas across different parts of the country for such distribution.

The reason why bulk of RCEF will go to PHilMech is because mechanization in the rice sector could help reduce post-harvest losses, which makes locally produced rice more expensive than the imported supply.

Right now, the cost of producing rice in the Philippines stand at P12 per kilo, which is more than half of the production cost of Thai and Vietnamese rice farmers.

PHilMech believes with the successful implementation of the different components under RCEF, the cost of producing palay in the Philippines can be reduced by P2 to P3 per kilo.

“We should be aware that we really need to modernize the country’s rice industry as we cannot rely forever on imported rice to help feed our country’s growing population. That fact also underscores the importance of the different components under RCEF that will make the rice farmers competitive,” Jallorina said.

Last March, PHilMech Deputy Director Raul Paz said that even if RCEF will soon be made available, his agency — used to handling only P200 million to P300 million budget every year — could not immediately distribute machineries all over the country.

He said that before PHilMech could spend its RCEF allocation, the agency would first need to hire more people, get more vehicles for effective transportation, and expand its procurement unit. He said all of this could take months.
“PHilMech is a very small agency,” Paz said before.

What PHilMech needs right now, he said, is additional “administrative cost” of at least P250 million to expand its operations and structure.

Nevertheless, he said PHilMech is now “ready” to help the government implement the Rice Tariffication Law.

“It will take a while,” he said. “But at this time, we are already doing preparatory activities and we are starting to validate the municipalities.”

To be specific, RA 11203 removes the quantitative restrictions on rice imports in place of tariffs, or 35 percent for those coming from Southeast Asia, and 50 percent for outside the region.

Former Agriculture Secretary Dr. William Dar said that even if the country can source cheaper rice from abroad, it should maintain at least a 95-percent self-sufficiency level for the staple.

He explained that there will come a time when even the leading exporters of rice worldwide will experience production shortfalls from the extreme weather events.

Also, only 5 percent of worldwide rice supply is traded internationally.

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