Productivity continues to lag behind expectations for rice cultivation
In the Philippines, a significant amount of nearly P80 billion, mainly derived from rice tariffs, has been invested back into the local rice industry since the establishment of the Rice Competitiveness Enhancement Fund (RCEF) in 2019. This fund, spanning six years, aims to enhance the competitiveness of rice farmers.
As of the end of 2023, the RCEF has accumulated approximately P79.336 billion, including both the annual P10 billion allocation and excess rice tariffs collected by the Bureau of Customs. A portion of these funds, totaling P29.336 billion, has been allocated to provide cash assistance of P5,000 to farmers cultivating two hectares of land or less, under the Rice Farmers Financial Assistance (RFFA) program. The Department of Agriculture has disbursed P20.456 billion of this assistance, with the remainder scheduled for distribution this year.
2024 marks the final year of the RCEF, with an anticipated total budget of P30 billion, combining the guaranteed fund and excess rice tariffs from the previous year. This brings the total investment by the government over the six-year period to nearly P110 billion. Despite these substantial investments, some stakeholders and experts express disappointment over the slower-than-expected impact on local rice productivity.
The national average yield per hectare reached 4.17 metric tons in 2023, a modest increase from 3.99 MT in 2018. However, this falls short of the RCEF’s target of achieving at least 5 MT per hectare. While some consider the RCEF a success, citing record palay harvests, others argue that the program did not meet minimum expectations.
Challenges such as the COVID-19 pandemic and the Ukraine-Russia conflict have disrupted global trade and impacted rice farmers, leading to increased production costs and decreased net returns. Despite these challenges, experts suggest evaluating the RCEF’s impact in its pilot areas, considering external factors like climate change.
Ultimately, the assessment of palay production costs should be analyzed in real terms, excluding inflation and other market factors, to accurately gauge the RCEF’s impact.
Business News: Productivity continues to lag behind expectations for rice cultivation
