Exploring RCEF and its implementation

Written by Clariza Sophia Alcantara and Kristina Isabel Perez

Rice remains to be the staple food of over 89% of the Philippine population. In fact, rice farming contributes to the income and employment of 12 million farmers and family members. With this, the government continues to create programs and policies that aim to help rice farmers become more productive and be able to sustain the production of food for Filipinos. The Rice Competitiveness Enhancement Fund (RCEF) or Rice Fund is one of them. 

The RCEF was created to improve the competitiveness and income of rice farmers amidst the liberalization of the Philippine rice trade policy brought by the controversial Rice Tariffication Law (RTL). 

Despite these, farmers also have their reservations in the matter. What about the RCEF that makes it controversial for critics and beneficial for the Department of Agriculture (DA)? Read our full explainer for the details.

Rice seed development, propagation, and promotion

Tariffs collected from rice imports go to RCEF. The RTL ensures that farmers can directly benefit from the liberalization of rice trading by providing P10 billion a year to the RCEF up to 2024. After the first three years of its implementation, the RTL has earned over P46.6 billion in rice import duties, which palay farmers have directly benefited from. The P10-billion annual fund was created to fund the seed, mechanization, credit, and extension programs for the Four Key Programs of RCEF.

“Through RCEF, we hope to uplift the practices and lives of our farmers, who are our main partners in achieving rice security. Their success will pave the way for available, affordable, accessible, safe, and nutritious rice for the Filipinos,” William Dar, outgoing agriculture secretary), said.

The seed program, implemented by the Philippine Rice Research Institute (PhilRice), aims to increase the adoption of certified inbred seeds and integrated crop management through distributing rice seeds to the farmers, strengthening their local seed production, and supporting the farm’s variety development. To become beneficiaries of the program, the DA requires farmers to be part of either the Registry System for Basic Sectors in Agriculture (RSBSA) or any Farmer’s Organization accredited by them. The number of seeds distributed per kilo depends on the farmer’s farm size.

One 20 kg. bag will be given to a farmer with a farm of less than or equal to 0.5 hectares, while four bags will be given to farms with more than 1.5 hectares of land. A target yield should be met for farmers to receive seeds again in the next program cycle.

The Department of Agriculture distributes bags of certified inbred seeds to rice farmers under the RCEF program (Photo from the Philippine News Agency)

On machinery and equipment 

More well-off and capacitated farmers are the main beneficiaries of this program. A 50-hectare rice farm and a rice area of 100 hectares are among the minimum technical requirements. A machinery shed and the capacity to operate and maintain the machinery or equipment are also required of the beneficiaries of the program.

This mechanization program is implemented by the Philippine Center for Postharvest Development and Mechanization (PhilMech). It aims to increase rice farmers’ productivity, profitability, and global competitiveness through mechanization technologies that can improve production and post-production, such as tractors, tillers, transplanters, mechanical rice dryers, and so on.

The Department of Agriculture turned over farm machineries under the RCEF Mechanization Program to cooperatives and associations in Mindanao (Photo from DA PhilMech)

The ERCA-RCEF Credit Program 

Of the P10 billion, 10% or P1 billion has been allocated to the Expanded Rice Credit Assistance (ERCA), which shall be shared equally between LANDBANK and DBP at P500 million each annually for lending to small palay farmers in the country. The financial assistance requires individual farmers to be registered under the RSBSA maintained by the DA.

Cooperatives with rice farmers as members are also eligible to borrow from the program; a maximum loanable amount of up to 90% of the total project cost and an interest rate of 2% per annum for production and acquisition of machinery equipment. The goal of this credit facility is to support rice farmers and their cooperatives in ameliorating their productivity. Moreover, to increase their income amidst the current liberalization of the country’s rice trade policy.

Rice Extension Services Program 

This program under the Rice Competitiveness Enhancement Fund proactively capacitates its beneficiaries through strategic extension services. About 10% of the rice fund is distributed to the services offered by DA-PHilMech, DA-PhilRice, DA-ATI, and Technical Education and Skills Development Authority (TESDA) for

Training Course on the Operation and Maintenance of Rice Machinery in Angat, Bulacan (Photo from Agriculture Development PH)

educating the participants’ added skills on rice crop production. From the name itself, RESP’s goal is to extend and expand the beneficiaries’ knowledge about rice farming, farm mechanization, seed production, and other relevant skills for improved competitiveness and increased income.  

RCEF at present

Three years after its implementation, together with the pandemic hitting the country in early 2020, the country logged a record of palay or unmilled rice harvests in 2020 and 2021, or 19.29 MMT or 19.96 MMT, respectively. This record allowed for adequate stocks of rice during the two dreadful years of the pandemic.

“Despite the blabber and noise by detractors, we see the RTL and RCEF as testaments to what a sustainable policy can do to help ensure food security for more than 100 million Filipinos,” said Dar.

Other achievements of RCEF such as an increase in the palay production by 17 percent to 4.26 metric tons (MT) per hectare (MT/ha) from 3.64 MT/ per hectare have been recorded in 42 provinces, and a P1 reduction in the previous average production cost of P12.52 per kilogram (kg) to P11.52 per kg was also achieved in the past years. 

At present, the ultimate goal of RCEF remains unwavering. By 2024 or 2025, the country’s palay production be increased to 5 metric tons per hectare (MT/ha) from the current 3.64 MT/ha; to reduce the farmers’ postharvest losses by 2% to 3% and ultimately increase the average income or farmers by 30% for those who have availed of RCEF drying and milling facilities.

Drawbacks and mishaps

Despite its beneficiary-centered approach to its programs, it is indisputable that RCEF has its fair share of disadvantages.

With all the problems arising from the RTL provisions and the COVID-19 pandemic hitting the country, multi-billion peso programs such as RCEF, the distribution of seeds, machinery, and financial support to farmers were further hampered.

Other support programs of the Department of Agriculture have been compartmentalized by RCEF which led to the division of the country’s program and non-program areas and limiting interventions to a fixed menu of seeds, machinery, and its other key programs such as credit and extension. Subsequently, these irregular interventions are often nullified by the lack of irrigation and other support services that are equally important for farmers. 

Moreover, the issue of declining farm gate prices of rice was attributed by a number of sectors to the RTL. In a Technical Working Group meeting conducted by the House Committee on Agriculture and Food held last October 2021, the Action for Economic Reforms (AER) emphasized that the RTL is not a ‘be-all, end-all” solution to the problems that beset the rice sector. Consequently, RTL’s vision to make affordable rice accessible to the general public and address systemic flaws while supporting the local rice industry through the Rice Competitiveness Enhancement Program (RCEP) has its own flaws.

AER argued that the implementation of the RCEP has been a series of late or missed delivery of seeds, the slow roll-out of mechanization, insufficient access to loans and aid, delayed roll-out, and high costs of unsubsidized fertilizers. Inconsistent targeting of farmer-beneficiaries due to gaps in the RSBSA is also prominent. Furthermore, the AER recommended that “the government should provide direct cash transfers to farmers, and enhance the timeliness, targeting, scope, and effectiveness of the RCEP.”

As beneficial as the RCEF might sound to small-scale and local farmers, its execution remains to be idealistic as these present problems in the implementation of both the RTL and RCEP continue to arise.

What now?

With RCEF and RTL  going full blast, there are still questions that remain unanswered and farmers that are yet to receive the assistance they were promised. Despite the number of records presented, food security groups such as Tugon Kabuhayan are still urging the government to assess and amend the law

“Three years after the passage of RTL, what have our farmers gained from it? We were promised that this law, quoting the DA, is a game-changing reform policy that will break decades of the inefficiency of the country’s rice sector and enhance its prospect of being globally competitive, but are we on target?,” Tugon Kabuhayan said in a statement.

Additionally, Federation of Free Farmers Cooperative Inc. national manager Raul Montemayor asserted the RTL did not benefit the farmers despite all of its promises. 

With these, doubts continue to cloud the skies of the farmers disabling them to harvest the fruits of their hard work.

For more information on the Rice Competitiveness Enhancement Fund visit the DA’s website at https://www.da.gov.ph/rice-competitiveness-enhancement-fund/ or https://rcef.da.gov.ph/

Photo from DA-Philerice Batac

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