September 1, 2022

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Farm mechanization agency under pressure over disbursement performance

THE Philippine Center for Postharvest Development and Mechanization (PhilMech) faced questioning from the Senate after disbursing only a fraction of its budget for mechanizing the rice farming industry.

At a hearing of the Senate Agriculture, Food and Agrarian Reform committee Senator Maria Imelda Josefa Remedios R. Marcos said the agency disbursed only P159 million of the funding available to provide tractors and other equipment to rice farmers, for a disbursement rate of 2.1% in the first half.

PhilMech supplies farm machinery to support industry modernization efforts of the Rice Competitiveness Enhancement Fund (RCEF), a component of the Rice Tariffication Law.

“Even looking at the obligation rate, your rate is a mere 5.8% performance, that is so small compared to before where you could deliver 82.75%. What happened?” Ms. Marcos said at the hearing, which was reviewing the agency’s statement of appropriations, obligations, and distributions and balances in the first half.

PhilMech Director Dionisio G. Alvindia, however, contended that “this year, from January to July 2022, we have already disbursed P3.2 billion and by the end of December, we would like to tell this honorable committee that we can obligate all the P5 billion that is allotted for 2022.”

The discrepancy in the estimates of disbursement performance as reported by the agency and by Ms. Marcos was not explained. Mr. Alvindia said, however, that he has dropped other assignments to focus wholly on PhilMech.

“Yesterday, I asked the Department of Agriculture to relieve me from the Philippine Integrated Program just to concentrate on the PhilMech activities, because when I took my leadership position at PhilMech on March 3, we inherited a lot of problems,” Mr. Alvindia said.

Senator Cynthia A. Villar, who chairs the committee, cited two memoranda which called for the creation of an advisory council to implement the mechanization program of the RCEF. She called the advisory council counter to the intent of the Rice Tariffication Law.

She threatened legal action “if you don’t stop this advisory committee because when we passed the Rice Tariffication Law, in creating the Rice Competitiveness Enhancement Fund, I remember we gave the authority to PhilMech.”

The tasks associated with modernizing the rice industry were parceled out to various government agencies to ease implementation, Ms. Villar said. “Because if you give it to the (Department of Agriculture), it will not be implemented because they will point fingers at each other when mistakes are made, which is happening today.”

“If (the task was assigned to) PhilMech, then it should answer for it. If it was not implemented, PhilMech should be held accountable, that is the spirit of the law,” she added.

Ms. Villar said only PhilMech is authorized to implement the RCEF’s mechanization program, and not an advisory council.

The Rice Tariffication Law, or Republic Act 11203, liberalized rice imports, allowing private parties to bring in shipments of the grain. These importers, however, had to pay tariffs of 35% on Southeast Asian rice, thereby helping raise funds for RCEF and other modernization initiatives.

Tariffs provide RCEF P10 billion worth of funding a year for six years to support farm mechanization (50%), seed development (30%), training (10%), and credit assistance (10%).

“Based on studies, the reason our rice farmers are not competitive is that they are not mechanized and they are not using good, productive seed,” Ms. Villar said, “which is why a large budget of the Rice Competitiveness Enhancement Fund was given to PhilMech and 30% to PhilRice (Philippine Rice Research Institute) so that they will provide the farmers the inbred seed that they need.”

She said the cost of producing rice in the Philippines is P12 per kilogram, double the cost of production in Vietnam.

“I only agreed to pass that Rice Tariffication Law because all proceeds will be given to farmers,” Ms. Villar said.

The Senate panel asked the agency to commit to implementing the mandate of the law and send the necessary documents for its implementation to the committee, and Mr. Alvindia offered to resign if disbursements do not pick up. — Alyssa Nicole O. Tan