Aragones pushes subsidy for farm inputs

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STUMPED at persistent high rice prices hitting all-time highs in September despite the harvest season, Rep. Sol Aragones of Laguna third district has sought heftier subsidy to agriculture through a bill filed in the House of Representatives.

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Citing the country’s low productivity compared to other Asian rice producers and prohibitive cost of fertilizer as bases, Aragones on Wednesday filed House Bill (HB) 3252, also known as the “Rice Fertilizer Subsidy Act of 2013,” which seeks to provide qualified farmer-beneficiaries with 50 percent government subsidy for fertilizer procurement.

“One big threat cited by the Department of Agriculture [DA] when it comes to rice production is the price of fertilizers. It is thus necessary to restore the subsidy provided by the State to rice farmers in the purchase of their fertilizers,” Aragones, newsman-turned-lawmaker said.

The Philippine Rice Research Institute (PhilRice) estimates that fertilizers account for 20 percent of total rice production cost, requiring at least eight bags per hectare. Each bag of fertilizer costs upwards of P1,000 according to the September 2013 data from the Bureau of Agricultural Statistics (BAS).

Lack of government subsidy in agriculture has been regarded by experts as a major contributor to poor production and high retail prices, “effectively inhibiting growth of farm productivity and employment, reducing the earnings of poor farmers and landless workers, and making food more expensive and less accessible to poor urban consumers and even small farmers who are net buyers of food,” according to National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan.

But while government has yet to substantially increase its subsidy to agricultural inputs, the National Food Authority (NFA), in 2013 paid some P1.7 billion in duties and taxes for the importation of rice under a government-to-government arrangement.

This is on top of the $94.5 million or more than P4 billion spent by the agency to import 205,700 metric tons of rice from Vietnam in April of 2013. The transaction is currently under investigation by both chambers of Congress owing to allegations of half-a-billion pesos overpricing.

Despite having invested heavily in government importation this year, rice prices in September soared to an all-time high according to the BAS at P36.04 per kilogram, increasing 23 percent from P29.38 at the height of the rice crisis in 2008.

Balisacan, himself a former Agriculture Undersecretary, had previously pushed for higher subsidies in production and the “dismantling of the National Food Authority’s extensive interventions in rice trade, including its virtual monopoly in rice importation.”

The Aragones bill, consistent with the NEDA’s recommendations, bats for higher government investments in farm inputs to “support the livelihood of rice farmers; achieve national self-sufficiency in rice; ensure that it is financially sustainable for the government; and curtail transaction costs and inefficiencies associated with distribution,” among others.

Earlier, Rep. Delph Gan Lee of Agri-Agra Reporma Para sa Magsasakang Pilipinas (AGRI) party-list also advocated for wiser government spending in agriculture through HB 2936 or the “National Food Authority Rationalization Act of 2013” seeking to end the NFA’s supposed import monopoly and “to allow for scarce government resources to be re-allocated away from costly price stabilization functions to more productive investment in rice research and development, extension services and irrigation.”

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