Construct Irrigation
To Increase Rice Yield
From P7.5 billion worth of tax subsidy, the National Food Authority (NFA) will be given P32 billion this year. This increase is 426.6 percent over last year.
This increase is approved to insure NFA will have enough financial capability to import rice and to meet the demand until December.
Every year, the national government allocates a budget for the tax expenditure fund (TEF) from which tax subsidies to selected state-owned firms are taken.
The TEF is used to help state owned and managed firms settle duties and taxes to the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR). This tax subsidies given to state owned firms are usually deducted from its budget for the following year for those firms are not exempted from paying taxes and import duties. But for the NFA, the government is very lenient.
Through undersec-retary Jeremias Paul, Jr., the Dept. of Finance agreed to exempt temporarily the NFA from paying tax subsidies given by the national government which does not come in the form of cash. The Dept. of Budget and Management issues a document to a government agency in need of assistance to meet its tax and duty obligations, in this case the NFA. The NFA uses this document to settle its tax and duty obligations to the BIR and BOC.
This amount of tax subsidy given to NFA is booked as expenditures by NFA and is recorded as revenue collection by the BIR and BOC.
According to the NFA officials, the firm has been suffering from losses from its trading operations by importing rice abroad at high prices and sells it to the consumers at very low prices than its imported cost. Without tax subsidy, NFA will be buried in debt.
According to the BOC, imported rice is subjected to 50 percent tariff. For example, rice imported from Vietnam at US$1000 per metric will be taxed 50 percent or US$500 or a landed cost of US$1,500 per metric ton. Added to it will be the cost of handling, transportation, distribution and damages. Hence, it is expected that NFA would probably post losses from P29.5 billion to P43.1 billion in 2008.
Any Filipino is capable to imagine how far the P43 billion tax subsidy to NFA can go if invested in the construction of irrigation system. The Philippines does not need to import any rice from abroad if it can repair the present existing irrigation systems and construct new irrigation systems to irrigate the now rainfed rice field. The Philippines may produce surplus rice if it can fully irrigate a total of 2.5 million hectares rice paddies.
In Aklan, seven years ago, the sum of P200 million was appropriated to repair the existing Aklan River Irrigation System but it was only until ground breaking. After it, the money did not arrive. No irrigation development. The quality of irrigation service to the farmers has further deteriorated.
According to DA Sec. Arthur Yap, around 59 percent of rice trading will be handled by the NFA. Where will the NFA get its rice to sell? From importation? This is subsidizing foreign farmers vis-à-vis the Vietnamese and the Thais. The NFA imports rice from them, sells it to the Filipino consumers at so much lower retail cost than its imported cost.
This P40 billion tax subsidy to the NFA be better used to construct irrigation systems all over the Philippine, procurement for good seed subsidy, acquisition of farm equipment and post harvest facilities, provision of farm extension workers to advise farmers the use of recommended farm technology. These will motivate farmers especially the young farmers to go back to the farm and produce the food needs of the Filipinos. Cultivate the abandoned farms and improve the present yield per unit area.
Providing tax subsidies to the NFA is not sustainable. All the ingredients to obtain high yield of rice is available in the Philippines. It is the government and assistance that serve as the de-motivation among farmers to devote more time, effort and investment in farm production. /MP
This increase is approved to insure NFA will have enough financial capability to import rice and to meet the demand until December.
Every year, the national government allocates a budget for the tax expenditure fund (TEF) from which tax subsidies to selected state-owned firms are taken.
The TEF is used to help state owned and managed firms settle duties and taxes to the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR). This tax subsidies given to state owned firms are usually deducted from its budget for the following year for those firms are not exempted from paying taxes and import duties. But for the NFA, the government is very lenient.
Through undersec-retary Jeremias Paul, Jr., the Dept. of Finance agreed to exempt temporarily the NFA from paying tax subsidies given by the national government which does not come in the form of cash. The Dept. of Budget and Management issues a document to a government agency in need of assistance to meet its tax and duty obligations, in this case the NFA. The NFA uses this document to settle its tax and duty obligations to the BIR and BOC.
This amount of tax subsidy given to NFA is booked as expenditures by NFA and is recorded as revenue collection by the BIR and BOC.
According to the NFA officials, the firm has been suffering from losses from its trading operations by importing rice abroad at high prices and sells it to the consumers at very low prices than its imported cost. Without tax subsidy, NFA will be buried in debt.
According to the BOC, imported rice is subjected to 50 percent tariff. For example, rice imported from Vietnam at US$1000 per metric will be taxed 50 percent or US$500 or a landed cost of US$1,500 per metric ton. Added to it will be the cost of handling, transportation, distribution and damages. Hence, it is expected that NFA would probably post losses from P29.5 billion to P43.1 billion in 2008.
Any Filipino is capable to imagine how far the P43 billion tax subsidy to NFA can go if invested in the construction of irrigation system. The Philippines does not need to import any rice from abroad if it can repair the present existing irrigation systems and construct new irrigation systems to irrigate the now rainfed rice field. The Philippines may produce surplus rice if it can fully irrigate a total of 2.5 million hectares rice paddies.
In Aklan, seven years ago, the sum of P200 million was appropriated to repair the existing Aklan River Irrigation System but it was only until ground breaking. After it, the money did not arrive. No irrigation development. The quality of irrigation service to the farmers has further deteriorated.
According to DA Sec. Arthur Yap, around 59 percent of rice trading will be handled by the NFA. Where will the NFA get its rice to sell? From importation? This is subsidizing foreign farmers vis-à-vis the Vietnamese and the Thais. The NFA imports rice from them, sells it to the Filipino consumers at so much lower retail cost than its imported cost.
This P40 billion tax subsidy to the NFA be better used to construct irrigation systems all over the Philippine, procurement for good seed subsidy, acquisition of farm equipment and post harvest facilities, provision of farm extension workers to advise farmers the use of recommended farm technology. These will motivate farmers especially the young farmers to go back to the farm and produce the food needs of the Filipinos. Cultivate the abandoned farms and improve the present yield per unit area.
Providing tax subsidies to the NFA is not sustainable. All the ingredients to obtain high yield of rice is available in the Philippines. It is the government and assistance that serve as the de-motivation among farmers to devote more time, effort and investment in farm production. /MP
No comments:
Post a Comment