There is no "market failure" in tractor use and rental. More privately-owned tractors (like privately-owned tricycles/jeeps/buses/vans for hire), more competition, the rental cost goes down, farmers benefit, taxpayers do not owe anything to anyone as no tax money was used to procure tractors and maintain them. Local politicians should be disfranchised with arbitrary power to select who can use, who cannot use, the tractors.
Control of tractor gives mayor more power
By: Tonette Orejas 05:18 AM March 11, 201
"The four-wheel drive tractor costs P2.495 million while the harvester with a heavy-duty transport trailer was worth P1.995 million."
Wow, P2.5 M for one tractor. If those people/bureaucrats used their own money, they won't buy that big, heavy tractor for ricefields, it's designed more for sugarcane or corn or tobacco farming. Ricefields often have soft soil due to water inundation, they would need smaller, lighter tractor, about 1/2 or 2/3 the size of the tractor in photo.
Wise and practical private agribusinesspersons won't buy that Kubota 540 tractor for P2.5 M. They can buy a Kubota 225 to 300, brand new at around P1M each, 2nd hand (about 6-12 years old) at P300-500k each. These smaller Kubota (or Yanmar) tractors are more practical in PH ricefields because the soil is soft for 2nd cropping, heavy tractors can get stuck in mud even if they have big tires.
Only politicians and bureaucrats will go for the more expensive machines/tractors, the tong-pats is bigger for just one unit.
And this is the danger of using revenues from rice tariffication to buy farm machines and given away for free to farmer groups. The purchasing agencies, DA or LGUs or DILG, can go for the more expensive tractors and harvesters -- which will also require more expensive maintenance. The 'commission' will be bigger per tractor, and local politicians, from Mayor to Barangay Capt, can use the machines to sway political votes and support. Non-supporters likely won't be able to use the machines, or they can use but they must pay rent; only supporters can use, for free except diesel.
Most policy makers and supporters, lobbyists do not realize some details about soil character and appropriate tractors. I think for that big Kubota tractor in the Inquirer photo, it's good for sugarcane, corn, tobacco farming where the plots are larger, the soil is not too soft with water inundation.
When that big tractor gets stuck in a muddy rice field, it will also require another big tractor to pull it out. Small tractors may have difficulty bailing it from the mud.----------------
Agri Econ 27, On rice tariffication and trade liberalization, November 14, 2018
Agri Econ 28, SE Asia rice production is rising, not declining, November 17, 2018
Agri Econ 29, Bruce Tolentino lecture at BSP, December 10, 2019