By RONALYN V. OLEA
MANILA –When the Philippines lifted quantitative restrictions on agricultural products except rice, the government allocated funds purportedly to help farmers affected by the flooding of imported agricultural products.
The Agricultural Competitiveness Enhancement Fund (Acef) was created in 1996 by virtue of Republic Act 8178 to “protect local producers of agricultural products, except in the case of rice, which will continue to have quantitative import restrictions.”
The Acef is sourced from all duties collected from the importation of agricultural products under the minimum access volume (MAV) mechanism. MAV is the amount of imports of an agricultural product allowed into the country at a customs duty lower than the out-quota customs duty. The MAV allocation is a commitment of the Philippines to the World Trade Organization (WTO).
The law states further that “preferential attention shall be continuously given to products or people adversely affected by the repeal or removal of quantitative import restrictions to agricultural products.” The fund shall be set aside and earmarked for irrigation, farm-to-market roads, post harvest equipment and facilities, credit, research and development, other marketing infrastructure, provision of marketing information, retraining extension services and other forms of assistance and support to the agriculture sector.
Citing reports from the Department of Agriculture (DA) and the Commission on Audit (COA), the Kilusang Magbubukid ng Pilipinas said the Acef, instead of being used to help farmers, “has turned out to be a ‘milking cow’ of bureaucrats and big agri-businesses.”
Based on documents from the DA, as of September 2010, the Acef totaled to more or less P10.6 billion while the total amount of ACEF-Execom approved activities/projects totaled to more or less P8.6 billion. The Acef assistance in the form of loans amounted to more or less P5.9 billion ($135.22 million) and Acef assistance in the form of grants amounted to more or less P2.5 billion ($57.3 million).”
A COA report revealed that the DA granted loans to hundreds of companies from 2000 to 2009 but COA could not locate these borrowers. The audit commission said letters of confirmation were sent to the borrowers but these “yielded negative results.” Of the 264 confirmation letters sent to the borrowers, 140 did not reply for balances totaling P2.1 billion ($14.8 million) and 27 with balances of P370 million ($8.48 million) returned the letters to the agency due to various reasons. COA said beneficiaries that borrowed a total of P66.4 million, meanwhile, failed to pay back their loans due to the closure of the companies affected by typhoons and corporations that no longer exist. According to COA, P1 million ($22,920) in loans may not be collected anymore because of death, insufficient address or unknown identity of the borrower.
In a report, former Agriculture Secretary Arthur Yap, now Bohol representative, said a “low repayment rate does not make the Acef a failure or a scam.”
“It is the height of callousness for Yap to simply dismiss the reports that only big businesses and corrupt bureaucrats benefited from the Acef while farmers suffer from the brunt of the massive flooding of imported agricultural products in the local market,” KMP’s Echanis said. “Filipino farmers affected by the impact of agricultural trade liberalization are more than willing to testify that we did not receive a single cent from the Acef.”
In another report, a senator disclosed that the P1-billion loan of debt-ridden Quedan and Rural Credit Guarantee Corp. (Quendancor), an agency under the DA, from the Acef, was diverted to the retirement plan of Quedancor officials.
Citing an audit by the DA, KMP said Aurora, Sen. Edgardo Angara’s province, benefited from two grants from the Acef—P200 million (4.58 million) in 2008 for the Baler-Casiguran Highway and P100 million ($2.29 million) in 2007 for the Aurora State University for a project called Enhancement of Technology-Based Agribusiness Industry.
Angara, meanwhile, challenged the DA and the Senate oversight committee on agriculture to conduct an audit of the Acef.
In reaction, Echanis said, “Sen. Angara has no moral ascendancy to conduct a probe on the Acef funds because he himself is among those accused of benefiting from the funds.”
“It is totally revolting that while poor farmers shoulder the killing impact of agricultural trade liberalization agriculture officials brazenly plunder billions of pesos supposedly intended for farmers,” Echanis said.
In a resolution, Anakpawis Rep. Rafael Mariano called for a complete disclosure of the Acef, including the disbursements, loan balances, interests gained from each loan, individual/corporation/organization/cooperative which availed of the fund.
Mariano called on the House Committee on Agriculture and Food chaired by Batangas Rep. Mark Leandro Mendoza to investigate the status of the Acef. Since he filed House Resolution 1270 in May seeking a congressional inquiry into the status of Acef, Mariano said, the Committee has not called for any inquiry.
Mariano, also chairman of KMP, said the committee must immediately schedule a hearing and summon Yap to explain his knowledge and involvement on the alleged anomalous disbursement of the Acef.
“Rep. Yap’s membership in the Committee does not automatically exempt him from scrutiny by his colleagues in the Lower House as well as farmers and fisherfolk groups who want to know the truth. A congressional probe is the best venue for Rep. Yap to explain how the Acef was spent during his term as agriculture secretary.”
Acef’s ten-year life-span should have expired in December 2007, but Yap extended the funding until 2015 with an allocation of additional P6-billion.