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ACEF seen benefiting importers, not farmers

JCOMP-FREEPIK

THE Agricultural Competitiveness Enhancement Fund (ACEF), which is funded by import tariffs on farm goods, contains a built-in incentive to import more food and generate more revenue for the government, to the detriment of the farmers it was designed to help, legislators said.

The House committee on agriculture and food, which is evaluating proposals to extend ACEF, heard allegations from legislators that traders and importers are benefiting, and not farmers.

“We need a consultative assembly so resources will be directed to measures that will respond to the problems of our agriculture industry. I appreciate the value of ACEF. Out of the import taxes, we are able to support our agri-fisheries. However, it appears that this program is not being felt by our individual farmers and even our consumers,” Batangas Rep. Gerville R. Luistro told the committee on Thursday.

“If there is anyone benefiting from this, it appears to be the traders and importers. It’s like we are giving them permission or license to go for more imports. We should focus on agri-sustainability,” she added.

Quezon Rep. Wilfrido Mark M. Enverga, who also chairs the committee, said that the program is not intended to promote imports.

“Unfortunately, it’s a reality and we do have to make the most out of it. (The funds) must be given back to the affected sectors in agriculture,” he added.

ACEF proceeds fund the development of farm machinery and infrastructure, as well as other support projects to improve the lives of farmers.

Collections routed to ACEF between 2000 and March 2022 are at P20.07 billion.

Mr. Enverga introduced House Bill No. 2385, which seeks to extend the implementation period for ACEF.

“Tariffs collected were not envisioned to be distributed as dividends, Conditional Cash Transfer (CCT) style. Instead, they are intended to be used to build, and, as provided in the law, ‘irrigation, farm-to-market roads, post-harvest equipment and facilities, credit, research and development,’” according to the bill.

Also covered are marketing infrastructure, provision of market information, retraining, extension services, and other forms of assistance and support to the agricultural sector. 

“The idea was to use the very same taxes levied on imports to finance projects that would boost agriculture and allow it to compete with imports,” it added.

The bill calls for extending ACEF and backed the earmarking of tariffs for farm development as a valid concept.

“What is needed is not to write the requiem to ACEF, but a law reforming and extending its validity to help farmers and fisherfolk improve their productivity and competitiveness… our produce has to be competitive, as integration enlarges markets for both local and regional firms,” according to the bill.

The bill hopes to “debug” ACEF “of corruptive and corrosive practices. Stringent safeguards against deliberate acts that go against the purpose of the program have been put in place as the overarching principle that only legitimate farmers and fisherfolk must benefit from ACEF,” it added.

The bill also highlighted that ACEF’s mandate is not just to ramp up agriculture production, but also to produce graduates of agriculture courses. 

“In hindsight, the scholarship component of ACEF is one of its few bright spots. Some loans for production capital may have been misappropriated but by and large, the tuition to train human capital was not. While some borrowers may have left debt notes, ACEF scholars have diplomas as proof of grants well spent,” it added.

Agriculture Undersecretary Rodolfo V. Vicerra proposed that ACEF measures be routed through farmers’ cooperatives and associations (FCAs).

The Department of Agriculture (DA) has been handicapped by devolution which keeps DA technical assistance outreach at the regional level. “It’s going to be much easier to implement this program and reach out to more farmers (through cooperatives),” he said.

“We can reach more farmers and effectively assist in the development of our rural sector… there is a big gap with the DA’s centralized system. We need to be able to reach out directly to farmers and fishers and strengthen partnership between the DA and local government units,” he added.

Land Bank of the Philippines (LANDBANK) Assistant Vice-President Edgardo S. Luzano also recommended a capacity-building fund to be allotted to strengthen FCAs and technology transfer.

“We are only able to extend credit assistance to 33,000 farmers and fishers that are individual borrowers. This is a small segment being targeted by the DA for the program,” Mr. Luzano said.

“We agree to the statement to increase our penetration of FCAs although the bank has assigned officers to cover all municipalities in the country; we recognize that FCAs serve as an additional touchpoint to increase reach to farmers and fishers,” he added.

Rolando Ortega, a farmer from San Jose, Occidental Mindoro, told the committee that forming more FCAs would speed up the application process.

“I benefited from the ACEF loan program. I support the continuation of this program… It would be easier if there were formed groups. What happens right now is that farmers go straight to LANDBANK. It would be more efficient if every region has a group or cooperative to easily process the documents,” he said.

Mr. Vicerra also said program administrators should be treating farmers as borrowers or enterprise groups and refrain from describing the funding as ayuda or government-provided assistance.

Nicanor M. Briones, Agricultural Sector Alliance of the Philippines, Inc. president, proposed that instead of providing credit, the funds be used for specific farm machinery or equipment.

“We need to put more into indemnification by those hit by African Swine Fever, bird flu and (machinery) like dryers and cold storage,” he added. — Luisa Maria Jacinta C. Jocson

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