Cabinet-level body extends duty-free perks under AFMA

The Cabinet-level Trade and Related Matters (TRM) committee has approved a resolution extending the duty-free incentives granted to small farmers, cooperatives or small enterprises under the Agriculture and Fisheries Modernization Act (AFMA) which was supposed to have expired last month.

Trade and Industry Secretary Manuel Roxas II said yesterday that the TRM committee approved the resolution in view of the fact that with the expiry of the AFMA incentives, tariffs on certain agricultural inputs may go up again.

Roxas, however, did not disclose how long the government wants to extend the duty-free incentives under AFMA.

The AFMA was passed into law in 1997 to help the local agriculture sector modernize by allowing duty-free importation of farm inputs, agricultural machinery and spare parts.

But based on a report submitted by the Department of Finance (DOF), majority or 80 percent of those which were able to avail themselves of the AFMA incentives were giant corporations in the feedmilling industry instead of the intended beneficiaries such as small farmers, cooperatives or association or small enterprises with assets of less than P3 million.

The DOF claims that the government lost P2 billion in foregone revenues from the incentives granted under the AFMA since 1997.

The big corporations which supposedly benefited most from AFMA were identified as General Milling Corp., RFM Corp., San Miguel Corp., Universal Robina Corp., and Vitarich Corp.

The big corporations were able to enjoy the duty-free perks to buy sophisticated machineries for their plants as well as imported soybean meal and mixed feeds.

Albay Rep. Joey Sarte Salceda is among those questioning the extension of the AFMA duty-free incentives in view of the government’s budget deficit.

"The AFMA appears to be promoting corporate profitability instead of focusing on the small farmers, cooperatives and SMEs.

He challenged the big corporations to prove that their availment of the AFMA incentives has led to lower input cost for small farmers and livestock operators.