Lorenzo bats for changes in agri competitiveness fund mechanism

Agriculture Secretary Luis Lorenzo Jr. is seeking to amend the mechanisms of the Agricultural Competitiveness Enhancement Fund (ACEF) so that tariff proceeds from the imports of agricultural products will directly benefit sectors affected by trade liberalization.

Lorenzo said there is also a need to address growing complaints about the slow disbursement of the fund which now amounts to about P5 billion.

The ACEF was created out of the tariff proceeds of the minimum access volume (MAV) importations. Its aim is to provide funds to make local agricultural producers globally-competitive by improving their infrastructure and marketing sytems.

MAV is the minimum volume of specific agricultural products committed by members of the World Trade Organization that are allowed entry in their respective countries. The tariff collections are done by the Bureau of Customs (BOC) and remitted to the Bureau of Treasury (Btr).

The DA chief said the current system does not allow for the direct channeling of tariffs collected from imports to the affected sectors.

For instance, the corn industry still has to have its request for funding approved by the National Agricultural and Fisheries Council (NAFC), tasked by the DA to handle the fund. NAFC in turn, endorses the projects to the Department of Budget and Management (DBM) which determines the amount to be released in a given year.

But ACEF ad hoc task force chairman Pete Borja scored the DBM for the slow release of ACEF money.

Borja said that while the BTr credited as of end-May about P5-billion ACEF proceeds to Special Account 183, less than P1 billion has been released by the DBM.

"The proposed list of projects requesting ACEF funding is long, but disbursement is slow. Once the ACEF expires however, all of the money will be reverted back to the General Fund and that will make it even more difficult to avail of the fund," said Borja.

The ad hoc task force earlier urged Congress to extend the program until 2015 when it expires in March 2005.

NAFC national sectoral committee chairpersons Vicente H. Lim and Soledad Agbayani said in a joint resolution that "the utilization period of the ACEF should be extended in order to enhance the development and competitiveness of the agriculture and fishery sectors, especially in view of the country’s commitments to international trade agreements."

Previously, the task force also recommended amendments to the implementation guidelines of the fund. It said there are no clear and established guidelines on the ACEF disbursement, thus, there is a need to define the mechanisms and procedures to be able to effectively dispose off the fund.

On the other hand, the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCAFM) is moving to create a special fund that will replace ACEF.

COCAFM member Rep. Jesli Lapus said the proposed fund will be similar to the Agrarian Reform Fund (ARF) of the Department of Agrarian Reform (DAR) which was created for the purpose of compensating landowners whose lands were coveted under the Comprehensive Agrarian Refrom Program (CARP), and to provide loans and technical assistance to beneficiaries of the program.

"Like the ARF, the fund that we want to establish will be deposited directly to that special account, it will no longer be coursed through the Treasury and the General Appropriations Act," said Lapus, adding that "the fund cannot be used for other purposes outside of its original intent."

Lapus, who was formerly an undersecretary of DAR and president of Landbank of the Philippines, said replacing the ACEF should make it easier for intended beneficaries of the fund to avail of badly-needed funds.

COCAFM chairman Sen. Ramon Magsaysay Jr. said earlier he wants to ensure that disbursements from the ACEF will only be for projects that will benefit industries as a whole and not only a particular proponent or group.

Disgruntled groups have been complaining that only strong lobby groups such as those from the sugar industry, have been given the biggest chunk of the ACEF money.