DA pushes measure extending life of ACEF to 2015

The Department of Agriculture (DA) is asking Congress to fasttrack the passage of the proposed bill stretching the life span of the highly-unutilized Agriculture Competitiveness Enhancement Fund (ACEF) until 2015.

Agriculture Assistant Secretary Segfredo Serrano said extending the ACEF program is critical in delivering the government’s promise of providing farmers safety nets when it committed to liberalize agricultural trade.

"ACEF should be extended for the simple reason that it is not being fully implemented, just like the AFMA (Agricultural And Fisheries Modernization Act), another safety net that has yet to be provided to farmers," said Serrano.

Serrano said the DA will push for the swift passage of the bill when it is expected to be submitted to Congress early next year.

One of the significant proposed amendments to the ACEF is the conversion of the Fund into an Agriculture Revolving Fund (ARF).

Under the ARF, duties collected from the importation of agricultural products will be treated as a revolving fund of the DA.

This should resolve the snail-paced release of ACEF money by the Department of Budget and Management, but should also make it easier for intended beneficiaries to avail of badly-needed financial assistance.

Transforming ACEF into a revolving fund will be a departure from the current system wherein tariff proceeds are remitted by the Bureau of Customs (BOC) to the Bureau of Treasury (BTr) and deposited under Special Account 183. It is the DA’s National Agricultural and Fishery Council (NAFC) which evaluates and endorses proposed projects to the ACEF executive committee and the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCAFM). These are then submitted for funding to the DBM.

The fund, once paid up by sectors that availed of it, is reverted back to the general fund. Under the proposed revolving fund, loans paid by beneficiaries are kept intact since the funds will no longer be passing through the DBM.

Another integral change being proposed is that when ACEF expires in 2015, the remaining balance will be converted into a Project Development Fund of the DA and it will be used to finance agriculture and fisheries activities, including agriculture and fisheries extension service.

ACEF was created when Congress signed into law the Agricultural Tarrification Act or Republic Act 8178 in 1996. It was one of safety nets established to protect local farmers from the anticipated onslaught of cheaper agricultural imports. Loans granted were interest-free and collateral-free.

The money came from the tariffs collected from the importation of agricultural products under the minimum access volume (MAV) mechanism. MAV refers to the minimum volume of products that member countries of the World Trade Organization (WTO) committed to liberalize.

Under RA 8178, ACEF beneficiaries are farmers/fisherfolk organizations, cooperatives, federations and consortia; agribusiness enterprises and industry associations; non-government, people’s organizations and federations, and the government sector. It was supposed to be used for projects like irrigation, farm-to-market roads, postharvest facilities, research and development assistance, marketing infrastructure, and provision of marketing information.

Since its creation however, the disbursement of ACEF had always been questioned. The criticism stemmed from disgruntled groups who complain constantly that the fund was being disbursed, not exclusively to intended beneficiaries, but more so to strong lobby groups.