Conversion of agri competitiveness fund into a mutual fund proposed

The National Agricultural and Fishery Council (NAFC) is pushing for the conversion of the largely unutilized Agricultural Competitiveness Enhancement Fund (ACEF) into a mutual fund to ensure the fund is channeled directly to intended beneficiaries.

At the same time,  NAFC, composed of  representatives from the Department of Agriculture (DA) and agribusiness leaders of  the private sector, is urging  the department to  refile in the new Congress a bill that seeks to extend to 10 years or until 2015, the life span of ACEF.

Pete Borja, chairman of the ACEF ad hoc task force, said leaders of  various agriculture subsectors  have expressed willingness to lobby in Congress for the creation of  ACEF Mutual Fund which will be similar to the structure and function of  the Home Development Mutual Fund. 

Under the proposed ACEF Mutual Fund, all tariff collections of  the Bureau of  Customs (BOC)  will go to the fund and no longer to the Bureau of  Treasury (BTr). The fund will be governed by an autonomous corporate body.

"What will happen is that all tariff payments from the minimum access volume (MAV) will be remitted by the Customs to the fund, not to the Treasury. That way not only do we have a better picture of  how much really goes into the fund, but we can program releases or disbursements for agriculture projects already approved," Borja said.

Under the current system, all collections from MAV imports by the BOC are remitted to the BTr under Special Account 183. NAFC said however, that the Department of  Budget and Management (DBM)  limits ACEF releases to only P632 million yearly and in reality, while the fund should be used only for ACEF projects, is usually diverted for other purposes.

BOC Deputy Commissioner Gil Valera  noted that the DBM funds are lumped and used based on the priority programs of the government. The DA has been criticized for prioritizing favored subsectors such as the sugar industry which to date has been given the biggest ACEF allocation.  On the other hand,  the DBM was hit for its slow disbursement of  the fund.

Thus, if ACEF, which expires on March 6, 2005, is not extended and converted into a mutual fund, the money, now at about P5.1 billion,  will revert back to the general fund and can no longer be used for agricultural competitiveness projects. 

ACEF was created in 1996 to cushion the effects of the lifting of quantitative restrictions on affected sub-sectors of agriculture by collecting tariffs from  the MAV importations. It is part of the safety nets pledged by government to make local agricultural producers globally-competitive once further trade liberalization takes place by improving their infrastructure systems. – Rocel Felix