Also known as the Agricultural Trade Development and Assistance Act, PL 480 was enacted in 1934 so the American people could help use their agricultural productivity to enhance the food security of developing countries.
The PL 480 Fund Program consists of three food and aid programs, namely: government-to-government sale on credit of US commodities under a long-term concessional arrangement; donations to governments to most humanitarian food needs; and government-to-government grants to support the economic development of least-developed countries (LDC).
Since 1991, the Philippines has received hundreds of millions of dollars under the US PL 480 Title I Program. Requested commodities have included soybean meal, wheat, corn, dried peas, and rice.
Under the program, the United States government sells American agricultural products to a recipient-government. The recipient-government pays for the commodities over 30 years on concessional credit terms, normally with a grace period of five years.
The recipient-government, in turn, sells the products locally and uses the proceeds for development of its agricultural sector.
A fact sheet from the US embassy in Manila stated that this year’s agreement provides for 69,000 metric tons of rice valued at $20 million (more than a billion pesos).
The rice will arrive in the country in early 2007 and the Philippine government will sell it through open and competitive bidding. Bidders are usually traders or cooperatives.
The 2006 PL 480 agreement calls for the proceeds of sale to be used for Philippine agricultural development in four priority areas.
These are postharvest handling and infrastructure development, biotechnology research and commercialization, livestock development, and capacity building.
The loan agreement for the sales of agricultural commodities under the Fiscal Year 2006 US PL 480 Title I Program was signed recently by Finance Secretary Margarito Teves and US ambassador to the Philippines Kristie Kenney.
The signing was held at the University of the Philippines Los Baños-Institute of Plant Breeding (UPLB-IPB) here.
This year’s program, amounting to $20 million, will be used to finance the importation of about 69,000 tons of rice from the US.
Examples of agricultural development projects that could be funded using PL480 proceeds are the building of farm-to-market infrastructure, such as roads and warehouses, that will help get products more quickly to market and minimize spoilage; purchasing equipment and providing training to support harvesting, postharvest product storage, and nonspoilage; research and development in biotechnology; and training aimed at providing modern technology to farmers.