More on poverty and hunger issues

Below are some thoughts in response to the ongoing debate on population control and related issues on poverty and hunger alleviation programs. This includes a reader’s reaction focusing on the effectiveness of government programs, specifically the Agricultural Competitiveness Enhancement Fund (ACEF)

Family size, poverty and hunger

Managing the country’s population is necessary in view of the continued high hunger rates. As per the Accelerated Hunger Mitigation Program (AHMP) of the Arroyo administration, family size is highly correlated with poverty and hunger.

Aside from infomercials on radio and television shows and appearances on TV and radio talk shows by key government officials, responsible parenthood training in areas tagged under the AHMP has resulted in reaching out to 261,000 couples.

These classes undoubtedly created awareness and consequently encouraged Filipino couples to practice responsible parenthood. The education and awareness acquired should in turn redound to better lives.

Fate of government programs

And now, from one of our regular readers, Manuel Q. Bondad, is a lengthy e-mail in reaction to two of my columns (“War vs Hunger” and “El Niño Threat to Hunger Programs” which came out on Feb. 15 and 22, respectively), plus his views on several ongoing government programs and the Millennium Development Goals. Here are parts of his letter.

“A drastic reduction of hunger through a five-point agenda (BizLinks, Feb. 22 issue) as well as those of the UN MDGs goals certainly needs unqualified support from all sectors. Correctly, the President authorized P1billion to swiftly address anti-hunger projects. The DSWD too has a P1.2-billion fund for livelihood projects. (BizLink Feb. 15 issue).

“Are the goals attainable, and the funds judiciously used as envisioned?

“Is the year 2000’s 189-nation Millennium Declaration to end poverty in the Philippines by 2015 a dream? Other ASEAN neighbors are close to the targets. Let us play the role of a devil’s advocate for now.

Agricultural competitiveness

“Much earlier, in 1996, the Agricultural Competitiveness Enhancement Fund was passed, coincidentally expiring in 2015 as the MDGs. The ACEF is a uniquely Filipino creation, with goals not as far-reaching and lofty as the MDG’s 8 (which promises [elimination of] extreme poverty and hunger to a global partnership for development), but similar in perspective and persuasion as the AHMP.

“The ACEF, by law and spirit, was designed to address basic needs of the agricultural sector such as irrigation, post harvest facilities, and farm to market roads [to enable it to become] a driver and engine of growth, [as well as become] a source of income for the rural households. Moreover, the ACEF sought to awaken and instill entrepreneurial spirit, assist out-of -school- youth, and graduates of agriculture and related fields.

ACEF history

“Is the ACEF about to meet its goal by 2015 after two decades of existence? A bit of history for a perspective:

“On March 28 1996, a law was passed to improve farmers’ productivity, to cope with liberalized importation in the global arena. Under an international trade commitment, we are bound to open up our markets, the tariff rates of which shall be gradually reduced.

“The scheme called for the removal of quantitative restrictions on about 800 agricultural items and replaced with two tiers of tariff rates. The concept of the Minimum Access Volume (MAV) was conceived, a ceiling on imports was set whereby a product whose volume is within the import limit is subject to a preferential tariff, and beyond the ceiling is slapped by the Bureau of Customs (BOC) a prohibitive rate.

“Thus ‘chickens, fresh or chilled’ and ‘other meat of swine fresh, frozen or chilled’ are subject to 100-percent out-quota tariff or 40-percent in-quota duty. Subject to a lower duty of 10 percent are breeding horses and 20 percent beyond the limit. Rice was exempted from any form of tariff, but covered by a 350,000 MT volume per year of last count as reported. The award of duty-free privilege to private traders sparked some controversy of late.

Special Fund 183

“Collections from in-quota duties were channeled to Special Fund 183, with the Land Bank of the Philippines (LBP) as trustee. Funds released to borrowers are approved by the Department of Agriculture (DA) and an ExeCom.

“But administrative constraints faced the ACEF in its formative years delayed its implementation. The BOC, as the 13th Congress (First Regular Session) reported, collected only P250 million, when based on actual DA-issued MAV licenses the amount [should have been] P1.73B.

 “Based on the COA Report for calendar 2008, [there were] 81 beneficiaries with loan approvals [amounting to] P2.315 billion, 87 percent or P2.025 billion of which was disbursed, including the controversial Quedancor’s P1 billion released before May 2004 with a seven-year grace period to assist small farmers and fisherfolk.

“With applications for ‘32 restructuring and 49 amortization deferments,’ the ACEF could be a bankers’ ‘nightmare’ with a 93 percent past due performance on P487 million ‘due and demandable,’ excluding Quedancor’s P1 billion.

 “[In reaction to] COA Audit Reports, the DA [issued] statements that “not all borrowers have defaulted,” and attributed the fund’s dismal performance to the Ebola-Reston virus, which in my opinion is hogwash.

Loan defaults

“A perusal of COA records for the 81 individual loan accounts showed 48 beneficiaries as reported defaulted on installments on loans with liberal terms of six-year maturities, one-year grace, and reported by the COA as interest and collateral-free.

“The collective projects as of Dec. 31, 2008 were apparently approved commencing 2001 (the second tranche) and loans correspondingly released ranging from P1 million to P40 million, and the bulk approved and disbursed in 2004-2005. Where are the ACEF-funded irrigation network and farm to market roads to attain rice self-sufficiency this year 2010?

“That the processing of loan applications took 505 days until approval, highlighted in the report is unusual and worrisome as a ‘basic criterion of clear and verifiable proof of sustainability of operations’ will not take years given the nature of the projects.

More disturbing questions

“Is the fund, self-liquidating as conceived, now drying up? With El Nino, corn farmers too are pleading for relief. How can 17 suspenseful months of waiting for decisions water the fields? How much has the Land Bank collected from MAV importation?

“Perhaps a 2003 study by FNRI-DOST researchers headed by Dr. Catherine Q. Castaneda on coping behavior mechanisms of marginalized households to hunger and food security, i.e., reduced food items normally served, as well as the quantity of food, and to pass on meals by one or all members of the household, is food for thought.

“The SWS December 2009 hunger rate survey (BizLinks, February 22), pointed to a higher 24 percent rate from 23.7 percent in 2008 and as the FNRI study was seven years ago, are the hungry now resorting to sleep to lessen the sensation from empty stomachs?

“On a positive note, let us hope for the best.”

Should you wish to share any insights, write me at Link Edge, 25^th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.