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Extending
ACEF life for whom? The Agricultural Competitiveness Enhancement Fund (ACEF) was created in 1996 as one of safety nets set up by government to protect local farmers from the anticipated onslaught of cheaper agricultural imports. The money, now standing at P5.1 billion, comes from the tariff collected from the importation of agricultural products that threatens to displace local agriculture and fisheries production because of the country’s commitment to the World Trade Organization’s liberalization policies. Loans from the fund are granted interest- and collateral-free to intended beneficiaries for projects like irrigation, farm-to-market roads, post-harvest facilities, research and development assistance, marketing infrastructure, and provision of marketing information. Strong criticism, however, continues to come from disgruntled groups who complain that the fund is being disbursed not to poor local farmers and fishermen, but to strong lobby groups such as the sugar and coffee sectors that can very well fend for themselves. Unorganized Farmers Choke When Agriculture Secretary Luis Lorenzo Jr. assumed office last year, he vowed to re-channel money to sectors that were most battered when the Philippines embraced globalization. The agri chief apparently recognized that the fund was not going to intended beneficiaries. Since its establishment in 1996, mostly big agribusiness corporations have gotten the larger chunk of the ACEF money. The guidelines are too rigid to enable compliance by small farmer groups who get lost in the paper chase maze that includes preparing a project proposal, and presenting financial statements and at least a two-year track record. The approval process is also tedious: the agriculture department’s National Agricultural and Fishery Council (NAFC) evaluates and endorses proposed projects to the ACEF executive committee and the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCOFM) before being submitted for funding to the Department of Budget and Management (DBM). For unorganized farmers and fishermen, this choking bureaucratic process is daunting and frustrating. Quedancor To The Rescue To cut through the bureaucratic net, the Department of Agriculture (DA) is making effective use of its credit arm, the Quedan Rural Credit and Guarantee Corp. (Quedancor). This year, it received P1 billion; another P1 billion is expected next year. Quedancor, incorporated in 1992, is considered the best agency by government to link small Filipino farmers and fishermen bruised by the global trade. After full evaluation of the credit and financial capability of those applying for loans, a decision is usually reached from between three to four weeks only. By encouraging farmers, fishermen and small entrepreneurs to form teams of five to 15 members, loans are made available through a relatively accessible network of regional and district offices nationwide. After two years of implementation, Quedancor says it has assisted 35,000 teams with a repayment rate of 98 percent. There is a slight trade-off though for the ease of loan facilitation: Quedancor charges an interest rate of 0.795 percent a month. Borrowers, however, prefer to pay this interest charges rather than endure the long-wait for the release of interest-free loans from ACEF. As they say, aanhin pa ang damo kung patay na ang kabayo. Rectifying Other Acef Flaws The DA is also trying to rectify other flaws. For example, with ACEF set to expire in 2005, the President is being asked to certify as urgent a bill calling for the extension of the beleaguered fund by another 10 years or until March 2015. During the last seven years of ACEF, government had been too busy ironing out problems: keeping tabs of the Bureau of Customs (BOC) collections, getting the DBM to release funds, setting up a special account where the ACEF money could be deposited, and defining the lending process ("Where is the ACEF money", BizLinks, 3rd February 2003). The DA is also proposing that future collections from ACEF loan payments be converted into a project development fund of the DA. Under the proposed project development fund mechanism, the DA will keep payment on loans paid by beneficiaries instead of reverting to the general fund. The proposal will also lessen bureaucratic red tape and make it easier for intended beneficiaries to avail of the badly needed financial assistance. ACEF For The Needy, Please From all indications, ACEF will get its second wind. Politician in Congress will most likely pass the bill and not risk the ire of farmers and fishermen who were not favored with the promised benefits during the current life of the fund. The next problem is to have a DA secretary who will have the creativity, the drive and the audacity to ensure the fund goes to needy beneficiaries and not just to politically-backed agriculture lobby groups.
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