T The name of Cong. Arthur Yap of the third district was dragged in the latest fund scandal involving the Agricultural Competitiveness Fund (ACEF). The third district solon’s alleged involvement in the fund irregularities was in his capacity as former secretary of the Department of Agriculture. The latest fund mess was one of the many irregularities in the DA during the Arroyo administration of which Yap was one of its Cabinet secretaries. As thias developed, a party list lawmaker urged his colleagues in the House of Representatives to investigate the reported irregularities concerning ACEF. In a press statement sent to house beat reporters in Congress, Anakpawis (Toiling Masses) Rep. Rafael Mariano asked the House Committee on Agriculture and Food chaired by Batangas Rep. Mark Leandro Mendoza to investigate the status of the Agricultural Competitiveness Fund (ACEF), especially with new evidences of irregularities in the use of the P10-billion agriculture fund intended to help small farmers and fisherfolks during the administration of former President, now Pampanga Rep. Gloria Macapagal-Arroyo.
On May 17, 2011, Mariano filed House Resolution 1270 seeking a congressional inquiry into the status of ACEF, including the disbursements made, loan balances, interests gained from each loan, individual/ corporation/ organization/ cooperative which availed of the fund and beneficiaries of ACEF funded projects. “The Committee hasn't called for any inquiry since our office filed the resolution. Now that there are new evidences coming out on the previous administration's 'misuse and abuse of funds' intended for farmers and fisherfolks, it is high time for the Committee on Agriculture and Food to investigate the issue,” said Mariano. “The Committee must schedule a hearing as soon as Congress resumes session next week,” he added. Mariano who also chairs militant peasant group Kilusang Magbubukid ng Pilipinas (KMP). The party-list solon added that he expected the Committee to 'summon' former DA secretary, now Bohol Rep. Arthur Yap, to explain before Committee members and to stakeholders, his knowledge and involvement on the alleged anomalous disbursement of the ACEF. “Rep. Yap's membership in the Committee does not automatically exempt him from scrutiny by his colleagues in the Lower House as well as farmers and fisherfolk groups who want to know the truth. A congressional probe is the best venue for Rep. Yap to explain how ACEF was spent during his term as agriculture secretary.” The Arroyo administration have made a milking cow out of billions of funds allocated for the agriculture sector.
“The 728-million fertilizer fund scam in 2004 is only the tip of the iceberg. Arroyo and her ilk have benefited so much from agri funds.” ACEF's 10-year life-span should have expired in December 2007, but Yap, then DA Secretary, extended the funding until 2015 with an allocation of additional P6-billion. Yap is also being involved with several borrowers and beneficiaries that availed of the funds. The activist-solon also reiterated that DA Secretary Proceso Alcala must continue the suspension of the implementation of ACEF, pending investigations by the Senate and Lower House. Alcala previously said DA will soon resume providing credit assistance to organized groups of farmers, fisherfolk, and agri-fishery entrepreneurs under the new ACEF implementing guidelines. Based on the new guidelines, final loan approvals will no longer be the exclusive authority of the DA Secretary, but will now include the concurrence of the chairpersons of the Committee on Agriculture and Food at the Senate and Lower House. The ACEF - created in 1996 under Republic Act No. 8178 - is a pool of funds consisting mainly of the duties or taxes collected from the imports various of agricultural and fishery products, except rice, covered under the minimum access volume (MAV) mechanism. The fund shall be set aside and earmarked by Congress for irrigation, farm-to-market roads, post harvest equipment and facilities, credit, research and development, other marketing infrastructure, provision of marketing information, retraining extension services and other forms of assistance and support to the agriculture sector.
No moral ascendancy
Mariano's colleague in the Kilusang Magbubukid ng Pilipinas (KMP) supported his call for the House of Representatives to immediately probe the controversial P10-billion Agricultural Competitiveness Enhancement Fund (Acef) that was allegedly drained during the administration of President Arroyo. The KMP issued the statement after Senator Edgardo Angara called on the Senate oversight committee on agriculture to conduct a performance audit on Acef and draw a list of its beneficiaries. KMP deputy secretary general Randall Echanis said the House should immediately probe what he described as the “multi-billion plunder of the decade” involving agricultural funds. “Sen. Angara has no moral ascendancy to conduct a probe on the Acef funds because he himself is among those accused of benefiting from the funds. It appears that Angara has been used to practicing conflict of interest,” says Echanis noting that Angara is a member of the Senate panel of the Congressional Oversight Committee on Agricultural and Fisheries Modernization.
Recent reports said that an audit by the agriculture department found that Aurora, Angara’s province, benefited from two grants from Acef—P200 mililon in 2008 for the concreting of the Baler-Casiguran Highway and P100 million in 2007 for the Aurora State University for a project called Enhancement of Technology-Based Agribusiness Industry. Echanis also assailed former DA secretary Arthur Yap’s statement that “low repayment rate does not make the Acef a failure or a scam.” “It is the height of callousness for Yap to simply dismiss the reports that only big businesses and corrupt bureaucrats benefited from the Acef while farmers suffer from the brunt of the massive flooding of imported agricultural products in the local market,” the peasant leader said. “Filipino farmers affected by the impacts of agricultural trade liberalization are more than willing to testify that we did not receive a single cent from the Acef,” Echanis said. Echanis said House Resolution 1270 filed by KMP chairperson and Anakpawis party-list Rafael Mariano last May 17, 2011 is already pending before the lower House.
HR 1270 states that “a document from the Department of Agriculture (DA) revealed that as of September 2010, the Agricultural Competitiveness Enhancement Fund (ACEF) totalled to more or less P10.6 billion while the total amount of ACEF-Execom approved activities/projects totalled to more or less P8.6 billion.” “However, the document did not disclose the specific activities/projects that were funded by Agricultural Competitiveness Enhancement Fund (ACEF) as well as the specific proponents of these activities/projects,” the Anakpawis resolution stated. It added that “as of September 2010, the ACEF-assistance in the form of loan amounted to more or less P5.9 billion (69.64%) and ACEF-assistance in the form of grant amounted to more or less P2.5 billion (30.36%).” “The status of the Fund including the disbursements made therefrom, the loan balances, interests gained from each loan, individual/corporation/organization/cooperative which availed of the Fund, if there is any, and projects wherein the Fund was used along with the beneficiaries of these projects need to be disclosed in order to determine whether the objectives of the law have been met,” states HR 1270.
YAP REACTION
Sought for his reaction, Cong. Yap e-mailed to the Post a long explaination including the beneficiaries of the ACEF. He cited the following companies which availed of the ACEF money: 1) Hi-las Marketing (Roberto Amores, president; president, Philippine Food Exporters PHILFOODEX) “HI-LAS is one of the established processors of fruits and vegetables products in the local agriculture industry. We have been in the market for more than 25 years. We supply mango products all over the world and vegetables specifically to Japan. However, to compete, we needed to secure ACEF funds to modernize our operations in FTI, Taguig. We did not take any short cuts.
We had to pass the strict critera and the technical evaluations. We were approved fair and square without paying kickbacks. We amortized our loan schedules and just requested for a postponement due to a setback in our main market as a result of a chemical residue incident in our Japan mango exports which seriously affected our financial position. Our request for postponement was approved and are covered by post-dated checks. This does not mean we are a failure or the project is a failure because in our industry, the weather, disease and pest out-breaks are so much a factor in our operations. We can always be given extensions which is allowed even by private banks so why not the government when this program is for us in the industry? But we can bounce back as long as we have the support of government and our customers. I can say this with confidence because I have met these problems myself. This is so unfair to us.”
2) Gemsun Marketing ( MARTIN OZAETA, president)
“This issue is not fair since this will create a bad reputation for us. We patiently participated in all agri activities for us to be recognized and our project proposal was scrutinized thoroughly by the different ACEF committees, from the regional to the national committees. We badly needed the loan for us to compete in the market and to reduce trading layers so that consumers can avail of lower priced eggs in the market. They can check on the project and the repayment scheme and also our egg stall in MEGA QMART, which is giving the lowest priced eggs in the area today because of our ACEF loan. There is no such thing as kickbacks. They can also check on the feasibility study of the project and find out for themselves if it would still be operational if a certain amount of will be slashed-off for that alleged kickbacks. This will not work if we still had to pay kickbacks. Everyone is much welcome to visit our place in San Jose City, Batangas. What we have is not a ghost project.”
3) Pamora Farms(MRS. TINA PAPILLON, President)
“The ACEF funds greatly helped us become competitive. Despite that Abra is landlocked, we can produce top quality free range French bred chickens for the local and very soon, the export markets. Nobody asked kickbacks from us…those claiming they paid kickbacks are maybe those with incomplete documents and did not get their loan application approved. Fixers are everywhere and we must be very careful. Allegations must be supported with evidence. Our project is not a ghost project. Anyone is welcome to see us in ABRA. We hardly know past and even present DA officials as we work with regional DA office, DA-CAR, our project loan to ACEF was approved after compliance to all ACEF requirements. It is so unfair that allegations are so broad.”
4) QUEENS AGRO-INDUSTRIAL FARMS, INC. (MR. ALBERT LIM, President and Chairman of the Philippine Hog Federation, Inc.)
“What kickbacks are they talking about? Nobody asked kickbacks from me. I was given an extension for repayments because we needed some extra time to stabilize our operations. I got that approval during the time of Sec. Bernie Fondevilla, Yap had already resigned by then. Anyway, the DA is holding my post-dated checks for security. But even with ACEF, we will not be competitive if smuggling continues of pork products in the local market.”
STATEMENT ON THE ACEF FUNDS
Congressman Arthur Yap, 3rd District Bohol September 21, 2011 Let me make my comments about the ACEF:
What is the ACEF? The ACEF is not some DA creation. The Agriculture Competitiveness Enhancement Fund (ACEF) is created under Republic Act No. 9496 and consists of all duties collected from the importation of agricultural products under the minimum access volume (MAV) mechanism. The Fund was created as one of the safety net provisions that our Government set up for the agriculture sector for our accession into the WTO in 1995. The ACEF was called a “Competitiveness Enhancement Fund” because it is primarily for increased productivity of our commodity producers for which reason, the law allows the fund to be used for a broad range of purposes like: irrigation, farm to market roads, post harvest equipment and facilities, credit, research and development, other marketing infrastructure, provision of marketing information, re-training, extension services, young entrepreneurs, out of school youth, graduates of agriculture, fisheries and other infrastructure including access as well and establishment of transport mechanism towards speedy delivery of products.
The case being that the Fund was primarily set up as a safety net, the Implementing Rules and Regulations of the ACEF, allows it to be collateral-free and interest free. The original IRR was approved long before I became Secretary of Agriculture. Any allegations to the effect that I extended the program or expanded it according to my terms, has no legal basis. I do not have that power. Only Congress has the power to legislate the extension, the terms or modification of the law. The Implementing Rules and Regulations of the Acef were drafted pursuant to law and submitted for approval to the Congressional Over-Sight Committee on Fisheries and Agriculture Modernization (COCAFAM). The Cocafam counts the private sector, the DA, Senators and Congressmen as members.
On my initiative, ALL LOANS RELEASED ARE COVERED BY CROP INSURANCE AND POST-DATED CHECKS DEPOSITED IN THE LANDBANK to protect the fund while the approval process mandates going through a minimum of two levels: the Regional Technical Committee and the National Technical Committee. The National Technical Committee has for its members, private sector representatives and the Landbank, among others. In certain cases, the loan proposal is brought up to the EXECOM for deliberation. The EXECOM counts the private sector, Senators and Congressmen for members. This would be a third level for approvals.
Therefore, I merely implemented the Law according to approved guidelines. There are procedures followed in the dispensing of funds. The alternative would have been to do nothing and that would have been the tragedy. The banner headline that P 10 billion in funds were “drained” is misleading and baseless. Allegations were made that certain borrowers were favored like: Mr. Lyndon Tan of Basic Necessity, GEMSUN Marketing and Hi-Las Marketing, to name a few. Let me state for the record that Mr. Tan’s ACEF loan WAS NOT APPROVED DURING MY TERM. Furthermore, Mr. Tan is a reputable agri-entrepreneur having been selected last year as one of Ernst and Young’s Entrepreneurs of the Year. In the case of GEMSUM and HI-LAS, these are beneficiaries with a proven track record in the agriculture industry. GEMSUM, based in San Jose City, Batanggas is now producing 200,000 eggs daily because of ACEF, while HI-Las is a long-standing exporter of mangoes and vegetable products. The President of Hi-Las is Mr. Roberto Amores, President of PHILFOODEX. The mango products bought in COSTCO, USA are supplied by Hi-Las.
If there are allegations of kickbacks attendant on the Program, those asking for commissions must be named and the allegations against them proven in the proper forum lest this be unfair to the many hardworking and honest personnel of the DA. It is true that I encouraged the UBRA to avail of these funds in my belief that these funds can better help the smaller poultry producers compete in the market. It was never brought to my attention that kickbacks were being solicited from them. Pains have been made to highlight the alleged negative side of the Program, but what about the hundreds of others who benefitted from this program? Why is nobody talking about the many whose agri-businesses flourished because of the ACEF? The DA must come out and reveal these success stories to balance the picture on ACEF. A low repayment rate does not make the ACEF Program anomalous or a failure. There may well be other reasons to re-think or re-study the ACEF but it must be done objectively sparing us all the political agenda behind the current moves. Thank you and I hope these comments will help in presenting a more balance view of the ACEF Program.
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