Senator Edgardo Angara. INQUIRER file photo
Senator Edgardo Angara called on the Department of Agriculture and the Senate oversight committee on agriculture to conduct a performance audit of the P10-billion facility, Agricultural Competitiveness Enhancement Fund (Acef), and draw a list of its beneficiaries.
Angara, a former agriculture secretary, said the audit should make it clear whether the government had successfully aided distressed farmers whose livelihoods had been threatened by trade liberalization.
“Acef was a general fund. We give a subsidy. That’s easy to trace because there’s a record of who received, how much and where it was used. Why should we not publish all names,” the senator said.
P300M for Aurora
Angara’s challenge came on the heels of an Inquirer report that he was among the beneficiaries who may have taken advantage of the Acef by recommending projects that would be funded by it.
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.
Senator Francis Pangilinan, chairman of the Senate committee on agriculture, said his panel would conduct a joint investigation along with the finance committee.
“We just have to agree on the proceedings. We can start with the P7.5 billion missing farm-to-market roads then proceed to the utilization of the Acef,” Pangilinan said in a separate interview.
“It’s also the duty of the Senate to look into it. We owe it to the farmers. They are the victims here,” he added.
Former Undersecretary Antonio Fleta said those who were responsible for the irregularities should be held accountable. “Somebody should be charged for this,” Fleta said.
A total of 110 accounts funded by Acef were in arrears of P3 billion, according to Fleta. Of these accounts, 18 were restructured. He said the borrowers were corporations and individuals.
Agriculture Secretary Proceso Alcala said his department would cooperate with the Senate when it investigates the irregularities in Acef, a P10-billion facility created in 1996.
“We will send supporting papers and documents if the Senate needs it for its investigation … This should be sorted out,” Alcala said at a press briefing.
The fund was suspended in January and its implementation reviewed because of the alleged irregularities.
Poor collection rate
Data from the agriculture department showed that only P345.58 million had been paid as of June.
Fleta and Alcala said the implementation of Acef was poor as the collection rate of the loans was only at 26 percent.
Acef, funded by tariffs from agricultural products, is a mechanism aimed at providing financial support to the agriculture sector to increase their competitiveness in the global market.
The money from the taxes was supposed to be used to establish “safety nets” for agriculture sectors affected by trade liberalization when the Philippines joined the World Trade Organization.
It was also aimed at raising the capacity of farmers, fisherfolk, and cooperatives and improving their facilities so that they can compete with products from abroad and find new markets overseas.
Records from the agriculture department showed that Acef was used in schemes that turned out to be questionable.
Beneficiaries of 12 grants, which ranged from P10 million to P500 million, did not have to pay back the money.
P500M for Nabcor
In 2008, National Agribusiness Corp. (Nabcor) was granted P500 million for a project called the Establishment of Cold Chain Facilities for Fruits, Vegetables, Livestock and Fisheries Products.
The fisherfolk group Pamalakaya said money for this project was used for the procurement of ice-making machines from Integrated Refrigeration Systems and Services Inc. (IRSS).
At P4.6 million per unit or P2.3 million higher than the prevailing industry rate, the ice-making machines were overpriced, said Pamalakaya vice chairman Salvador France.
The document detailing the 12 grant projects from Acef noted that the P500 million given to Nabcor showed that P428.5 million of that fund was paid to IRSS.
Plunder case
The deal with Nabcor was the basis for the plunder case filed by Pamalakaya against former President Gloria Macapagal-Arroyo and ex-Agriculture Secretary Arthur Yap.
Gerry Albert, Pamalakaya spokesperson, said his group didn’t know that the funds for the Nabcor project was from Acef at that time.
The P500-million grant was not the only funds earmarked for Nabcor. The corporation’s president, Alan Javellana, was listed as the recipient of P225 million in 2007 for the establishment of processing plants and cold storage facilities, and P300 million in 2008 for the creation of corn-processing and -trading centers.
An agency of the agriculture department, Philmech, was given P500 million in 2007 for the purchase of flatbed dryers.
According to the document, the money was to be spent for flatbed dryers to be distributed to 37 provinces. Of the P500 million, P276 million was supposed to go to machinery and equipment, while P224 million was earmarked for infrastructure and buildings.
Useless flatbed dryers
In its 2010 audit of the agriculture department, the Commission on Audit (COA) said the flatbed dryers the agency purchased were useless to many farmers and of “inferior quality.”
Of the 513 flatbed dryers bought by the department, 320 units were not operational, the COA said. The unusable units cost P231 million.
Fleta said Acef would reopen within the year. Fleta said the agriculture department was just waiting for the Development Bank of the Philippines to release the funds.
He said the agency had put safeguards to make sure that the benefits would go directly to farmers and fisherfolk with viable projects, and not to dummy businesses.
In the past, borrowers did not pay interest for the loans. Under the new rules, those who want to borrow will have to pay a 4-percent interest rate per annum. They also have to submit a mortgage contract to the agriculture department as collateral and as proof that their project is legitimate.
Applicants will also have to present their project proposal to the department. “We are requiring them to be present to make sure they are not dummies and that they know the project,” Fleta said.