Abused farmer lending facility to reopen in 2012, says Alcala

BAGUIO CITY—Acknowledging that the Agricultural Competitiveness Enhancement Fund (Acef) had been misused, Agriculture Secretary Proceso Alcala on Sunday said the government was ready to reopen the controversial farm credit facility in the first quarter of 2012 after instituting reforms.

Speaking to Cordillera farmers and local officials at a forum, Alcala said that he and Senator Francis Pangilinan “have set in motion the process needed to reinstate the P10-billion noncollateral credit fund” set up in 1996 with tariff collected from imported food products.

Alcala credited Pangilinan, chairman of the Senate committee on agriculture, with approaching Budget Secretary Florencio Abad for permission to free up the P1.9-billion balance of the Acef.

The government developed Acef as a “safety net” for farmers who would be affected by trade liberalization.

The Acef was intended as a credit line for projects that promote farm productivity and efficiency, but the new guidelines allocate only 30 percent of the Acef balance for loans, leaving 60 percent for grants and 10 percent for scholarship programs, Alcala said.

The new guidelines also give majority party leaders a say in who should get the loans. Acef requires the secretary and the respective chairpersons of the Senate and House committees on agriculture to study each P15-million loan proposal, Alcala said.

Political fund?

Earlier, critics denounced the previous Arroyo administration for politicizing the fund. An investigation by Congress in September showed that the fund benefited political allies of the Arroyo administration, who allegedly dictated which borrower would receive loans. Many of the loans remain unpaid.

Acef was suspended in January after a Commission on Audit report questioned the slow pace of repayment of the Acef-facilitated loans, the DA said.

The website of the congressional oversight committee on agricultural and fisheries modernization (Cocafm) said P8.7 billion was disbursed by Acef from 1999 to 2010, of which P2.96 billion was released as grant aid.

P5.8 billion unpaid

The government needs to collect P5.8 billion worth of loans handed out by Acef, the Cocafm site said.

Alcala said demand letters had been sent to borrowers who had failed to repay their loans. The DA will take legal action against those who still do not settle their accounts.

During the open forum, Alcala described the credit fund as a facility that “was used by whoever was powerful at the moment (nagagamit ng kung sino ang malalakas).”

He said some Acef transactions were anomalous because these involved “cash-sunduan” (slang for agreements in exchange for cash). This was a reference to allegations that the Acef loans were released to farm organizations only after they agreed to pay kickbacks.

“Maliwanag po sa inyo iyan (This was clear to many of you here),” Alcala said.

But in an interview on the sidelines of the forum, Alcala said some politicians implicated in the Acef anomaly had been cleared.

Angara cleared

Senator Edgardo Angara, who authored the measure creating Acef, was suspected of benefiting from the credit fund because Acef facilitated the P200-million rehabilitation of the Baler-Casiguran highway in his home province of Aurora in 2008 and had provided P100 million in 2007 to fund the Enhancement of Technology-Based Agribusiness Industry project of the Aurora State University.

“When we checked those programs supposedly accessed by Angara, we discovered that [these Aurora projects] subscribed to the…provisions of Acef. [Using Acef to complete] roads is part of the provisions of the law,” Alcala said.