Press Release
December 13, 2007

Senate passes ACEF extension

Voting 14-0, the Senate yesterday passed the extension of the Agricultural Competitiveness Enhancement Fund (ACEF) which is due expiration this year.

Senator Edgardo Angara, sponsor of the bill extending the ACEF until 2015, said the fund needs to be continued to further enhance the competitiveness of our agriculture sector.

"Currently, the ACEF has a balance of Php6 billion, and this will be reverted back to the general fund if the ACEF expires this year. That Php6 billion could provide more farm-to-market roads, post-harvest equipment and facilities, research and development, training and other extension services, which will all benefit our farmers," asserted Senator Angara.

A salient amendment to the previous ACEF bill includes the continued use of the fund for agricultural competitiveness, even if the collections from the Minimum Access Volume stop flowing into the ACEF by 2015.

This means that if the ACEF still has a balance by 2015, this amount, and the collectibles from the loans ACEF funds, will continue to be earmarked for agricultural competitiveness.

"The Philippines is the only country in Asia that does not provide subsidies for farmers, one of the reasons why our agricultural growth trails behind its Asian neighbors," Senator Angara stressed.

"Under the World Trade Organization, a country is allowed to provide up to 10 percent of a country's gross domestic product in agriculture as subsidies for farmers. If we could provide 10 percent of this which is P21 billion to farmers, we will become more prosperous."

According to him, financial institutions like World Bank and Asian Development Bank have started focusing on agriculture as a major force in economic growth. "These financial institutions have realized that ignoring agriculture would increase the scale of poverty."

Improving agricultural development in rural areas, he said, is the best weapon against poverty.

Enacted in 1996, the ACEF is a special purpose fund created by Republic Act No. 8178, which will come from the proceeds of the in-quota Maximum Access Volume (MAV) importations. It was created to help the agricultural sector become globally competitive viable, efficient, and sustainable.

It makes credit available to small farmers and fisherfolk and agriculture entrepreneurs which the regular credit market does not provide. It is intended to augment the support for selected agricultural products in terms of farm-to-market roads, post-harvest equipment and facilities, research and development, marketing infrastructure, training and other extension services.

Four years after the fund was made fully available in 2000, ACEF was able to fund 93 sugar projects and 56 other projects on livestock, poultry and fruits and vegetable subsectors.

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