Time to move on with the Coconut Levy Funds Act

We join the dismay and apprehension of coconut farmers over the version of Senate Bill (SB) 1223 passed on second reading early this week, SB 1223 prospectively titled as the Coconut Farmers and Industry Development Act, has to do with the coconut levy funds and assets (CLF), the purposes for which they will be spent and how they will be managed and conserved.

Actually SB 1223 as revised is fine, PROVIDED that all the amendments introduced by Senator Ralph Recto will pass muster when the versions of the bill passed by the two Houses are reconciled at the bicameral level.

The original SB 1223 filed and sponsored by Senator Francis Pangilinan had three very important premises, namely: 1) that the CLF will be expended exclusively for the benefit of coconut farmers and the coconut industry, 2) that the CLF will be conserved in perpetuity using only the interests thereof, and 3) that the coconut farmers, who are the real owners and de facto beneficiaries, should have a major say on how the CLF will be managed.

The Pangilinan draft was the product of many public hearings and consultations. It was heartily endorsed by coconut farmer groups, by the five-member Agriculture and Fisheries Alliance (AFA) convened by Ernesto Ordonez, as well as by scientists and academics belonging to the Coalition for Agriculture Modernization in the Philippines (CAMP).

The key safeguard as contemplated in the Pangilinan draft was the constitution of an independent body, the Coconut Levy Trust Fund Committee (CLTFC), majority of whose members are farmers representatives.

The amendment introduced by Senator Recto ominously deletes this provision on the argument that the CLTFC is superfluous because its function could be readily assumed and at much less cost and delay, by an expanded Board of Directors of the legal implementing agency — the Philippine Coconut Authority (PCA). From seven members, the PCA Board will be raised to eleven, with coconut farmers representatives constituting the majority (6 farmers representatives versus five ex-officio government officials).

Unfortunately, many coconut farmer groups are distrustful of PCA.

The second apprehension was the fear among coconut farmers that government will use the huge CLF funds (in excess of R70 billion) as a substitute for the annual allocations the coconut industry otherwise deserves under the annual General Appropriations Acts (GAAs). By limiting the use of CLF to the fund investment interest, the intention should be clear that the CLF are supplemental NOT SUBSTITUTE for GAA.

The Recto amendment similarly ominously lifts the restriction on the use of the fund principal and potentially allows the rapid exhaustion of the CLF. It is very tempting for any administration to use up all the CLF during its term to gain maximum political mileage, which with our experience will lead to wastage. The original public hearings on SB 1223 were conducted during the last two years of the Benigno S. Aquino administration and there were fears that without the interest income restraint, CLF could be used for electioneering purposes (as alleged to explain the haste in funding Dengvaxia?).

To Senator Recto’s credit, he partly allayed this fear by a R10-billion base appropriation for PCA, which is 3-4 times the recurrent budget of PCA. With a R10 billion base budget, PCA will be hard put utilizing this amount and thus, the need for using the CLF principal will be moderated. After all PCA had been consistently “returning” unutilized appropriations.

Conclusion The coconut farmers have waited long enough (40 years). These wellmeaning amendments in S.B. 1223 should not serve as excuses for derailing the CLF law any further. We can live with the improvements introduced in the Senate provided ALL are adopted in toto, particularly the R10 billion annual recurring appropriations for PCA.

Further, we hope we can prevail on Senator Recto to further improve the representation of coconut farmers in the PCA Board by widening the ratio from six vs five, to seven vs four. The six vs five majority ratio is uncomfortably too narrow.

Finally, the majority representation of coconut farmers in the PCA Board will be for naught if the Board is not sufficiently guided on the substantive, technological re-direction the coconut industry needs to take to raise farmers’ income and improve the coconut’s competitiveness with other vegetable oils in the world markets.

We therefore propose that part of the re-organization of PCA will include the constitution of a Technical Advisory Committee directly reporting to the PCA Board, composed of competent individuals nominated by recognized professional bodies like the National Academy of Science and Technology (NAST), National Research Council of the Philippines (NRCP) and the Management Association of the Philippines (MAP).

***** Dr. Emil Q. Javier is a Member of the National Academy of Science and Technology (NAST) and also Chair of the Coalition for Agriculture Modernization in the Philippines (CAMP). For any feedback, email eqjavier@ yahoo.com.