THE WAY FORWARD │ Level Up Philippine Agriculture!

Proposed coconut trust fund to help millions of poor farmers; perk up and modernize industry

Author: DA Communications Group | 18 December 2020

The Department of Agriculture (DA) welcomes and fully supports the proposed legislation of both the Senate and House of Representatives (HOR), creating a coconut industry trust fund from the proceeds of the coconut levy.

“Once the respective bills are reconciled and signed into law by President Rodrigo Roa Duterte, this decades-long awaited legislative measure will greatly help rehabilitate and modernize the country’s coconut industry,” said Agriculture Secretary William Dar.

“We are one with our legislative leaders on lifting millions of coconut farmers and their dependents from poverty. Thus, on behalf of the DA family, particularly the Philippine Coconut Authority (PCA), we sincerely thank Senator Cynthia Villar and Congressman Wilfrido Mark Enverga, respective chairperson of the committee on agriculture and food at the Senate and House of Representatives, who vigorously pushed for the crafting and approval of the revised version of the proposed bill,” he said.

He added that the proposed law will help unlock the vast potential of the Philippine coconut industry. In particular, it will pave the way to further increase the country’s export revenues from the sector, which in 2019 and 2018 totaled P61.84 billion (B) and P75.34 B, respectively, in the form of coconut oil, desiccated coconut copra oil, cake or meal, according to the Philippine Statistics Authority (PSA).

Both versions of the Senate and HOR will automatically augment by P5 B the annual budget of the PCA, which this year amounts to P1.13 B.

House Bill No. 8136, or the “Coconut Farmers and Development Trust Fund Act,” was approved on December 14, 2020. The trust fund will be maintained for 99 years, in contrast to the 50 years in the Senate version, entitled “Coconut Farmers and Industry Trust Fund.”

The measure was among the priority legislations specified by President Rodrigo Roa Duterte during his State of the Nation Address in July 2020.

To recall, he vetoed a previous bill, citing that vital safeguards be in place “to avoid the repetition of painful mistakes in the past.”

“In all, the transformation and modernization of the coconut industry requires getting our acts together in pursuing to the hilt the much-needed interventions to increase the productivity and incomes of more than three and a half million coconut farmers and their families nationwide,” secretary Dar said.

Under HB 8136, the trust fund will be disbursed in accordance with the Coconut Farmers and Industry Development Plan (CFIDP) to be crafted by the DA-PCA and approved by the President. The agency is also mandated to complete the coconut farmers registry. The Plan will be reviewed annually.

The PCA Board will be reconstituted, still to be chaired by Secretary of the Department of Agriculture, with the secretary of finance as vice-chair, and with the following members: secretary of budget and management (DBM), science and technology (DOST), and trade and industry (DTI); three representatives from the coconut farmers sector, one each from Luzon, Visayas and Mindanao; and one representative from the coconut industry sector.

A coco levy trust fund board will also be created composed of representatives from coconut farmers’ organizations, industry associations, civil society organizations, academe, and other stakeholders.

The Senate version, approved on October 5, 2020, mandates the government to turn over P75B of the coconut levy assets in the next five years: P10B each in the first and second year; P15B each, in the third and fourth year; and P25B, in the fifth year.

Both the HOR and Senate versions mandate that P5B from the trust fund be given to the DA-PCA, on top of its regular annual budget, to pursue the following major tasks:

  • Planting, replanting, production, and conduct of research on hybrid coconut seedlings;
  • Training of coconut farmers and their families as listed in the coconut farmers registry in farm schools through TESDA and DA’s Agricultural Training Institute;
  • Coconut research, marketing, and promotion;
  • Provision of farm implements, and adoption of crop diversification and coconut intercropping with livestock, dairy, poultry, coffee, and cacao production;
  • Shared facilities for coconut processing;
  • Organization and empowerment of coconut farmers’ organizations;
  • Provision of credit through the Land Bank of the Philippines and Development Bank of the Philippines;
  • Infrastructure development;
  • Scholarship programs for farmers, their children, rural women, and youth;
  • Health and medical programs for farmers and their families; and
  • Crop insurance. ### (DA StratComms)
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