Farmers not part of Coco Levy trust fund committee

Published March 2, 2021, 6:00 AM

by Madelaine B. Miraflor

Only representatives from three government agencies – Department of Finance (DOF), Department of Budget and Management (DBM), and Department of Justice (DOJ) – will have the final say on how the Coconut Farmers and Industry Trust Fund (CFITF) will be managed and use.

Based on the Republic Act (RA) 11524, which mandates the creation of a 50-year CFITF, there should be a management committee tasked to set investment priorities for the coconut industry with regards to the release and utilization of the controversial P100-billion coco levy fund.

The management committee should be composed of authorized representatives from the DOF, DBM, and DOJ.

(MB File, Keith Bacongco)

The committee is also tasked to set the trust fund’s investment themes, asset allocation, and policies; evaluate assets; issue guidelines for portfolio turnover and CFITF management expenses; set annual allocation of the CFITF; and approve financial requirements. 

To recall, RA 11524 directs the Bureau of Treasury to transfer from the accumulated coconut levy at least P75 in the next five years to the CFITF in the following tranches: P10 billion each this year and in 2022; P15 billion each on 2023 and 2024; and P25 billion in 2025 plus any amount accruing, including interest of the coconut levy, in the special account in the general fund.

The utilization of coco levy funds, based on RA 11524, will be led by the Philippine Coconut Authority (PCA), which will now have a reconstituted PCA board. 

The PCA Board will be chaired by the Department of Agriculture (DA) secretary and vice-chaired by the secretary of DOF.

Other board members include the respective secretary of departments of budget (DBM), science and technology (DOST), and trade (DTI); PCA administrator; and three members from the coconut farmers sector, representing Luzon, Visayas, and Mindanao. 

On Monday (March 2), the Federation of Free Farmers (FFF) voiced both relief and disappointment over RA 11524, which President Rodrigo Duterte signed on Friday.

“We welcome the release of long-awaited funds that will improve the livelihood and incomes of the country’s 3.5 million coconut farmers and farm workers, who had paid the coconut levies during the Marcos presidency,” FFF said.

“However, we deplore the exclusion of coconut farmers from the newly created Trust Fund Management Committee that will control the management and disposition of coconut levy funds and other assets,” it added.

The Federation also expressed apprehension over the law’s approach to preparing the 50-year master development plan for the coconut industry.  
Dioscoro A. Granada, FFF secretary-general and a coconut farmer in Tagum, Davao del Norte, noted that the new law prescribes rigid percentage allocations and implementing agencies for the funding of various components of the industry master plan, which will still be drafted by the PCA in consultation

with farmers and other industry stakeholders.  

Some of these agencies have no direct connection or involvement with coconut farmers or the industry, he said.

“This is putting the cart before the carabao, or letting the tail wag the dog,” Granada quipped.
FFF’s involvement in the coconut levy issue began in the late 1970s when Col. Virgilio M. David, then Military Supervisor to the PCA, briefed FFF officers on his concerns about the onerous tax burden being imposed by the coconut levy on coconut farmers and on what David considered to be questionable non-coconut industry uses of the levy collections.

In response, the FFF called for a complete audit of the coconut levy fund.

Then, in 1993, then FFF Secretary-General and Peasant Sector Representative Leonardo Q. Montemayor filed House Bill (HB) 10428 in the 9th Congress. This was subsequently refiled in the 10th and 11th Congress.

The measure sought to re-affirm the coconut levies as public funds held in trust for coconut farmers, strengthen the PCA’s role in industry development, provide for three small coconut farmer-representatives in the PCA board, and consolidate the various coconut levy collections into a trust fund for the benefit of coconut farmers, farm workers and the industry as a whole.

Despite Montemayor’s position that Congress legislates public policy while the Supreme Court merely interprets it, opponents of HB 10428 argued that Congress could not act on the measure because several coconut levy cases were then pending sub judice in the Supreme Court.  

In 2012, the Supreme Court decided with finality that the coconut levies were public funds held in trust for the benefit of coconut farmers and the coconut industry.