Press Release
March 2, 2015

Villar: Bill on coconut levy trust fund will help farmers and develop industry

Sen. Cynthia Villar today said the bill that will create a coconut levy trust fund will make sure programs will be implemented that will directly benefit 3.5 million coconut farmers in the country.

Villar, chairperson of the Senate Committee on Agriculture and Food, sponsored the committee report on the Coconut Farmers and Industry Development Act of 2015. Senate Bill No. 2675 under Committee Report No. 106 is the substitute bill for Senate Bill Nos. 455, 2126, 2467 and Proposed Senate Resolution No. 30.

The act seeks to create the Coconut Farmers and Industry Trust Fund. This will be composed of all coconut levy assets, including those declared by the Supreme Court as special public funds.

"We are confident that this law will finally resolve the decades-old issue surrounding the coco levy fund and will carry out its two-pronged goal--to help coconut farmers and develop the coconut industry," Villar said.

Villar said the coconut farmers are considered as one of the country's poorest. Citing a National Anti-Poverty Commission (NAPC) report, she said coconut farmers have the highest poverty incidence at 60 percent with a per capita income of P41 a day.

About one-third of the so-called arable agricultural land or about 3.5 million hectares are planted with coconuts, representing 68 out of 79 provinces, and 1,195 out of the 1,554 municipalities in the country.

In her dialogue with the KM71 farmers who marched from Davao to Manila to push for the creation of the coconut levy trust fund last November, Villar said her committee will work for the passage of the law in the early part of 2015. The group was also able to get the commitment of President Aquino to prioritize the enactment of the bill.

The proposed measure requires the conduct of an audit and inventory of all coconut levy assets by the Commission on Audit, together with the Presidential Commission on Good Government, and the Philippine Coconut Authority (PCA).

"Because there are differing figures on how much the assets really cost, we are including the conduct of audit and inventory in order to account for all assets funded out of the coconut levy funds, including its nature, value, description, among others," Villar said.

The Coconut Farmers and Industry Trust Fund Committee will be created to ensure the fulfillment of the objectives of the proposed law, and to direct and coordinate the implementation of the plan and the privatization of the levy assets.

This will be composed of the Secretary of the Department of Agriculture (DA) as chair; the Secretary of the Department of Finance as vice-chair; the National Economic and Development Administration (NEDA) Secretary, the PCA Administrator and five members from the coconut farmers sector.

Under the bill, all cash assets, reported to be about P70 billion, will become the initial capital of the trust fund. All non-cash assets will be transferred to the Trust Fund Committee and will be privatized by the Privatization and Management Office (PMO) within a 5-year period. The proceeds will be remitted to the trust fund and will augment its capital.

The trust fund will be maintained perpetually and can only be invested in Philippine government securities. The Bureau of Treasury will be designated as the depository of the trust fund.

Five percent of the initial capital of the trust fund will be used for the initial implementation of the plan, and to fund the expenses of the Trust Fund Committee, the conduct of the audit and inventory, the formulation of the Plan, and the activities of the PMO.

The Coconut Farmers and Industry Development Plan shall be formulated within 180 days after the effectivity of the law. For this purpose, an ad hoc committee composed of the NEDA as chair, and members from the DA, Department of Agrarian Reform, Department of Trade and Industry, Department of Science and Technology, Department of Energy, Department of Public Works and Highways, Department of Interior and Local Government, and the NAPC, will be formed.

Only programs and projects falling under four categories can be funded, namely, 1) coconut productivity, including intercropping and livestock raising; 2) community-based coconut enterprises, including integrated processing of coconut products and downstream products; 3) coconut farmers organization and development; and 4) social protection programs, such as medical, health and life insurance services, and scholarship grants.

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