CFITF to revitalize coco industry

MANILA, Philippines — The law creating the multi-billion peso coconut levy trust fund is seen to revitalize the coconut industry, which will lead to its greater economic contribution, according to the Department of Agriculture (DA).

On Friday, President Duterte signed Republic Act   11524 or the Coconut Farmers and Industry Trust Fund Act (CFITF). The law creates a trust fund which will receive P10 billion from the Bureau of Treasury upon enactment of the law, and then P10 billion in the second year, P15 billion in the third year, P15 billion in the fourth year, and P25 billion in the fifth year, for a total of P75 billion, plus any amount accruing, including interest of the coconut levy, in the special account in the general fund.

“This is a game changer for the coconut farmers and the coconut industry. This will unlock the potential of the industry to contribute much more to the nation’s economy,” Agriculture Secretary William Dar said.

With an ensured funding of P75 billion in the next five years, Dar said the CFITF would pave the way to modernizing and industrializing the Philippine coconut sector.

“This ushers in a new policy that will set in motion big reforms in the coconut industry using efficiently the proceeds of the coconut levy for the benefit of 2.5 million coconut farmers and their families and the coconut industry in general,” Dar said.

The law mandates the creation of a 50-year CFITF as provided under a coconut industry development plan that is yet to be formulated by the Philippine Coconut Authority (PCA), an attached corporation under the DA. The plan, when crafted, needs to be approved by the President.

It also reconstitutes and strengthens the PCA that is tasked to craft and implement a Coconut Farmers and Industry Development Plan (CFIDP).The DA-PCA will be given an allocation of P5 million for the formulation of the CFIDP.

Under RA 11524, the PCA board will be chaired by the DA secretary and vice-chaired by the Secretary of Finance. Other board members include the respective Secretary of departments of Budget, Science and Technology and Trade; PCA administrator; and three members from the coconut farmers sector, representing Luzon, Visayas and Mindanao.

The CFITF is over and above the annual budget of the DA-PCA, which will continue to pursue its mandate of implementing programs and projects from the regular GAA appropriations.

The law also creates a CFITF management committee composed of authorized representatives from the DOF, DBM and DOJ.

The committee is tasked to set investment priorities, 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.

The DA said that the Philippines ranks as the world’s second largest producer and number one exporter of coconut products. However, the coconut sector contributes a measly four percent to the gross value-added in agriculture, mainly due to the declining productivity in the coconut sector brought by dwindling area and low yields.