Rodis, Heidi Kim Linh Rollan, Jeffrey AGSC 5 : Agro Economics

RA 8435 Agricultural and Fisheries Modernization Act of 1997

Passing of the Act The Philippine Senate and House of Representatives passed the Agriculture and Fisheries Modernization Act in December, 1997. It was signed into law by then President Fidel V. Ramos on December 22, 1997. Objectives By passing the AFMA, the Phillipine government sought to aid in the development and enhanced profitability of agriculture and fishing enterprises. According to the Phillipine Tariff Commission, the act achieves this goal by placing emphasis on new technologies and inclusion in the global market. The act also seeks to empower people working in these industries and ensure greater food accessibility and security to all Filipino people. Duty Exemption The Philippine government put in place a duty exemption as a result of this act. For five years--until 2003--all persons working in fishing or agriculture could import necessary equipment and updates without paying national taxes to the Philippine government. An additional act in 2004 extended this duty exemption until 2015. What are the main objectives of AFMA? To modernize the agricultural and fishery sectors by transforming these sectors from a resource-based to a technology-based industry To enhance profits and incomes in the agricultural and fishery sectors, particularly of the small farmers and fisherfolk by ensuring equitable access to assets, resources and services, and promoting higher-value crops, value-added processing, agribusiness activities, and agro-industrialization; To ensure the accessibility, availability and stability of food supply at all times; To encourage horizontal and vertical integration, consolidation and expansion of agricultural and fishery activities, groups, functions and other services through the organization of cooperatives, farmers and fisher folks associations, corporations, nucleus estates, and consolidated farms and to enable these entities to benefit from economies of scale, afford them a stronger negotiating position, and enable them to pursue more focused, efficient and appropriate research and development efforts; To promote people empowerment by strengthening peoples organizations, cooperatives and NGOs, and by establishing and improving mechanisms and processes for their participation in government decision-making and implementation; To pursue a market-driven approach to enhance the comparative advantage of our agricultural and fishery sectors in the world market; To induce the agricultural and fishery sectors to continuously ascend the value-added ladder by subjecting their traditional or new products to further processing in order to minimize the marketing of raw, unfinished or unprocessed products; To adopt policies that will promote industry dispersal and rural industrialization by providing incentives to local and foreign investors for them to establish industries that have backward linkages to the countrys agricultural and fishery resource bases; To provide social and economic adjustment measures that increase productivity and improve market efficiency while ensuring the protection and preservation of the environment and equity for small farmers and fisherfolk; and To improve the quality of life of all sectors. What are the trade and fiscal incentives provided under AFMA? Section 109 of RA 8435 provides that all enterprises engaged in agriculture and fishery duly certified by the Department of Agriculture in consultation with the Department of Finance and the Board of Investments (BOI) shall, for

five (5) years, be exempted from the payment of tariff duties on all types of imported agricultural and fishery inputs, equipment and machinery including, among others, fertilizers, insecticides, tractors, hybrid seed, farm implements and machinery, packaging machinery and materials, and fishing equipment and parts thereof, provided that the imported agriculture and fishery input, and/or equipment shall be for the exclusive use of the importing enterprise. Who are eligible for exemption from the payment of import duties of agricultural and fishery Inputs, equipment and machinery as provided for under Section 109 of Republic Act 8435? Agricultural sectors; Cooperatives; Farmers and fisher folk; Farmers and fisher folk organizations and associations; Fishery enterprises; Fishery sectors; and Import consolidators. Five major Concerns poverty alleviation social equity food security global competitiveness sustainable development Income profitability especially for farmers and fisher folks. The Department in coordination with other concerned departments or agencies shall formulate medium-and longterm plans addressing food security, poverty alleviation, social equity and income enhancement concerns based on, but not limited to, the following goals and indicators of development: a. Increased income and profit of small farmers and fisherfolk; b. Availability of rice and other staple foods at affordable prices; c. Reduction of rural poverty and income inequality; d. Reduction of the incidence of malnutrition; e. Reduction of rural unemployment and underemployment; and f. Improvement in land tenure of small farmers. When is the effectivity and the implementation period of the duty exemption on agricultural and fishery inputs? Section 109 of RA 8435 stated that all enterprises engaged in agriculture and fishery as duly certified by the Department of Agriculture in consultation with the Department of Finance and the Board of Investment, shall for five (5) years after the effectivity of the Act, or until February 8, 2003, be exempted from paying the tariff duties on imports of all types of agriculture and fishery inputs. By virtue of R.A. 9281, enacted on March 30, 2004, the duty-free privilege was extended until December 31, 2015. EO 376 was issued on October 22, 2004 providing the implementing rules and regulations of RA 9281. The EO limits the product coverage and prescribes the requirement of a Certificate of Eligibility or Accreditation to accompany the dutyexempted importation. What was the role of the Tariff Commission in the AFMA? 1. The Commission actively participated in the preparation of the IRR of the AFMA, particularly in the preparation and review of the product lists in consultation with concerned government agencies and the private sector. 2. The Commission conducted public hearings on January 25, 1999, December 14, 2000, June 28, 2001, January 21, 2003 and June 29, 2004 to provide interested parties the opportunity to be heard and submit position papers. RESOURCES: http://www.tariffcommission.gov.ph/afma.htm http://www.ehow.com/facts_6773136_agricultural-fisheries-modernization-act.html

http://www.cocafm.gov.ph/2011/02/modernizing-philippine-agriculture-and-fisheries-the-afma-implementationexperience/ http://faspo.denr.gov.ph/knowledge/policy_studies/NRMP%20II/Agri&_fisheries_modernization_act&_fisheriescode_of _1998_conflict%20&%20recomd%20courses%20of%20action.pdf