Budget for ‘AAA’ abattoirs diverted

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(Conclusion)

Editor’s Note: The third part of this four-part series discussed how the government handled an outbreak of the ebola virus in a pig farm in Bulacan, and allegedly did not help Mindanao hog raisers in exporting meat to Singapore. It is also part of the article that was adjudged 2013 Agriculture Story of the Year during the BrightLeaf Agriculture Journalism Awards held in December last year. It was originally published in Livestock and Meat Business (LaMB) Magazine by the author.

Perhaps one of the Department of Agriculture’s (DA) most disturbing sign of insincerity toward hog and meat industry players was the agency’s failure to put up, as promised, two Triple A abattoirs north and south of Manila in 2012. This in spite of repeated pronouncements made by Agriculture Secretary Proceso Alcala himself that his department had the money to build the facilities.

Budgeted at P180 million (an amount no one from the department could explain how it was arrived at), the two meat establishments would have played a vital role in boosting chances of local hog raisers to export pork to its Asian neighbors ahead of the Association of Southeast Asian Nations (Asean) economic integration in 2015.


Putting up these facilities is also considered top priority given that the Philippines critically lacks “AAA” accredited slaughterhouses required for the export trade.

Properly managed, they could even churn out manufacturing grade pork cuts for local meat processors, thus reducing the country’s heavy reliance on imported pig meat products and providing solution to hog farmers’ perennial complaints regarding meat smuggling, industry sources said.

As the money to build the two facilities was placed under the care of the National Meat Inspection Services (NMIS), livestock officials were mobilized to look for suitable local government units (LGUs) and private agribusiness entities with whom DA can collaborate in building and operating the structures.

Sources said that the group of Edwin Chen, president of Pork Producers Federation of the Philippines Inc. and managing director of Bounty Fresh Foods Inc., offered to partner with government in operating one of the facilities under terms yet to be agreed upon by all parties.

Another private sector participant who reportedly expressed interest in running one of the units was the San Pablo, Laguna-based 3J Foods Corp. owned by the Agoncillo family.

But for undisclosed reasons, Alcala and livestock officials put the project on hold for weeks until the DA chief was reminded by his subordinates that the unspent “Triple A” funds with NMIS had to be released before the end of 2012, otherwise it would be reverted to the National Treasury.

In the last quarter of 2012, the Agriculture secretary decided to divert a large chunk of the funds for a different purpose. He opted to grant a total of P130 million to 13 LGUs for their use to put up “AA” slaughterhouses in their respective areas, to the dismay of swine industry players.

“We were willing to build and operate the ‘Triple A’ abattoir Alcala was talking about. Our group was even invited to help draft a road map for the swine sector. Now, we see that DA is not really sincere in its commitment to help the hog industry in its export drive,” Chen, visibly disappointed, told this writer on learning that the project was scrapped.

DA officials said that while it was “unfortunate” the project implementation of the two slaughterhouses “had to be deferred,” they indicated a promise, which some consider a vague one, by saying they have “included the budget for the project in the department’s 2014 budgetary proposal.”

In an e-mailed letter sent to LaMB Magazine, Alcala’s chief aide, Emerson Palad, also said that the project originally was supposed to be undertaken in two phases. But he claimed that the first one—where the Livestock Development Council (LBC) was supposed to identify the recipients and location for the project—did not turn out well due to various reasons.

“At the onset, the availability of a sizeable property proximal to Metro Manila became a problem to proponents due to increasing value of land,” Palad said.

“Secondly, the interest of the key players to participate was not evident in their actions,” he added.

Beneficiary provinces
With the original “Triple A” money realigned to build “AA” abattoirs, the LGUs that benefited from the fund diversion include Tuao in Cagayan, Agoncillo in Batangas, Bansud in Oriental Mindoro, Odiongan in Romblon, Santa Cruz in Marinduque, Pres. Roxas City in Capiz, San Joaquin in Iloilo, and Mati and Tagum in Davao. Also included are the municipalities of Lucban, Real, Tagkawayan and Tiaong—all in Quezon province.

Critics said that the criteria by which Alcala used in deciding to grant P10 million to each of the 13 beneficiary LGUs raises questions, considering that it runs inconsistent with existing rules. They cite, in particular, a memorandum circular pertaining to guidelines on LGUs’ meat establishment improvement program jointly crafted and approved by the DA, Department of Interior and Local Governments (DILG), and the Department of Budget and Management (DBM), which Alcala apparently ignored.

For one, they point out that the money to construct the “AA” abattoirs had been released by DA without requiring the beneficiaries to provide their own counterpart fund, thus disregarding the joint DA-DILG-DBM circular which clearly stipulates that LGUs should provide counterpart funds for such projects.

They also claim politics, more than anything else, motivated Alcala to choose which among LGUs shall be granted the dole out. Of the 13 slaughterhouses to be constructed by the grant, they noted that four will be erected in Quezon—Alcala’s home province and where his family has lots of political stake to protect. Quezon province is where his son Irwin is gunning for a provincial post and who went up against incumbent Gov. David Suarez in the May 2013 elections. Alcala’s camp denies such allegation.

“The choice on which LGUs should be granted assistance for the construction of their slaughterhouses was mainly on the requests received from various local chief executives or by way of Sangguniang Bayan resolutions,” Palad, with the rank of undersecretary, said in his email.

“This show of interest is vital in the selection process as it is the LGU which will eventually operate and maintain the facility. If they ask for it, the DA takes it as a positive proof that the LGU is willing to take on the responsibility for its upkeep,” he added.

In light of past and current developments, much has yet to be done in fostering and advancing public-private sector cooperation in the animal industry. A greater level of openness and transparency is also needed from both government and industry in formulating and implementing key projects and programs to move the sector forward.

What is evident is there is a disconnect between the bureaucracy and key industry players in the way they view and handle issues of profound significance and impact to the feed-to-food supply chain. The big fuss over CP Foods merely reflects this disconnect.

Unless the two sides collaborate and genuinely cooperate with each other and come to terms in a real, meaningful way, the domestic poultry and hog industries will continue to lag behind and remain uncompetitive. This translates to lower productivity, inefficiency and higher cost of meat products, making them less affordable to consumers, thus becoming a food security concern for the entire country.

Meanwhile, with Asean economic integration just looming around the corner and where trade barriers are now significantly dismantled, all foreign agribusiness players have to do is come over to the Philippines and put up shop and grab opportunities as they arise.

They would smartly understand that there really is more fun in the Philippines.

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