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US
PL 480 refers to Public Law 480 of the United States,
which is also known as the Agricultural Trade Development
and Assistance Act. This was enacted in 1954 in line
with the US Policy of using its agricultural productivity
to enhance the food security of developing countries
and the determination of the importing country's capacity
(Philippines) of improving its food security.
PL 480 consists of three food
aid titles:
Title I of this law provides for government-to-government
sale on credit of US commodities under long-term,
concessional arrangement. This was amended later to
include commodity sale to private entities. Payment
of the commodities is expected over 30 years with
a grace period of seven years. Beneficiaries of the
program are developing countries that find it difficult
to provide for the food needs of its citizens through
commercial sources because of foreign exchange problems. |
Download PL-480 Bid Guidelines
Link to Special Projects Division |
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Title
II involves donations to governments, through public
or private agencies, to meet humanitarian food needs
of recepient governments.
Title III involves government-to-government grants aimed
at supporting economic development needs of least developed
countries.
The US Department of Agriculture (USDA) administers
Title I while the US Agency for International Development
(USAID) administers Title II and Title III
Under Title I, the US Agriculture Secretary determines
the value allocated to partner-countries of the US,
and with the recepient government, the commodity involved.
Philippine Component
The Philippines has time and again been a recepient
of the US PL 480 Title I Program. Recent Philippine
availments of the US PL 480 Program were made under
Title I and were managed by the Department of Agriculture
(DA), through the National Agricultural and Fishery
Council (NAFC).
Under the Program, the Philippines has received commodity
loans from 1991-1994 and 1998-2000. Soybean meal was
the sole commodity requested until 1998. It has expanded
to include sorghum and rice in 1999.
The year, commodities and amount involved and specific
purpose of the yearly tranche are as follows: |
| Year |
Amount
($ 'M) |
Commodities |
Specific
Purpose |
| 1991 |
15 |
Soybean
meal |
National
budget support |
| 1992 |
20 |
Soybean
meal |
National
budget support |
| 1993 |
20 |
Soybean
meal |
For
Medium-Term Livestock
Development Program |
| 1994 |
15 |
Soybean
meal |
For
Medium-Term Livestock
Development Program |
| 1998 |
10 |
Soybean
meal |
For
agricultural programs
and projects |
| 1999 |
30 |
Soybean
meal,
sorghum and rice |
For
agricultural programs under
the 10-point Agenda in Agriculture
and Fisheries |
| 2000 |
40 |
Soybean
meal
and rice |
For
agriculture and fisheries
modernization programs |
| 2001 |
40 |
Soybean
meal, corn
rice and feed peas |
For
agriculture and fisheries
modernization programs |
| Total |
190 |
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Monetization
or Local Sale of US PL 480 Commodities
Following USDA determined schedule,
US PL 480 commodities are shipped to the country sometime
toward the end of the third quarter. The entire volume
leaves US ports by end-September as it marks the end
of the US fiscal year.
Responsiblity for
and manner of local sale
Except
for rice, importation of which is the exclusive domain
of the National Food Authority, the commodities are
sold locally by the NAFC.
Sale is through open and competitive bidding. Bidding
is carried out by tranche, depending of the volume carried
by an arriving carrier. The idea is that volume carried
by ships should be sold out on or before local port
call. Bidders are usually traders, feedmillers, livestock
and poultry integrators, and farmer groups or cooperatives.
Price Setting
The floor price for the commodities
is generally based on: a) cost recovery, that is the
cost of the goods, plus freight and insurance; b) prevailing
market prices; c) the concerns of the immediate users,
usually the feedmillers; and d) the welfare of the farmers
and the consumers. These factors are not arranged in
their order of importance.
Use of US PL 480 Loan Proceeds
Consistent
with government requirements for use of loans. Use of
US PL 480 proceeds may be used only with the expressed
approval of the Congress of the Philippines, written
as a provision in the General Appropriations Act.
The Department of Agriculture has formed an oversight
committee that decides what programs and projects may
be funded from the US PL 480 funds. The DA's undersecretary
for planning chairs the committee. Its members include
heads of the DA-Agribusiness and Marketing Assistance
Service, DA-Project Development Service, DA-Field Operations
Group, DA-Finance and Administration, Agricultural Training
Institute and NAFC.
Programs and projects should comply with a set of minimum
criteria, namely: a) they are supportive of AFMA concerns;
b) they are feasible; c) they have capable proponents;
d) they have counterpart funding; e) they have verifiable
socio-economic impact; and f) they are sustainable undertakings.
These programs and projects should fall under any or
a combination of the following eight categories which
represent priority focus on the AFMA: human resource
development, rural infrastructure and post harvest facilities;
research and development; extension, LGU support and
capability building; market development and investment
promotion; information, communication, and advocacy;
food safety; and grassroots capacity building. |
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