Safeguards sought to prevent MAV abuse

Farmers’ groups are urging the Department of Agriculture (DA) to come up with more rigid measures to make sure that feedmillers and livestock producers do not abuse their allocations under the minimum access volume (MAV).

Federation of Free Farmers Cooperative Inc., business manager Raul Montemayor in a letter to Agriculture assistant secretary Ma. Celia Fernandez, said the department should come up with a system for tracking business affiliation and actual usage of MAV shares to prevent corn users from procuring more than their MAV allocations.

"There are instances and attempts of some groups to secure multiple MAV shares by directly applying and at the same time, coursing additional applications through their federations, subsidiaries or business partners," Montemayor said.

Montemayor said some federations just resell their shares to their members who are themselves listed among those authorized to procure using the MAV scheme.

MAV refers to the least volume of imports that the government allows at low import duty. MAV products include sensitive farm commodities such as corn, sugar, pork, chicken, onion and coffee. Volume imported outside of MAV is called MAV plus which has higher tariffs.

The private sector and the inter-agency MAV secretariat met recently to discuss proposed revisions to Administrative Order 1 which outlines the rules and regulations for the implementation of the MAV mechanism for corn.

One of the critical changes being sought is to base the allocation of the MAV on the total volume indicated in the lots drawn in the licensee’s or applicant’s favor or its volume request, whichever is lower.

There is a clause however, which provides that in cases where the volume requested is beyond the capacity of the applicant, based on historical data or previous importation volumes, consumption and market share, the secretary of agriculture can determine a specific volume to be awarded.

Moreover, the volumes awarded to such entities will be carried over to their regular allocations for the following MAV allotment year.

The MAV secretariat in justifying the change, said that under the existing rules, the applicant with the higher volume request has the better chance of obtaining a higher allocation. This is based entirely on the volume asked for, and not on the actual need of the applicant.

The changes in AO 1 were sought because of the defects in the manner of allocating the MAV and MAV plus. Problems surfaced because of the earlier decision to base regular MAV allocations on historical import records which were not necessarily reflective of relative corn requirements and feedmilling capacities of users.