DA prepares measures to cushion impact of EVAT

The Department of Agriculture (DA) is lining up measures to cushion the impact of the expanded Value Added Tax Law (EVAT) which takes effect on Nov. 1.

"We are fast-tracking development programs to accelerate products‚ easy accessibility and to increase productivity in an effort to lessen the impact of the EVAT on the agriculture and fisheries sectors," said Agriculture Secretary Domingo F. Panganiban.

Panganiban noted that while raw agriculture and fishery products are exempted from EVAT, there would still be a minimal impact because other sectors such as the transport and food processing sectors will eventually pass on the additional VAT costs to consumers.

One positive effect of the EVAT on agriculture is that 50 percent of taxes generated by the local government units (LGUs) will be allocated to farm-to-market road projects, he added.

Moreover, the roll-on-roll-off or RoRo transport system will be enhanced with a total of 243 ports expected to accommodate agricultural produce from major vegetable, grains and fishery centers nationwide, said Panganiban.

Panganiban said the mitigating measures would include enhancing productivity of the agro-fishery sector, improving the logistics and distribution system of agricultural produce, facilitating direct market access and reducing trading layers, and if necessary, impose policy interventions.

In the area of improving logistics and distribution system of agricultural produce, the DA is institutionalizing the food lane project that cuts through regular trading layers to bring cheap and fresh produce to major markets in Metro Manila.

This program is complemented by the cold chain program of the Bureau of Postharvest Research and Extension (BPHRE) which establishes cold chain systems such as refrigerated vans and integrating this into the marketing operations of farmer groups. This assures reduced spoilage and losses for farmers, ensuring better prices for their produce.

Through the direct market linkage program, the DA is also strengthening its Pork in a Box Project, May Gulay Project, its Huwarang Palengke, and Tipid Abono programs.

The other critical mitigating measures are the reinforcement of policy interventions such as Executive Order 376 which provides duty-free privileges for agricultural inputs under

Section 109 of Agricultural and Fisheries Modernization Act or AFMA.

This is intended to give agro-fishery stakeholders access to cheaper sources of raw materials in the form of imported feed and ingredients.