Farmers deserve levy refund, not a trust fund

Farmers deserve levy refund, not a trust fund"What Philippine coconut farmers need is a new dog with a new collar."



Criminal law has a word for the men and women in the Executive Department and Congress who participated in the crafting and enactment of Republic Act No. 11524, better known as the Coconut Farmers and Industry Act of 2021. The word is recidivists. Recidivism takes place when a person, after having been meted a punishment for having committed an offense, goes on to commit the offense again.

R.A. No.11524 is a piece of recidivistic legislation. Those who crafted the preceding laws supposedly intended to benefit the coconut farmers disregarded the taxation principle that requires that taxes illegally or erroneously collected be refunded to the taxpayer in cash, not in kind. The levy that was imposed on all copra produced during the Marcos dictatorship was paid by the coconut farmers in cash: having been paid by the coconut farmers compulsorily, the Supreme Court declared the coconut levy collections to be funds “imbued with a public character.” What the nation’s highest tribunal should have said, but didn’t say, was that, since the coconut levy was not a part of the National Internal Revenue Code, the collected funds belonged to the private-sector people who paid it, i.e., the coconut farmers.

Those who had been expecting that the latest law would provide for the return of cash - or shares in the stocks of the business enterprises acquired with the coconut levy funds - to the coconut farmers, but they were disappointed yet again. The return of the coconut levy funds to the farmers has again come in the form of a slew of non-cash items, viz., “construction of shared facilities for processing… improvement through diversification and intercropping such as projects on livestock, dairy, poultry, coffee and cacao production…..development of hybrid coconut seed farms and nurseries…..(encouragement of) self-sufficiency…..and empowerment of coconut farmer organizations and cooperatives.” These items will be paid for out of an annual allocation from a 50-year CFITF (Coconut Farmers and Industry Trust Fund) established by R.A. No. 11524. Management of CFITF has been entrusted by the new law to a Trust Fund management Committee composed of representatives of DOF (Department of Finance), DOJ (Department of Justice) and DBM (Department of Budget and Management).

Thus, under R.A. No. 11524, the coconut levy payments made by the coconut farmers individually and in cash will again be returned to them on a collective, entire-industry basis. This is improper, unfair, and probably illegal, to repeat, erroneous or excessive payments made by a taxpayer must, under taxation law and jurisprudence, be returned to him in cash.

Almost certainly, the best test of whether a piece of legislation is a good law or a bad law is whether it is welcomed by those for whose benefit it was intended. Viewed from this standpoint, R.A. 11524 must be considered a bad law: all of the major coconut farmer organizations - Kilos Magniniyog Organizations of the Philippines, Confed (Coconut Farmers Organizations of the Philippines) and Federation of Free Farmers - have expressed displeasure with it.

Not the least of their sources of displeasure is the non-inclusion of a bona fide farmers’ representative in the Trust Fund Management Committee. How can an entity created to manage a for-coconut-farmers fund be considered truly representative when the farmers have no representation therein?

The assumption implicit in R.A. No. 11524, as in the preceding coconut industry laws, clearly is that Filipino coconut farmers are incapable of doing a good job of managing their personal finances. This assumption has to go.

The enactment of R.A. 11524 has been hailed by some government officials as the dawning of a new day for the Philippine coconut industry. It is nothing of the sort. It is just an old dog with a new collar. What the Philippine coconut farmers need is a new dog with a new collar.

Topics: criminal law , Coconut Farmers and Industry Act of 2021 , Supreme Court
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