S2C Draft Administrative Circular Comments

Basis and Relevance

While several legal bases, planning documents and studies were cited in the Administrative
Circular, these citations do not necessarily recommend the need to scrap subsidies and
endorse the shift to credit financing as the better alternative. It would also help the cause if
prior to the issuance of this Administrative Circular, all the subsidy programs as well as the
credit programs of the DA have been evaluated already. If already available, findings from
evaluation studies conducted for existing credit programs must also be cited for a more
balanced perspective and to prove that the benefits of shifting to credit financing outweighs
that of continuing DA’s subsidy programs.
It would have been better if a feasibility study was conducted beforehand to gauge the
relevance, need and appropriateness of this new scheme. Findings from both the feasibility
study and evaluation studies would help justify the need for this new scheme or possibly just
highlight the need to revisit the current guidelines of the various subsidy programs or just
improve the scope and coverage of existing credit programs or even recommended a hybrid
scheme with complementing subsidy and credit components.
Effect on Production
While this Credit Program can help empower farmers, the Administrative Circular did not
really tackle the potential impact of implementing this scheme to the production
goals/targets of the DA. With more freedom over their production inputs, this new scheme
may have repercussions on productivity. The DA must institute mechanisms that will ensure
that projects that will be approved and implemented are still aligned with the production
targets of the Department.
Timeline Feasibility
Taking into consideration the bulk and weight of the transition activities identified, having
this program rolled out by 2020 is highly improbable. Evaluating and harmonizing all credit
programs of the DA alone is already a heavy task and would really require a lot of time.
Also, some activities identified are not really relevant anymore. The Circular did not really
elaborate on the purpose/objective of conducting an inventory of DA’s subsidy programs
and assessing the status of the distribution and utilization of farm equipment/machinery
and post-harvest facility grants procured by DA in the previous years. If the objective of this
activity is to determine the effectiveness of subsidy programs, this should have been
conducted before a decision to scrap the subsidy programs was made.
Budget for Transition Activities
If things will proceed as planned, transition activities will be conducted in the latter part of
2018 and 2019. The Circular did not specify the source of funds for the transition activities
considering that 2018 budget is already in place and 2019 budget is already up for
deliberation.
Project M&E
A provision for the periodic evaluation of the program - schedule, office responsible and fund
source, is not stipulated in the circular. This will help program implementers evaluate
results/impacts of the program. Based on the findings, an agency/office or a TWG must be
explicitly assigned to review and amend the program and its relevant provisions as needed.
Also, a discussion on the proposed M&E Framework must be included in the circular as this
will be vital to ensure the sustainability of the program.
Structure of Loan Facilitation Teams (LFTs) and Field Staff
The LFTs are composed of designated employees from various DA operating units but the
Circular was silent as to how the LFTs will operate. Will this be a unit that will be constituted
and will be required to regularly report to a common workplace or just a unit that will meet
based on an agreed schedule or when the need arises? Which among the agencies involved
will shoulder the costs that will be incurred by the LFTs and their staff in the performance of
their duties? This must be clarified as this will have significant implications in the effective
and efficient implementation of the program.
Also, taking into consideration the sensitivity of the functions of LFTs and their staff, will the
program only allow permanent employees to form part of the team?
Lending Conduits
The duties and responsibilities of lending conduits must also be explicitly stipulated in the
Circular.
Program Document
Salient stipulations must also be backed up with specific mechanisms and strategies that will
be employed to really ensure that the program will be implemented effectively and
efficiently. (See Section 6.10)
Since there are still many general and vague statements in the Circular, for better
appreciation and understanding, maybe a more detailed program document must be
attached in support of this document. A detailed implementation process flow (highlighting
responsible units, control points, etc. at different stages in the loan process) must be
developed.
Credit Financing Scheme of other Government Agencies
This Circular must also take into consideration other existing credit financing scheme of
other government agencies (e.g. DSWD- Sustainable Livelihood Program; DTI-SBC- Farm
Development Loan Program) to avoid possible duplication of beneficiaries or maybe find
opportunities for collaboration.
Impact on DA Banner Programs
Consequently, a shift to credit financing will have a significant impact on the operations of
DA Banner Programs which facilitates majority of the subsidy programs of the Department.
This must also be addressed during the transition period.