THE AGRICULTURE AND FISHERIES MODERNIZATION ACT OF 1997

1.                  What is the Agriculture and Fisheries Modernization Act?

             The Agriculture and Fisheries Modernization Act (AFMA) of 1997 (Republic Act 8435)  was passed by the Senate and the House of Representatives on  December 15, 1997 and  December 16, 1997, respectively.  It was signed into law by then President Fidel V. Ramos on  December 22, 1997.

 2.                  What are the main objectives of AFMA?

 a)                 To modernize the agricultural and fishery sectors by transforming these sectors from a resource-based to a technology-based industry;

b)                 To enhance profits and incomes in the agricultural and fishery sectors, particularly of the small farmers and fisherfolk by ensuring equitable access to assets, resources and services, and promoting higher-value crops, value-added processing, agribusiness activities, and agro-industrialization;

         c)                  To ensure the accessibility, availability and stability of food supply at all times;

         d)                 To encourage horizontal and vertical integration, consolidation and expansion of agricultural and fishery activities, groups, functions and other services through the organization of cooperatives, farmers’ and fisherfolk’s associations, corporations, nucleus estates, and consolidated farms and to enable these entities to benefit from economies of scale, afford them a stronger negotiating position, and enable them to pursue more focused, efficient and appropriate research and development efforts;

         e)                 To promote people empowerment by strengthening people’s organizations, cooperatives and NGO’s, and by establishing and improving mechanisms and processes for their participation in government decision-making and implementation;

f)                    To pursue a market-driven approach to enhance the comparative advantage of our agricultural and fishery sectors in the world market;

 g)                 To induce the agricultural and fishery sectors to continuously ascend  the value-added ladder by subjecting their traditional or new products to further processing in order to minimize the marketing of raw, unfinished or unprocessed products;

 h)                  To adopt policies that will promote industry dispersal and rural industrialization by providing incentives to local and foreign investors for them to establish industries that have backward linkages to the country’s agricultural and fishery resource bases;

         i)                    To provide social and economic adjustment measures that increase productivity and improve market efficiency while ensuring the protection and preservation of the environment and equity for small farmers and fisherfolk; and

         j)                    To improve the quality of life of all sectors.

 3.                  What are the trade and fiscal incentives provided under AFMA?

            Section 109 of RA 8435 provides that all enterprises engaged in agriculture and fishery duly certified by the Department of Agriculture in consultation with the Department of Finance and the Board of Investments (BOI) shall, for five (5) years, be exempted from the payment of tariff duties on all types of imported agricultural and fishery inputs, equipment and machinery including, among others, fertilizers, insecticides, tractors, hybrid seed, farm implements and machinery, packaging machinery and materials, and fishing equipment and parts thereof, provided that the imported agriculture and fishery input, and/or equipment shall be for the exclusive use of the importing enterprise.

4.                  Who are eligible for exemption from the payment of import duties of agricultural and fishery Inputs, equipment and machinery as provided for under Section 109 of Republic Act 8435?

         a)                    Agricultural sectors;

b)                    Cooperatives;

c)                     Farmers and fisherfolk;

d)                    Farmers and fisherfolk organizations and associations;

e)                    Fishery enterprises;

f)                       Fishery sectors; and

g)                    Import consolidators.

 5.               When is the effectivity and the implementation period of the duty exemption on agricultural and fishery inputs?

     Section 109 of RA 8435 stated that all enterprises engaged in agriculture and fishery as duly certified by the Department of Agriculture in consultation with the Department of Finance and the Board of Investment, shall for five (5) years after the effectivity of the Act, or until February 8, 2003, be exempted from paying the tariff duties on imports of all types of agriculture and fishery inputs.  

By virtue of R.A. 9281, enacted on March 30, 2004, the duty-free privilege was extended until December 31, 2015. 

EO 376 was issued on October 22, 2004 providing the implementing rules and regulations of RA 9281. The EO limits the product coverage and prescribes the requirement of a Certificate of Eligibility or Accreditation to accompany the duty-exempted importation.

 6.               What was the role of the Tariff Commission in the AFMA?

a)                 The Commission actively participated in the preparation of the IRR of the AFMA, particularly in the preparation and review of the product lists in consultation with concerned government agencies and the private sector.

b)                 The Commission conducted public hearings on January 25, 1999, December 14, 2000, June 28, 2001, January 21, 2003 and  June 29, 2004 to provide interested parties the opportunity to be heard and submit position papers. 

 [ Home ] [ AFMA ] [ Phil. Fisheries ] [ Jewelry Industry Act ]