Memorandum Circular No. 16, Series of 2020 on the Guidelines on Financial Grant Assistance to Farmers and Fisherfolk Cooperatives/Associations and Community Based Organizations under the Enhanced Kadiwa ni Ani at Kita Inclusive Food Supply Chain Program

, .. May4, 2020 Republíc of rhe Philippines OFFICE OF THE SECRETARY éll:plic..;l �Odd. o,!,man 1 1 GO ÜU'!lO!I c,ry MEMORANDUM CIRCULAR No.: .JlL. Series of 2020 SUBJECT: GUIDELINES ON FINANCIAL GRANT ASSISTANCE TO FARMERS ANO FISHERFOLK COOPERATIVES/ASSOCIATIONS ANO COMMUNITY BASEO ORGANIZATIONS UNDER THE ENHANCED "KADIWA NI ANI AT KJTA INCLUSIVE FOOD SUPPLY CHAIW Pursuant to the declaration of Sta te ofEmergency under Republic Act No. 11469 ("Bayanihan Act of 2020"), the Department of Agriculture (DA) among others has been tasked to "ensure availabilíty of food by adopting measures as may reasonably be necessary to facilita te and/or minimize disruption to the supply chain, especially for basic commodities and services to the maxímum extent possible;" Jn this regard, the DA has intensífied the operations of "KADIWA ni Ani At Kita" not only in Metro-Manila but ín other regions, which facilitated food availability and accessibilíty to consumers in high-demand areas through partnerships with local government units, producers groups, private sector food chain actors and communíty organizations such as church-based organizations and homeowners' associations; The DA, in its submitted re-casted budget to the DBM under RA 11469, sought to expand the coverage as well as enhance the efficiency and effectiveness of the KADIWA ni Ani at Kita Program by capability enhancement of the Farmers and Fisherfolk Cooperatives and Associations to become reliable and efficient food commodity suppliers, setting up of food depot and engaging Community Based Organízations to operate and manage the KAÓIWA markets (palengke) and community retail stores; To provide guidance to DA concerned offices in the extension of financial assistance grants to qualified organizations under the "Enhanced KADIWA ni Ani at Kita Inclusive Food Supply Chaín Program" the following guidelines are hereby issued: Section 1, Program Objective The Program seeks to ensure food commodities are made available and accessible in high consumer demand areas, particularly among the poor and low-income families, by harnessing private sector participation, capacity enhancement of farmers' cooperatives and associations and engaging community organizations' participation in food supply distribution system. �ecure Pfií[iyyínes williyrwyemm)i1rmers antffu·lierjoffl. "" Republic of the Philippines OFFICE OF THE SECRETARY flliptic.11 íload, Dili,11,111 11 00 Qucwn City Section 3. Scope and Coverage. These guidelines cover the provision of financial grants for capacity enhancement of (a) fanners and fisherfolk cooperatives, associations (FCAs) on value-adding activities in the food supply chain such as procurement of produce, aggregation, initial processing. packaging, transport and distribution of agricultura! and fishery commodities and (b) community-based organizations for the operation and management of KADIWA retail markets (palengke) or KADIWA retail stores. The target organizations are those that participate and/or interested to participate in the DA's Enhanced KADIWA ni A11i at Kita Inclusive Food Supply Chain Program. Section 4. Deflnltion ofTerms 1. "Community-Based Organization (CBO)" refers to a type of a Civil Society Organization (i.e., Non-Government Organization, cooperative, association, domestic corporation, People's Organization, Homeowners' Association) with representation from the community, expressing the interest and values of their members, duly registered with Securities and Exchange Commission (SEC), Cooperative Development Autl10rity (CDA), Department of Labor and Employment (DOLE)- Bureau of Rural Workers (BRW), or Housing and Land Use Regulatory Board (HLURB). 2. "Farmers and Flsherfolk Cooperative or Association (FCA)" refers to farmers and fisherfolks cooperative, association or corporation duly registered with appropriate government agency (i.e., SEC, CDA. DOLE-BRW) and which are composed primarily of small agricultura! producers, farmers, farm workers, agrarian reform beneficiaries, and fisherfolk who voluntarily join together to form business enterprises or non-business organizations which they tllemselves own, contrai and patronize. 3. "Food commodities" refer to commonly consumed foods that are lngested for their nutrient properties, such as raw agricultura) commodities (agricultura) produce) or processed commodities provided they are the forms that are sold or distributed for human consumption. The term "agriculture" as used in this Guideline includes the following sub­ sectors: (a) crops, (b) poultry and livestock, (e) aquaculture and fishing, (d) agro-forestry. Section 5. Types of Financial Grants and Eliglble Organizatlons 5.1. Types of Financial Assistance Grants The financial assistance shall be in the form of financial grants that are to be utilized by the beneficiary organization solely fo.r defined purpose/projects/activities. Jl fooá-secure Plií{í pyínes �111.,· /Íln11,·n an(fisfie�f<•ffi. . •. ,., . '\ �·-� Rept1blic of the Philippin�s OFFICE OF THE SECRETARY fll1pt11 ,ti P.,l,Hl, 0111111,111 1100 l.)11t•J01l Cnv The types of financial grants, amou11ts and activities to be financed are as follows: T e oíGrant Amount Activities to be financed Grants for Packing Facilities P200,000 up to P 1 Million To finance value adding activities as assemblers of farmers' produce such as procurement of produce, aggregation and pre-processing (cleaning, sorting, e "A" Grant ackin°, d ina. etc . P 500,000 up to P 5 Million To finance value adding activities as consolidators and distributors of farmers' produce to consumer markets such as assembly, storage, transport, delivery of PS0,000 PlS0,000 roduce roducts to distribution centers or bu ers. to To finance the start-up cost requirements of operating and maintaining KADlWA retail markets (palen9ke) or retail stores. Note: Gra11t amount for a FCA may exceed the above ceilin9s in case o[ ur9ency to provi de supply o[ a particular commodity to stabilize farm gate and/or retail prices, provided that tl1e FCA has the proven capability to immediate/y scale-up their operatlons. Provfdcd further tl1at in such cases, the grant amount to the FCA sholl have apprm10/ by the DA Secretary. Sectlon 5.2. Types of Eligible Organlzatlons and Fund Utillzatlon The eligible purpose and activities that can be financed out of the financial grants shall be as follows: Grant Eligible Grant Purpose and Fund Utllization Oraanization TypeA FCA To be used for any or combination of: (a) seed fund for procuring fanners produce, and/or (b) purchase of facility, machinery or equiprnent needed e.g. storing shed, delivery vehicle. The grant is extended to enhance the capacity of the FCA as a local (e.g. municipal, provincial-based) assembler. TypeB FCA To be used for any or combination of (a) to be used for the purchase of delivery vehicle, machinery or equipment; and/or (b) construction or rehabilitation of storage facilities. The grant is extended to enhance the capacity of the FCA to become a medium to large consolidator/distributor. TypeC CBO To be used for any or combination of (a) procurement of store facillty and/or equipment such as stalls, weighing scaJes, chiHer, crates, shelves, etc; (b) construction of retail store structure or store storage room. The grant serves as start-up funds to enable the CBO operate and maintain the KADIWA pa/en qke or the KADIWA retail stores. ..'A fooá-secure Pfií{iyyínes �y1m1usfam1<'rs an,f[isFrcrfc,IE "" ílepublic of the Philippines OFFICE OF THE SECRETARY (llipt1C<1f Roa1f, 0ilini.1n 1100 QUt'lOfl (ÍI}' 5.3. Eligibility Criteria and Doc11mentary Requirements 5.3.1. Eligible Farmers/Fisherfolk Cooperatives and Associatfons (FCAs) Eligible FCAs for Type A Grant (Packing Facilities) and Type B Grant (Consolidators) are those that pass the following criteria: a. Must have a jurídica! personality (registered with SEC, CDA or DOLE-B�W); . db. Must have been operatlng for at least three years with proven expenence m fun management (if less than 3 years, it can still be eligible but must have proof that 1t had implemented similar activity as evidenced by accomplishment report or a�y equivalent proof certified by its President and Secretary in addition to lts financial reports in the years it has been in operation) 1; e. Must have farmers and/or fisherfolk members; d. Must have core management team that will implement the project; e. Must be in good standing with government agendes from which it has received public funds ( either grant or loan) and not in default in liquidating any public funds; f. Must have proven track record in implementing proposed project which shall be scaled-up by the grant assistance; g. The FCA must not have any Director, Trustee, Officer or key personnel related wühin the fourth civil degree of consanguinity or affinity to any official involved ln processing and evaluation of the grant application or any offtcial of the government agency or office handling or implementing the project to be implemented by the FCA. Relationship of this nature shall automatically disqualify the FCA of the grant assistance. Note: An organization shall be eligible for only one type of grant facility. 5.3.2. Eligible Organizations for "Type C" Financial Grants: a. Must be a CBO as defined in this Guideline with juridical personality (SEC, COA, DOLE­ BRW, HLURB); b. Must be operating for at ¾east three years (if less than 3 years, it can still be eligible but must have proof that it had implemented similar activity as evidenced by accomplishment report or any equivalent proof certified by its President and Secretary in addition to its financial reports in the years it has been in operation); e. Must have community residents' representation in the management of the project; d. Must have an endorsement from the LGU (municipality/city or barangay) where the store/palengke will be established; e. Must be in good standing with government agendes from which it has received public funds ( either grant or Joan) and not in deifault in liquidating any public funds; f. Must have a system for the operation and maintenance of the retaíl store/palengke· g. The CBO must not have any Director, Trustee, Officer or key personnel related within the fourth civil degree of consanguinity or affinity to any official involved in processing and evalu�tion of the grant application or any official of the government agen�y or �ffice ha�dhng or implementing the project to be implemented by the CBO. Rel�t10nsh1p of th1s nature shall automatically disqualify the CBO of the grant ass1stance. � fooá-secure 'Plií{íyyínes WLlfiym�prm11s (L1rmers anáfisFieifolli. Republic of the Philippines OFFICE OF THE SECRETARY lllio1,c,1I Ro,llf. Olfillldll 1 1 00 Qu.,�011 City 5.4. Documentary Rcquircments The applicant must submit a (a) simple project proposal and (b) documents required under Section 4.4.1 of COA Circular No. 2007-01. Annex A lists ali these documentary requirements. The Project Proposal must contain the following ínformation: • Objectives of the project ( describe the value adding activities and incarne objectives) • Direct beneficiaries (in case of Packing FaciJlties and ConsoJidation, the number, commodities and location ofthe farmers/fishers where produce are procured) • Business operations plan (management, systems, etc) • Financial feasibility/projections of the project (Cash flow, Projected Incarne Statement). 5.5. Evaluation of Project Proposals 5.5.1. Receipt and Processing of Proposals. The DA-Agribusiness and Marketing Assistance Service (AMAS) shall receive and process ali applications of CBOs that operate within Metro-Manila. The DA-Regional Field Offices (RFOs) through the Agribusiness and Marketing Assistance Division (AMAD) shall receive and process ali applications of FCAs that opera te within their area coverage. The corresponding Approved Budget Allocations for the financial grants shall be directly released to DA-AMAS and RFOs for their disbursement 5.5.2. Evaluation of Proposals. The DA-AMAS Director and RFO Regional Executive Directors shall designa te the Technical staffin their offices, who shall conduct the processing and evaluation of the proposals. The evaluation of the proposal by the Technical staff shall be based on the foJJowing: a. Assessment of management capabiJity and credibility of the organization. This shall be based on the track record of the organization as per review of submitted reports, endorsement from agencies that the FCA/CBO had dealt with and feedbacks from key infonnants (LGU, customers, business partners, creditors, or community residents). b. Assessment of viability of the enterprise activities proposed. This shall be based on financial statements and projections submitted, and operational feasibility assessment of the planned expansion (viability of enterprise scale as to sourcing of materials/produce and presence of finned-up links with buyers ). e. The amount of grant shall be based on funding requirements based on validation of the cost estimates of the specific activities to be financed, as follows: • Procurement of produce - actual list of prospective farmers or number and location of farmers where the produce will be procured. • Facility construction - detailed construction cost estimates, • Equipment, machinery or delivery vehicle - canvass of quoted prices, description and specifications of the equipment, machinery or vehicle. �secure 'Pfií{íyyínes witfi pros p<!r1111sfarm<!rs aná Jísli<!rf11(k .,, • • 1 ��:1;.�· � 1 • , ílepublic of the Philippine� OFFICE OF THE SECRETARY (lhptíul ílodcl, 01lrmJn i 100 Quezo11 City .... Provided that the amount of grant does not cxcccd 80% of lhe total pmjcct cost. Thc FC/\ or CBO shall have at least 20% as equity countcrpart through any or combínatíon of (a) paid up capital, (b) owned assets such as land, other facílítlcs or cqulpmcnt, (e) manpower Qabor cost/salary of personnel/workers dlrcctly cngagcd ín thc projcct). Provided further that for Grants A and B, grant amount per FCA shall not excecd PZS,000 x number of FCA farmer/fisherfolk members. Section 6. Fund Releases and Reporting Requirements 6.1. Approving Authorities. The approving authorities in the grant approval, signing of disbursement vouchers and executíon of Memorandum of Agreement (MOA) with the concerned FCA or CBO shall be as prescribed under DA Memorandum Order No. 03, s. 2016 as amended by DA Memorandum Order No. 01, s. 2018. 6.2. Fund Releases and Monitoring. Upon approval. the FCA or CBO shall execute a MOA with the DA The approved grant shall be released in accordance with the approved work and financial plan of the Project. The DA concerned offices (AMAS, RFO-AMADs) shall conduct monitoring and inspection of project implementation and veriflcation of financial records and reports of the FCA/CBO. Fund utílization reports shall be submitted by the FCA/CBO certified by its Accountant and approved by its Chairman/Presídent showing the summary of expenses and status of accomplishments evidenced by píctures. The FCA/CBO shall keep and maintain financial and accounting records of the project Section 7. Accreditation. The FCAs and CBOs that passed the eligibility requirements as evaluated by DA-AMAS and RFO-AMADs under these Guidelines are deemed to have passed on an "ad interim basís" the DA accreditation of Civil Society Organizations (CSOs) without the need for them to undergo the process of accreditation procedures and requirements prescribed :n DA Administrative -Order Nc. 13, s. 2020 dated .'\prfl 3, 2020. This is ín consideration of emergency sítuation brought about by COVID-19. Provided however, that the effectivity of accreditation shall be for a period of one year from the date of effectivíty of the MOA between DA and the FCA/CBO. Section 8. Other Assistance. The participating FCAs/CBOs shall also be assisted in market linkage facilitation activities of the DA-AMAS and RFO-AMADs, technical assístance in agribusines:,management, anà in iinkirrgthem to othergu-vermmmt agencies/pmgrams to access loans such as the DA-ACPC Agri-Negosyo Loan Program, ACEF Loan Program with the Land Bank and other lending facilities of Landbank and/or Development Bank of the Philippines. Section 9. Effectivity. These Guidelines shall take effect immediately upon signlng hereof and other issuances inconsistent herewith are deemed superseded. Don e this day of E., of May, 2020 Approved: � cc � WILLIAM D. DÀR,lh"d � Secretary f " \') 01,AltmtNT OF AOlllCUI.TUAI 10\IIIIDl\lllllllllllllll!DIDIII ln rtp1y'lna pi• clh lt\11 COÓ♦ ; For Slgnaturo: S-05·20-0009 R•C•ho•d · 0UMl2020 02 ot PM .'A fooá-secure Pftí{í pyínes wil F, yr-os pcr1111) [t,rmcri anáfislicrfi,lli