SOP Library

SOP NO: TS-ES01.A

Mission: Stabilization

Area: Technical Services (TS)

Activity:

Title: Amendment to the Implementing Guidelines on the NFA Facility Assistance Program
Involving Japanese Grant Facilities

Date Approved/Issued: 05/15/89

Date Effective: 06/01/89

Digest:

1. To speed up the disposition of JICA facilities by liberalizing the qualification and

application requirements for availment of facilities by beneficiary FOs.

2. To provide farmer-traders, farmer-miller and commercial grains procedures or

processors the oppurtunity to avail of JICA driers under the direct purchase scheme.

3. To decentralized the processing and evaluation of application of beneficiary FOs to the

provincial office.
 1. Approved Memorandum No. EXD-TED-H27 dated August 11, 1988 on the proposed
revisions in the Guidelines of the NFA-JICA PHF Assistance Program.

The following amendments/addenda on the Implementing Guidelines on the NFA Facilities

Assitancee Program Involving Japanese Grant Facilites numbered TS-ES01 issued 17 July
1987 and effective 15 August 1987 are hereby effected:

01. The name of the program shall be changed to NFA-JICA Post-Harvest Facility
Assistance Program, Further, the term JICA (Japanese International Cooperative
Agency) as provided under the Backgrounder is hereby corrected to read as Japan
International Cooperation Agency.

02. Several specific provisions under Item II.A on "General Policies" shall be smended as
follows:

1. Facilities offered under the program are warehouse, stationary ricemills, portable
ricemills, driers and threshers. The intended beneficiaries are farmers
organizations (F.O.s). Driers, however, can also be availed of through a direct
purchase scheme by farmer millers, farmer-traders and commercial grains
procuders or processors. Farmers organization who wish to avail of the facilities
must meet the following qualifications:

a. Farmers organizations who wish to avail of facility/ies with total value of more
than P170,000 must have been registered with the Bureau of Cooperative
Development (BCOD)/ Securities and Exchange Commision (SEC) at least two
(2) years prior to their application for availment of these facilities. However, for
F.O.s which have been engaged in business for at least the past two (2) years
as certified by any goverment supervising agency and/or lending institution, only
one year of registration with SEC or BCOD shall be required.

Fos who wish to acquire facility/ies valued at P170,000 or below must have
been registered with SEC or BCOD at least one (1) year prior to their
application for availment of these facilities; however six (6) months of
 registration with SEC or BCOD shall suffice provided the FO had been engaged
in business for at least one (1) year as certified by any government supervising
agency and/or lending institution.

2. Farmers organization who wish to particioate in the program must submit the
following application requirements;

a. Accomplished Application Form (Exhibit 1)

b. Original and xerox copies of BCOD/SEC registration certificate, articles of

incorporation and by-laws (Note; Original copies shall be returned to the
applicant immediately upon verification by NFA. The, NFA provincial office shall
certify that the xerox copies are true copies of t he original documents). The
Articless of Incorporation should specify that the FO is authorized to engage in
the grains business and to enter into contracts for the acquisition of facilities.

c. Notarized/Sworm Statement of Assets and Liabilities. (Note; The NFA

Provincial Manager may be Administrative Officer).

For purchases abpve P170,000, FO applicants shall be required to submit the

notarized/sworm year-end. Statement of Assets and Liabilities for the past 2
years.

For purchases equivalent to P170,000 and below, only the notharized/sworm

statement of Assets and Liabilities for the immediately preceding year-end shall
be required.

d. Notarized Financial (Income and Expenses) Statement. (Note; The NFA

Provincial Manager may be the Administering Officer).

For purchases above P170,000 FO applicants shall be required to submit the

notarized/sworm financial statements for the past 2 years. For purchases
equivalent to P170,000 and below, only the notarized/sworm financial years
shall be required.

e. Updated Masterlist of officers and members and their respective addressses,

location and size of production area.

f. Board Resolution designating its authorized representative to negotiate and

sign documents in behalf of the F.O. (Annex C)

g. RTC clearance certifying that the applicant FO and its authorized

representative have no pending case in its courts. (Note; There should be
separate RTC clearance for the FO applicants and its authorized
representative.)
 h. For FOs appliying for warehouse and/or stationary ricemill, original nad xerox
copies of TCt or Lease Contracts on the land on which the facilities wil be set up
shall be required. Lease contracts should be period of at least twelve (12)
years. (Original document shall be returned to the applicant after the xerox
copies are authenticated).

2.1 A farmer-miller, farmer-trader or commiercial grains producer or procrssor

who wish to avail of JICA driers through the direct purchase scheme, shall
negotiate directly with Extension Directorat. He shall submit a certification
from the NFA provincial office that he is a legitimate farmer-miller, farmer-
trader or commercial farmer, as the case may be.

4. Beneficiary FOs could avail of the facilities under the program through the
amortization scheme. No downpayment, interest payments, collateral and service
charge shall be required from the beneficiary FOs. Payments for warehouses,
stationary ricemills, portable ricemills and driers shall be made within ten (10)
years, in twnty (20) equal semi-annual payments, collectable every June 30 and
December 31. Threshers, however, shall be paid within six 9^) years, in twelve (12)
semi-annual payments.

4.1 Farmer-millers, farmer-traders and commercial grains procedures or

processors can avail of driers through the direct purchase scheme. Driers
shall be sold for cash at P77,000 per unit on "as is- where is" basis. Payment
in the form of Manager's Check shall be accepted . Payment shall be made at
the NFA Central Office.

5.b The beneficiary farmers organization may uses their accumulated

cooperative incentive fee (CIF) as payment for the asmortization of PHF under
this program (Refer to SOP # 05020 re: Revision of the Cooperative Incentive
Program to include Management Incentive, issued and effective December 2,
1983), as well as to shoulder installation and transportation costs on the
facility/ies availed of.

7. A Deed of Sale with Reservation of Title (Exhibit 3) shall be executed between

NFA and the beneficiary FO. Ownership of the facilites shall be transferred to the
beneficiary FO only upon full payment of the price of the facility/ies availed of, after
which a corresponding Certifcate of Onwership shall be issued in favor of the
beneficiary Fo.

7.1 Farmer-millers, farmer-traders and commercial grains producers and

processors who wish to avail of driers through the direct purchase scheme
shall execute a Deed of Absolute Sale (Annex B) with NFA immediately upon
payment of the driers. The Deed of Absolute Sale shall be signed at the NFA
Central Office.
 7.2 All PHFs availed of under this program should be licensed/registered with the
local NFA provincial office prior to operation.

8.a JICA warehouses and/or stationary ricemills shall not be granted to FOs which do
not own the land on which the facilities will be set-up, or which do not have lease
contract on such land with a duration extending at least the next twelve (12) years.
Further, the land should not be less than 500 sq.m.

9.a Secure insuance thru Grainsor for the value of the facility/ies to cover
losses/damages in case of fire, theft or any other natural calamity. Such insurance
should de secured upon notarization of the contract. FOs who acquired portable
thershers and portable ricemills which will not be permanently installed shall
instead secure an equipment floater insuance.

13. The Technical Services Directorate shall extend technical assistance to the F.O.
in the installation/assembly and testing of all JICA PHFs and shall conduct periodic
inspection of the facilities thru the Provincial Offices Technical Services Unti
(TSU).

13.1 A Certificate of Installation and Testing shall be issued by TSD after the
facility has been installed and tested. The F.O. representative should sign in
the conforme portion of he certificate. (Annex D)

15. The accounting entries to record payments under theprogram are presented in
Annex A. The accounting entry to record cash payment for driers acquired under
the direct purchse scheme is as follows:

DR: Cash - Collecting Officer xxx

CR: Other Assets - Miscellaneous JICA
Facilities xxx

03. The following items under II.B.1 on the "Filing, Evalution and Approval of
Applications for JICA facilities" shall be amended as follows:

3. EBDPS shall check the completeness of all required documents submitted by

applicants. Only application with complete requirements shall be accepted. For
applicants with incomplete requirements, a list of the deficiencies shall be
prepared by EBDPS. The application forms, supporting documents and a list
of deficiencies shall be returned to the applicant for completion.

3.1 Farmer-millers, farmer-traders and commercial grains producers or

processirs who are interested in buying driers through the direct purchase
scheme shall be endorsed to the Extension Directorate.
 3.2 The Provincial Office shall issued a Certification that the applicant is a
legitimate farmer-miller, farmer-trader or commercial grains producers or
processors as the case may be.

4. EBDPS, with the assistance of other field personnel, shall conduct a situational
assesment on at least 110% of the total membership (or minimum of 10
member) of the F.O applicant, FOs shall be evaluated on the technical
feasibility of establishing the facilities vis-a-vis viability of the organization and
judicious representation of the different FOs among the applicants.

4.1 EBDPS shall request the Field Investigator to conduct a background

investigation on the applicant FOs.

4.2 The Provincial Office shall issue a Certification (Exhibit 2) for each FO
applicant evaluated to be qualified PHF beneficiary.

4.3 Qualified FOs availing of facility/ies with total value exceeding P220,000
shall be required to submit a project funds flow for the next three years.

5. The Provincial Office shall forward all documents with the corresponding
recommendations to the Extension Directorate.

5.1 Applicantion for availment of facilities valued over P220,000 shall be

endorsed by Extension Directorate to BDPD for financial evaluation and
review of the projected funds flow statements.

5.2 The documents together with the funds flow statement and the financial
evaluation shall be returned by BDPD to EXD for processing.

5.3 Applications shall be approved by the Administrator upon recommendation

by the Director of EXD and Asst. Administrator for Marketing Development.

6. Beneficiary FOs with approved applications shall be execute a Deed of Sale

with reservation of Title with NFA. the contract shall unclude among others,
detailed provissions on the PHF utilization, payment, pull-out in case of default
in payment, etc.

6.1 Any JICA PHF allocated to an FO awardee shall be forfeited and

reallocated to another qualified FO if the FO awardee does not sign the
contract within a period of thrity (30) days from the original scheduled date
of contract signing.

6.2 Farmer-millers, farmer-traders and commercial grains producers or

processors who wish to avail of driers through the direct purchase scheme
 shall execute a Deed of Absolute Sale with NFA upon payment of the
driers purchased.

6.3 The Administrator or his absence, thee Deputy Administrator, shall sign
each Deed of Sale with Reservation of Title and each Deed of Absolute
Sale.

7. The Extension Directorate shall furnish the NFA Regional and Provincial
Offices whrere the beneficiary FO is based with a copy each of the Deed of
Sale with Reservation of Title after it has been signed by the
Administrator/Deputy Administrator.

04. Item II.B.2.1 under "Payment Term" shall be amended as follows:

1. Payment of the Post Harvest Facilities availed by beneficiary FOs shall be

amortized in ten (10) years, in twenty (20) equal semi-annual payments,
collectible every June 30, and Decenber 30. In the case of threshers,
amortization period shall be six (6) years in twelve (12) semi-annual payments,
collectible every June 30 and December 30.

1.1 The first payment of JICA PHFs installed from May 1 to October 31 as
reflected in the Certification of Installation and Testing shall be due on
December 30, while first payment for PHFs installed from November 1 to April
30 shall be due on June 30.

1.2 Farmer-millers. farmer-traders and commercial grains producers or

processors who wish to avail of driers through direct purchse scheme shall pay
the total each value of the facilities.

05. Item No. II.B.3.2 and II.B.3.3 under "Issuance/Withdrawal of PHF to/by Beneficiary
FO" shall be amended as follow:

2. Awarded PHFs except for warehouse and stationary ricemills, shall be

withdrwan by the beneficiary FO from the ACA Warehouse within a period of
fifteen days bfrom the signing of the Deed of Sale with Reservation of Title by
both parties, provided the beneficiary FO shall have secured the necessary
insurance policy properly endorsed to NFA. Delay in the withdrawal of the
conntructed facility/ies shall subject the beneficiary FO to payment of storage
fee as determined by thee NFA Metro Manila Office.
 2.1 Portable ricemills, driers and threshers allocated to the beneficiary
ricemills shall be issued to the beneficiary FO only after its foundation had
been installed.
2.2 Warehouses and stationary ricemills shall be issued to the beneficiary FO
only after its foundation had been installed. Allocated warehouse and
stationary ricemills of FO awardees shall be forfeited and reallocated to
other qualified FOs if the FO awardeess do not start the construction of the
foundation within two (2) months from the contract signing.
2.3 Allocated warehouse and stationary ricemills whixh remain unwithdrawn by
FO awardees after the foundation is already shall not be charged any
storage fee for a period of two months after the foundation is finished. For
a period of another two months thereafter the NFA Metro Manila Office
shall charge a storage fee per day of P200,00 for each warehouse and
P100,00 for each stationary ricemill. Upon the lapse of the additional
period, the NFA shall have the right to ferfeit these allocated warehouse
and stationary ricemills from the FO awardee, the to reallocate these to
other qualified FOs.
3. The EXtension Directorate shall inform thru radiomessage the MMO-Marketing
Operations Office (MOO) the namee of th F.O (or drier purchaser), the name of
the FO representative, and the scheduled withdrawal of the PHF. The MMO-
MOO shall then prepare the AI-PHF (Exhibit 4) which shall serve as basis of
the Warehouse Supervisor to issue the PHFs. The AI-PHF shall contain the
name of the farmers organization (or drier purchaser) to which the PHF/s shall
be issued, address, nature of transaction, OR/PR number, specs of the PHF to
be issued and the authorized representative. Copy distribution of the AI-PHF
shall be as follows:
Copy 1 - Warehouse Supervisor
2 - MMO-MOO
3 - Auditing-COA MMO

06. Item II.B.4.5 under "Utilization of PHF" shall be amended as follows:

5. Upon notarization of the Deed of Sale with Reservation of Title, the beneficiary
FO shall insure thru Grainsor the facility/ies against loss or damage due to fire,
theft, or any natural calamity at an a amount equivalent to the value of the
facility/ies, with NFA asthe designated beneficiary. Portable warehouse,
however, shall only be insured against fire or any natural calamity. All the
facilities shall also be insured against any loss or damage while in transit from
the NFA-MMO depository warehouse up to their delivery to thee beneficairy
FOss site. Grainsor shall deliver to NFA the correspondig policy upon
execution thereof. Effectivity of the insuance shall commence upon withdrawal
of the facility from ACA warehouse by the F.,O. beneficiary.
 5.1 The insuance policy shall be renewed yearlyy at an amount not less than
the outstanding balance of the beneficiary FO with NFA.

5.2 A notice shall be reserved by Grainsor to EXD thirty (30) days before
expiration of each insuance policy. EXD shall remind concerned FO and
NFA provincial offices of the expiration of the insuance coverage within the
first fifteen days of the thirty (30) day period.

5.3 EBPDS shall send three (3) consecutive billing notices to the beneficiary
FO within fifteen days before the expiration of the insuance polcy. Failure
of the beneficiary FO to renew the issuance policy effective uopn the
expiration of the coverage shall give right to NFA to secure the necessary
insuance ppolicy. The beneficairy FO shall pay NFA the corresponding
premium and other costs of the insuance within five days from execution
thereof.

5.4 Failure to pay the premium shall subject the beneficiary FO to an interest
of 18% per annum.

5.5 Renewal of insurance shall authomatically be issued by GRAINSOR to

NFA province that premiums shall be remitted by NFA to Grainsor within
60 days from date of expiry of the previous insurance coverage.

07. All other pertinent provision/policies of the original Implementing Guidelines on the
NFA Facilities Assitance Program involving Japanese Grant Facilities not
inconsistent with the herein provisions shall still be enforced.