April 19, 2022 – The Department of Education (DepEd) assures the local dairy industry that locally-produced milk remains its priority for its School-Based Feeding Program (SBFP).

This is DepEd’s response to the letter from the Philippine Chamber of Agriculture and Food, Inc. (PCAFI) and Dairy Confederation of the Philippines (DCP), the contents of which were reported by some media outlets. While DepEd is now addressing the concerns raised by the PCAFI, this statement is issued to correct some of the claims inaccurately made in the media reports.


On “dislodging” local dairy farmers

DepEd categorically denies the “allegation” that it asked the National Dairy Authority (NDA) and Philippine Carabao Center (PCC) “to sign a certification that local dairy farmers cannot supply the milk to allow the entry of foreign multinational dairy companies dislodging the local dairy farmers for [sic] the GAA budget 2022,” as indicated in one media report. This statement seems to make it appear that DepEd was influencing the NDA and the PCC to sign the said certification and that the intention of the certification was to “dislodge local dairy farmers [from] the GAA budget 2022.”

On the contrary, requiring such certification is in fact a mechanism that has been institutionalized by DepEd to ensure that its field offices will prioritize locally produced milk and procure commercial milk only when local milk is not readily available.

DepEd assures all concerned that its implementation of the SBFP espouses the sourcing of milk from the local dairy farmers, consistent with RA 11037 or the “Masustansyang Pagkain para sa Batang Pilipino Act.”

The law is operationalized through DepEd Order (DO) No. 22, s. 2020, and DO 37, s. 2022, stating that:

“Schools division offices (SDOs) that are either not covered or are insufficiently covered under the final source/supply map jointly prepared and approved by the National Dairy Authority (NDA), the Philippine Carabao Center (PCC), and DepEd, may be allowed to procure commercial powdered/sterilized, subject to the following pre-requisites: (1) Certification by NDA and/or PCC that it is unable to provide the milk requirements of the SDO concerned; and (2) Justification by the SDO that it is no longer practicable to source the milk supply from a local dairy farm/cooperative despite best efforts and utmost prudence.”

The DepEd Orders practically tied the SDOs, as the procuring entities for the SBFP, to source out milk to local suppliers, except in areas that will be certified by NDA and the PCC that they are unable to supply the milk requirement of concerned SDOs. In addition, DepEd has regularly secured a Memorandum of Agreement (MOA) with the NDA and with the PCA since the milk component of the SBFP has been implemented, which has helped facilitate the procurement of locally-produced milk for the program.

DepEd Undersecretary for Administration Alain Del Pascua reported that “for the last two years, we sourced out around 80% of fresh milk and other milk-based products from the local cooperatives and enterprises, and we purchased only 20% commercial milk in areas where the partners of the NDA and the PCC cannot supply the milk requirement.”


On “minimizing” farmers’ participation in the implementation of SBFP in 2022

PCAFI in its letter also says that DepEd’s decision to implement the milk feeding component of the SBFP from April to July 2022 “in effect will diminish and minimize the participation of local dairy farmers under the program” and “effectively exclude and eliminate the local dairy farmers and milk processing plants from participating of [sic] DepEd’s Milk Feeding Program in favor of the big multinational processors….”

To contextualize this claim, it is reiterated that the local farmers’ participation in the SBFP has been through DepEd’s MOA with the NDA and the PCC, as also provided by law. Together with the said agencies, DepEd regularly conducts “milk supply mapping workshops” to determine how much milk local farmers can provide for the program through these agencies. It is only after the NDA and the PCC have made their commitments that the “share” for commercial suppliers can be determined.

PCAFI itself admits in its letter that local farmers are currently producing and delivering milk for the SBFP through funds allocated from 2021 and that they have consistently done the same for funds allocated in 2019 and 2020. This proves that local farmers have been and will always be prioritized when determining milk supply.

DepEd, however, cannot particularly adjust its feeding calendar, as requested by PCAFI, solely depending on when the farmers can produce milk for its learners. PCAFI is practically requesting DepEd to delay the utilization of its 2022 funds for the milk component of the SBFP beyond June of this year because it is only then that local farmers will be able to supply the program’s requirement.


Why DepEd has decided to start milk feeding on April 2022

DepEd appreciates PCAFI for understanding DepEd’s “commitments [sic] on fund utilization” with the Department of Budget and Management (DBM), as communicated in their letter. Such commitment is among DepEd’s considerations in deciding to start in April the 16 days of milk feeding budgeted through 2022 funds, but it is not entirely so.

The current school year ends in June, and the next school year is set to start around two months after. If the milk feeding does not commence in April, the effectiveness of the SBFP will be affected as its components (e.g., the milk component and the nutritious food product component) will be split into different sets of beneficiaries in different feeding periods with two months break in between.

DepEd needs to balance effectively achieving the goals of the SBFP (e.g., sustaining the feeding within the school year to achieve optimal nutrition impact among learner-beneficiaries), and fulfilling the administrative demands for the program (e.g., achieving budget utilization rate targets, complying with directives from the Commission on Audit [COA]).

But this is not to say that the welfare of the farmers was not considered.


Ensuring support and opportunities for the farmers

As stated in PCAFI’s letter, one of the reasons that some farmers are not able to supply milk for the April-June feeding is that “[the feeding, utilizing 2021 funds,] is ongoing and the milk is still being produced and delivered by them.”

To better understand this, it needs to be understood that the transactions between DepEd and the NDA and the PCA, as governed by DepEd’s MOA with each of them, involve fund transfers from DepEd’s SDOs to the NDA’s or the PCC’s field offices. These fund transfers are governed by COA circulars, such that the SDOs that have unliquidated accounts (from 2021 funds) cannot transfer funds to the NDA or the PCC, particularly for the April-June feeding (utilizing 2022 funds).

As agreed by DepEd, the NDA, and the PCC, concerned SDOs and field offices are enjoined to focus on settling these unliquidated funds from 2020 and 2021, instead of entering into new agreements for 2022, so that by 2023, the implementation of the SBFP through the partnership of the three agencies will be smoother, more focused, and more efficient.

While the said SDOs and field offices of the NDA and the PCC will not enter into new MOAs for the April-June feeding, and the SDOs are likely to procure from commercial suppliers, it is clarified that local farmers are not restricted from participating in such procurement.

In the Initial Milk Supply Mapping Workshops held in March 2022, NDA Administrator Farell Magtoto recommended that the SDOs that will procure commercial milk (due to lack of supply or unfinished contracts with NDA or PCC utilizing 2020 and 2021 funds) may still source their milk from the local dairy suppliers through appropriate procurement methods. DepEd has fully supported this recommendation.

Lastly, DepEd has also proposed that the additional P1 billion allocation for SBFP be used solely for milk feeding. Once approved, this will be implemented during the first semester of the next school year. The same process—prioritizing local farmers through the partnership with the NDA and the PCC—will be observed in securing the milk supply requirements for the said feeding.


Appeal for support

“With big investments for milk feeding, we hope that the local dairy industry, together with the government agencies overseeing them, will respond to the challenges of program implementation including satisfying volume of production, product quality and certification, packaging, business processes, and government procurement. SBFP has implementation timeline and fund validity based on the provisions of GAA, and we cannot delay the needed milk for the nutrition of our learners,” Undersecretary Pascua said.

“We fully understand the plight of our local dairy industry. We thank them for their efforts in producing and supplying quality milk products for SBFP and we are committed to continue partnering with them, despite the challenges we are facing”, Undersecretary Pascua added.