The Department of Agriculture (DA) has issued an administrative order that provides general guidelines on the valuation of agricultural and fisheries mechanization and infrastructure projects.
Administrative Order (AO) 20 series of 2022 aims to furnish DA implementing offices (IOs) with guidelines on the valuation of agri-fisheries machinery, equipment, facilities, and infrastructure projects of DA and its attached bureaus, agencies, and corporations.
DA is implementing agri-fisheries mechanization and infrastructure projects like farm-to-market roads (FMRs); small-scale irrigation projects (SSIPs); production, postharvest and processing facilities, machineries and equipment; Agricultural Training Centers; and fish ports among others. These interventions are vital in accomplishing DA’s mandate of promoting agricultural and fisheries development through the provision of public investments and support services.
However, land improvements, other structures and machineries as well as livelihood of landowners may be affected in the process of planning and implementation of these projects. Implemented projects eventually deteriorate and breakdown due to several factors. Proper valuation and appraisal of properties are therefore needed to determine the cost of acquisition, damage, replacement or rehabilitation.
The guidelines in AO 20 covers the valuation activities of DA, including those of its Regional Field Offices, bureaus, attached agencies and corporations. Activities requiring appraisal activities include estimate of structures, crops, trees, and other improvements in the land, as part of the Right-of-Way (ROW) to be acquired for the implementation of mechanization and infrastructure projects; assessment of damage and probable insurance coverage for various machinery, facilities, and infrastructure installed/constructed; and the establishment of basis for the appropriation of budget for the maintenance, repair, replacement or rehabilitation of agri-fisheries facility, machinery and equipment among others.
While the Philippine Valuation Standards (PVS) encompass different types of real properties, agricultural and biosystems engineers (ABEs) were only authorized to conduct valuation of agricultural and biosystems machineries and equipment, structures and facilities and agricultural and biosystems engineering projects located in or part of a farm/agricultural land. Thus, there is a need to enhance the applicability of standards relative to specific DA programs and projects.
Pursuant to Section 3 of the PRBABE and PRBRES Joint Resolution No. 1, series of 2022, the valuation report prepared by the ABE shall serve as reference on the preparation of report by the Real Estate Appraiser.
According to AO 20, the valuation report for agricultural and biosystems projects shall be prepared by a licensed and trained ABE. The report must specify the estimated cost of the property and the scope and processes undertaken for the valuation.
Section 4 of AO 20 outlines the several approaches that can be used to determine the value of property that includes agri-fisheries machinery, equipment and facilities. These approaches are the market approach, cost approach, and income approach.
The said AO states that in order to assess the valuer’s work, a valuation review must be conducted. The different types of review that can be done are administrative (compliance), desk, field, technical, and valuation review. A Review Committee consisting of representatives from concerned offices (DA Central Office, BAFE, RAEDs, National Banner Programs, Section Chiefs of RAEDs, Regional Executive Director and Regional Technical Director for Operations of DA Regional Field Offices) may be created to facilitate the review of appraisal report/estimated cost.
Section 7 explains the implementation arrangement and the functions of the concerned offices. At the national level, BAFE shall oversee the implementation of the guidelines in AO 20. ###Marshall Louie Asis