Why cut agriculture budget?
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - September 14, 2020 - 12:00am

In his SONA last July, President Duterte called for boosting the agricultural sector to enable the country to recover from COVID-19. I guess his budget secretary was not listening because the DBM sent a budget proposal cutting, instead of increasing, the agriculture budget.

The budget department provided a ceiling of P66.3 billion for agriculture next year, an amount less than the current budget of the agriculture department of P79.9 billion. The DA took the President’s SONA statement seriously, and asked for a 2021 budget of P284.4 billion.

Agriculture will get an extra P24 billion as initial component of the stimulus fund under Bayanihan 2. Another P42 billion may be added to bring a total budget of P108.3 billion for 2021, less than half of what is needed.

After listening to the presentation of Agriculture Secretary William Dar before the Foundation for Economic Freedom, the increased budget sought for 2021 seems justified. We need to support growth in the agriculture and fisheries sector amid the crippling economic effects of the pandemic.

Sec. Dar’s presentation to the FEF talks of his plans to “sustain, reboot and grow’’ the agriculture and fisheries sector. We agree with his observation that agriculture has been a “sleeping giant’’ of the national economy.

Agriculture’s potential, given our rich and wide land resources suitable for growing crops, should inspire our leaders to start investing in it. We have neglected the sector through low funding support, the agriculture chief observed, and I might add, corruption in previous administrations.

“While the agriculture sector contributes about 10 percent to the country’s gross domestic product (GDP), it gets a measly share of total national appropriations, at three to five percent in the last 10 years,” Dar pointed out.

Dar’s proposal to increase the budget for agriculture would help us achieve a 95 percent sufficiency level for rice, with the DA’s proposed allocation of P56 billion for rice production support.

The DA is also seeking P22.5 billion for fisheries, P13.7 billion for high-value crops, P11.2 billion for livestock, and P6.6 billion for corn.

Indeed, we should have been encouraged by the performance of the agriculture sector during these pandemic months. Agriculture grew at a time when most industries and economic sectors were reeling from the lockdowns.

As Sec. Dar pointed out to us, the agri sector posted a positive performance of 1.6 percent growth compared to the negative performance of industry (-23 percent) and services (-16 percent). In the second quarter of this year, agriculture still managed to post a 0.5 percent growth even as the food supply chain was disrupted by the badly thought out community quarantine restrictions.

We should worry that less and less Filipinos want to be farmers. But it is understandable because farming consigns them to a lifetime of poverty. The average age of Filipino farmers now is supposedly in the late 50s.

A report of the Philippine Statistics Authority confirms our suspicion that agriculture is the least attractive sector of the economy in terms of average pay. For 2019, average wage for agricultural workers increased by only 49.8 index points from 2012, and even much lower when purchasing power is considered.

A NEDA report showed that from a workforce of 12.25 million in 2010, the number of Filipinos working in agriculture has decreased by 25 percent to 9.07 million by 2017. If the trend continues, who will grow our food?

It probably doesn’t matter because the Villars would have converted our rice fields into subdivisions… including the irrigated ones. That’s throwing our large investments on irrigation facilities down the river.

But it shouldn’t have to take the World Bank to tell us the obvious: “Transforming Philippine agriculture into a dynamic, high-growth sector is essential for the country to speed up recovery, poverty reduction and inclusive growth…”

A new World Bank report, “Transforming Philippine Agriculture During COVID-19 and Beyond,” says that transforming the country’s farming and food systems is even more important during the COVID-19 pandemic to ensure strong food value chains, affordable and nutritious food, and a vibrant rural economy.

Ndiame Diop, World Bank country director for Brunei, Malaysia, Thailand, and the Philippines explains:

“With the exception of a few small natural resource-rich countries, no country has successfully transitioned from middle- to high-income status without having achieved an effective transformation of their agri-food systems.

“Transforming agriculture and food systems is always challenging. But the country’s new vision for agriculture, it’s current thrust for diversification and use of modern technologies, and its effective management of food supply during this pandemic clearly indicate that the country is well-equipped to overcome the challenge.”

That’s exactly what Sec. Dar told me and my FEF colleagues. His vision is for a food-secure and resilient Philippines with prosperous farmers and fisherfolk.

The World Bank prepared the report to support our Department of Agriculture’s “new thinking” in agricultural development: shifting away from a heavy focus on specific crops towards improving the overall resilience, competitiveness, and sustainability of the rural sector.

The World Bank pointed out that “in situations where farmers need support to help them access markets and improve their livelihood, or when compensation measures are needed for farmers affected by trade policies such as the rice liberalization in the Philippines, direct cash payments or cash transfers can be a better option, as practiced in many countries like Turkey, European Union, and the US…”

The report says that interventions like farm consolidation (including cooperative farming schemes for instance), better extension services, e-commerce, and investments in agribusiness start-ups can further advance modernization of Philippine agriculture.

It isn’t often we have an agriculture secretary who is capable and trustworthy. The Duterte administration should support this saving grace of its watch. Cut the budget of Congress and abolish useless offices in government (MTRCB, for instance) to support agriculture.

Our Great Leader is pandering too much to the police and the military, giving them bloated budgets. But he is forgetting the lesson from the pandemic that unless proper budget support is given to food and health, peace and order conditions will always be iffy.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

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