Business World, 8 March 2016


Citizens have the right to know where the P260 billion the Aquino III administration spent for agriculture (excluding the budget for the National Food Authority), between 2011 and 2015 went. With that kind of money, what has the Aquino III administration done for the agriculture sector in general and for the farmers and Filipino consumers in particular?

It is an incontrovertible fact that the Aquino III administration has neglected agriculture. From 2011 to 2015, agriculture registered an average growth of 1.6%, second to the lowest, the lowest being Fidel Ramos’ with an average growth of 0.8%. Agriculture grew the fastest during Joseph Estrada’s truncated term, when it registered an average growth of 6.5%.

It is ridiculous to talk about inclusive growth when the sector that employs one third of the work force is hardly growing.

From 1986 to 2015, the post-EDSA 1 period, agriculture, on average, grew at the rate just about equal to the population growth rate of 2%.

The growth of the agricultural sector has consistently lagged behind the growth of the overall economy, except during the time of Estrada.

The lesson here for the next President is that he should appoint an agriculture expert — not a politician — as head of the Agriculture Department, and that the Agriculture secretary should be empowered to do his job well.

The second lesson is that agriculture should be protected from the wicked claws of corrupt politicians, bureaucrats, private groups, and individuals. Sadly, most of the frauds, scams, and rent-seeking opportunities, in the past and the present took place in this sector that affects the lives of many poor farmers and fishermen. Remember, the over-importation of rice, the Jocelyn “Jocjoc” I. Bolante fertilizer scam, the irrigation scam and most of the Napoles scams. There are allegations that a big chunk of the Disbursement Acceleration Program (DAP) went to doubtful disbursements by the Agriculture Department and its attached corporations.

During Mr. Aquino’s watch, the national government expenditures for agriculture was erratic but huge nonetheless. Starting from a cutback of 6.5% in 2011, the budget for agriculture ballooned by 73.52% in 2012. The budget for agriculture further increased by 17.07% when it peaked at P66.3 billion.

The total spending of the Aquino III administration for agriculture from 2011 to 2015 was a hefty P260 billion.

But despite these huge budget allocations for the Department of Agriculture, the sector’s output remained anemic — initially less than 3% of overall economic growth in 2011 and 2012 before it slowed down further to 1.1% in 2013. In 2015, agriculture growth was close to zero.

There appears to be a mismatch between the resources allocated by the government to the sector and the sector’s performance. This might be due to two reasons: first, the misguided pursuit of self-sufficiency in rice; and second, the misuse of public funds attributable to the DAP.

The first reason is based on the propensity of any President to achieve self-sufficiency in rice. But ask any real economist and he would argue that the Philippines does not have any comparative advantage in rice. It cannot compete with its ASEAN neighbors like Thailand, Vietnam, and Cambodia. It is better off focusing on the production of high value crops and just importing a significant portion of our rice requirement.

Any President who believes the advice of his Agriculture secretary that it pays to achieve self-sufficiency in rice is taken for a fool. But he’s a bigger fool if he himself instructs his Agriculture secretary to work for self-sufficiency in rice at all costs. Yes, to food security but No to rice self-sufficiency.

The second reason is that as a result of the DAP, some public funds were disbursed sloppily. This allegation would be proved or disproved to the satisfaction of the public only if the Commission on Audit will do its job objectively and comprehensively.

The CoA, as the guardian of public funds, should examine whether the use of the DAP funds, transaction by transaction, was in accordance with established budgeting, accounting and auditing rules. In addition, it should do a value-for-money audit of all expenditure items listed in the DAP.

Summing up, recognizing the important role of agriculture in the pursuit of inclusive growth, the next President should do the following: first, prioritize the modernization of Philippine agriculture; second, appoint an agriculture expert — not a politician — to head the Department of Agriculture and then empower him to do his job well; and third, protect the sector from grafters of all types — legislators, executive officials, private organizations, and individuals.

Agriculture is such an important sector of the economy, especially for the poor, to be left unprotected from the wicked claws of corrupt and greedy politicians and bureaucrats.