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Waiting won’t work

FOR FARMERS and fisherfolk, waiting won’t work if they are to benefit from an economy that has remained non-inclusive.

This was the message given by an Alyansa Agrikultura leader in a meeting with the Cabinet’s economic cluster last Oct. 16.

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Government statistics showed the Department of Agriculture (DA) had increased its P30.1 billion budget in 2011 to P88.6 billion in 2015. However, agriculture growth did the reverse by declining from 2.6 percent in 2011 to 0.3 percent in the first half of 2015.

This averaged 1.6 percent during the period, less than half of the 4 percent growth target.

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In contrast, the Department of Trade and Industry (DTI) budget grew from P3 billion to only P4 billion in the same period. But industry growth averaged 6.3 percent, more than three times the 1.6 percent agriculture growth.

Nonetheless, Agriculture Secretary Proceso Alcala should be commended for the sector’s accomplishments in 2014.

Among others, the Philippine rice industry reached an all-time high national production of 18.97 million metric tons (MMT), exceeding the previous record by 528,406 MT. The Philippines also remains free from the foot-and-mouth disease and the avian influenza.

Despite these accomplishments, the agriculture sector is still in trouble.

Waiting for the next administration means foregoing potential improvements in the next eight months, especially if the DA’s budget is spent unwisely.

If reforms are instituted now, the next administration can just hit the ground running by building on these reforms.

Reform areas

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We must immediately address three key reform areas.

The first is DA governance. Despite a well-intentioned Secretary, the absence of a good management system is the main cause of the sad state of agriculture today.

Even if we have a “Tuwid na Daan (straight path,” if there is no clear “daan” or road map for agriculture, we will still not attain inclusive growth.

The DA has yet to submit sectoral road maps to the Philippine Institute of Development Studies (PIDS), the state’s think tank. It should now work with the private sector to finalize these road maps, so that both can work synergistically in the same direction.

The DA also has no program that comes close to DTI’s rule requiring all units to use ISO 9000. Many have said the problem of the department is not vision, but implementation.

The second area is private sector participation.

Despite a law mandating the private sector in the public-private sector Agriculture Fisheries Council (AFC) to monitor budget implementation, it was discovered that DA officials at both national and local levels withheld critical budget information from them.

Thus, the DA budget was allegedly often misused. This could easily be stopped by a department order mandating officials to provide this information to the private sector and post this on a website for transparency purposes.

In addition, private sector participation should also be harnessed by maximizing the potential of Agriculture Trading Centers.

They can help convert primarily “bagsakan” establishments into full service centers offering price information, market matching arrangements, and production and credit assistance.

The third is the critical component of credit.

The DA earlier expressed concern over a 2014 Commission on Audit (COA) finding that only 10.7 percent of the P1 billion loan portfolio of the Agriculture Credit Policy Council (ACPC) reached the targeted small farmers and fisherfolk. DA should pay more attention to the Land Bank of the Philippines’ loan portfolio, which is more than 300 times the ACPC amount.

In its 2013 annual report, Landbank said only 11.4 percent of its P303.9 billion loan portfolio went to small farmers and fisherfolk. The rest went to other sectors, such as utilities (13.9 percent) and transportation and housing (13.8 percent).

If it would take a longer time to gradually veer away from its fiduciary responsibilities to depositors, Landbank should already take measures to target lending to a much larger percentage of small farmers and fisherfolk.

This is what successful agricultural banks do in our competitor countries, often providing subsidies instead of optimizing balance sheet performance.

Waiting further will simply not work if we are to achieve inclusive growth. Action, not misplaced patience, is needed now.

(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, e-mail [email protected] or telefax 8522112)

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TAGS: Agriculture, Business, Commentary, Department of Trade and Industry, DTI, economy, farmer, fisher, fisherfolk, Growth, Industry, sector, Trade
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