Efficiency vs effectiveness
If the proposed Department of Agriculture (DA) budget does not address the private sector’s needs, we will do more of the same of what we’re doing now and continue our downward slide.
One-third of my professional life has been in the government sector. While there, I was involved with the budgets of the DA, the Department of Trade and Industry (DTI) and the Presidential Flagship Programs and Projects under the Office of the President. In general, I believe corporate budgets address more consistently private sector needs than do government budgets.
In 2021, the DA held a national food security summit. The proposed 2022 DA budget submitted after that included very few of the approved private sector recommendations.
For the 2023 budget, the DA has the benefit of the 356-page 10-year National Agriculture and Fisheries Modernization Plan crafted by experts. While the consultation was not extensive, it nevertheless advocated an appropriate direction significantly different from our experience in the last three years, with emphasis on production rather than importation.
But since this general plan lacked specific recommendations with budget implications, the heads of six private sector agriculture-related coalitions submitted to the President, the DA and the agriculture committees of both the Senate and the House of Representatives a 69-page document entitled “Towards an Effective Agri-Fisheries Plan.”
Five key recommendations there are not sufficiently funded in the proposed DA budget. If not funded and therefore not implemented, our agriculture transformation will not be realized.
The private sector hopes that Congress will ensure the budget provides for doing things right (efficiency), but more importantly, it should also do the right things (effectiveness).
Here is how it works. Congress gets a proposal from the Executive called the National Expenditure Plan (NEP). Congress then improves on this, but starts with the paradigm provided there. The DA starts the NEP process doing a fairly good job, but which will then be modified by the Department of Budget and Management (DBM), which finalizes the NEP.
After Congress adjusts the budget for doing things right (efficiency), such as decreasing proposed large intelligence funds, it sometimes does not question enough if the submitted NEP paradigm addresses sufficiently the private sector’s needs for doing the right things (effectiveness).
For the 2023 budget, Congress must now consider five essential “right things” identified by the private sector. Ignoring these items jeopardizes our agriculture transformation:
A market and business information system. Legally mandated but not implemented, we need this information to plan and implement agriculture policies and programs effectively, the way our neighbors are doing with their vastly superior information systems.
A commodity system approach. This departs from the one-crop production setup, practiced in 73 percent of our arable lands. It uses the supply chain approach from production to marketing and advocates additional income through intercropping and other livelihood opportunities.
Consolidation. This advocates grouping our average 1.3 hectare landholdings to achieve economies of scale. Only then can we compete with imports and increase our low exports.
Agriculture provincial and municipal planning. This will ensure effective and systematic use of scarce resources.
Budget use. This will ensure private sector monitoring of the DA budget. This way, the 40-percent increase in the budget will not be lost to mismanagement and corruption (and the Commission on Audit findings of P22 billion in unliquidated and questionable DA expenses in 2020 will not be repeated).
In the next few weeks, Congress must approve a budget that is not only efficient, but more importantly, effective.
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