Inclusive growth
Given the recent Senate elections indicating our people’s support for President Aquino’s governance, his goal of inclusive growth can now be better attained. PNoy identified three areas that best contribute to this goal: agriculture, infrastructure and tourism.
Though much can be done through legislation, significant impact can likewise be delivered through executive action. Last May 15, Alyansa Agrikultura leaders identified three agriculture-related areas which significantly affect inclusive growth: budget, roadmaps and smuggling.
Budget
The Department of Agriculture budget has increased by more than 3 times from P19 billion in 2007 to P65 billion in 2013. However, the Department of Budget and Management (DBM) has turned down the DA recommendation of a 48-percent increase to P96 billion for 2014. Instead, the DBM is recommending a 26-percent decrease to P48 billion next year. The decrease may seem baffling. If agriculture is key to inclusive growth, why is DBM recommending a decrease?
A possible reason given is that if DA could get a 5-percent growth increase with only P19 billion in 2007, why did it post only a 3-percent growth increase in 2012 with P53 billion? We must note the previous administration’s zero-growth rates in 2009 and 2010. Alcala has reversed this trend by having growth rates of 2 percent in 2011 and 3 percent in 2012.
If in DBM’s view the resources were not optimally used by the DA, the solution is not to cut the budget but to improve budget use. The DBM is correct in requiring the DA to submit roadmaps before recommending DA budget increases. This is an effective motivator for DA to formulate these roadmaps, which the AF2025 government-private sector group recommended as early as February 2011. We hope that with these DA roadmaps, the DBM will reconsider its decision to cut the DA budget, which is necessary to hasten inclusive growth.
Roadmaps
In completing the DA sectoral roadmaps, we recommend a quality control system that will contribute to inclusive growth. The first is to follow the example of another executive department, which offers a roadmap outline to guide roadmap formulation.
This is not happening at the DA. Consequently, the submitted DA roadmaps used varied outlines. Some of these lack important sections such as a global scenario, market segmentation and competitive analysis. Providing a guide outline for all subsector roadmaps will result in a more systematic approach to agriculture growth.
We further propose that included in this outline should be a section on strategies to achieve inclusive growth. This is very important. For example, Omi Royondoyan of Alyansa Agrikultura has pointed out that the commendable rice growth has been found mostly among farmers owning three hectares or more. Little growth has occurred among farmers with smaller landholdings.
Unfortunately, 90 percent of our rice farmers are in the latter category. They were not included in the growth. Therefore, it was stated that they were not really included in the growth. Identifying and implementing strategies to include these small farmers, such as better credit access and organizing them into groups for economies of scale, are necessary to achieve inclusive growth.
Anti-smuggling
Inclusive growth should have not only be a proactive but also a defensive approach. The DA has good growth programs. However, it lacks the defensive program of an anti-smuggling strategy.
Some DA officials argue that this is the responsibility of the Bureau of Customs (BOC), not the DA’s. But when DA statistics show that 20 percent of small backyard hog raisers lost their livelihood because of smuggling, DA cannot just continue their development programs and ignore smuggling.
Inclusive growth must necessarily include a defensive approach. The AF2025 recommendation done on February 2011 for a DA anti-smuggling plan has not yet been done. We commend the DA hog and poultry divisions for having embarked on anti-smuggling initiatives. Other DA divisions should follow soon so that there is a DA-wide anti-smuggling plan, as earlier proposed.
PNoy’s goal of inclusive growth will surely be supported by the newly elected Congress. This must now be similarly supported by the executive branch. With DA, DBM and BOC acting on the recommendations above, inclusive growth through agricultural development will get a much needed boost.
(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, email [email protected] or telefax (02) 8522112).
