IN the past, we agriculture academics and analysts complained about the relatively low funding devoted to the sector's development under the national government budget.<\/p>\r\r
The budget for agriculture has hovered below 2 percent of the yearly General Appropriations Act (GAA). In contrast, neighboring Asian countries have provided budgets of 4 percent or more of their yearly appropriations. We argued then that this was one of the reasons why we could not foster sustained agricultural growth.<\/p>\r\r
This no longer holds true today. When President Ferdinand Marcos Jr. concurrently served as head of the Department of Agriculture (DA), he made sure of higher budget allocations in 2023 and 2024. This was in recognition of the critical role of agriculture in promoting balanced and higher economic growth, as the sector's lackluster performance was acting as a deadweight.<\/p>\r\r
In 2023 and 2024, the budgets allotted for the DA were more than 3 percent of overall yearly government appropriations. The DA's budget practically doubled from around P140 billion in 2022 to more than P200 billion in 2023 and 2024. Note that the budget covers all agencies, bureaus and attached agencies under the department.<\/p>\r\r
Interestingly for the rice program, the budget jumped from around P60 billion to more than P100 billion. This included funding support for the National Rice Program (NRP) plus those from the Rice Competitive Enhancement Fund (RCEF), National Irrigation Administration (NIA), Philippine Rice Research Institute, Philippine Crop Insurance Corp. (PCIC) and Bureau of Soils and Water Management (BSWM), etc.<\/p>\r\r
Though they are supposed to provide across-the-board support to various agricultural commodities, the bulk of these agencies' services go to supporting rice-related production programs. More than 85 percent of the irrigation water supplied by the NIA supports rice farms, around 80 percent of PCIC's insurance covers rice farmers and the small water impounding system of BSWM mostly supports rice farming.<\/p>\r\r
As it stands now, more than P100 billion, or about 60 percent of the DA's annual budget, supports rice-productivity enhancement programs. In fact, the NRP has a whopping budget of P30.8 billion, which is bigger than other government agencies, this year on top of the guaranteed P10 billion from the RCEF.<\/p>\r\r
Moreover, beyond the P10 billion earmarked for RCEF from rice tariffs, excess funds collected from rice import duties of around P15 billion are also used to support rice farmers. In addition, the newly signed amendments to the Rice Tariffication Law raise the RCEF budget to P30 billion a year for the next six years.<\/p>\r\r
Given the huge budget dedicated to rice, being a political commodity since it is the staple food of Filipinos, what do we get in return from this massive yearly investment?<\/p>\r\r
Not much. Local production can only meet 13 million metric tons (MT) of our yearly rice consumption demand of 16 million MT. Productivity gains are practically insignificant and this year, a decline in the palay harvest of around a million MT is expected. This will trigger record-high rice imports of nearly 5 million MT, a staggering volume that will earn the Philippines the unenviable tag of being the largest rice importer in the world. And yet rice prices remain sticky high.<\/p>\r\r
What happened to all the money poured into rice? A good analogy for an answer is the status of our flood control projects. We spend a billion pesos a day for flood control projects that are non-existent or of very poor quality that are easily destroyed whenever a destructive typhoon hits the country.<\/p>\r\r
Similarly, the government has not seriously monitored and evaluated whether the array of subsidies given to eligible farmers has raised farm productivity or whether the seeds, fertilizers, machineries, etc. distributed to cultivators are of the right quality and appropriate to the needs of beneficiary communities.<\/p>\r\r
Just like flood control projects, rice farmers experience inadequate and delayed funding to cover the costs of operating and maintaining machinery, postharvest facilities, dryers, etc. There is no proper determination as to whether geographical areas are the right places to extend the assistance due to the existence of strong farmer cooperatives and associations that can operate and maintain facilities.<\/p>\r\r
The measure of success is based on the number of seeds, fertilizers or machinery distributed. There is no measurement of the ultimate goal of the assistance, which is raising the productivity of cultivators \u2014 resulting in higher income and improved socioeconomic welfare.<\/p>\r\r
We are witnessing the same in the law that amended the Rice Tariffication Law, extending the RCEF for another six years with bigger funding. The same components (i.e., in-bred seeds, farm machinery, credit and training) were retained with additional dole-out components. Lessons gained from the implementation of the original RCEF were not used to improve the design of the amended RCEF.<\/p>\r\r
It is all about the distribution of dole-outs without regard to the different needs of rice-growing areas. It is all about distributing subsidies through favored politicians in order to gain the political support of voters.<\/p>\r\r
Obviously, the needs of areas favorable to rice production (with a good irrigation system) will differ from unfavorable areas (without reliable irrigation). Expectedly, higher productivity is obtained in the former but is lower in the latter.<\/p>\r\r
Should unfavorable areas still be planted to palay during the dry season when these would be more suitable for the production of high-value crops if small water (pump or impounding) systems are present? Will the government fund such rice-based crop diversification given that the budget is only dedicated to the promotion of rice production?<\/p>\r\r
An agricultural scientist friend who specializes in rice breeding told me that he has never seen a Filipino rice farmer improve his economic lot by planting rice alone because the land he tills is too small, averaging less than 2 hectares. He noted that income improvement can only be attained if the farmer plants high-value crops between the two palay planting seasons or during the dry season.<\/p>\r\r
Unfortunately, such a change might not be forthcoming because the current system is oriented toward attaining rice self-sufficiency when the reality shows that this has become an unrealistic economic goal.<\/p>\r\r
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Quality of public spending
