Because of identified constraints, the 2027 Department of Agriculture (DA) budget submitted by the government’s Executive Branch to the Congress is more of a liability than an asset. In its current form, this budget might harm the growth of our agriculture, the water it needs for irrigation and the agriculture exports required for job creation and poverty reduction.
The Executive Branch’s submission is usually lower than the DA original submission. Within the DA, there is already considerable cost-cutting. When the budget goes to the Department of Budget and Management (DBM), there is further significant budget reduction before the Executive Board’s submission is finalized.
Improvements
Changes by the Congress from this submission are often recommended by the private sector. Before finalization, Congressional consultation is done with the relevant department secretary. Quite often, these are welcomed. This is because many of these changes were initially recommended by the secretary, but later turned down by DBM because of identified constraints.
It is now up to the Congress, which is currently deciding on this submission, to use its ‘power of the purse.’ This will address these constraints and prevent this danger from happening.
What are the proposals in this submission? For agriculture, it is an 8-percent decrease from P215.7 billion to P198.5 billion. For water in irrigation, it is a 27-percent decrease from P63.3 billion to P46.4 billion.
For agriculture exports, it is an initial measly P600 million. This is because it is only now that the export initiative will be directly funded.
Agriculture
There are several reasons why the Congress should support a much larger budget for agriculture.
The primary reason is food security. It determines if we will have enough rice, fish, fruits, vegetables and other foods to survive.
In terms of gross domestic product (GDP), agriculture’s total contribution is 33 percent. The sector directly contributes 8 percent to Philippine GDP. Its indirect contribution is from related activities, such as processing, distribution, trade and food services.
In terms of jobs, the food system supports 19 million jobs or 38 percent of total employment.
As for poverty, the rural poverty rate is 22 percent, more than double the 10-percent urban poverty rate.
On manufacturing, 57 percent of Philippine manufacturing is food processing. This is much larger than the 16-percent share from chemicals and 9-percent from electronics and computers.
In terms of outbound trade, the Philippines is the only member of the Association of Southeast Asian Nations whose imports surpass exports.
Regarding inclusive growth, this enables our development to include the whole country, especially our provinces and depressed areas.
With regard to natural resilience, a resilient broadly-based domestic food system enables us to withstand external shocks during this difficult time of climate change.
Water use
Agriculture needs water to exist. Water is everywhere (floods) and nowhere (droughts). Irrigation systems allow us to manage water, instead of water managing us. Last Sept. 7, Sen. Francisco ‘Kiko’ Pangilinan said in his Facebook page: ‘Huwag natin hintayin na tamaan tayo ng El Niño bago tayo kumilos. Ayusin natin ang irigasyon ngayon.’ (Let’s not wait until El Niño hits us. Let’s fix irrigation now.)
Roger Allan King responded thus: ‘This is where irrigation management should come in. We need to move from reactive repair to proactive risk-based and life-cycle management of irrigation facilities.’
‘Our rain harvesting rate is 4 percent, compared to India’s 60 percent in some areas. We need a significant irrigation budget increase to address our critical water problem, not a 27-percent decrease.’
Exports
Much of our foreign exchange and additional jobs come from overseas remittances and business outsourcing. Competition from other countries’ increasingly educated workforces and artificial intelligence now pose threats to us in these areas.
We must now focus on our agriculture exports as the new opportunity to overcome these threats.
Last year, we had $9.7 billion in export revenue compared to Vietnam’s $62.5 billion. If we produced only two-thirds of what Vietnam did, we would not have needed our overseas remittances of $39 billion last year to support our economy.
The good news is that our 19-percent agriculture export growth exceeded Vietnam’s 13 percent and Thailand’s 3 percent.
In addition, Agriculture Secretary Francisco Tiu Laurel Jr.’s export initiative has resulted in $8.5 billion exports. This is three years ahead of the official $8.6 billion target for 2028.
Though some components of other DA bureaus and program budgets are used indirectly for exports, we need much more than P600 million to be directly focused on export development and marketing.
Time is running out. Our competitor countries are progressing swiftly in agriculture. Some have already overtaken us in key areas such as bananas and mangos.