The Market Monitor Minding the Nation's Business
By Luis Leoncio
For the past five years it has been in power, the Aquino administration spent an estimated P260 billion on the agriculture sector without producing substantial results in terms of the country’s farm output, according to former Budget Secretary Benjamin Diokno.
The amount was given to the Department of Agriculture, largely through budget allocations. It is known that agriculture projects have been the most prone to corrupt practices, as proved by the misuse of a P10-billion Priority Development Assistance Fund (PDAF).
The findings were based on a Commission on Audit (CoA) special report on the use of the legislative pork barrel.
Diokno, now an economics professor at the University of the Philippines School of Economics, told the Samahang Plaridel’s Kapihan sa Manila Hotel media forum recently that the P260 billion was spent for agriculture, excluding the budget for the National Food Authority (NFA), between 2011 and 2015.
Most of the alleged frauds and scams took place in the sector at the time.
“The over-importation of rice, the Jocjoc Bolante fertilizer scam, the irrigation scam, and most of the (Janet Lim) Napoles scams. There are also allegations that a big chunk of the Disbursement Acceleration Program (DAP) went to doubtful disbursements by the agriculture department and its attached corporations,” Diokno said.
“It is an incontrovertible fact that the Aquino administration has neglected agriculture,” he added.
Diokno presented figures based on government data, which showed that, from 2011 to 2015, the agriculture sector registered an average growth of 1.6 percent, second to the lowest, the lowest being during the term of former President Fidel V. Ramos with an average growth of 0.8 percent.
The best performance of the sector took place under President Joseph Estrada’s truncated term; it registered an average growth of 6.5 percent, according to the figures.
“It is ridiculous to talk about inclusive growth when the sector that employs one third of the work force is hardly growing,” Diokno said.
He said the wrong priorities of Mr. Aquino, primarily his single-minded thrust on rice self-sufficiency, resulted in wasted government funds and resources.
He added that the use of agriculture projects in the highly politically motivated DAP also contributed greatly to the waste of public funds thrown into the agriculture sector.
“There appears to be a mismatch between the resources allocated by the government to the sector and the sector’s performance.
This might have been due to two reasons: first, the misguided pursuit of self-sufficiency in rice; and second, the misuse of public funds attributable to the DAP,” Diokno said.
He noted that the failed pursuit for rice self-sufficiency was a policy issue that greatly depended on Mr. Aquino’s guidance.
“Should the Philippines pursue the policy of being self-sufficient in rice? Any real economist would disagree, arguing that the Philippines does not have comparative advantage in rice production,” he said.
Diokno added that the Philippines could not compete with Thailand, Vietnam or even Cambodia. “It’s better off focusing on the production of high-value crops and just import a significant portion of our rice requirement,” he said.
Diokno said Mr. Aquino may have received misguided advice on his administration’s priority on agriculture.
“Any President who believes the advice of his agriculture secretary that it pays to achieve self-sufficiency in rice is taken for a fool. But he’s a bigger fool if he himself instructs his agriculture secretary to work for self-sufficiency in rice at all costs,” he added.
“Yes, to food security but no for rice self-sufficiency,” Diokno added.
The dissipation of agriculture funds in the DAP, which was estimated to have cost the budget P200 billion in reallocations would be proved or disproved to the satisfaction of the public “only if the Commission on Audit (CoA) will do its job objectively comprehensively, and in a timely manner.”
“There should be no selective audit,” he added. The CoA should examine whether the use of the DAP funds, transaction per transaction, was in accordance with established budgeting, accounting and auditing rules, Diokno said.
Figures given by Diokno showed that, from 1986 to 2015, or the post-Edsa 1 period, the agriculture sector, on average, had grown at the rate about equal to the population growth rate. “The growth of the agricultural sector has consistently lagged behind the growth of the overall economy, except during the time of Estrada. The lesson here for the next President is that an agriculture expert, not a politician, should head the agriculture department, and he should have the full support of the President,” Diokno said. In Mr. Aquino’s term, the national government expenditure for agriculture was erratic. Starting from a cutback of 6.5 percent in 2011, the budget for agriculture ballooned by 73.52 percent in 2012. The budget for agriculture further increased by 17.07 percent when it peaked at P66.3 billion.
In sum, from 2011 to 2015, the Aquino administration spent P260 billion, but despite these huge increases in the budget of the DA, the sector’s output remained anemic, initially less than 3 percent of overall economic growth in 2011 and 2012 before it slowed down further to 1.1 percent in 2013.
Diokno said the successor of Mr. Aquino will do well if he will give priority to agriculture through effective projects, if he wants to make economic growth inclusive and pro-poor. Also, the new leader should protect the sector from grafters of all types, legislators, executive officials, private organizations, and individuals. “Agriculture is such an important sector to be left unprotected from the wicked claws of corrupt and greedy politicians and bureaucrats,” Diokno said.