Private investments needed to modernize agriculture — Villar

Economic experts consider agriculture to be the lifeblood of the Philippine economy. Around 40 percent of Filipinos are dependent on agriculture and the sector employs 11 million workers. Agriculture contributes about 20 percent of the country’s gross domestic product (GDP).

The sector’s development has been hampered by various factors, principal of which are limited government resources and the acute lack of private sector investments needed to modernize the country’s agriculture and spur its competitiveness.

"Lack of funding is a given as government is short of resources. We must find ways to work around this limitation to move our agriculture forward," says Senate President Pro-tempore Manny Villar, chairman of the Senate committee on agriculture and food.

On Dec. 22, 1997, Congress enacted Republic Act No. 8435, better known as the Agriculture and Fisheries Modernization Act of 1997 (AFMA), which was envisioned to spur productivity in the agriculture and fishery sectors and make them profitable and globally competitive. AFMA was also aimed at ensuring the accessibility, availability and stability of food supply all over the country at all times.

The law provided an appropriation of P20 billion for the first year, and P17 billion every year thereafter for six years, for the implementation of agriculture and fishery-related projects. This is on top of the annual budget of the Department of Agriculture, the lead agency in the implementation of AFMA.

A fresh approach

Economic experts observe that there is still no indicator that the agricultural sector has dramatically moved forward more than three years after the law was passed. They lament that AFMA, which can provide the safety nets Filipino farmers need to cushion the impact of trade liberalization, has not been fully implemented due to scarce government resources and lack of private sector investments.

The DA reported that in 1998, P11 billion in allotment was released for the agricultural and fisheries sector. This was slightly increased to P13 billion in 1999, while, last year, the department got about P17 billion from the national budget. As of October this year, a total of P14.8 billion has been released to DA.

Villar, while assuring that he will fight for the budget of agriculture next year, says that agriculture officials must be creative and take a different approach to move the country’s agricultural sector forward while accepting the fact that the government has limited resources to pour into the sector.

The Senate president pro-tempore, who also chairs the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCAFM), says the biggest problem of Philippine agriculture is lack of investments from the private sector, a fact admitted by agriculture officials.

The senator has noted that agriculture is still being addressed in a traditional way, with officials depending solely on receiving their share from the national budget. He urges the agricultural department to formulate a program to attract needed investment into the sector.

‘We must design a program to make agriculture attractive to investors and make it globally competitive so this sector can truly move forward," Villar stressed.

Villar laments the timid growth rate of the agriculture sector, which averages only 1.7 percent over the past 10 years, while population grows at the rate of more than two percent yearly.

Role of COCAFM

During the first en banc meeting of the COCAFM under his chairmanship, Villar stressed the important role of the COCAFM in the successful implementation of the AFMA. COCAFM is a bicameral body created by law to ensure that R.A. 8435 is implemented in letter and spirit.

Aside from Villar, other members of the COCAFM are: Rep. Alfredo Marañon Jr., co-chairman; Senators Edgardo Angara, Robert Barbers, Rodolfo Biazon, Gregorio Honasan, Ramon Magsaysay Jr., and John Osmeña; Reps. Benjamin Cruz, Junie Cua, Jeslie Lapus, Celso Lobregat, Prospero Nograles and Generoso Tulagan.

Executive director Catherine Mae Santos heads the COCAFM secretariat, which provides administrative support and performs all the liaison, research, documentation and communication activities for the committee.

The committee is now checking the government financial bin to secure the funds supposed to be appropriated for the implementation of the agricultural modernization program.

Under AFMA, additional funds over and above the regular yearly budget of the DA shall be sourced from 20 percent of the proceeds of the securitization of government assets, including Subic, Clark and other special economic zones.

Other sources of funds shall be from the following: 50 percent of the net earnings of the Public Estates Authority; loans, grants, bequest, or donations, whether from local or foreign sources; 40 percent of the TESDA Skills Development Fund; net proceeds from the privatization of the Food Terminal, Inc., the Bureau of Animal Industry, the Bureau of Plant Industry, and other assets of the DA that will be identified by the DA secretary and recommended to the President for privatization. Proceeds from the Minimum Access Volume (MAV) in accordance with the provisions of Republic Act No. 8178; Poverty Alleviation Fund; and 50 percent of the Support Facilities and Service Fund under Republic Act No. 6657.

Of the yearly AFMA appropriation, 30 percent goes to irrigation; 10 percent to post-harvest facilities; 10 percent to other infrastructure; 10 percent to agro-industry modernization credit and financing program; eight percent to marketing system and support of market vendors’ cooperatives; 10 percent to research and development, of which four percent to the support of biotechnology program; five percent to capability building of farmers and fisherfolk organizations; six percent to salary supplement of extension workers; five percent to upgrading the facilities of state universities and colleges chosen as centers for agriculture and fisheries education; four percent to national information network; one-and-three fourth percent to rural-non-farm employment training; and one-fourth percent to identification of Strategic Areas for Agricultural and Fisheries Development Zones (SAFDZ).

Villar said the COCAFM is conducting research on the Agri-Agra Law and how it is being implemented to ensure that credit facilities will be more accessible to farmers and fishermen on easy terms. The committee will also give priority to cooperative development to enable the small farmers and fishermen to enjoy the benefits offered under AFMA.

"Agriculture has to be improved, it has to be modernized, there is a program, we have to see to it that the program is implemented properly. And there is a need to work hard in attracting private sector investments. We must not rely on government funds alone," Villar tells COCAFM members. "We want the AFMA to succeed, that is our mandate. I want to see agriculture take-off so let us help each other," he adds.