At least 10% of local government budget should be allocated for agriculture—PCAFI

March 26, 2021

At least 10% of the internal revenue allotment (IRA) of local government units (LGU) should be allocated for food security and agriculture to ensure rural development once national budget is devolved locally under President Duterte’s proposed executive order (EO).

   The Philippine Chamber of Agriculture and Food Inc. (PCAFI) has reiterated its call for government to raise the budget for agriculture.

   This is in consideration of agriculture’s big contribution of 9 to 10%  to the Philippines’ gross domestic product (GDP). 

   PCAFI President Danilo V. Fausto said a minimum of 10% of the IRA of LGUs should be made mandatory allocation for agriculture if national government fund will be devolved to local governments.

    “This is just proper since agriculture accounts for 10% of the GDP.  Budget for agriculture should increase, rather than decrease,” said Fausto.

   Senator Juan Miguel F. Zubiri, guest speaker of the PCAFI’s virtual membership meeting Friday, said given an increase in budget for agriculture, the proposed EO will play a significant role ensuring farmers’ welfare and agricultural production.

   “Some of our LGU leaders are lawyers or doctors.  That’s why it’s important to elect leaders who have the heart for agriculture,” said Zubiri.

   Fausto has been stressing that the agriculture sector gets barely 2% of the total national budget while contributing 9-10% of the GDP. With the P4.5trillion 2021 budget, DA should get at least P405 billion in the national budget, he said.

   Duterte’s draft EO ordering some executive functions’ transfer to local government supports implementation of the Supreme Court ruling on the Mandanas-Casas cases in 2022.

   Zubiri said he is pushing for other important agriculture policies to be legislated in order to advance growth of the farm sector.

   He noted that the proposed expansion of the minimum access volume (MAV) by eight times will cause a collapse of the local hog industry.  This should not be allowed if the local hog industry has to recover from the devastation of the African swine flu in say 3 to5 years.

   HE also supports an amendment to the Cabotage Law in order to allow entry of international players in the domestic shipping industry. 

   “It is cheaper to ship goods from New Delhi to the Philippines than to ship this from Bukidnon to Manila,” he said. 

   This shipping restriction must be one of the reasons why agricultural products such as pork and poultry products in Mindanao  cannot be easily shipped to where the market is in Metro Manila.

   In credit access, Zubiri said government will continue to prod Land Bank of the Philippines and Development Bank of the PHIlippines to minimize requirements for loans.  This is for easier access to credit of the smallest of farmers who rather resort to borrowing from loan sharks that charge onerous interest of 20% per month.

   Zubiri advised organic food producers to organize and establish a formal policing organization against unscrupulous food producers that claim to produce organic food that are not authentically organic certified.

   Fausto said livestock and poultry should get at least P112.5B billion from the national budget.

   Poultry and livestock plays a highly significant role in the economy as it has important multiple effect in many other sectors.

   “The feed industry is a P510 billion industry.  Assuming two-thirds (67%)  of feeds go to livestock and poultry, that represents P340 billion,” said Fausto.

   Fausto also said DA does not really need to raise imports of meat and poultry given adequate distribution nationwide of the supply. 

   The supply is enough to fill the local demand.  The need is to channel poultry and meat production, particularly from Visayas and Mindanao where these are produced, to where these are needed—Metro Manila and other cities. 

   Poultry and livestock plays a highly significant role in the economy with its multiplier effect in many other sectors.

   “The feed industry is a P510 billion industry.  Assuming two-thirds (67%)  of feeds go to livestock and poultry, that represents P340 billion,” said Fausto.

   The Supreme Court ruling was based on a petition of Batangas Gov. Hermilando Mandanas and former Bataan Gov. Enrique Garcia Jr. to base LGU’s IRA on 40% of the collection of all national taxes.  These include those collections of Bureau of Customs and Bureau of Internal Revenue. (Melody Mendoza Aguiba)