THE RECIPE for success in food production thus calls for Congress to meet the P32.5-billion annual budget for agriculture mandated in the Agricultural and Fishery Modernization Act (AFMA). In the past, Congress has never approved more than P19 billion for the agriculture department; in the last two years, the department’s annual budget has even been decreased to P15 billion.  

There should also be more transparency. The government, for instance, has attempted to claim that it provided the P1.2 billion for agricultural marketing required by AFMA. But it now turns out that the great majority of these funds were made up of Land Bank loans given to commodity traders. These loans, which would have been given even without AFMA, have contributed little to Afma’s objective of agriculture modernization.  

However small the DA funds are at present, though, Ricardo Provido, former national coordinator of the country’s 16 regional Agricultural and Fisheries Councils or AFCs, wants to see more transparency regarding their use. So far, the AFCs, which are joint government-private sector bodies, have only a vague notion of how the agriculture department uses its money. Without that kind of information, the AFCs are unable to provide location-specific recommendations for the best use of government funds. At the same time, it renders monitoring almost impossible. Provido says, “We believe the DA should get more resources. But if it is just used for corrupt purposes, then better nothing than something used wrongly.”

Having scarce funds is also no excuse for unwise spending. Today much of the budgeting remains largely centralized, with historical spending as a main basis for determining proposed budget increases. Perhaps it’s time for a decentralized cost-benefit approach.

An example is given by University of the Philippines-Los Baños Chancellor Wilfredo David in his new book Averting the Water Crisis in Agriculture. David laments the fact that because of centralized government decision making, shallow tube wells with the highest Economic Internal Rate of Return (EIRR) of 77 percent received only 11 percent of the budget. By comparison, the National Irrigation System (NIS) with the lowest EIRR of eight percent took 78 percent of the budget. It takes P200,000 to 600,000 to irrigate one hectare using NIS. With shallow tube wells, the expense would be only P25,000. (See Table 4) Though there are cases when only NIS is feasible and others where shallow tube wells are not, David says that the former has generally been overused and the latter underused.

TABLE 4: Comparison of irrigation systems
IRRIGATION TYPE	ECONOMIC INTERNAL RATE OF RETURN (EIRR)	BUDGET DISTRIBUTION	2003 NIA BUDGET
Shallow Tube Wells	77%	11%	P0.5B
Communal	14%	11%	P0.5B
National Irrigation System (NIS)	8%	78%	P3.7B

There are other ways of getting more bang for our rice production buck. Consider the cost-effectiveness of seed usage versus irrigation: If we were to increase a hectare’s average yield of 3.2 tons from uncertified seeds by 4.8 tons through NIS irrigation, this would cost at least P200,000. But if we used certified seeds for four hectares, this would yield an even higher increased yield of 5.2 tons. Using certified seeds for four hectares comes to a grand total of P2,600, or just a little more than one percent of what we would have to spend for NIS irrigation to achieve the same objective. In so many instances, however, this kind of decentralized cost-benefit approach is not used.