The Philippine Chamber of Agriculture and Food Inc. (PCAFI) asked the Senate to draft a mandate requiring local government units (LGUs) to set aside 10 percent of their annual budget for the agriculture sector once they start receiving their higher internal revenue allotment (IRA).
During PCAFI’s general membership meeting, PCAFI President Danilo V. Fausto raised concerns about the forthcoming increase in the IRA of LGUs, which may result in lower national budget allotted for the agriculture sector.
According to Fausto, a minimum of 10 percent of the IRA of LGUs should be made mandatory allocation for agriculture if national government funds will be devolved to local governments.
“This is just proper since agriculture accounts for 10 percent of the GDP . Budget for agriculture should increase, rather than decrease,” said Fausto.
Fausto was referring to the implementation of a Supreme Court ruling – which was reaffirmed in 2019 and to be implemented in 2022 – that will result in higher IRA for LGUs starting 2022.
To be specific, the high court decision favors Batangas Governor Hermilando Mandanas and former Bataan Governor Enrique Garcia Jr. on their petitions to compute LGUs’ IRA based on 40 percent of the collection of all national taxes.
Government estimates showed that instead of more than P800 billion, LGUs, with higher IRA, may actually take up nearly P2 trillion of the P5 trillion proposed national budget for next year.
To pave way for this, an Executive Order (EO) was drafted to transfer some functions of the national government to LGUs. The EO now awaits the signature of President Rodrigo Duterte.
Fausto feared that this development will result in lower government budget being allocated to the struggling agriculture sector. He urged lawmakers to ensure this will not happen.
“It's a difficult time right now for the agriculture sector. While hogs are being slaughtered by ASF , there is also a need to protect poultry and fisheries too,” he said.
Right now, the agriculture sector gets barely 2 percent of the total national budget.
For this year, the DA will receive a higher budget of P71.0 billion, compared to the nearly P60 billion it received in 2020 under the general appropriations act.
While this is way smaller than the DA’s original budget request of P280 billion for this year, the DA may still receive an additional P42 billion under the P66-billion COVID-19 stimulus package it requested last year.
Nevertheless, Fausto said that “with the P4.5 trillion 2021 budget, DA should get at least P405 billion”.
Livestock and poultry, he said, should get at least P112.5 billion from the national budget.
“Poultry and livestock play a highly significant role in the economy as it has important multiple effects in many other sectors. The feed industry is a P510-billion industry. Assuming two-thirds (or 67 percent) 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,” Fausto said.
For his part, Senator Juan Miguel Zubiri, who attended the PCAFI meeting, said there is really a possibility that the budget of DA will be slashed significantly because of the higher IRA for LGUs.
The senator also acknowledged the difficulty in amending the Local Government Code at this time. Thus, he urged LGUs to take the initiative to set aside some of their budget for the agriculture sector.
Zubiri also cited the need to elect leaders who have the heart for agriculture as he noted that some of LGU leaders are lawyers or doctors.