LGUs urged to prioritize agriculture spending

LOCAL GOVERNMENT UNITS (LGUs) are urged to spend more efficiently, particularly for agriculture, the World Bank said, adding this will help improve growth and productivity in the sector.

“It’s about helping LGUs to spend effectively. If you look at farm-to-market roads, irrigation, research and development — those have been undervalued and that’s where you need sufficient funding to raise productivity. Those areas could receive much more resources,” World Bank Country Director for the Philippines Ndiame Diop said at a briefing on Wednesday.

World Bank Senior Agriculture Economist Anuja Kar said LGUs should prioritize agriculture spending.

“Agriculture has remained a very important source of livelihood in the country, especially during the pandemic, where it absorbed the retrenched workers. It has a profound importance in livelihood, food security, and jobs,” she said.

In 2021, the agriculture sector employed about 24% of the country’s total workforce.

Ms. Kar noted that despite an increase in nominal terms, agriculture’s share in the national budget has been steadily declining to 1.3% in 2019 from 2.6% in 2015.

The sector has put a lot of emphasis in “commodity-based banner programs” such as rice, which has not yielded the desired results, Ms. Kar said.

“Rice hasn’t really picked up, overall, we are seeing the amount of spending going into the sector is not generating the result,” she said.

According to the World Bank’s Philippine Economic Update report, the effectiveness of the Mandanas-Garcia Ruling could be transformational for local service delivery if managed properly.

“Though such devolution presents an opportunity to make agriculture service delivery more client-driven and accountable, there remain significant risks if it is not managed well,” the World Bank said.

Ms. Kar said that the LGUs’ allocation for agriculture is “mismatched.”

“LGUs’ spending allocation for agriculture is small relative to the Department of Agriculture. There has to be a clear prioritization of agriculture. The devolution transition plan can be a very effective tool in terms of correcting these discrepancies in the subnational level spending,” Ms. Kar said.

The World Bank recommended that agricultural public expenditure policies should improve sectoral competitiveness and resilience to ensure food security; boost effectiveness of the current spending; and address public expenditure issues related to devolution.

Ms. Kar said there should be a “greater balance in sectoral priority-setting and budget allocation to support agricultural diversification.”

“It has to come out of the single commodity focus and look at a more holistic level,” she said.

The government should also scale up climate smart policies and programs to foster increased resilience of the food system. “Agriculture has remained a victim of climate change but it can become a solution to climate change,” Ms. Kar added.

In terms of devolution, the World Bank said that ensuring procedural improvements on government budgeting institutions will be critical.

“We have to understand that a one-size-fits-all solution will not help. There are LGUs that have great potential, some need more hand holding,” Ms. Kar said.

The World Bank also cited improving evidence-and results-based monitoring and evaluation through enhanced and targeted capacity development for LGUs and investing on extension services to improve capacity development.

“The Philippines can play a phenomenal role. It can play an important role in transforming the sector by putting money in the right place. there has to be more research and development, infrastructure, investment in developing the extension system, all that can lead to improving the efficiency of the budget and productivity,” Ms. Kar added. — Luisa Maria Jacinta C. Jocson