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RCEP conditionalities critical for agriculture

Business Inquirer - 25 May 2024

RCEP conditionalities critical for agriculture
By: Ernesto M. Ordoñez

For our transformation of agriculture to continue, it is critical that Regional Comprehensive Economic Partnership (RCEP) conditionalities are met. On Feb. 21, 2023, the Senate ratified our RCEP membership, but specified certain conditionalities.

If not met, the ratification states: “The Senate of the Philippines may recommend to the President the withdrawal of the agreement.”

In line with this, the Senate Special Oversight Committee on the RCEP Agreement scheduled a hearing on Oct. 25, 2023, on the conditionalities’ implementation. After a six-month postponement, it was rescheduled to May 22.

However, because of the recent Senate reorganization, this was cancelled last May 20. This cancellation is very disconcerting. Here is why.

The Agriculture Alliance, composed of farmers and fisherfolk (Alyansa Agrikultura-AA), agribusiness (Philippine Chamber of Agriculture and Food Inc.), and science and academe (Coalition for the Agriculture Modernization in the Philippines), agreed with the RCEP ratification, provided it had six conditionalities.

These conditionalities were also previously approved by the International Trade Committee of the Philippine Council of Agriculture and Food, and are now in the RCEP ratification document.

The Senate hearing is an important activity to ensure that these conditionalities are actually implemented. Though there has been partial implementation, more action is needed. Four of these conditionalities are discussed here.

Smuggling and corruption
The first is the proper use of the Department of Agriculture’s (DA) budget. Over the last decade, our DA budget has averaged 2 percent of the total government budget, compared to Thailand’s 4 percent and Vietnam’s 6 percent.

Shockingly, the Commission in Audit reported that one-third of this already small budget was in unliquidated and unexplained expenses, indicating significant corruption and waste. This happened consistently in 2020, 2021 and 2022.

To prevent this repetition, the RCEP conditionality is to restore the abolished effective public-private sector committee on DA budget monitoring for transparency and accountability. This process was started last Jan. 5 by Agriculture Secretary Francisco Tiu Laurel, Jr., shortly after his appointment.

It is hoped that the actual budget monitoring will start soon. This is because there are six more months this year when this corruption and waste can continue.

The second is the restoration of the abolished public-private antismuggling interagency committee reporting to the President. The two times it was operational reduced the smuggling rate by 25 percent and 31 percent. Both times, the committee was abolished because it was allegedly too successful and caught “big fish.”

This committee has not been restored. However, the DA created its own committee with some good results. Yet, since RCEP ratification, they have not been able to meet the Customs Commissioner to discuss problems and recommendations. A Senate hearing will surely remedy this problem.

Information and clustering/consolidation
The third and fourth conditionalities refer to information and cluster/consolidation. For information, we cannot make good decisions if we have faulty information. Largely because of this RCEP conditionality, the DA information budget of P267 million in 2023 was increased 10 times to P2.27 billion in 2024.

Similarly, the conditionality of clustering and consolidation of the average two-hectare farms to achieve economies of scale is now also supported. Thailand has a Ministry of Agriculture and Cooperatives, which largely accounts for their agriculture exports in 2022 reaching $43 billion, compared to our $8 billion. This conditionality has resulted in a P3-billion budget for this year.

However, for both these components, these budgets are distributed in different DA units, with little coordination. This has to be executed soon to get the needed optimal unified strategy and synergy.

Our future agriculture development is largely dependent on how these RCEP conditionalities are effectively implemented. If the Senate hearing on RCEP is cancelled, these conditionalities may be forgotten. The Senate should consider postponing, instead of cancelling, the RCEP hearing to the earliest possible date. This way, these conditionalities can reach their full potential.

 Fuente: Business Inquirer