3 December 2001; Governance Constraints to Sustainable Rice Productivity

Governance Constraints to Sustainable Rice

Productivity in the Philippines1

By

V. Bruce J. Tolentino, Ph. D.2

Since the early 1980s, growth in rice production in the Philippines has been quite
slow. The rate of growth in the Philippines’ rice productivity in particular, and the
country’s agricultural sector in general, have also lagged behind much of Asia.

Political instability has contributed to the disappointing performance of the

Philippines in food security and agricultural and rural development over the past
20 years. This paper outlines the effects of political and bureaucratic instability on
the formulation and implementation of government policy and support programs
for food security and agricultural productivity, particularly on rice.

The intention of this paper is to attempt a political-economy and public

administration insight into the effectiveness and efficiency of efforts to boost rice
production – specifically in the case of the Philippines. It is clear that the
significance of public goods and public policy is greater in rice productivity and
growth than in most other commodities. Research and analysis that intensifies
attention to public sector governance as a crucial factor in the attainment of
sustainable food security is thus appropriate.

Section 1 provides a summary of the performance of the Philippine rice sector over
the past three decades, while Section 2 describes the country’s institutional
structure for agriculture sector governance. Sections 3 and 4 emphasize the
frequency with which Philippine government officials have been changed since the
1980s, and the negative impact of such changes on agricultural and food security
programs. Section 5 takes a closer look at the effects of discontinuous leadership
1
?
Presented at the “International Workshop on Medium and Long-Term Prospects of Rice Supply and
Demand in the 21st Century,” 3-5 December 2001, International Rice Research Institute, Los Banos, Philippines.
The able assistance of Ms. Elcee Noveno is gratefully acknowledged.
2
?
Currently Team Leader/ Grains Policy Specialist, Department of Agriculture – Department of Finance –
Asian Development Bank Technical Advisory Project TA 3429: Grains Policy Advocacy and Institutional Reforms
Project, Philippines. Formerly Undersecretary for Policy and Planning, Department of Agriculture – Philippines,
1986 – 1992. Comments may be directed to the author at capacity@[Link].

1
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
on the agricultural program’s capacity for strategic sector planning, and finally
Section 6 concludes with some suggestions to strengthen the stability of the
bureaucracy and in so doing, help ensure improved governance for rice
productivity.

1. The Philippines’ Overall Performance in Rice Production3

Rice Production and Population Growth

Growth in the total production of rice in the Philippines has averaged 2.44% per
year over the period 1980 - 2000. This rate is considered quite slow because over
the same period the population of the Philippines was growing relatively rapidly at
an average of over 2.3% (Figure 1).

Figure 1

Rice Production, Rice Use and Population,

Philippines, 1980 - 2000

3
?
More details on the rice sector in the Philippines may be gleaned from V. Bruce J. Tolentino, et. al, “101
Facts About Rice in the Philippines,” Department of Agriculture and Asian Development Bank, 2001.

2
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
Total rice usage in the Philippines began to regularly outstrip domestic rice
production in the 1990s, and since then the country has shifted from a state of
marginal self-sufficiency to that of a regular and growing importer rice – the
largest customer for the exports of Viet Nam of low-quality rice, and a regular
customer of the better-quality rice exports of the United States, particularly those
under soft loan terms provided by programs such as US Public Law 480.
Relative to its major rice-producing neighbors in the ASEAN region, the
Philippines has been left behind in terms of productivity growth. Over the decade
of the 1990s, the rice productivity growth of Viet Nam literally spurted upwards,
and that of Thailand steadily rose. In contrast, Philippine rice productivity has
remained basically stagnant (Figure 2).

Figure 2

Trends in Paddy Yields, Philippines,

Thailand and Viet Nam, 1990 = 100

Equally worrisome as the trends in rice production volumes are the trends in rice
prices. Over the 1990s, while world rice prices have remained relatively low and
stable, domestic consumer prices have been two to three times those of Viet Nam
and Thailand, and also more volatile (Figure 3).

3
 3 December 2001; Governance Constraints to Sustainable Rice Productivity

Figure 3

Domestic Consumer Rice Prices in Philippine Peso Terms,

Philippines, Viet Nam and Thailand, 1990 - 2000

Unfinished Reforms

Philippine governance has been unable to substantially implement a broad range of

policy and institutional reforms necessary for long-term, sustainable growth and
development. From the early 1980s onwards, a wide-ranging agenda of reforms
have been set but left unfinished4.
The reforms left uncompleted include the: (a) transfer of land ownership from
large landowners to landless farmers under the comprehensive agrarian reform
program, (b) cost-effective delivery of support services - including infrastructure
and technology, to farmers; (c) productivity and competitiveness-enhancing policy
4
?
For a comprehensive enumeration of the unfinished reforms, see V. Bruce J. Tolentino, “Monopoly and
Regulatory Constraints to Rapid Agricultural Growth and Sustainable Food Security in the Philippines,”
Foundation for Economic Freedom and the Trade and Investment Policy Analysis and Advocacy Support Project
(USAID), May 1999.

4
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
reforms in grains, sugar and coconut; (d) revitalization of the food parastatal the
National Food Authority (NFA), (e) quantum increases in public investments in
irrigation, technology and other public goods, and (f) the full financing and
implementation of the Agriculture and Fisheries Modernization Law.

Several of the above reform areas have direct bearing on rice productivity and food
security. These are the provision of public goods that determine the pace of
productivity growth: irrigation and transport infrastructure and market
interventions, particularly constraints to international trade and domestic shipping.

The National Food Authority

The government food parastatal, the NFA continues to exercise monopoly powers
over the international trade of rice in the Philippines. Along with South Korea, the
country remains one of only two countries in the World Trading Organization
(WTO) that maintains quantitative restrictions (QRs) on rice imports. These
extended monopoly powers of the NFA and its tight implementation of these QRs
has maintained high farmgate as well as high consumer prices in the country. This
has contributed to an over-reliance of policymakers on price intervention
instruments rather than productivity increases to support farmers’ incomes and
ensure domestic food security.

As set by law – Presidential Decree 4 (1972), the mission of the NFA is

praiseworthy: buy high (from farmers), sell low (to consumers), store long (to
stabilize prices). However, its performance over the past three decades shows that
its mission has been impossible to successfully achieve (See TA 3429, 2001).

5
 3 December 2001; Governance Constraints to Sustainable Rice Productivity

2. The Institutions of Rice Sector Governance in the Philippines

Over the last two decades, while there has been not much growth and change in
Philippine agriculture, there have been many and frequent changes in the
institutional structures of governance, as well as in the officials of government
responsible for the sector’s governance. To what extent can such frequent changes
in the agricultural bureaucracy and bureaucrats explain the poor performance of the
sector?

The Basic Institutions of Government

The Philippine Government is made up of the co-equal and independent branches:

the Executive, Legislative and Judiciary. The President is the Chief Executive.
The President’s Cabinet is made up of Secretaries who head key executive
departments.

Directly supporting the President is the Office of the President, made up of the
Executive Secretary and the Presidential Management Staff (PMS). The Executive
Secretary serves as the President’s Chief Executive Officer – and is thus termed the
“little President” in everyday bureaucratic operations.

Key Executive Departments

By law, the three key agencies of the Philippine government that are responsible
for rural and agricultural development are the Departments of: (a) Agriculture
(DA), (b) Environment and Natural Resources (DENR), and (c) Agrarian Reform
(DAR). Prior to the early 1980s, the DA was also responsible for matters related to
agrarian reform and environment and natural resources as the large, unified
Department of Agriculture and Natural Resources (DANR).

The DA, DENR and DAR are each headed by a Department Secretary who is a
member of the President’s Cabinet. Note that prior to 1972, the roles and functions
now split among the three Departments were in only one: the Department of
Agriculture and Natural Resources (DANR).

Of course, other departments also influence the agriculture and rural sector and the
workings of the DA, DAR and DENR. These include, in particular, the

6
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
Departments of: (a) Public Works and Highways (DPWH), (b) Transportation and
Communications (DOTC), (c) Trade and Industry (DTI), (d) Budget and
Management (DBM), and the (e) National Economic and Development Authority
(NEDA).

The Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP -
Central Bank of the Philippines) exert major indirect influence on rural and
agricultural development through fiscal and monetary policies.

Basic Departmental Structure

Within each major Department, the Office of the Secretary includes the
Undersecretaries and Assistant Secretaries. These senior officials are alter egos of
the Secretary and serve to extend the Secretary’s authority into specific areas and
assignments. In general, there are three Undersecretaries and three Assistant
Secretaries in each Department5.

According to the Commissioner of the Civil Service Commission (CSC),

Undersecretaries exercise line authority, while Assistant Secretaries are responsible
for staff functions6. However, in practice these distinctions are either unknown to
or ignored by the Departments, since the Undersecretaries and Assistant
Secretaries indeed undertake a mixture of line and staff functions, depending on
the assignments they receive from the Secretary.

The rest of the Departmental organization is made up of the Bureaus, Regional and
other local offices, and Attached Agencies and Corporations. The Bureaus are
core units of the Departments and are generally tasked to undertake or provide
specialist and technical functions and services.

The attached corporations government-owned and operated and were chartered –

or created - by law. Their charters specify their “attachment” to particular
Government Departments or Ministries. “Attachment” to a Department is
generally understood to be for the purpose of policy coordination, and thus the

5
?
Prior to 1992, the number of Undersecretaries and Assistant Secretaries in each Department was not fixed.
Beginning in 1992, Congress legislated limits of three Undersecretaries and three Assistant Secretaries per
Department by legislating limits on the budget appropriations for these posts.
6
?
Interview with Ms. Patricia Santo Tomas, former Commissioner of the Civil Service Commission (CSC),
August 2000.

7
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
department to which a government corporation is attached is usually that which has
responsibility for or authority over a particular sector. For example, the Fertilizer
and Pesticide Authority (FPA) is attached to the DA, and the Agriculture Secretary
sits as the Chairperson of the FPA Board of Directors.

Attached corporations are expected to raise revenues and even be self-financing by

selling particular goods or services that normally would be sold by private
enterprises. However, the corporations are created because for the goods or
services concerned, private production is either: (a) temporarily infeasible for
competitive production, or (b) is being produced by a private monopoly and thus
the government corporation is expected to provide the competition. Thus by and
large the corporations continue to require subsidies through occasional capital
infusions or by regular appropriations.

Frequent Reorganizations

Over the past two decades, the DA has been subjected to several episodes of
reorganization and devolution: 1983 – 1984 under Secretaries Tanco and
Escudero, 1986 – 1987 under Secretaries Mitra and Dominguez, 1992 – 1994
under Secretaries Bacani and Sebastian, and 1998 – 2000 under Secretaries Angara
and Panganiban.

As of 2001, the DA is composed of 53 offices, units, regional offices, bureaus,

attached agencies and corporations, as listed in Table 1.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity

Table 1

Component Units of the Department of Agriculture

[Per EOs 116 (1987) and 272 (1987), GAAs since 1990, RAs 8435 and 8550,
DA AO6 (1998) and other AOs]

Group Unit
The Secretary of 1. Secretary of Agriculture
Agriculture 2. Three (3) Undersecretaries
3. Three (3) Assistant Secretaries
4. Head Executive Assistant

Office of the 1. Administrative Service (AS)

Secretary of 2. Agribusiness and Marketing Assistance Service (AMAS)7
Agriculture 3. Agriculture and Fisheries Information Service (AFIS)8
4. Field Operations Service (FOS)
5. Financial and Management Service (FMS)
6. Information Technology Center for Agriculture and Fisheries (ITCAF)
7. Legal Service (LS)
8. Planning Service (PS)9
9. Policy Analysis Service (PAS)10
10. Project Development Service (PDS)11

Regional Offices One per region, Regions 1 through 12, plus the Cordillera Administrative Region
(CAR) and CARAGA, but not including the Autonomous Region of Muslim
Mindanao (ARMM)

Bureaus 1. Agricultural Research (BAR)

2. Agricultural Statistics (BAS)
3. Agricultural Training Institute (ATI)
4. Agriculture and Fisheries Product Standards (BAFPS)12
5. Animal Industry (BAI)
6. Fisheries and Aquatic Resources (BFAR)
7. Plant Industry (BPI)
8. Post harvest Research and Extension (BPHRE), and
9. Soils and Water Management (BSWM)

Attached 1. Agricultural Credit Policy Council (ACPC)

7
Formed under AO 6 (1998) by merging the functions and personnel of the Marketing Assistance Service
and the Agribusiness Investment Information Service, and renaming the AIIS into the AMAS.
8
Formed under AO 6 (1998) by renaming the MAS and absorbing the Agricultural Information Division.
9
?
Created under AO 6 (1998)
10
Created under AO 6 (1998)
11
Created under AO 6 (1998)
12
Mandated under RA 8435.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
Group Unit
Agencies 2. Cotton Development Administration (CODA)13
3. Fertilizer and Pesticide Authority (FPA)/
4. Fiber Industry Development Authority (FIDA)
5. Livestock Development Council (LDC)
6. National Agriculture and Fisheries Council (NAFC)
7. National Fisheries Research and Development Institute (NFRDI)14
8. National Meat Inspection Council (NMIC)
9. National Nutrition Council (NNC)
10. National Stud Farm (NSF)
11. Philippine Carabao Center (PCC)
12. Southeast Asia Fisheries Development Center – Aquaculture Department
(SEAFDEC-AQD)15, and
13. Sugar Regulatory Administration (SRA)

Attached 1. Food Development Center (FDC) – a subsidiary of the National Food Authority;
Corporations 2. Food Terminal, Inc. (FTI) – a subsidiary of the National Food Authority;
3. Guarantee Fund for Small and Medium Enterprises (GFSME),
4. National Dairy Authority (NDA),
5. National Food Authority (NFA),
6. National Irrigation Administration (NIA),
7. National Tobacco Administration (NTA),
8. Philippine Coconut Authority (PCA),
9. Philippine Fisheries Development Authority (PFDA),
10. Philippine Genetics, Inc.
11. Philippine Rice Research Center (PhilRice),
12. Planters Foundation, Inc., (PFI)/ Planters Products, Inc. (PPI),
13. Quedan Guarantee and Credit Corporation (QuedanCorp),
14. National Agribusiness Corporation (NABCOR), plus subsidiaries, and
15. Sacobia16 Development Authority (SDA)

13
Created under RA 8486.
14
Created under RA 8550.
15
Created under an ASEAN Agreement.
16
?
Sacobia area in Central Luzon.

10
 3 December 2001; Governance Constraints to Sustainable Rice Productivity

Devolution Since 1991

Since Republic Act 7160 – the Local Government Code of 1991 was passed, the
offices the regional level of key departments have been devolved to the Provincial
and Municipal local governments. The Regional Offices have been maintained
and expected to serve as technical support units for the local government units
(LGUs).

The LGC focused its devolution requirements on only three departments: the DA,
Department of Health (DOH) and Department of Social Welfare and Development
(DSWD). Note that out of the three key departments responsible for agriculture
and rural development, only the DA was devolved.

The strategy behind the partial implementation of devolution across agencies is

that progress in devolution per the LGC was to be assessed after five years. The
results of the assessment would then guide the expansion and modification of the
LGC. Unfortunately, it seems that the five-year assessment was never fully
implemented and thereby not translated into amendments of the LGC.

Also unfortunately, the LGC as enacted in 1991 left many threads hanging and
undefined. Therefore, in the absence of more specific instructions and
authorization, many sub-units and functions of these agencies have generally
continued to be centrally administered and undevolved.

For example, there are a number of key agencies and offices within the DA that
continue to be centralized – like the National Irrigation Administration (NIA),
National Food Authority (NFA), Philippine Coconut Authority (PCA), National
Tobacco Administration (NTA) and the Sugar Regulatory Administration (SRA).
These agencies continue to exercise line functions and authority through
independent offices at the regional, provincial and in some cases municipal level.
These offices also operate outside the purview of LGUs. Although these offices do
some “consultation” with the LGUs, in essence their activities are under the full
direction of their respective head offices, executives and governing boards in
Manila.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity

3. Frequent Changes in Bureaucrats Responsible

for Rice Sector Governance in the Philippines

Two key types of events have provided the contexts for frequent changes in
officials responsible for rice sector governance in the Philippines since the 1980s:
elections and reorganizations.

Political Appointments

Virtually all senior-level officials of the Departments of the Philippine

Government, from the level of Assistant Director and upwards to the Secretary, are
political appointees and are appointed directly by the President of the Philippines
(Assistant Directors are at the 5th level of the Philippine bureaucracy, with Cabinet
Secretaries occupying the first level below the President).

For example, at the Department of Agriculture about 180 posts are to be filled by
appointment of the President of the Philippines. Thus when Presidents change, the
appointees to the top levels of government also change. Since there have been four
changes of Presidents since the departure of Ferdinand Marcos in 1986, there have
been at least four sets of changes of all political appointees.

There are ongoing efforts to create a permanent civil service through the “Career
Executive Service Officer (CESO)” system. However the process of
institutionalizing the CESO system has been slow due to its nature as a system of
accreditation and qualification. In order to be recognized as a CESO and thereby
protected from capricious removal from office, individual civil servants have to
gain the qualities required for appointment to a “permanent” or tenured post
through examination and experience.

However, despite the existence of the CESO system, appointing authorities have
chosen to override the system or ignore its controls.

Five Presidents in 35 Years

Over the last 35 years the Philippines has been led by a succession of five
Presidents. Mr. Ferdinand Marcos held on to the office for 20 of the 35 years.
Presidents Corazon Aquino and Fidel Ramos served six years each. Since Marcos

12
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
and under the Philippine constitution of 1987, Mr. Ramos has been the only
President to serve out his full term of office – six years.17

President Estrada’s service was foreshortened, while President Macapagal-Arroyo

may possibly serve for up to nine years. President Macapagal-Arroyo is currently
serving the unexpired period of service of President Estrada, and she is eligible to
stand for election and possibly win a full term of office from 2004 – 2010.

19 Executive Secretaries in 36 Years

In Philippine practice, the Executive Secretary of the Cabinet serves as the so-
called “Little President”, operationalizing the leadership of the President, as primus
inter pares among the rest of the Cabinet. Over the last 36 years there have been
19 men who have served as Executive Secretaries.

On the average, the Executive Secretaries of the last 35 years served for 23
months. However, in more recent years the Executive Secretaries have worked for
much shorter periods. Six men were appointed to the post by President Marcos,
and served an average of 40 months. In contrast, President Aquino worked with
four Executive Secretaries in six years, keeping them an average of only 19
months.

President Fidel Ramos had five Executive Secretaries during his six-year term.
Over his foreshortened Presidency of 31 months Mr. Joseph Estrada worked
principally with only one Executive Secretary.18

Finally, while the Presidency of Gloria Macapagal Arroyo has yet to play itself out,
so far she has already appointed two Executive Secretaries in the space of only ten
months19.
17
?
Mr. Ramos is generally regarded as a successful President, so much so that toward the close of his six-year
term there was significant political support for a change in Constitutional rules in order that he continues as
President.
18
?
Mr. Estrada was elected in 1998 to a 6-year term as set by the Philippine Constitution. He was forced from
the Presidency in January 2001. Mr. Zamora served as Executive Secretary until the month before Mr. Estrada was
forced from office. Mr. Edgardo Angara then moved from the Agriculture portfolio to Malacanang Palace, serving
for barely a month before the administration of President Arroyo took over.
19
Mr. Renato De Villa entered as Executive Secretary as President Arroyo began her administration in
January 2001. He left in March 2001, citing health reasons. Mr. Alberto Romulo was asked by the President to
leave the post of Finance Secretary to replace Mr. De Villa.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity

11 Agriculture Secretaries in 30 Years

Eleven men have served as Secretary of Agriculture since 1971, averaging periods
in service of 33 months (Table 2).

Table 2

Department of Agriculture Leadership, 1971 - 2001

(As of December 2001)

From – To Secretary of Months of

Agriculture Service
January 1971 - June 1984 Arturo Tanco* 162
July 1984 – February 1986 Salvador H. Escudero 20
March 1986 – February 1987 Ramon V. Mitra 12
March 1987 - December 1989 Carlos G. Dominguez 34
January 1990 - June 1992 Senen C. Bacani 30
July 1992 – February 1996 Roberto S. Sebastian 44
March 1996 – June 1998 Salvador H. Escudero 25
July 1998 - April 1999 William D. Dar** 9
May 1999 - December 2000 Edgardo J. Angara 19
January 6 – February 15, 2001 Domingo F. Panganiban 1
February 16 – December 2001 Leonardo Q. 10
Montemayor
* Including Environment, Natural Resources and Agrarian Reform.
**Acting Secretary

However, there is great variability in the length of service among the Agriculture
Secretaries. Secretary Arturo Tanco served for 162 months, while Secretary
Domingo Panganiban served for barely a month.

With regard to the two men who served as Agriculture Secretary prior to 1986, Mr.
Arturo Tanco was Secretary from 1971 to 1984 – a total of 162 months. Had the
EDSA revolution not taken place in February 1986, Mr. Tanco’s successor Dr.
Escudero20 would have continued in office until at least 1990, adding another 48
months to the 20 that he had already served.
20
?
Dr. Escudero, a Veterinarian, was the Dean of the College of Veterinary Medicine of the University of the
Philippines when he was asked to serve as Director of the Bureau of Animal Industry in the 1970s.

14
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
Moreover, both Mr. Tanco and Dr. Escudero were no strangers to the Agriculture
Department. Mr. Tanco was Assistant Secretary for several years prior to being
appointed Secretary. Dr. Escudero had been Director of the Bureau of Animal
Industry (BAI) for several years before being promoted to the Agriculture portfolio
in 1984.

Thus prior to 1986 the top leadership of the DA was quite stable, with the
Secretary and his team being in place for at least 5 ½ years.

In contrast, the periods of service of the Agriculture Secretaries from the “EDSA
Revolution” of February 1986 up to the present have been quite short. Since 1986
nine men have been appointed in quick succession to the post, each serving an
average of only about 20 months. The longest period was 44 months - that of
Secretary Sebastian in mid-1992 to early 1996. The shortest was that of Secretary
Panganiban – barely a month in December 2000 – January 2001 just before the
“EDSA Revolution, Part 2”.

It should be noted that since 1986 none of the Agriculture Secretaries have been
able to serve their full terms as provided by law – six years. With the exception of
the transition from Mr. Senen Bacani to Mr. Roberto Sebastian after the elections
in 1992, all these Secretaries came into office, and rather soon after left, during a
state of political turmoil.

4. Changing Leaders, Changing Styles, Changing Programs

With each changing of the guard at the Departments came changes in sectoral and
Departmental goals, objectives, strategies, timetables, programs, projects and
activities. Such changes were unavoidable, first because there were new people in
top positions in each of the departments, and new people at the very least meant
changes in leadership styles and work arrangements.

The changes instituted immediately after the Marcos regime in 1986 were truly
substantial. In the first place there was a new openness and a return to Democratic
institutions, a clear differentiation between the very strong Presidency (or in some
views – dictatorship) of President Marcos, and that of Ms. Aquino which was
much more consultative and balanced by a re-empowered Legislature and
Judiciary.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
The Aquino government came into power in 1986 with very broad, very ambitious
ideas on reforms, initiatives and programs. Most of these ideas still had to be
translated into implementable form. Furthermore, many of President Aquino’s
appointees to the Cabinet were also new to government service.

The combination of new initiatives and people new to government service meant
that some time was necessary to “learn the job”. This necessitated a very steep
learning curve over a short period – and not a few birthing pains and mistakes.
The task of learning the job is also complicated by the need for visibility and
impact as soon as possible after taking office. This pressure results in two major
initial preoccupation upon entry: (a) the need to erase the programs of the previous
appointee, and (b) the need to announce programs labeled as one’s own – no matter
if the difference is only the label.

Frequent Changes in Programs

A clear example of the need for immediate impact and visibility is the series of re-
invented programs for rice production and food security announced and
implemented by successive administrations since 1972 (Table 3).

Table 3

Chronology of Rice Production and Food Security Programs,

1972 - 2001
(As of December 2001)

From Program Name/ Secretaries of Years of

– To Title Agriculture Implemen-
tation
1972 – Masagana 99 (M99) Arturo R. Tanco/ 15.0
1986 Salvador H. Escudero III

1987 – Rice Productivity Enhancement Program Carlos G. Dominguez 2.5

1989 (RPEP)

1990 – Rice Action Program (RAP) Senen C. Bacani 2.5

1992
1993 – Key Production Areas (for rice and other Roberto S. Sebastian 3.0
1995 priority commodities)

1996 – Gintong Ani Programs (for rice, corn, Salvador H. Escudero III 2.5

16
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
From Program Name/ Secretaries of Years of
– To Title Agriculture Implemen-
tation
1998 livestock, fisheries, high-value crops and
marginal areas)

1998 – President Erap’s MakaMASA Programs William D. Dar*/ Edgardo 2.5

2000 (for rice, corn, livestock, fisheries, coconut, J. Angara/ Domingo F.
sugar, tobacco and high-value crops) Panganiban

May – GMA CARES (for credit, “rolling stores”, Leonardo Q. 0.5

Decem- rice, corn, irrigation, livestock, fisheries, Montemayor
ber 2001 coconut, sugar, tobacco and high-value
crops)

The landmark program Masagana 99 (Productive 99) implemented during the

tenure of President Marcos and Agriculture Secretaries Tanco and Escudero is
credited for bringing the country from the brink of starvation in the early 1970s to
self-sufficiency and some exports by 1979.

The M99 program ran for 15 years and at least 14 “phases”, with refinements made
with each phase. The initial phases were wracked with design errors and
inefficiencies. Given that the country was under Martial Law, the implementers of
M99 were allowed room to learn from their mistakes and improve the program
with each succeeding cycle.

All the rice and food security programs since 1986 have been short-lived, at least
in name. In 1986 the key features of the Masagana 99 program were abandoned
in favor of a much more market-oriented approach based less on irrigation
infrastructure and directed credit support and more on seed and fertilizer
distribution and farm procurement. The program was named the Rice Productivity
Enhancement Program (RPEP), and lasted for 2 ½ years – through the
administration of Secretary Carlos Dominguez.

Since 1989, the RPEP has been revived and relabeled at least five times through
the administrations of at least five replacement Secretaries of Agriculture. The
replacement of Secretary Roberto Sebastian in 1996 can be directly traced to the
performance of the rice sector, where his “Key Production Areas” approach was
perceived to be not delivering desired results, as manifested in a jump in rice prices
during 1995 – the so-called “1995 rice crisis”.

17
 3 December 2001; Governance Constraints to Sustainable Rice Productivity
It should be noted that analysis of the blip in rice prices in 1995 were
fundamentally due to rice procurement, import and inventory policy and not to
production support. The National Food Authority (NFA), attached to the DA and
chaired by the Secretary of Agriculture, maintains the monopoly on rice imports.
The policy to hold NFA inventories and imports down led to the rise in domestic
rice prices in 1995.

Finally it should be noted that in terms of design, the rice production and food
security programs in the post-1986 period differed only in labeling but not in
substance. Each focused on priority production areas – usually irrigated areas.
Each was highlighted by programs for access to and subsidies for seeds and
fertilizers. Each was in the end dependent on the NFA for procurement support.
Given the frequent changes in leadership, there were however many changes in
timing, implementation calendars, and learning and re-learning of the management
and administration of the programs.

Frequent Re-organization and Restructuring

With each new Secretary there usually followed a period of restructuring and re-
organization. These were all explained as part of a process of “streamlining the
bloated bureaucracy”. Offices were moved around, abolished, created or re-
created in the process. However, because legislation is required to make any
substantial changes permanent, many of these actions usually ended up as
uncompleted initiatives.

Successive administrations of course had different ideas about how institutions

should be structured. One of the actions that could be implemented under the
President’s executive authority is the attachment of agencies.
An example of the changes in attachment is the case of the NFA, which since the
1970s has been shifted in attachment back and forth from the DA to the Office of
the President (Table 4).

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity

Table 4

Discontinuous Structures: Attachment of the NFA

Issuance Date President/ Secretary/ Structural

NFA Administrator Purpose
Presidential 26 President Ferdinand Abolish Rice and Corn Administration
Decree September Marcos/ (RCA), creates National Grains
(PD) 4 (As 1972 Secretary Arturo Tanco/ Authority (NGA), attached to the DA.
amended Administrator Jesus
by PDs Tanchanco
699, 1485)
PD 1770 14 January Prime Minister Marcos/ Expands NGA to National FOOD
1981 Secretary Imelda Marcos/ Authority (NFA), places Minister of
Administrator Tanchanco Human Settlements (MHS) as Chair
of NFA Council

Executive March 1987 President Corazon Attaches NFA to the DA, with DA
Order (EO) Aquino/ Secretary as Chair
292 Minister Ramon Mitra/
Administrator Emil Ong

EO 2 July 1998 President Joseph Estrada/ Attaches NFA to the OP, with
Acting Secretary William Administrator as concurrent Chair
Dar/
Administrator Edgardo
Nonato Joson

EO 315 December President Estrada/ Attaches NFA to DA, with DA

2000 Secretary Domingo Secretary as Chair
Panganiban/
- vacant –

EO 41 15 October President Gloria Attaches NFA to the OP.

2001 Macapagal Arroyo/
Secretary Leonardo
Montemayor/
Administrator R. Anthony
R. Abad

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity

5. Fallout from Frequent Changes in Sector Leadership

By any measure, the management of the agriculture and rural sector for sustainable
growth is complex and difficult. In the Philippines, the task of sector management
has become even more difficult and complex due to the intensely political
atmosphere that has come to envelop the bureaucracy.

Intensified Politicization of Senior Bureaucrats

Therefore it is no surprise that particularly in more recent years the men appointed
as Secretaries of DA, DAR and DENR partake more of the qualities of politicians
rather than sector experts. Politicians are rewarded for political support, and
Cabinet seats and other top jobs in bureaucracy have become more as rewards to
be savored for tasks already accomplished, rather than tasks that require to be
performed for future benefit not to oneself – but for the sector and population at
large.

The political nature of cabinet and other senior-level posts in government have
emphasized the need for visibility and impact as soon as possible after taking
office. This pressure results in two major initial preoccupations upon entry into
office: (a) the demolition of previous programs, and (b) the announcement, as
soon as possible after taking office, of “new and better” programs carrying one’s
own identity and label – no matter if the difference is only the label.

Thus Cabinet members often find themselves rushed to announce half-baked goals,
agendas and programs of government even before they have had an opportunity to
thoroughly review the challenges they need to face and the options available to
them.

Each of the Administrations since 1986 have had so much to do, so little time, and
not much experience on how to get the job done. This combination, in a context
with a hungry political opposition anxious to capitalize on mistakes, has helped
foster an atmosphere where cabinet members are replaced at the first mistake –
however unavoidable, whether in perception or in actuality. A culture of “cabinet
revamps” and replacements of one official or the other has emerged, where one of
the first reactions to a perceived inadequacy in leadership, capacity or political skill
is the replacement of the erring or inadequate cabinet member.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
In turn, such an atmosphere has emphasized political expediency and a focus on
short-term gains, often at the expense of sustainable, long-term effectiveness.

Weakened Planning, Policy and Analytical Capability

The brief tenures of the agriculture secretaries since the mid-1980s have
contributed to the weakening of the agriculture sector bureaucracy as a whole. As
the leadership focused on short-term gains, the tasks of long-term structural change
and strengthening was neglected. These weaknesses are evident, as gleaned from
several observations such as:

1. Non-competitive compensation for mid-to-upper level technicians and

managers;

2. Declining overall quality of mid-to-upper level sector technicians and

managers;

3. Inadequate technical staff support for top managers; and

4. Institutional and management structures not appropriate to current

challenges and realities.

Clearly the compensation of mid-to-upper level employees in the bureaucracy has

fallen behind their counterparts in the private sector. Analyses by the Personnel
Management Association of the Philippines and the Department of Budget and
Management report that the gross monthly salaries of government staff below the
rank of Division Chief (Grade 24) are “competitive” with the private sector.
However, the salaries of all personnel of Grade 24 and above are substantially
below that of comparable jobs in the private sector.

It is interesting to note that the twin facts that: (a) the salaries of government
employees below Salary Grade (SG) 24 are competitive with the private sector,
and (b) the salaries of government staff and officials SG 24 and above are not
competitive is the result of the same program of “salary standardization” that has
been implemented over the past 12 years. The salaries of lower-level staff have
been successfully upgraded through the program. However, the program has been
implemented in the context of a poor fiscal base, overall high unemployment and
underemployment and thus weak political support for substantial increases in the

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
compensation structures of upper-level government officials and staff. This is
made obvious in the salary of the President of the Philippines: P50,000.00 (less
than US$1,000) per month.

Given that the President’s salary is the ceiling for all official compensation, the
salaries of all cabinet officials, Undersecretaries and Assistant Secretaries,
Directors and Assistant Directors and Division Chiefs are all woefully low! The
structure also invites the creation of mechanisms for hidden compensation,
elaborate structures for allowances and other benefits, and graft and corruption.
Unfortunately, it is at the mid-to-upper levels of government officialdom and
bureaucracy where technical analysis, administration, decision-making,
policymaking, resource allocation and contracting take place. When compensation
structures cannot attract and keep persons of sufficient training, experience and
capability in the bureaucracy, certainly the effectiveness of the government will
deteriorate.

While the preparation of these notes did not benefit from empirical analysis of
personnel records. Thus it is stated from the viewpoint of an experienced observer
that the general quality of mid-to-upper level staff and officials in the
agriculture and rural development bureaucracy has deteriorated rapidly in
the last 20 years. “Quality” is understood to be determined by appropriate
education and training – achieved prior to assumption of office, direct experience
and other indicators of capability.

The same compensation conditions for upper-level sector officials also afflict mid-
to-upper level analysts and technical staff. Accepting that the overall quality of
upper-level sector officials has deteriorated, the analytical and technical staff
support for these officials have also become weaker. The overall effect is a weaker
bureaucracy, barely able to cope with the demands of sector leadership and
management, and unfortunately more prone to corruption.

Inappropriate Institutional Structure

The technical assistance project TA 2733-PHI recently undertook an intensive

diagnosis of the current capacities and capabilities of the DA.21 This diagnosis was
in the context of the DA’s tasks in policy formulation, planning and monitoring
21
SEA Consultants, “Diagnostic Report”, TA2733-PHI, “Institutional Capacity Building in Policy
Formulation, Planning, Monitoring and Evaluation for the Agricultural Sector,” Department of Agriculture and the
Asian Development Bank, October 1997.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
and evaluation, in the context of the increasing globalization of agriculture and
fisheries and the process of devolution. In summary, the diagnosis concluded that:
the agriculture and fishery policy, planning and monitoring and evaluation
structure of the Philippines is fragmented, uncoordinated and weak. A
“problem tree” of this conclusion is illustrated in Figure 2.

The Diagnostic Report produced under TA 2733 states that the DA’s structure is:

“Fragmented:

 Institutionally, the structure is spread out over OSEC, 7 staff bureaus and 25 attached
agencies and corporations, ARMM, CAR and 14 regional offices.
 Many sector policy and planning functions are handled by government units other than
the DA, such as the PMS, Cabinet Clusters, the Presidential Advisers and Commissions
(Poverty, Rural Development, Flagship Programs, Mindanao, Visayas), NEDA, DAR,
DENR, DTI, DFA and DOF.
 there is perceived inconsistency between pronouncements and actions, particularly in the
impact and implementation of the MTDP, MTADP, the GAA and macroeconomic
policies.

Uncoordinated:

 The responsibilities, authority and accountability for policy and planning are ill defined
and not clearly assigned to particular units.
 there are no organized, continuing linkages among the policy and planning units of the
various DA agencies.
 the relations, contacts and coordination with LGUs, farming communities, farmers’
groups, NGOs and private sector agribusiness groups is intermittent and generally of low
intensity and weak follow-up.

Weak:

 There is no DA unit dedicated to agricultural trade policy (GATT/ WTO, APEC, ASEAN,
PECC, Cairns, E.U., U.S., Japan, Australia and other bilaterals).
 there is no DA unit responsible for corn (food and feed).
 sector budgeting and appropriations preparation is split from planning.
 there is practically no economic and policy analysis unit at the DA. The existing OSEC
PAD is very understaffed and ill-trained.
 Most DA units have no staff dedicated to policy and economic analysis, particularly in
support to legislation, the relationship between technological factors and productivity,
the impact of macroeconomic factors on particular commodities and on agriculture as a
whole, market competitiveness of particular commodities, and intersectoral linkages,
both domestic and international.
 Most DA units are understaffed and have limited skills in agricultural investment project
formulation, preparation and appraisal – especially of public investments.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
 the DA has very weak influence on market infrastructure policy and programming –
especially roads and shipping.
 the DA has very weak influence on the size and allocation of technology research
resources.
 The DA has been unable to fully tap and harness the considerable expertise in the
research community outside of the DA (UP System, etc.), and
 There has been no continuing staff support and human resource development program
which will promote staff skills and stability in service.”

The bottom half of the problem tree in Figure 4 portrays the causes of the weak,
fragmented and uncoordinated nature of the DA. The reason why the DA is weak
is because some tasks are haphazardly done or not performed at all. This is
because required organizational units are missing, too small, or already
overburdened. These structures find their basis in legislation or administrative
issuances; instruments that were poorly structured to begin with or have already
become obsolete in the light of current imperatives.

In sum, poor continuity in sector leadership is clearly a major factor in existing

weakness in rural development governance. Such discontinuity results in
inadequate understanding in sector dynamics. As leaderships focused on short-
term gains, the tasks of long-term structural change and strengthening have been
neglected. Short periods of service emphasize short-term gains.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity

Figure 4

Problem Tree: Fragmented, Uncoordinated and Weak Policy,

Planning and M&E Structure of the Department of Agriculture

6. Conclusion: The Agriculture Sector in Flux

And Some Recommendations

In may be said that the agriculture, rural development and natural resources
management sectors of the Philippine economy and government has been in
transition since 1986. This is true particularly in reference to the very frequent
changes in sector leadership and governance that have been made in the

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
Departments of Agriculture, Agrarian Reform and Environment and Natural
Resources since 1986.

Since 1986 all Secretaries of the DA, DAR and DENR have, with only a single
exception, been unable to serve their full six-year terms as provided by law. Yet
prior to 1986 the Ministers/ Secretaries of Agriculture and Agrarian Reform served
for at least 13 and up to 20 years - in the process learning from both mistakes and
victories.

At the very least, the frequent changes have caused the programs and projects in
each department to be halted then re-started with each episode of replacement of
the Secretary and other senior officials. There have been at least six periods of
transition between outgoing and incoming Secretaries of Agriculture since 1986.
These transition periods have each lasted, nominally, at least a few months.

Yet the task of agriculture sector management must go with the seasons. Crops
cannot be hurried through their growth cycles. Yet the sector grows all the more
complex and long-term in nature with rapid population growth, increased food
requirements, intensified domestic resource scarcity and global openness.

In actuality, given that the DA is a very complex organization and the task of
governance for agricultural growth is by itself a complex undertaking, the period of
administrative transition is merely a sub-period of the overall learning period
required to achieve a level of understanding and expertise sufficient for effective
sector governance.

Some Recommendations

It is crucial that some stability and long-term vision is institutionalized into sector
management. Quite clearly the level of the President and perhaps even cabinet
secretaries will remain political and thus subject to political tides.

At the very least, however, a professional, long-term technical core group of

managers, administrators and technical experts must be installed in each of the
departments. Even these key posts must not become spoils to be distributed as
rewards in the aftermath of political contests.

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 3 December 2001; Governance Constraints to Sustainable Rice Productivity
A beginning point is to have a majority of Undersecretaries, Assistant Secretaries
and agency heads not subject to political appointment. This can be achieved
quickly by Presidential Order, confirmed by legislation.

Another easily-accomplished step is to have all senior officials be subject to fixed

terms of office – say at least three or four years, with the possibility of renewal
(perhaps limited) given some minimum acceptable level of performance.

The experience of the last two decades indicates that any period of service beyond
two years is already a major achievement. A minimum of one year is required to
thoroughly “learn the job”. Thus the appointees can then focus the rest of their
terms on accomplishing results for the sustainable benefit.

Another measure to induce more stability in the service is to accelerate the

conferment of Career Executive Service Officer status on qualified officials. This
is easily accomplished as part of the management powers of the President and the
Civil Service Commission.

Poor growth in agriculture, weak rural development, fragile food security,

worsening poverty and hunger. These results are at least partly traceable to
discontinuous, disjointed attention to the management of the agriculture sector.
Unless strong measures are immediately taken to stabilize sector leadership on a
definitive sustainable growth path, the agriculture and rural sector will continue to
be mired in stagnation.

27