Right dev’t path to make PH more than self-sufficient in rice

The population poverty incidence (PPI) target in the 2017-2022 Philippine Development Plan (PDP), at 14 percent, is hardly attainable for the following reasons:

1. The country’s PPI was decreasing from 44.3 percent in 1980 to 24.3 percent in 2003; after 2003 it sort of leveled off at 25.2 percent in 2012 and 21.6 percent in 2015.

2. On the other hand, the average GDP (Gross Domestic Product) growth during the period 1980-2003 was just a little over 3 percent. After 2003, it averaged at around 6 percent. In 2016, it reached 6.8 percent; despite the increase, the PPI has not improved. This is due to the fact that growth is driven by the service sector, making the agricultural sector perform below par.

3. In particular, the failure of land reform, initiated during the Marcos administration and continued via the Comprehensive Agrarian Reform Program (CARP), resulted in a situation in which 70 percent of the farmers remain landless and impoverished, on a PPI of 38.3 percent. But the worst thing was the corruption in the “fertilizer scam” and “pork barrel scam” which involved billions of pesos and further jeopardized agricultural development.

The country’s neighboring countries have attained significant improvement in their PPI—China, 6.1 percent; Indonesia, 11.3 percent; and Vietnam, 11.3 percent. This can be attributed to the following factors:

1. The share of the agricultural sector to the labor force and the corresponding GDP per capita PPP (purchasing power parity) are 33.6 percent and $14,100 in China; 38.9 percent and $11,100 in Indonesia; and 48 percent and $6,000 in Vietnam, respectively. By relating the two variables among these countries, we can see that there is a perfect negative correlation of 1.00—which means that as the GDP per capita increases, the share of the agricultural sector to the labor force decreases. This implies that the Philippines, with the agricultural sector’s share of 29 percent to the labor force should have a corresponding per capita GDP of almost $20,000. But the actual is only $7,300 which is indicative of economic development that is biased in favor of the service sector.

2. By following the correct path of development that gives priority to agriculture, China, Indonesia and China have become not only self-sufficient in rice but also rice exporters. In fact, Vietnam is the country’s preferred rice supplier.

The above data, which have been presented in several publications, have never been considered as assumptions in the formulation of the PDP. The possible reason is that majority of the elected officials—from the national down to the local levels—with their limited stints in government (three-year or six-year terms) do not see much (or less) benefits to be derived from agricultural development, so they prefer more investments in infrastructure projects.

Nevertheless, with the promised massive infrastructure investments, it is expected, given President Duterte’s sympathy for the poor and his influence and political will, that his administration will introduce the changes needed to make agricultural development a priority.

EDMUNDO ENDEREZ, eenderez@gmail.com