Emulating a neighbor

Vietnam and the Philippines have similar land area, population, agricultural area, and farm sizes, notes agricultural economist Dr. Rolando Dy in a recent BusinessWorld article that merits much wider attention beyond that paper’s more focused audience. I looked up the numbers: Vietnam’s total land area is 31 million hectares; ours is 30 million. There are now 96 million Vietnamese, against 105 million Filipinos. Vietnam’s total farm area is 12.2 million hectares, less than our 12.4 million. Average farm size in both countries is 1.2 hectares.

That’s where the similarities end. Dy observes much higher fertilizer use, more mechanized farm operations, and nearly four times more irrigated areas in Vietnam. The last is because of huge river delta plains around the Mekong River—a natural advantage Vietnam shares with other Greater Mekong Subregion (GMS) countries, all high-yielding rice surplus economies. Similarly, our most productive rice areas surround major rivers like the Cagayan, Pampanga, Pulangui and Bicol Rivers in Luzon; Panay and Jalaur Rivers in Western Visayas; and Rio Grande, Agusan and Davao Rivers in Mindanao.

With proper support, these areas can match rice productivity in the GMS. If we focus on these while shifting marginal rice lands to better-suited and more profitable crops, average cost (hence price) of Philippine rice can approximate that in GMS. Ultimately, we won’t even need a 35-percent tariff on imported rice (hence a 35-percent penalty on Filipino rice consumers) if we settle for producing most, but not all, of the rice we eat. That’s what the Asean Economic Community is for: so we can pursue food security at a regional level, even without self-sufficiency at the national level.

Back to the Vietnam comparison, Dy notes that in the past 20 years, our rice area grew 28 percent, while coconut, banana, sugarcane, rubber and mango areas grew 14, 19, 18, 144 and 50 percent, respectively. Vietnam’s rice area grew by only 8.5 percent, but corn, rubber, coffee, cashew and tea grew 77, 256, 226, 127 and 88 percent, respectively, with nontraditional exports having the largest area increases.

While overall average yield rose by 17 percent in the Philippines, it jumped 45 percent in Vietnam. Yields rose in six of our Top 10 crops: rice, corn, banana, sugarcane, cassava and sweet potato, but fell in coconut, rubber, mango and coffee. In contrast, Vietnam’s top crops all increased: rice, corn, rubber, coffee, cassava, cashew, groundnuts, dry beans and coconut. The value of our total rice crop grew 2.7 times, and 2.1 times for other crops. Vietnam did much better, with rice growing 3.6 times, and other crops 5.6 times.

Our agri-food exports rose 1.6 times to $4.96 billion in 2016 from $1.88 billion in 2001. But Vietnam zoomed 5.6 times from $4.42 billion in 2001, to $24.55 billion in 2016. Only two Philippine farm product exports have earned $1 billion or more in a year: coconut oil and fruits (mostly banana). Vietnam has five farm exports bringing in over $1 billion a year: fish and seafood, coffee and pepper, nuts, rice and fish preparation—plus six more earning over $500 million a year.

All told, Vietnam has grown its agriculture on a broad base of much more diverse products. Why haven’t we done the same? Dy, like many other researchers, identifies the culprits to include an inordinate focus on rice self-sufficiency, land reform that undermined economies of scale, lack of continuity of programs, absence of meritorious civil service, and more. Vietnam’s record in agriculture and poverty reduction sets an example for us to follow.

Opening our rice trade through rice tariffication and deregulation should finally push us to truly help farmers beef up our rice productivity and competitiveness, and provides the resources from rice import tariffs to do so. We can tap the Asean Economic Community to ensure food security, especially via food affordability. The government can then direct much of the regular budget and efforts of our agriculture authorities well beyond rice, and achieve for us a much more dynamic and diversified agricultural sector.

Vietnam has shown the way. It’s up to us to follow.

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