The disaster that is agriculture (2)
This is the conclusion of my column on agriculture.
UP School of Economics professor and National Scientist Raul Fabella, in his discussion paper “Comprehensive Agrarian Reform Program (CARP): Time to Let Go,” noted that the CARP only created a new class of people: the “landed poor.”
It has given title to land farmers can’t benefit from as a land owner. As I mentioned, they can’t use it as collateral for a loan, they can’t convert it to other nonagricultural uses, they can’t sell it. Entrepreneurial farmers aren’t allowed to acquire land greater than 5 hectares, so the economies of scale that greater production could accomplish aren’t permitted. Plantations, which some crops such as sugar and bananas must have, aren’t allowed in a draconian law created by nonagriculturalists.
CARP’s term is over. It not only should not be extended, it should give the agrarian reform beneficiaries the flexibility to lease their lands to agri-entrepreneurs while keeping ownership of their land, with perhaps some restriction in its conversion to nonagricultural uses. This is, after all, a country with limited arable land for a large and growing population.
Plantations need to be revived. The economies of scale that single ownership of a large plot can create are essential for the efficient production of some crops. But cartelized capture (as in sugar of the past) must be prevented.
In February 2018, a law was passed providing free irrigation to farms. It’s a well-intentioned mistake (another example of a populist decision without sufficient thought about its consequences). You get something for free, you don’t look after it. There’s no sense of ownership and responsibility, no requirement to look after it, to maintain it. Water needs to be communally owned and paid for. And then looked after.
Growing the produce cost-effectively is only one of the problems. Getting it to the market in fresh condition at a fair price is another. Here, three things stand in the way: lack of farm-to-market roads (or, as Sen. Panfilo Lacson so brilliantly expresses it, “farm-to-pocket roads”), lack of affordable cost of sea freight, and middlemen who make more money than the farmers while doing far less.
My wife buys vegetables from the farmers in the local provincial market at a price less than half what she pays in the supermarket. That’s a hugely inefficient distribution system. Vegetable prices in Bangkok are half what they are in Manila. That alone tells you how bad things are, and how urgent is the need to change it.
Missing in all of this is the research into developing higher productivity and resilience. The Philippines hosts the International Rice Research Institute, but then doesn’t utilize the research developed and does nothing to research better methods oriented to the Philippine environment. It’s no better for other crops, despite the agencies who’ve been given this mandate. Our neighbors have created dedicated research centers for crops that could be of major export potential, and it has worked: Malaysia—rubber and palm oil; Thailand—rubber, tapioca, horticulture; Indonesia—palm oil, rubber, coffee, cacao; Vietnam—rubber, coffee, pepper, cashew.
In contrast, the Philippines (under Marcos) abolished the only one the Philippines had, the Philippine Coconut Research Institute. Coconut has suffered since, way below its potential.
The failures show up in the numbers. The Philippines just doesn’t seem able to grow crops in the most efficient way. It’s last, or near the last, in all of them.
For the past 50 years, there’s not been a leader who has given agriculture the dedicated attention it must have. The focus has been on manufacturing and services, and they have grown modestly well because of it.
The equal focus on agriculture has not happened. President Duterte now needs to correct that failure and spend the next three years putting this as a priority, if not the top priority of his administration. The goal should be agriculture growth of at least 4 to 5 percent annually. Some revolutionary changes are needed in this essential-to-life sector. It’s time it had them.
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