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Agriculture: the top priority

/ 12:28 AM February 16, 2016

MOST OBSERVERS would agree that among the three major economic sectors, agriculture must receive the closest attention of the next Philippine president. The following facts should bear this out:

One, agriculture is the seat of poverty in the country. Seventy percent of the Filipino poor can be found in the rural areas, where the dominant source of livelihood is farming and fishing. Poverty incidence is also highest in rural areas (at 40 percent, against only 13 percent in urban areas and 3.9 percent in Metro Manila); and it is worst among coconut farmers and fishers. Our rural poverty incidence is two to five times higher than in our comparable South East Asian neighbors—Vietnam has only 17 percent, Thailand and Indonesia 14 percent, and Malaysia 8 percent.

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Two, compared to industry and services, Philippine agriculture has yielded the lowest productivity and lowest incomes over the years. Our labor productivity in agriculture barely improved in the 1990s, growing annually at an average rate of only 0.7 percent, less than half of corresponding productivity growth in our neighboring countries. Total factor productivity, which embodies technology and efficiency, grew annually in the sector by an average of only 0.4 percent since 1980, well behind corresponding growth in most of the region. (For example, Vietnam’s grew at 1 percent, China’s at 3.9 percent.) Ironically, the Philippines has long been a knowledge center for the agricultural sciences, and actually mentored leading agricultural scientists in the region, especially at the University of the Philippines-Los Baños College of Agriculture.

Three, it’s in agriculture where the current administration appears to have done worse than the previous one. Whereas total farm employment went up by around 698,000 workers from 2004 to 2009 (based on January data of the quarterly Labor Force Surveys), it actually fell by 756,000 workers from 2010 to 2015. Average annual growth of the sector over the last six years has been only 1.3 percent, less than half of the 3.2 percent posted in the previous six years. In contrast, and to its credit, this government has managed to ramp up industry growth to 7.4 percent, nearly twice the 4 percent posted in the previous six-year period 2004-2009. Services growth has also improved to 6.6 percent from the previous period’s 6.2 percent. But these numbers suggest that it is in agriculture where the current leadership could have done much more to match the otherwise sterling performance it has apparently induced in the rest of the economy, especially in industry and manufacturing.

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Four, the agriculture bureaucracy has been tainted over the years with a succession of massive corruption scandals, including fertilizer scams, swine dispersal scams, pork barrel diversion scams, “farm to pocket roads,” and so on. It is unconscionable and enraging that much of the wealth illicitly accumulated by corrupt officials in past years has been obtained at the great expense of the poorest among us, the farmers.

Where have we failed in the sector? Where should the next president direct his/her attention, if he/she is to improve the lot of millions of Filipino farmers?

Through the years, my own observations and analyses tell me that our problem in agriculture is primarily institutional, and not so much natural or technological. Our most critical impediment in the sector is that governance and the management of agriculture have been fundamentally flawed— among other things, still too top-down and over-centralized in planning, budgeting and program execution, for the Department of Agriculture’s own good. I have time and again argued that DA need not, and should not, assume an undue burden of the responsibility of operational interventions in the sector—and with it, the blame for failures therein.

Agriculture services, along with health services, were supposedly devolved to local government units (LGUs) 25 years ago, with the enactment of the Local Government Code of 1991. DA could have done much more to focus efforts on capacitating provincial LGUs so they could help their constituent farmers effectively, and course resources for services through them more than it did. Instead, we saw too much of centrally determined “one-size-fits-all” solutions, even as there is a wide variation in crops and agro-climatic conditions across the country. And as indicated above, rampant graft and corruption, which could very well be a motivation for this over-centralization, has deprived farmers of billions of pesos’ worth of legitimate assistance.

The other related problem is how our agriculture authorities have inordinately focused their attention, and the budget, on rice. This has left woefully little for other commodities critical to income and employment (such as coconut and fisheries, and high-value crops such as fruits, vegetables and beverages), and to food security as well (protein-rich legumes and livestock). Furthermore, our agricultural interventions have been too politicized and focused on the wrong goals. For example, there is too much emphasis on production levels rather than on farmers’ and their families’ income and welfare, and on 100-percent rice self-sufficiency rather than on true food security that provides for accessibility and affordability of food.

I would like to hear that before he/she even speaks of specific initiatives for the sector, our next president declare that he/she will choose an agriculture secretary who will reinvent the agriculture bureaucracy to correct the above flaws. With the right bureaucracy and right leadership, much of what needs to be done on the ground should fall into place.

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