Food crisis?

To those who can afford to buy and read a newspaper, it sounds absurd to hear anyone declare the existence of a food crisis. To them, indeed to us, a food crisis happens when we can’t make up our minds which new restaurant to have lunch with family or friends.

But to some 10 million of our countrymen who experienced involuntary hunger at least once in the past three months, a food crisis is real.

Perhaps Rep. Joey Salceda is correct to describe our national situation as a mini crisis that was brought to our consciousness by our runaway inflation. The growth rate of the agriculture sector is flat. That cannot be.

We are now 104 million Filipinos and multiplying. We must be able to increase our food production capability to feed all those mouths. Failure to do that is a crisis that demands the same attention we give to the crisis brought about by secessionists in Mindanao.

It is not totally fair to blame the current administration for the food crisis. It is a crisis that was years in the making. Many administrations failed to fix the problem. Worse, many of the things we have done aggravated the situation.

Of course it doesn’t help that we now have an agriculture secretary whose prescription is to remove food costs from the consumer basket used to measure inflation. Lately, he was also blaming weather, as if adverse weather is not a “given” that we must work around.

Our agricultural sector constantly complains they do not get enough help. What little technical and financial support is available are diminished by corruption. The fertilizer scam and the Napoles pork barrel scams are good examples.

We have protected our agricultural sector with high tariffs and non-tariff barriers. Rent seeking trading cartels flourished. But no increase in productivity happened even as these measures punished the consumers. Maybe the problem lies somewhere else.

Perhaps our farms are too fragmented and we need economies of scale. Maybe our agrarian reform law is to blame. Merely giving a farmer ownership of at most seven hectares condemns him to a life of poverty because there is little he can do with it beyond subsistence, if at all.

How did Taiwan manage land reform and end up an export producer of vegetables and other foodstuff? Filipino scientists even helped them get started. We could have learned from them.

Then maybe the problem is proper financing. The current agriculture secretary blames the banking system for the unimpressive growth of the agri sector. “How can you expect an impressive growth in Philippine agriculture when banking institutions are avoiding the Agri-Agra Law commitments?”

By way of background, the law requires all banks to allocate at least 10 percent of their total loan portfolio for agrarian reform, and 15 percent for agriculture to increase market efficiency and promote the modernization of the agricultural sector.

The law is well-intentioned, but unrealistic. The banks are not set up to provide those loans. They don’t have the grassroots network, nor the technical expertise to deal with agricultural finance.

The banks have a fiduciary obligation not to risk the money of their depositors and shareholders by lending to a sector they do not understand. This is why they choose to pay a penalty which becomes a tax on lending growth.

Maybe, the government can issue bonds instead of imposing penalties and use the bond proceeds to lend to the agri sector. And how come the government-owned Land Bank, designed to help agrarian reform beneficiaries, has become more of a commercial bank?

It is only now that the commercial banking system is getting familiar with this type of lending at the grassroots. BPI’s BanKo is an example, but even here, it is more microfinance for small enterprises.

Perhaps the banks can contribute to a fund that will be used to finance farmers, but coursed through experienced and well networked microfinance institutions like the Magsaysay Award winning Dr. Jaime Aristotle Alip’s CARD.

Beyond financing, the government must lead in the agri sector’s modernization, changing policies and laws as required. Putting up agricultural investment zones with the right incentives is one idea to be explored.

The country’s large conglomerates should be encouraged to do industrial farming at a scale that would make a difference. Corporations like Jollibee are now helping farmers grow potatoes and assuring purchase of all they can produce. Contract growing is a good concept.

San Miguel Corp., with its food subsidiaries, should be incentivized to expand their activities on the food production side, working directly with farmers. The same can be done with SM which can guarantee sale of produce in their network of supermarkets. Often government help farmers increase production only to fail on the marketing side.

But government must have a vision and a grand plan for agriculture that is totally radical. We haven’t had a well thought out, well organized food production program since Paeng Salas. The current mini food crisis can only get worse if we do nothing or continue to do the old things that brought us to grief.

We need the political will of a Duterte to say agrarian reform, as we know it, is counterproductive and must be changed. 

We must open our agri industry to foreign investors who can share modern technology to improve productivity. A large Thai agri-business company wanted to invest in a joint venture here some years ago, but local producers vigorously protested.

The average age of the Filipino farmer is now 57. The next generation would rather risk life in a city slum or the burning sands of the Middle East than be a farmer. That’s because farming condemns a man to a life of poverty. Maybe if we discarded old notions and simply focused on how to lift farmers out of poverty by being productive farmers, half our battle is won. 

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco.