Agriculture is not growing
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - December 21, 2018 - 12:00am

Last Monday, Agriculture Secretary Manny Piñol held his year-end press conference and admitted that total volume of production in agriculture and fisheries from Jan. to Sept. 2018 grew by 0.15 percent year-on-year from the figures in 2017.

Grew? Technically, it did grow but hardly… at less than one percent. That is not surprising because when our inflation menacingly increased beyond the BSP target in the second half of this year, high prices of agricultural products due to serious supply issues were to blame.

It was so bad the agri chief wanted to remove food products from the typical consumer basket being measured for inflation. He probably flunked Eco 101 or is just plainly an economic illiterate.

President Duterte was blaming high oil prices, but that was not the major cause of rising inflation. Neither is it correct to blame TRAIN 1.

The thing is… the President couldn’t blame high food prices because assuring adequate rice supply and improved agricultural productivity is his responsibility. True, that’s Secretary Piñol’s problem, but the President backed up his agriculture secretary amidst increasing proof he isn’t quite up to the job.

I asked respected agri-business expert Rolly Dy of the University of Asia and the Pacific (UAP) and he sadly confirmed that “the likelihood of flat growth in 2018 is very high. Overall, the outlook for recovery is a major challenge.”

Last  August, the Philippine Statistical Authority or PSA reported that “agricultural output grew in value terms by a nearly flat 0.07 percent annually last quarter, compared to the upward-revised year-ago 6.22 percent and the first quarter’s 1.47 percent.

“The latest data brought first-half growth of farm output — which contributes nearly a tenth to gross domestic product (GDP) — to just 0.58 percent against a 2.5 to 3.5 percent annual target for the sector under the 2017-2022 Philippine Development Plan.”

Economist Ciel Habito, a former NEDA secretary, observed in his column that “the biggest dampener was agriculture, fishery and forestry, which not only slowed down (which means having a lower growth rate), but where output actually fell, with a negative growth rate of -0.4 percent. Last year’s comparable figure was 2.6 percent. Agriculture alone (not counting forestry and fishery) fell 0.1 percent.

“One has to worry when agriculture production falls, or even if it still grows, but at a pace slower than the growth of overall population, now about 1.7 percent. What that means, in the favorite analogy of former president Fidel V. Ramos, is that every Filipino gets a smaller slice of the bibingka (rice cake).”

Of course, no one can reverse overnight a trend started many years ago, but is the agri secretary even aware of the target he is supposed to meet under the Philippine Development Plan? How does he plan to reverse the negative trend?

The country’s food security now lies in the hands of Piñol, a former sportswriter who became a gentleman farmer and provincial politician. He may know how to run a small farm in Mindanao, but does he understand the complexities of our agricultural sector?

Just as the President is about to sign the Rice Tariffication Law, the agriculture secretary is warning about rising rice prices once it is in effect. He is mourning NFA’s loss of monopoly powers over rice imports.

Indeed, the fierce Cabinet debates he had with the finance secretary indicate a weak understanding of the agricultural sector. Unfortunately for him, Sonny Dominguez was also once the secretary of agriculture and knows what he speaks of.

I am not sure President Duterte has the luxury of time to indulge his political ally and friend. If Piñol fails again to improve the performance of agriculture, the country is in deep doo-doo.

But President Duterte must also take responsibility for the major mistakes this year that led to high inflation. He coddled his NFA administrator to the point that we ended up with practically zero buffer stock, which gave the traders an opportunity to raise their retail prices.

The economic managers must do the difficult task of educating the President, otherwise all the gains in other sectors of the economy will be negated by a massive failure in agriculture. High food prices, not just rice, impacts the lives of every Filipino, specially the poor.

We need a big push to fix the agri sector once and for all. That starts with a drastic change in land reform policy. The objective should shift from giving farmers a piece of paper they can do little with, to giving the farmers a dependable source of livelihood.

We have to accept the fact that land reform, as we know it has failed miserably. Some 80 percent of our farmers make do with just three hectares of land. There isn’t much they can do with that.

An administration led by a President who claims political will and not afraid of bishops should be able to tear up an old failed law and replace it with something to allow farmers economies of scale. Only then can they use modern machinery and technology to improve productivity and livelihood.

The President cannot throw money at the problem too. This approach had been done in the past and we ended up with assorted thieves using the farmers as an excuse to access public funds to fatten their wallets.

The Arroyo administration had its fertilizer scam. I don’t remember anyone being punished for that.

The Napoles pork barrel scams also involved using public funds for so called non-profit foundations, helping mostly farmers and rural communities. We can assume, from the fierce battle for pork now going on in Congress that the scams still exist.

Can Duterte make sure funds to help the farmers actually help them and not line the pockets of politicians claiming to be his allies? It takes political will and Duterte claims he has it. So far, we don’t see it.

Boo Chanco’s e-mail address is Follow him on Twitter @boochanco

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