MANILA, Philippines — It's time for the Philippines to abandon its rice-oriented agriculture policies and start investing in improving production of other crops to develop the country's farm sector, the World Bank said Wednesday.
In a report, the Washington-based multilateral lender said the government's excessive focus on rice, the country's main staple, has not been the most efficient way of spending public funds as it neglects other farm sectors that have potential to drive growth.
"The narrowly focused agenda has caused other segments of the agricultural sector to fall well short of their potential," the World Bank said in a report titled “Transforming Philippine Agriculture During Covid-19 and Beyond."
"Rice will remain a vital food staple for the country, yet the bulk of the income-earning and job creation opportunities for the sector going forward will be generated in other non-rice sub-sectors," it added.
Although the Duterte administration's move to lift rice import caps by enacting the Rice Tariffication law "was an important step" in bringing more attention to other farm sectors, World Bank said the government remains overly-focused on the rice program.
Based on the bank's estimates, large chunks of the agriculture budget for this year were cornered by rice programs, particularly the agency's funding for production support services where rice accounted for 48% of the outlay, education and training (53%), equipment and facilities (35%), research and development (49%) and irrigation (88%).
"There is a need to shift from a rice-centered agri-food policy to one that anticipates greater balance in sectoral priority-setting and resource allocation," the lender said.
The share of agriculture in the country's gross domestic product (GDP) has declined from 13% to 9.3% between 2008 and 2018, which World Bank mainly attributed to low productivity in rice and the country's failure to diversify into high-value-added farm products for local consumption and export.
For the lender, the coronavirus pandemic heightens the urgency for government to "transform" the farm sector to ensure sufficient food supply. Government data showed the farm sector grew an annual 0.5% in the second quarter, bucking a downtrend posted by most industries.
But as it appears, the bank's ecommendation is easier said than done. Next year, the agriculture department will see a 6.2% budget cut if the Duterte administration's proposed outlay come out of Congress intact. The agency initially asked for P280 billion budget for 2021.
"The budget of DA should be proportional to the contribution of the DA to GDP." Agriculture Undersecretary Ariel Cayanan said in a press conference.
"The secretary keeps on saying we will try to work on this one, but of course (the budget) should be proportional to what you wanted to achieve," Cayanan added.