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‘New thinking’ in agri still our best bet

BIZLINKS - Rey Gamboa (The Philippine Star) - April 13, 2021 - 12:00am

William Dar’s “new thinking” for Philippine agriculture is struggling to circumvent some serious setbacks, the biggest of them being the pandemic, and more recently, the ongoing pork supply distortion caused by the African swine flu (ASF) and the two big typhoons last year.

If the national government fails to give the sector the attention and support it deserves while the economic power block that is the National Capital Region and surrounding provinces (now known as NCR Plus) remains fettered by the lockdown, the country could fall into deeper misery this year.

Dar, who was appointed to lead the Department of Agriculture in 2019 replacing Manny Piñol, had espoused to reorient his bureaucratic machinery, mainly by introducing a new thinking in agricultural development to achieve food security and boost the sector’s diminishing contribution to the overall economic growth.

His formula calls for a shift from the government’s heavy support of a few selected crops – mainly through subsidies on inputs like fertilizers, planting materials, and machines for rice and corn – to the overall improvement of the whole agricultural sector focusing on profitability and sustainability.

In simpler terms, Dar spoke of focusing on having farmers learn and implementing modern farm technologies to boost their productivity, and in the process, earn more. He also said that there is a need to diversify crop production in the Philippines since about 80 percent of the country’s farm lands are devoted to only three crops: rice, corn, and coconut.

This “visionary” expression of Philippine agriculture’s future direction was made in August 2019; seven months later, in March 2020, the country went into its first extreme lockdown that even temporarily paralyzed movement of food supplies across provincial boundaries.

By the time the agriculture department managed to iron out the reopening of food supply lines, the ASF infections in Central Luzon hog farms broke out. Perhaps because of the pandemic, response to isolating the infected swine and keeping the virus from spreading was never fully contained, even to this day.

Essential move

Still, Philippine agriculture managed to keep a steady keel last year, retaining overall productivity relatively unchanged (a negative 0.2 percent for 2020) compared to the previous year. The sector managed to buck the severe blows that the manufacturing and service sectors were dealt with, both of which combined dragged the overall economic performance to a 9.5 percent contraction.

A World Bank study published in June of 2020 noted that transforming Philippine agriculture into a dynamic, high-growth sector was essential, not just because of its significance to food security and the agri-food system, but also for poverty reduction.

Ndiame Diop, World Bank country director for Brunei, Malaysia, Thailand, and the Philippines, underscored in the study that “With the exception of a few small natural resource-rich countries, no country has successfully transitioned from middle- to high-income status without having achieved an effective transformation of their agri-food systems.”

The growth of Philippines agriculture from 2016 to 2019 was an anemic 1.3 percent compared to the double-digit growths of its regional neighbors: Vietnam at 73 percent, Indonesia at 50 percent, and Thailand at 67 percent. This was attributed to two factors.

Disproportionate support

The first is the continued low productivity of rice farms, with yields comparatively much lower than other countries that produce rice. The study points out that there has been too much focus on rice growing in government policies and spending decisions to the detriment of other agricultural sub-sectors.

In the agriculture department’s 2020 budget, for example, the rice program received disproportionately higher allocations in production support services (48 percent), extension support, education, and training services (53 percent), research and development (35 percent), and irrigation (88 percent), when it only comprises about 18 percent of the total crop production value.

This has been detrimental to other “new thinking” groundwork components such as research, market development, and extension that, ironically, seem to have received even lower funding.

The lopsided attention given to rice is even magnified by other support mechanisms like high tariffs on imports, and subsidies to fertilizers and chemical inputs, cost of irrigation, and mechanization. Taken together, the study noted that these have failed to increase farmers’ earnings and improve competitiveness.

Failed diversification

The second factor is the agriculture sector’s failed ability to diversify into high-value-added products for local consumption and export. Up until today, many farmers have been unable to integrate directly into value chains, thus failing to maximize on their harvests.

The World Bank report bares that the share of high-value crops in Philippine agriculture rose only slightly over the last two decades, from 19.6 percent in 2000 to 22.9 percent in 2019. This is a pointed failed grade of how the High Value Crops Development Act of 1995 has fared.

Definitely, the economic team and our legislators must give agriculture an enlightened view, especially since getting the economy off to some seriously effective growth tracks will be a major challenge with the availability of enough vaccines and vaccinations still months, perhaps even years away.

Putting serious attention on agriculture could be the nation’s best bet during these trying times.

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.

WILLIAM DAR
Philstar
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