Freeman Cebu Business

Trivializing agriculture’s impact on GDP

FULL DISCLOSURE - Fidel O. Abalos - The Freeman

Too tiny a country, yet, the weather in the south is so different from that of the north.  While it is dry in the north, the south is literally inundated. In Cebu, you feel both. It is so dry in the morning but so wet as the sun goes down.

To most of us in the urban areas, it is just a matter of tagging along an umbrella or a raincoat. That’s it, and life will go on. To the farmers, however, it is a lot different. It is about their livelihood. Obviously, as such extreme weathers are both disastrous and render farmers (especially, the small ones) penniless. So that, it is disheartening sometimes that there are people who do not see it that way. 

For instance, in May last year, as concerns of El Niño started to build up, NEDA Sec. Balisacan simply told us that “rice production could decrease by double digits.” That “agriculture’s contribution to the country’s economy as measured by gross domestic product (GDP) is “roughly 10%, so that, “contraction in agriculture caused by El Niño may not deeply impact the economy.” Lest we forget, earlier last year he also expressed “the need for the country to liberalize the agriculture sector to allow the timely importation of crucial farm products whenever necessary.” 

Notably, while importation is the immediate default for Sec. Balisacan, seemingly, then Sec. Chua had a different approach. To recall, during his term, in justifying the Rice Tariffication Law during a panel discussion, Sec. Chua said that with a growing population, “agriculture has to grow by at least 1.6 percent, preferably, 2 percent or more, otherwise we cannot feed our own people and we will be relying on imports and the price will go up.” “In order to improve farming efficiency, the Rice Competitiveness Enhancement Fund (RCEF) provides P10 billion financial aids to around 2.5 million Filipino farmers”, he added. 

We agree with Sec. Balisacan that the performance in the agriculture sector will have a minimal impact on the economy. However, apart from just solely relying on imports for our shortages, hopefully, Sec. Balisacan will not just trivialize agriculture’s contribution to GDP but have the same degree of preference for the improvement of the agriculture sector. 

It is noteworthy though that last week, the Department of Budget and Management (DBM) has “approved the release of around P455.58 million for the operating requirements of the Rice Competitiveness Enhancement Program (RCEP) for the first quarter of 2024.”  DBM Sec. Pangandaman “vowed to continue supporting programs that boost the local production of major agricultural commodities, to fulfill the Marcos administration’s goal of attaining food security.”  Though a pittance vis-à-vis the annual budget of P10 billion, still, it will go a long way.

To reiterate, the RCEF is “intended to improve the productivity and competitiveness of local rice farmers and increase their income through the provision of farm machinery and equipment, rice seed development, propagation, and promotion, expanded rice credit assistance, and rice extension services.” 

Remarkably, there is emphasis in providing machineries and farm inputs.  This is good because this country has an unpalatable history when doling out cash to farmers/beneficiaries.  There is a little caveat though.  Remember, the law also extends credit assistance.  With that, anything can go wrong.  Moreover, there are also highly saleable farm inputs that can be easily converted to cash.

To make sure that these inputs are not sold or placed as bets when they (farmers/beneficiaries) find gambling as another preoccupation and/or credit assistance aren’t used to buy gadgets and appliances these must be closely supervised.  Or, in the jargon of the banks, these must be considered supervised loans. 

Since these are to be closely supervised, we need a battalion of agriculturists to guide them through. These agriculturists must be employed and under the strict supervision of the Department of Agriculture not with the local government units (LGUs). This is to make sure that LGU executives won’t dip their hands into the cookie jar. Nor can they claim credits for it and make these farmers/beneficiaries their perpetual parasites.     

To ensure success, this government must also provide the necessary infrastructure, such as, farm to market roads, irrigation, storage facilities, transport equipment, packing and processing facilities. 

 With this program done well, probably, the time will come for the agriculture sector to shine.

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