Widespread poverty limits PH agriculture from attaining full potential

Posted September 16, 2020

The very poor condition of the Philippine agriculture clearly presents the widespread poverty among the farming and fishing sectors considering that it accounts for the bulk of total workforce in the country.

Ben Punongbayan, chairman of Buklod, a national political party so many successive government administrations had not been able to make a dent in improving the sector’s poor state of affairs. “One can only conclude that these administrations did not know what to do or just ignored this sector that has wide-ranging effects on the economic lives of the Filipino people,” he said.

Punongbayan said the analysis presented in the recently released World Bank report entitled “Transforming Philippine Agriculture during Covid 19 and Beyond” pointed to the present poor state of Philippine agriculture.

The report said that while the whole Philippine economy grew at 6.4% from 2016 to 2019, the agriculture sector had an “anemic” growth of 1.3% in the same period.  In terms of Total Factor Productivity (growth rate for output less growth rate for input), Philippine agriculture for over two decades grew 32% only. This is a very low performance compared with the equivalent growth rates of Vietnam, 73%; Thailand, 67%; and Indonesia, 50%.

“The problems are clearly systemic because the bad state of affairs of the agriculture sector has been with the country for a very long time now,” said Punongbayan, a leader in the Philippine accounting profession and was co-founder of auditing firm Punongbayan & Araullo.

He also said the World Bank study provides a whole range of recommendations to turn things around in a big way—towards a huge transformation.

But, first, there must be acceptance of the recommendations, in whole or in part. According to Punongbayan, that phase will probably be the most difficult one to deal with. Acceptance of the major recommendations will entail adopting policy decisions that will reverse long-standing policies and may be politically unpalatable.

 

Move away completely from a rice-centric food policy and focus on the whole range encompassing the agriculture sector, without giving bias to any specific crops

 

He noted that the most important recommendation in the World Bank report is to move away completely from a rice-centric food policy and focus on the whole range encompassing the agriculture sector, without giving bias to any specific crops.

“This shift would mean abandoning the rice-sufficiency objective. It will also move the entire agricultural sector towards what the report describes as agricultural industrialization, or commonly known as agribusiness. It also requires necessary substantial changes and modernizations in irrigation systems, road infrastructure and network, research and development and extension service systems, including marketing support,” said Punongbayan.

Another recommendation that has far-reaching material effects is the abolition of the regulation on sugar. This implies removing the quantity quota in the importation of low-priced foreign sugar and, therefore, making the local sugar producers practically uncompetitive, if left entirely on their own.

There are other difficult-to-decide recommendations from the multilateral institution, such as land consolidation and changing the form of subsidies to farmers.

Punongbayan believes that the government must make these difficult decisions soon and solely on the basis of promoting the general welfare of the Filipino people and set aside any contrary self-interest of any affected parties. “We should not even wait and pass on the making of the decisions to the next government administration,” he said.

Finally, he said, he is fearful the report may just end up being shelved and left to gather dust, just like similar other wide-ranging external reports in the past and the agriculture sector will then continue to remain in its slumber.



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