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Entrance of the National Economic and Development Authority building in Pasig City. ITOH SON

Neda cites urgent need for agri infra infusions

The National Economic and Development Authority (Neda) stressed the need for better land governance and increased infrastructure investments in agriculture and rural areas, as these remain critical for productivity, job generation, and poverty reduction in many parts of the Philippines.

“Agricultural development remains a critical area for poverty reduction in many parts of the country, particularly in areas with high potentials for irrigation development, but are remote or isolated from rapidly developing growth centers,” said Socio-economic Planning Secretary Arsenio Balisacan  during the session on “Land Governance and Climate-Smart Agriculture” as part of the World Bank (WB)-International Monetary Fund (IMF)’s 2015 Spring Meetings held from April 17 to 19 in Washington, D.C.

He noted that among the binding constraints to growth in rural areas are the inefficient land markets and poor infrastructure.

“There are serious land management and administration problems,” said Balisacan, who is also Neda director-general.

“Throughout the years, we have created so many institutions that administer and manage lands. Their functions are overlapping and they have made the operation of rural markets more costly. As a result, the cost of doing business in rural areas is quite high,” he added.

Balisacan also said that the country’s protracted land reform program has created uncertainty in rural markets, especially in credit markets.

“The country probably has the world’s longest land reform program—40 years and still an unfinished business. Until now, many of the beneficiaries of the program are restricted from transferring their lands and even if these lands are with the banks for credit, the banks could not dispose of them. As a result, many of the farmers are holding land titles that have low collateral values. And as a consequence, credit was not flowing to rural areas and investments therefore suffered,” he explained.

Balisacan also emphasized that the demand for credit in rural areas is very much dependent on the profitability of agriculture, which in turn is directly affected by the quality of infrastructure.

“If there are no profitable agricultural projects or activities, credit will not flow to agriculture.

Likewise, increased agricultural production without access to growth and urban centers where the produce can be transported to markets, can actually work against the farmers. Investments have to flow to agriculture and rural areas and that’s what we have been working on lately,” Balisacan said.

In the approved P2.606 trillion 2015 Philippine national budget, P89.1 billion was allocated to support agricultural programs while four percent of the Gross Domestic Product (GDP) has been provided for infrastructure development throughout the country for the year.

“Connectivity is the key to getting the rural communities to participate in the growth process,” he said.

The WB-IMF session discussed ways to better integrate land and climate-smart agriculture into countries’ development strategies. It also tackled the close links between land governance, food security and climate change in affecting overall growth.

Panelists who joined Balisacan during the session were: Gerd Müller, Federal Minister for Economic Cooperation and Development, Germany; Claver Gatete, Minister of Finance and Economic Planning, Rwanda; John Streur, President and Chief Executive Officer of Calvert Investments; Winnie Byanyima, Executive Director of Oxfam International; Dao Trung Chína; Deputy Director General of the General Department of Land Administration, Vietnam; and Kaushik Basu, Senior Vice President and Chief Economist and Klaus Deininger, Lead Economist in Agriculture and Rural Development, both from the World Bank Group.

Balisacan was also a panelist for a session titled “Why Focus on Results when no-one uses them? Towards Useful Evaluations” that was held on April 17. The session tackled country experiences in producing evaluations and programs towards evidence-based decision making.

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