Agriculture’s dismal performance to worsen

WITH THE worsening geopolitical tensions in the Middle East affecting the global supply chain and leading to rising oil prices and its byproducts– fertilizers and pesticides– the already dismal performance of agriculture is expected to worsen further.

Philippine agriculture has been suffering, but the government planners desperately try to hide the structural causes of the economic slowdown in pushing their neo-liberal logic, says a study done by IBON researcher Maricar Piedad. 

Agriculture has fallen to its lowest share of the GDP in history with farmers constantly trapped in a cycle of poverty and hunger while ordinary Filipinos bear the burden of high food prices.

The only winners are agricultural traders, importers and businessmen.

The government’s steadfast adherence to market-oriented land use and trade liberalization, has severely weakened the country’s internal productive capacity, making the once-revered agriculturally rich country into one that wallows in hunger and widespread poverty.

The agriculture, forestry and fishing (AFF) sector accounted for 7.9% share of GDP in 2025, the lowest in Philippine history. The downturn of its share to GDP has accelerated in the late 1990s with the full implementation of neoliberal policies in agriculture.

A key policy reform in RA 8535, or 1997 Agriculture and Fisheries Modernization Act facilitated the steady reduction of agricultural land nationwide with the government mandating Strategic Agriculture and Fisheries Development Zones (SAFDZs) to promote land use efficiency and maximize so-called economic returns from agricultural areas.

Time-series data on land use and sectoral GDP share clearly show the negative consequences of such profit-oriented land reclassification. From 1960 to 1991, agricultural land area expanded steadily from 7.7 million hectares to 9.97 million hectares, representing a 28.3% increase after an extensive land grabbing between 1971 and 1980 during Marcos Sr.’s martial law when his cronies seized lands for sugarcane haciendas, banana plantations, and other extractive industries.

Following AFMA’s implementation, agricultural land area sharply declined from 9.97 million hectares in 1991 to 6.2 million hectares in 2022, or by 38.2% in 31 years with massive land use conversions. AFMA has been instrumental in enabling widespread land conversions,  serving the interests of landlords and real estate developers.

Before AFMA in 1988, the Comprehensive Agrarian Reform Program (CARP) redistributed  lands to small farmers, but the Department of Agriculture (DA) in collusion with big landlords used the AFMA-driven land reclassification and other land conversion mechanisms to deny farmers their land. Decades after CARP, seven out of 10 Filipino farmers remain landless, based on the report of the Kilusang Magbubukid ng Pilipinas.

Back then, the number of farms continued to rise from 4.6 million farms in 1991 to 7.4 million farms in 2022, resulting in increasingly fragmented landholdings. At present, 56% of farms are smaller than half a hectare, 12.5% range from 0.5 to 0.99 hectare, and 25% are between 1 and 2.99 hectares in size, the author said.

The proliferation of smaller farms and the reduction of available agricultural land have also contributed to the steady decline of agriculture’s share in total employment. In 1991, agriculture accounted for 44.9% of total employment. By 2024, this figure had dropped to just 20.6%. 

The high level of informality in the sector further exposes the precariousness of employment. Typhoons and seasonality worsen this vulnerability, as farm workers are forced to seek alternative livelihoods during non-harvest periods. These realities are often obscured in official labor statistics, masking the true depth and instability of agricultural employment.

Farmers and fisherfolk remain among the poorest basic sectors in Philippine society. 

The latest poverty statistics show particularly high poverty incidence among indigenous peoples (32.4%), followed by fisherfolk (27.4%) and farmers (27%). These sectors significantly overlap, as the majority of indigenous peoples are also engaged in farming and fishing. Notably, these figures are based on an extremely low poverty threshold of P92 per person per day, or P462 per day for a family of five.

This widespread poverty is unsurprising given that agricultural workers are among the lowest paid with the average daily basic pay (ADBP) for farm workers at only P365.57—far below the national average of P498 as compared with the family living wage esimate of BON of P1,240 per day for a family of five.

The chronic neglect of agriculture has not only impoverished farmers but has also ingrained widespread hunger. The latest report of the UN Food and Agriculture Organization showed that  37.8 million Filipinos are moderately or severely food insecure—the highest in Southeast Asia. FAO also estimates that 51 million Filipinos cannot afford a healthy diet, the second-highest figure in the region.

The country’s accession to the World Trade Organization (WTO) accelerated the dismantling of domestic protection and flooding the Philippine market with cheaper imported goods, undercutting local producers and farmers.

The 2019 Rice Tariffication Law (RTL), the final commitment to the WTO, led the Philippines to convert quantitative tariff restrictions  and to reducing tariffs to historic lows.

Thus, prices of locally- produced rice have become more expensive than (the highly-subsidized) imported rice, enabling traders to depress palay prices and exploit farmers further. Rice smuggling also prospered under the trade liberalization regime, with no meaningful penalties imposed to date. 

The RTL has been catastrophic, but the Marcos Jr administration has even expanded it and disregarded repeated calls from farmers and small producers to repeal the law.

Agricultural trade deficit ballooned from $42 million in 1994 to $11.06 billion in 2025, peaking at $11.8 billion in 2022. By 2025, the total value of agricultural trade as share of GDP shrank to -2.3% of GDP from a positive 1.9% share in 1985. In 2024, the Philippines also recorded the largest agricultural trade deficit among ASEAN countries.

Rice self-sufficiency declined to  71.7% in 2024—the lowest level in 37 years in contrast to the average domestic utilization ratio for rice in ASEAN in 2025 of 115.2%, with countries such as Thailand, Vietnam, Cambodia, and Myanmar achieving more than 100% self-sufficiency. The Philippines ranked third lowest in the region, ahead only of Brunei and Malaysia.

Import Dependency Ratios (IDRs) were 3.2% for rice, 3.7% for garlic, 12% for beef, 0.1% for pork. By 2022, these figures rose sharply at 23% for rice, 94.5% for garlic, 61.9% for coffee, 50% for beef, 30.4% for pork and 11.9% for dressed chicken. Major sources for these items are ASEAN with 33%, the United States at 19%, the European Union and the United Kingdom combined (10%) and China (9%).

Although the sector posted a 3.1% growth rate in 2025 following a 1.5% contraction in 2024, its average growth over the past decade has been a mere 0.8 percent, demonstrating that agricultural stagnation can’t be blamed solely on seasonal shocks of typhoons or El Niño.

Yet instead of strengthening local producers, successive governments have used crises as justification to further marginalize agriculture in national development.

In 2024, the President signed RA 12252, extending the maximum land lease period for foreign investors from 50 to 99 years, which directly benefits foreign corporations and capitalists by allowing them long-term control and to profit over Philippine lands, including agricultural lands while it eases controls on the kinds of investments in the country’s land and natural resources.

Big agribusinesses and foreign corporations enjoy generous tax incentives under the CREATE MORE law and benefit from eased regulations through the revised Public-Private Partnership (PPP) Code.

The Marcos Jr administration allocated a meager budget to agriculture and agrarian reform at just 3% of the national budget, while corruption-ridden infrastructure programs command nearly 10 percent.

The deliberate underfunding prompted the DA to pursue P3.5 trillion in public-private investments across multiple areas: product support systems (P1.8 trillion), infrastructure and logistics (P816.2 billion), commodity sectors (P805.8 billion), innovation system enablers (P85.5 billion), and sustainable and alternative agriculture systems (P6.3 billion). This strategy enables large-scale profiteering from agricultural lands, while small farmers continue to suffer bankruptcies and poverty.

The deliberate sidelining of agriculture as a driver of national development is meant to ensure that power interests benefit from keeping the sector backward and impoverished. Landlessness, precarious employment, and backbreaking working conditions persist because the prevailing economic and political system is embedded in foreign and local elite interests and priorities, which prefer profits over food security, agrarian reform and rural development. 

The peasants and farmers have been talking about the long-standing, deepening crisis for a long time now. They know the basic problems of agriculture and how government’s pro-foreign and pro-landlord policies have only worsened these problems.

They know the solutions, which is a people-centered economic planning that transforms the weak and hollow national economy into a robust foundation that prioritizes agriculture, industry, and people’s rights and welfare. These can be done, because when the farmers raise their voice, everyone listens.