Focus on agri development, experts urge Duterte

By Luis Leoncio 

The Duterte administration must take prompt and decisive steps to raise agricultural productivity if it is to make a dent on the 25-percent poverty rate that the previous administration failed to address, despite its claims of the country’s steady economic growth, according to an agricultural expert.

Rolando Dy, executive director of the Center for Food and Agri Business at the University of Asia and the Pacific, said the key to inclusive growth and a lower national poverty rate is “enhanced farm productivity,” since poverty is “an agricultural and rural phenomenon.”

Poverty, he told a recent forum in Makati, is perpetuated by a vicious cycle of minimal farm productivity, lack of investments, and low income and savings for agricultural workers, resulting in widespread poverty in the countryside.

At the same time, this situation casts a domino effect on other sectors, Dy said.

Among the major thrusts of the Department of Agriculture (DA) under its new chief, Emmanuel Piñol, is to provide every Filipino with enough food priced within their reach.

The former North Cotabato governor replaced Proceso Alcala, long accused of involvement in irregularities, particularly in the use of the department as conduit for the Priority Development Assistance Fund (PDAF) scam that involved several legislators.

Piñol also seeks to achieve rice self-sufficiency by 2018, to revert the Philippine Coconut Authority (PCA), the National Irrigation Administration, the National Food Authority, and the Fertilizer and Pesticide Authority under the wings of the DA, and to halt the rampant smuggling of rice and other agricultural products, which has long been the bane of Filipino farmers and the government.

Since the agricultural sector is unable to provide sufficient supplies of raw materials to agro-processing industries, investors are discouraged from establishing factories that could generate more jobs.

The dire state of agriculture also seriously affects the export business, Dy said, because inadequate harvests, coupled with limited product diversification, diminish the country’s competitiveness in the overseas market.

In contrast, other members of the Association of Southeast Asian Nations (Asean), particularly Indonesia, Thailand, and Vietnam, have been making big strides in agricultural production and diversification over time, he added.

“So when your economy has poor productivity, when your agricultural economy is not diversified, then agro-processing industries don’t develop and you get very low export intensity,” Dy said.

He also said the Philippines’s export scorecard in 2014 was dismal, compared with those of other Asean members. He noted that the country had only two products on the list of agricultural commodities that made over $1 billion in exports in a year—coconut and banana.

On the other hand, Indonesia, Malaysia, Thailand, and Vietnam “had much, much more.” In fact, he continued, “Vietnam had eight commodities with over $1 billion in exports in a year” in 2014.

Raising the country’s farm output is not impossible to achieve, Dy said, because other Asean members have done it; he noted that even Myanmar is now making progress.

He recommended diversifying farmlands, reducing farm costs, cutting wastage, increasing value adding, and adopting modern technologies in agricultural production. He also pushed for higher taxes on idle lands so that vast tracks of unused areas would be utilized.

Physical infrastructure development, stronger institutions, and more incentives designed to attract private investments are other areas that the new President’s team should also look into, Dy said.

Dr. Fermin Adriano, consultant to the World Bank, said the agricultural sector remains mired in troubling issues, foremost of which is the “muddled land-titling system” in the country.

“One of the major reasons for the underdevelopment or the backwardness of agriculture is there is so much uncertainty over the final ownership of land,” said Adriano, who spoke at another forum early this month on the link between agriculture and rural poverty.

“The lack of investment is basically because of this problem of land tenure” and leads to another challenge-reduced productivity or yield, he added.

Adriano also said farm productivity and land-tenure issues are related to the farmers’ lack of access to credit “because since you don’t own the land, you cannot use it as collateral.” At the same time, he lamented, “there is practically no direct subsidized credit from government,” leaving farmers at the mercy of loan sharks.

Poor infrastructure, particularly the lack of farm-to-market roads and the inadequate provision of extension services, add another layer of obstacles to overcoming rural stagnation, he said.

To promote agricultural and rural growth, Adriano called for a “strategic industry road map” so that the budget allocated to the sector is spent with specific objectives in mind. He also suggested making agricultural development a science, applying advances in science and technology to benefit agriculture and fulfill its potentials.

Dr. Oscar Torralba, president and CEO of Kaltimex Energy Philippines Inc., cited the importance of allocating 25 percent of the investment portfolio to agricultural development, even as he sought a resolution to the coco-levy fund issue and putting the money in programs meant “strictly for the benefit of coco farmers and related industries.”