Comprehensive assessment of PH agriculture is needed

"The time for piecemeal, industry-by-industry approach is long over."



At the time that the Philippines received its independence from the US, the Philippine economy was essentially agricultural. True, some manufacturing establishments had been established during the colonial era—such as producers of power, cement, sugar and beverages—but this country’s GDP (gross domestic product) revolved around agriculture. The production of rice, corn, sugarcane and tobacco accounted for most of Philippine GDP.

In line with its premier-sector status, Philippine agriculture was at the front and center of national economic policymaking. Loans, government contracts, subsidies and all manner of performances were made possible by the fact that most of the pre-Independence political leaders represented the centers of the nation’s leading agricultural industries. The Osmenas, Roxases, Yulos and Alunans, among others, saw to it that the agricultural sector always got the lion’s share of the national economic pie.

After Independence, the mindset of the economic policymaking establishment changed. Seduced by the newly popular development-economics idea that the road to economic transformation lay through manufacturing, not agriculture, the economists in the postwar NEC (National Economic Council) and their friends in the legislature to shift from favoring agriculture to favoring manufacturing. Economic policy now acquired a pro-manufacturing bias. Government loans from the GFI (government financing institutions), tariffs, subsidies and preferences now moved toward manufacturing and away from agriculture. A prime example of this economic policy shift was the allocation of most of the Philippine-Japan Reparations Program to projects in the manufacturing sector.

The sugar industry, one of the Big Four sources of Philippine exports in the pre-1980s era, should have taken advantage of the Laurel-Langley Agreement (1955-1974) to improve itself and diversify. But it was complacent, with the result that the Philippine sugar industry became more and more inefficient and uncompetitive. Philippine sugar’s progressive uncompetitiveness became more manifest with the coming into force of the ASEAN (Association of Southeast Asian Nations) Free Trade Area.

A further blow to Philippine agriculture was delivered by the exodus of Filipino workers to overseas jobs. Undoubtedly one of the best things that has ever happened to the Philippine economy, the OFW experience, by providing this country with billions of unborrowed dollars every year, has had the unfortunate effect of desensitizing the economic policymakers—in NEDA (National Economic and Development Authority) and in Congress—toward the needs of Philippine agriculture. The rapid growth of the BPO (business process outsourcing) industry, with its close to $20 billion of annual revenue, has added to the desensitization.

With the advent of Philippine membership in the WTO (World Trade Organization), this country’s agricultural products lost whatever protection they once enjoyed. The only exception was rice, imports of which were granted MAV (maximum access volume) protection. That expired three years ago.

Alarmed by statistics showing that the agriculture’s share of Philippine GDP was steadily declining and that the poorest Filipinos were still the farmers and fishermen, Congress passed, in the late 1990s, the Agriculture and Fisheries Modernization Act (AFMA). Considering that the lowest quartile of this country’s income structure is still made up of farmers and fisherfolk, it is clear that AFMA has been one of the high-sounding but ineffectual pieces of legislation relating to the agricultural sector.

The creation of a trust fund for the return of the coconut levy to the farmers and the rice tariffication bill are the two most recent legislative actions dealing with Philippine agriculture. In the short term, and even in the medium term, these new laws cannot be expected to make much difference to the livelihoods and well-being of Filipino farmers and fishermen.

The time has come to take steps to arrest the decline of Philippine agriculture and improve the economic standing of Filipinos in agriculture, who account for most of Philippine employment. These objectives can be attained only by an assessment of the agricultural sector that will review everything that has happened in the agricultural environment—at home and in the world—analyze how the changes have impacted Filipino farmers and fisherfolk and determine what realistic solutions need to be brought into play.

The time for piecemeal, industry-by-industry approach is long over. Hereafter only a comprehensive, agriculture-as-one-sector approach will do.

Topics: Philippines , gross domestic product , National Economic Council , National Economic and Development Authority , World Trade Organization
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