The National Economic and Development Authority (Neda) called 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,” Economic Planning Secretary Arsenio M. Balisacan said during the session on “Land Governance and Climate-Smart Agriculture” as part of the World Bank-International Monetary Fund (IMF)’s 2015 Spring Meetings held recently in Washington, D.C.
Balisacan 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,” he said.
“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,” Balisacan added.
He said 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/urban centers, where the produce can be transported to markets, can actually work against the farmers,” Balisacan said.
In the approved P2.6-trillion national budget for 2015, P89.1 billion was allocated to support agricultural programs, while 4 percent of gross domestic product 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 World Bank-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.