Rebuilding a damaged agricultural sector

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“We’re a blessed Nation because we can grow our own food and, therefore, we’re secure.  A Nation that can feed its people is a nation more secure.”— President George W. Bush, on the occasion of the signing of the US Farms Bill, May 13, 2002.  The US Farm Policy, which provides massive subsidy to American agriculture, is renewed every five years.

During the election campaign in 2015-2016, then Presidential Candidate Rodrigo Duterte never got tired telling the voters that the Philippines became a major agriculture-importing country because of “failed agricultural programs”, as reflected in the nation’s heavy reliance on rice imports and smuggled agricultural products such as garlic and onion. Quoting an Israeli expert, he said that our soil is so rich the country is even in a position to feed the world.

And yet, as we all know, Philippine agriculture is a devastated sector.  It is unable to feed the nation.  Although it covers over one-third of the country’s landmass of 30 million hectares, agriculture output accounts for less than 10 percent of the GDP.  Still, it employs around one-third of the labor force. The resulting low income per capita in the sector explains why poverty wears a predominantly rural face.  In turn, the eroded capacity of the sector to create decent jobs explains the unabated exodus of rural migrants to the urban areas as well as the rise of rural poor colonies throughout the archipelago.

Hence, the big challenge to the Duterte Administration, now on its second year, is two-fold: how to stop the continuous decline of agriculture as a productive sector, and how to transform it into a motor of growth and job creation.

There are promising developments.  Department of Agriculture Secretary Manny Pinol has been insistent on the importance of the rice sufficiency program and the extension of more assistance to the farmers – for example, free irrigation and palay price support. To strengthen farmer coping adjustment to market demand and climate change challenges, Malacanang also launched a “color-guided” map on soil and crop suitability.

However, the Administration’s agricultural policy team is still not united on how to push the sufficiency-transformation program. There are advocates of liberalized rice importation even during palay harvest season.  There is still no policy unity on what should be the role of the government’s National Food Authority in the rice and other agricultural markets.

There are also unresolved land problems. The full implementation of the 30-year-old Comprehensive Agrarian Reform Program is an unfinished business. There are even debates within the Cabinet on whether to relax or not the policy banning conversions of agricultural lands.  Proposals for a comprehensive national land use plan remain proposals awaiting Congressional approval and public scrutiny.  In the meantime, big realty estate companies and resort and subdivision developers are having a field day accumulating agricultural land in various regions to build new cement jungles, develop resorts and playgrounds for the rich, or keep them idle temporarily for “land banking” purposes.

To strengthen agriculture, the new Philippine Development Plan (PDP) 2017-2022 has identified the following policy doables:  Revitalization (the DBM allocating P120 billion in five years), diversification (encouraging farmers to plant high-value products and exportables), and modernization (through mechanization, credit assistance and so on) of the sector.  In addition, the PDP talks of the need for product standardization and strengthening of agricultural supporting institutions.

However, the PDP is silent on the “failed agricultural policies” mentioned by then Presidentiable Duterte.  What are these failed policies?  How should these be corrected?  Answers to these questions are necessary if the government has to forge a national consensus on how agriculture can regain dynamism and how the country can regain its ability to feed the nation.  The DA-NFA conflict over rice importation illustrates the abject lack of policy coherence within the executive branch of the government.

For the Integrated Rural Development Foundation, which published a book entitled Rebuilding a Damaged Agricultural Sector (2016), one way of tackling the policy failure issue is to go historical.  There is a need to examine what has happened to the sector during the three decades of CARP (1988-present) and the longer period of structural adjustment program or SAP (late 1970s to the present).

The SAP program is built around the neo-liberal economic idea that agriculture grows best when it is “deregulated” (meaning no government intervention in the market such as price support) and “liberalized” (meaning no restrictions and low tariffs on agricultural imports). The unilateral SAP program of the 1980s-1990s pushed by the IMF-World Bank was reinforced by the Philippine trade liberalization commitments to the World Trade Organization, the Asean trade in goods agreement and to a number of bilateral free trade agreements.

And yet, the CARP and SAP decades have turned out to be lost decades for Philippine agriculture.  Yes, there are pockets of growth such as banana.  But the sector as a whole has been stagnating and shrinking. The country has become a net agricultural importing country since 1995, ironically the first year of Philippine membership in WTO.  In certain years, the Philippines was also officially reported as the world’s largest rice importer. Worse, majority of those living in the countryside, including the beneficiaries of CARP, have either remained poor or poorer because of limited farm incomes and jobs.

The point is that an honest-to-goodness review and inquiry on the “failed agricultural policies”, as voiced out by then Presidentiable Duterte, remains unaddressed.  A bold reform program should come out of the review process as a guide in the rebuilding of the damaged sector.  Reading IRDF’s book is a good starting point.