I attended a talk given by Cielito F. Habito, director of the Ateneo Center for Economic Research and Development and the secretary of Socio Economic Planning heading the National Economic and Development Authority (NEDA) during the late Fidel Ramos’ presidency.
Titled “Towards a Nurturing Department of Agriculture (DA),” the talk was given at the Management Association of the Philippines AgriBusiness and Countryside Development Foundation’s (MAP-ABCDF) 27th Weekly Online Forum for 2022 and was divided into two parts, the first of which will be discussed today.
Despite the industry’s falling number of practitioners and decreasing contribution to the country’s GDP, it is still considered resilient, with many Filipinos turning to agriculture during the pandemic. “In terms of our GDP… the data that we’ve seen over the last two years is that the agriculture sector was actually hit the least,” Habito said.
It is also what he calls the “most geographically inclusive sector in the economy.” Using the same example, the lockdowns forced many people to return to their provinces, where many turned to agri-related endeavors to make ends meet, with some achieving unprecedented success in the industry. “Which means that if you are able to help agriculture grow, the benefit is much wider geographically across our country.”
But the sector is plagued with problems, many of them systemic. Habito lists “Seven dysfunctions in our agriculture bureaucracy,” which he claimed are some reasons we “have lagged behind so badly compared to our neighbors.” They are:
Top-down approach of DA bureaucracy. Agriculture is not a one-size-fits-all industry. The DA has a tendency to dictate policies instead of giving local agricultural officers autonomy to recommend programs and request equipment relevant to their locations. He used Brgy. Lopero in Zamboanga del Norte as an example, which kept receiving seeds and fertilizer from the DA, but not the carabao needed to be able to till the land. Because of this, the seeds and fertilizer ended up being sold instead of planted.
Undue focus on rice. This is a common refrain from farmers who cultivate crops that aren’t rice. Habito’s example while interviewing Iloilo farmers for a NEDA study, who reported that the National Irrigation Administration would not allow them to benefit from irrigation from the Jalur dam unless they switch to rice. “This is a manifestation of [our] obsession with rice…. What happens? You don’t even provide irrigation to the other crops that need it just as much.”
Inordinate focus on farm production vs. the entire value chain. There is a need to look beyond the microcosm of farm production and at the macrocosm of the entire value chain. He cited Alabat, Quezon’s ex-Mayor Fernando Mesa as an example of an official who helped local coconut farmers by tapping government agencies to put up a coconut processing center. “You don’t stop at helping them within the farm. You actually have to look at…how they can participate more in that value chain.”
DA is organized by commodity rather than key central functions. This structure had led to either contradictions or redundancies in functions. Habito said, “…the [DA] is structured and organized by commodity rather than by key central functions… what the [DA] must be doing is more steering because you leave the rowing to the local governments according to the devolution of the local government code… the DA is too commodity oriented in its orientation, and in the budget itself, it’s commodity-based… what we really need is a reform of that.”
Reliance on protecting vs. nurturing farmers. The nation’s policies have mostly been about “protecting farmers from foreign competition… to the neglect of nurturing them… to be able to compete effectively,” which, unfortunately, “allowed our government and producers… to be more complacent about productivity, so much so that… rice and many other commodities are twice, even thrice as expensive in the Philippines compared to our neighbors.”
Failure to address farm fragmentation. An enduring problem exporters face is the lack of a consistent and quality supply. In other countries, this is solved through the effective organization of coops, contract growing, and nucleus farming, which also exists in the Philippines, but not on the same scale. “The farm fragmentation and inability to consolidate larger areas is… the biggest problem in all the other export products, especially those based on agricultural brands.”
Falling short on small farm finance. Habito said, “in Thailand, no small farmer is unable to access finance.” In the Philippines, many smallholder farmers are forced to borrow money from lenders at exorbitant interest rates. Making small farmers bankable will go a long way in helping break the cycle of poverty associated with agriculture.
Next week, I’ll discuss Habito’s proposed solutions. To end on a bright note, his overall message is this: “Agriculture has been resilient. It has not been as badly hurt in terms of deep declines as the other major sectors of the economy have been.”