BUSINESS TALK
By WILLIAM S. CO, chairman, Philippine Chamber of Commerce and Industry
Recently, I was invited as a panelist to a forum on boosting the Philippine agriculture sector and ensuring food security. As someone who is in agribusiness and previously worked as a Philippine agriculture attaché, I have witnessed the highs and lows of our farming and fishery sector. Sadly, for over the past decade or so, our country remains to be food-insecure, we are the most in emerging Asia. In that forum, I was able to share my thoughts on how our nation can achieve food security, which I believe is doable given the right policies and interventions.
Truth to tell, the Philippines remains to be rooted in agriculture, despite the challenges it continues to face. However, agriculture’s contribution to the GDP only accounts for 10 percent when its contribution could even reach 30-45 percent including allied services. As of 2021, the sector accounted for 24.2 percent of the total employment share. Half of the country’s 10 million population, 51.1 percent or 56 million Filipinos live in rural areas whose main source of livelihood is farming.
These numbers show that we are not reaching our full potential as an agricultural nation essentially due to some issues confronting our industry including productivity, competitiveness, technology, post-harvest facilities, and access to credit, among others. These are the same issues that we continue to face. As a result, the country is unable to provide sufficient food for its people and relies heavily on imports to feed our growing population. Hence, the Philippines is a food-insecure nation.
Food security is a long-standing dream that we remain to aspire for our country and its people. In fact, the Philippines recorded the greatest number of food insecure people in Southeast Asia in 2017 and 2019 with 64 percent or 59 million Filipinos, respectively, suffering from moderate to severe lack of consistent access to food, according to the United Nations’ Food and Agriculture Organization report.
Similarly, in the latest Global Food Security Index Q2 2022 by Deep Knowledge Analytics, the Philippines placed 146 out of 171 countries or the most food insecure country among its peers in the East and ASEAN region generating a score of only 5.05 out of possible 10 premised on these three key indicators – food accessibility; crisis level; and food system and economy resilience.
Now, the Philippines, like many other countries, is facing skyrocketing food inflation due to supply issues and the high cost of fuel. Our inflation rate as of November was at eight percent while our trade food deficit in the last three years was at a negative two percent of GDP, the largest in Asia.
Unlike our neighbors, Thailand and Vietnam, who have the biggest trade surplus, the Philippines is a net importer. These countries can use food protectionism should they wish to, especially when there is a global supply crisis, something that the Philippines can’t do.
One of our major imports is rice. This year alone (as of August), we imported 2.719 million metric tons and the bulk of which was imported from our neighboring countries Vietnam, Myanmar, Thailand, and Pakistan. While they have the advantage of producing rice because of the Mekong River which they use for irrigation, the Philippines can certainly improve its rice production if given the right support and interventions. Important would be lowering the costs of inputs, good infrastructure such as irrigation, sufficient post-harvest facilities, and noteworthy to mention also is climate change adaptation, among others.
While we depend on these countries for rice supply, we also have to strengthen our partnership and trade cooperation with them to ensure that we secure ample supply for our expanding population. We can probably tap Cambodia as a major trading partner for rice whether in terms of export or investment like setting up a rice processing plant in the country.
There is a need to urgently develop our food resilience. While working on our food security, we should also ramp up our productivity so we become less reliant on imports. We have to push for agriculture and manufacturing supply chain-enhancing infrastructure projects. Given the importance of farming and fishery to our economy, the government must allocate more funding and provide additional grants to cover the sector’s continuing needs for farm and fishery inputs such as seeds, fertilizers, crop protectants, feeds, irrigation and machinery, research and development and access to markets.
Certainly, we all agree on the need for a lot of policy reforms, direction setting, and most of all, technology intervention. With the Marcos government’s commitment and with the support of the private sector to revive and modernize the agriculture sector, we hope this would eventually translate to better productivity and income for farmers, availability of supply, and food at every table.