Growing the economy through agriculture: the Philippines

My course elective in college was agricultural economics. It wasn’t my choice. Mine was international economics. I thought it was the rational next subject for me after development economics the previous semester. But when I got to the course advisor, he told me that international economics was not offered. Hasn’t been in a long time. There had been no professor on the subject, he explained.  They didn’t anticipate to get one in, at least within my time there. But, there’s agricultural economics, he said. My shocked thoughts, none of them good, must have openly played on my face, because he looked at me with some concern. Recovering, I said but that’s like I’m being forced to get a subject that I’ve no inclination to study! Your syllabus said ‘elective’ and I thought I could choose from a list. Look at it this way, he said, you’d be doing the country a good turn. A good turn? I don’t know what you mean, I said, all I know is agriculture isn’t in my horizon. I’m sorry, he said, but this is the only elective on offer. When he said that of course I had no alternative but to get the subject. I expected to graduate after three semesters. I couldn’t wait to finish college which meant I couldn’t afford to make side trips (I thought of cross-enrolling in another school offering my elective of choice, that is, if the college allows that and credits the units).

First day of class, I went in face heavy with the full weight of the sullenness I felt. But, that changed. Soon afterward sullenness gave way to interest. By the end of the semester, I’ve acquired a new pair of eyes for agriculture i.e. it’s economic potential to move agri-based economies such as the Philippines up the ladder of progress. This was in the mid-90s. In the years after, indirectly, through my work, I got to know more about the realities of Philippine agriculture.

via country-data.com

1.  Rice production is characterized by lots of tenant -farmers with very small plots maintained by traditional methods (i.e. cow- or carabao-pulled plough). In 2005, based on 2002 census, the National Statistics Office (NSO) reported that the average farm size was two hectares.  But anyone working with data knows the catch in averages.  It doesn’t speak for the majority who have less than the average size.  Production, under favorable weather, is 25 to 50 cavans maximum per cycle. The produce isn’t all brought to the market however. They’re sent to: the landlord as part of tenancy arrangements; creditors as debt repayment (often, entire produce are mortgaged); retained as seed stock for the next cycle; family consumption; and, whatever remains which are minimal are sold.

This demonstrates that rice production in the country is more of a livelihood.  Like a sari-sari store to Shoemart’s Mall of Asia.  It may put food on the table but sari-sari store profit, if at all it’s way beyond break even, won’t make the owner any richer, and rich, or at least, middle class rich, is what any one hopes to attain, farmer or not.  I mean, what’s the point of toiling under sun and rain until old age when the work doesn’t provide you decent housing and plumbing at least?  And human labor ought to raise human dignity not trample on it.  This reality runs in the opposite direction to that of the national objective of rice production over and above national demand in order to be a major exporter.

2.  The fisheries industry follows a similar path but worse because majority of fisher folks, ironically, the small fry, only have a boat or two as capital assets.  Land even if on tenancy is a much more valuable asset, which explains the stark contrast between say farming communities in Northern Luzon a.k.a. rice bowl of the country and most villages in the Visayas where fishing is a way of life. Communities in the former have at least concrete bungalows whereas those in the Visayas are in huts on shorelines which is public land. Folks from Northern Luzon visiting the Visayas are stunned by the visual and say akala ko mahirap na tayo pero mas maswerte pa pala tayo (and I thought we’re poor, but it seems we’re luckier).

3. The country lacks a coherent national policy and strategy for agriculture that clearly links it, internally, to national and regional economic development, and, outward, to prospects in international food and related markets (e.g. ASEAN, EU). Regions lack the implementation plans to achieve desired levels of production.

Briefly to the highly-mechanized manufacturing industry for a parallel example. How could one producer, say, Samsung, supply global demand for it’s products? It intelligently replicates itself. How? Economics aided by science and technology, finance, and marketing. Of course, these days, competition in the mobile phone market isn’t just over the hardware. There’s now these so-called apps (or applications). Competition drives industries to innovate and diversify. To innovate, companies invest in research. Philippine agriculture needs that kind of strategy mix.

But before strategy and plans could even be effectively executed, there’s the issue of land, a critical production input. Unresolved land issues remain to be the greatest impediment to the modernization and the unlocking of economic potential in Philippine agriculture.

4. Producers need information systems, information being a key input in economic production. My former employer, in the period it operated a livelihood program (that included projects for farmers), contributed to the training and equipping of municipal-based information centers servicing farmers (under the Department of Agriculture’s (DA) Farmers Information and Technology Services (FITS) program). As it happened, the centers were underutilized. They’re frequently used as training and meeting halls and not necessarily with farmers. In the centers, I make it a point to go over the papers pinned on the information boards, which usually were DA circulars, thinking, if I’m a farmer, what further information do I need to get in here? Because that would dictate the kind of information the centers will produce. In one municipality, I approached the officer-in-charge and asked if I could briefly go over the information system from the center’s computer. I was shocked to hear that there was no information system (which explains the fact that there’s no aggregate national level data). And that it was because the municipality lacked funds.

Information systems are run on the principle of demand and supply. This dynamic was not apparent in the centers. For one, farmers still manage their farms in the traditional way i.e. from gut feel and nature reading handed down from their fathers. Many are illiterate. Municipalities on the other hand perpetuate the situation perhaps unknowingly (though this doesn’t get them off the hook) by repeatedly failing to consistently follow through on farmer-centred programs. Also, the corruption scandals involving the DA at national goverment involving it’s fertilizer and organic farming funds mirror the situation in many localities where farmers are trapped into buying municipality-endorsed fertilizers and seeds, often through burdensome credit arrangements that further saddle these already heavily-indebted farmers. On the other hand, the individual, the farmer, can choose not to be bullied into the situation. But what counter-arguments could the illiterate farmer utter to shoo off insistent silver-tongued public officials- and civil servants-turned corporate agents? Yet, there is the farmer literacy program of the DA (often bundled into skills trainings) but which seems to have been discontinued.

5. Relative to the argument that Philippine agriculture was derailed by neoliberal policies of the IMF imposed on the country in the Marcos years, my view is a sovereign nation can choose not to be imposed on. If the IMF says forget agriculture, what does the Philippine Government say to that? Does it automatically nod to the IMF? But in order to have a say, the government need to really know the state of the nation and it’s resources. It needs to have a plan of it’s own. And evidence of impact to back it up. The IMF will huff and puff, naturally, because that’s it’s job and that’s the point. The Philippine Government also has a job to do.

Then, the IMF. Soon, inevitably, the ASEAN Economic Community. The rule here is basic: The competitive producer always wins. With the regional economy as the market base, the carabao pulled plough plot will expire next to the strategically-managed and highly-networked mechanized farm.

The World Bank Research Group recently published a working paper Who Will Feed China in the 21st Century? by Fukase and Martin. See, agriculture isn’t dead. I bet after China, the next big place to check out is Africa (aside: if Africa out-develops the Philippines, we’re really a hopeless case). China may not be able to produce all of it’s food and related needs nor sustain an entire supply chains that only produce all these and so the China market presents an opportunity. The question is can the Philippines, now a net importer of rice, supply the need there, even if, theoretically?

The question how important is agriculture in Philippine economy? is asked often enough.  We need to shift toward a more proactive perspective: how could agriculture grow the Philippine economy?

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