Poor state of PH agriculture blamed on misdirected policies

by Karl R. Ocampo, 10 Jul 2021

Despite several attempts to revive the Philippine agriculture industry, a World Bank report showed that the local farm sector had remained the laggard in Asia due largely to misdirected policies.

As such, the efficiency of farmers and fishers to produce food has steadily declined over time, with consumers ultimately shouldering the costs.

The latest World Bank report, entitled “Realizing Scale in Smallholder-Based Agriculture: Policy Options for the Philippines,” said that over the past 25 years, the efficiency by which the country used its land, labor, capital, and materials to produce food had only grown by 32 percent.

This paled in comparison to Indonesia, which grew by 50 percent; Thailand, 67 percent; Vietnam, 73 percent, and China, 130 percent.

The World Bank said Philippine policies continued to be undermined by traditional views, including the strong bias in favor of rice production—considered by policymakers as the major yardstick to measure agricultural growth.

“The agricultural sector is much less diversified in the Philippines than in several of its regional peers, not only in terms of crops but in terms of the importance of livestock, aquaculture, and forestry,” it said in the report.

“Growing domestic and regional demand for animal products and other high-value foods has generally not been met by a requisite supply response in the Philippines …” it added.

The fixation on selected commodities has impeded the local industry’s growth, whereas, in many countries, food staples have already become less dominant to give way to a more diverse array of agricultural products.

“Notable examples include the steady expansion of China’s fruit and vegetable subsector, Thailand’s poultry industry, Vietnam’s aquaculture subsector, and the oil palm product industries of Indonesia and Malaysia. The Philippines has not experienced a similar shift in the composition of agricultural production and, unlike its peers, has not experienced the emergence of any major new internationally competitive subsectors,” said the World Bank.

Anticipating the implementation of the Garcia-Mandanas ruling next year that will transfer the functions of the Department of Agriculture (DA) to local governments, the World Bank said local governments would now be the catalysts to institute a new direction for agriculture. This includes a transformation of the industry’s value chains—from production to post-harvest to distribution—through incentives, clustering, and block grants.

One of the recommendations is to look at the country’s regional variations given how diverse the Philippines’ resources are.

Policies and programs must be geared to accommodate four factors: the state of agriculture in a particular area, the physical environment and natural resource base, demographic features, and the level of infrastructure.

The DA, for its part, should continue to lead high-quality analysis and research to assist local governments so that patchworks of production and distribution plans can be avoided.

“The challenge for the Philippines is not only to determine what types of approaches or interventions might be suitable but to understand where different approaches might work best and when they can be applied,” World Bank said. INQ