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[OPINION] Agriculture and rural push?

PHILIPPINE STAR/JOVEN CAGANDE

August 17, 2020 | 6:57 pm

MAP Insights | By Rolando T. Dy

 

COVID-19 or no COVID-19, agriculture needs continuous improvement. It has a long history of mediocre performance. Food manufacturing is underdeveloped, agri-food exports are low and rural poverty is high. The productivity of the country’s major crops lags its ASEAN neighbors. Low productivity has long-term ramifications.

This article highlights the urgency of addressing long-term productivity. Productivity plus quality and scale affect competitiveness.

FARM YIELD AND AREA
Across many crops, the Philippines lags. Vietnam and Indonesia are ahead. Thailand is low-yielder but it produces high-quality rice for export. Even in coconut, the Philippines is behind. Pineapple and banana are competitive. Cavendish banana comes at higher yields. On oil palm, Indonesia, Malaysia and Thailand are global leaders. On rubber, Thailand, Vietnam and Indonesia are the main players while coffee is dominated by Vietnam. (See Table 1.)

By area, palay — unmilled rice — dominates in most of ASEAN but other crops, like maize, coconut, sugarcane, cassava, coffee, oil palm and rubber, also have significant hectarage. (See Table 2.)

AGRICULTURAL EXPORTS
Every country’s agricultural export has global competition. However, the crop shifts and diversification instituted by our ASEAN peers have served to enhance their agri-export competitiveness:

  • The Philippines has coconut oil as a mainstay. Cavendish banana and pineapple have smaller areas but are world players.
  • Malaysia has palm oil, rubber and cocoa preparations. It boosted its palm oil because of comparative advantage over rubber due to higher yield and low labor inputs. The country is the manufacturing center of cacao products while importing beans from Indonesia and Africa.
  • Indonesia is the global player in palm oil, rubber, cocoa and coffee.
  • Thailand is in rice, rubber, sugar, cassava and pineapple.
  • Vietnam is a world player in rice, Robusta coffee and rubber. Cashew nuts and pepper have smaller areas but high yield and export earnings. (See Table 3.)

POVERTY
The Philippines severely lags in poverty measures in the ASEAN. Is it due to low productivity and poor diversification?

Such factors plus the lack of employment generation, among other things, contribute to high rural poverty. (See Table 4.)

Agriculture plays a crucial role in transforming the development economy and addressing poverty. The Food and Agriculture Organization cites that “the growth in agriculture has been more poverty reducing than growth in other sectors, having bigger impacts on the rural extreme poor.”

For rural areas, reducing poverty requires generating decent employment, both in the agricultural and non-agricultural sectors, and promoting participation in off-farm activities to diversify their livelihoods.

In the case of the Philippines, what must it do to reverse the long-term agricultural stagnation?

There has to be deep appreciation of the long-term causes of dismal agriculture performance — poor extension system, lack of meritorious bureaucracy, and limited land access.

The extension system should shift from the weak municipal local government units to the provincial level in order to achieve critical mass. A group of experts (CAMP) based in Los Baños is vigorously advocating this.

A merit-based bureaucracy must be re-engineered to introduce professionalized career service and continuity. This is a challenge in every administration as some key positions are not vetted on competence.

Freeing the land market is a running, contentious issue over the past 34 years. Land alone will not solve poverty. Lack of investment in the farms is a universal concern. Land markets must also be freed now to allow long-term leasing. The five-hectare ceiling must be lifted to achieve economies of scale to attract investors looking for economies of scale. While the country debates, our neighbors have advanced.

The most scarce commodity: good management. In my 40 years in agriculture development, I have observed this in Indonesia, Malaysia, Thailand and Vietnam. The Philippines’ status quo must be challenged here and now. Or else, the country’s agriculture will continue to be behind 20 years from now.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

Source: https://www.bworldonline.com/agriculture-and-rural-push/