The growth of the country’s agriculture sector was slower than that of other countries in the region, partly because the country failed to put in place the necessary reforms and measures that can bring about an “agricultural transformation.”
Roehlano Briones, senior research fellow at the Philippine Institute for Development Studies, said in a forum Tuesday that the country’s agriculture growth averaged only 2 percent from 1981 to 2014, short of the average of 3 percent across developing Asia.
The Philippines also lagged in terms of agricultural exports and growth in yield of major crops in the region.
According to Briones, developing the country’s agriculture sector will thus require a crucial transition from mere farming to agribusiness, a structural transformation that will call for increased diversification in farm outputs as well as sound government interventions.
In doing so, the government will also be able to achieve a “rural transformation” which, Briones said, can be attained by upgrading and restructuring the supply chain to gain competitive advantage in high-value agro-industrial products.
Among the binding constraints to a full agricultural transition were identified by Briones as the lack of access to new technologies, quality inputs, financing, and well developed logistics, transport, and marketing services.
Briones also cited as challenges the lack of investments in research and development; rural infrastructure backlog; weak regulatory and certification system; and defective property rights regime.
To address these constraints, Briones cited the need to, over the short term, develop a participatory competitiveness working group for agro-industry on a sector-specific basis and at a local level and ensure that the different agribusiness roadmaps will include detailed analysis and prioritization of constraints by importance or urgency.
Under the medium term agenda to transform the agricultural sector, the government must set up economic zones and industrial centers for agribusiness; provide tax incentives, subsidies, and flexible price stabilization schemes for stakeholders; and increase investments in research and development, extension systems, irrigation facilities, regulatory systems and transport infrastructure, among others.
Over the long-term, there is a need to set up an efficient land administration system; incorporate agribusiness in industrial incentives and zoning scheme; create a regulatory system facilitating business registration and licensing, standards and enforcement, contract compliance; and enact a competition policy prohibiting anti-competitive practices in agribusiness.