Agri solution: Production, extension, consolidation
To solve our agricultural crisis, we should emphasize three points—production, extension and consolidation. If we do not do this, the agriculture sector will never realize the potential it promises.
During the nine years before the pandemic, agriculture grew by an average of 1.6 yearly, compared to industry’s 6.8 percent. What caused this disappointing performance? This was the subject tackled by the Agrifisheries Alliance (AFA) at a press conference and town hall meeting held on May 13.
AFA covers five different sectors—farmers and fisherfolk (Alyansa Agrikultura or AA), agribusiness (Philippine Chamber of Agriculture and Food Inc. or PCAFI), science and academe (Coalition for Agriculture Modernization in the Philippines or CAMP), rural women (Pambasang Kilusan ng Kababaihan sa Kanayunan or PKKK), and multisectors (AgriFisheries 2025 or AF2025). During the press conference, these sectors shared their position unified over the past five years since they organized.
Agriculture contributes 8 percent of our gross domestic product (GDP) and accounts for 25 percent of our labor force. But if we add activities dependent on agriculture—such as agro-processing, agriculture inputs, manufacturing and trading—this contribution increases to 40 percent, while the labor force increases to 65 percent. What is most unfortunate is that farmers and fisherfolk today suffer a poverty level of 32 percent, more than double the rate in other Asean (Association of Southeast Asian Nations) countries. Why has agriculture fared so badly? At the May 13 meeting, PCAFI president Danilo Fausto said it was because of “shortcomings in the policy and institutional environment in which the sector operates.”
There are three main components of this poor production performance: policy, planning and budget. For policy, instead of putting the needed and correct emphasis on national development and domestic agriculture support, agriculture was largely ignored. Consequently, agriculture production and effectiveness declined. The immediate government reaction to please consumers was to liberalize importation. This was done without appropriate safeguards that other countries give their agriculture stakeholders. Consequently, jobs were lost, poverty increased and our agriculture imports exceeded our exports. We now have the dubious distinction of being the only net food-deficient country among the Asean-5 (the Philippines, Indonesia, Malaysia, Singapore and Thailand).
There are occasions when imports are desirable and beneficial. But when not managed properly, they cause tremendous damage. This we have recently seen in the areas of rice, hogs and poultry that have caused serious injury to our farmers and fisherfolk. Causes ranged from inadequate safeguards, wrong timing, foregone revenue from too low tariffs that go to importers who do not need it instead of the farmers who do, and rampant smuggling.
Our agriculture commodity roadmaps are lacking in quality, thoroughness, private sector involvement and, most importantly, implementation.
Agriculture Secretary William Dar has now addressed this gap with a standard roadmap outline to ensure completeness and consistency. It includes plans in the medium and long term and, most importantly, in the short term. This guides programs and actions with corresponding budgets to ensure the right priorities and focus. Responsibility and accountability for the roadmaps’ effective implementation will now become the joint responsibility of public-private sector implementation teams.
The agriculture budget is now being corrected, hopefully with Congress’ support. Though agriculture’s contribution to our GDP is 8 percent directly and 40 percent indirectly, its share in the current budget this year is only 1.5 percent. This does not make sense.
For example, livestock and poultry which contributes 31 percent to agriculture output, it receives only 3 percent of the agriculture budget this year. In comparison, rice which contributes 22 percent to agriculture output, receives 40 percent of the budget. If you add the irrigation budget which is mostly for rice, then this will be 75 percent for rice and 3 percent for livestock and poultry.
Extension and consolidation
Having addressed the policy, planning and budget aspects, the AA decided that the two most important and urgent recommendations to improve agriculture were extension and consolidation. These were explained by CAMP chair Emil Javier at the May 13 meeting.
Many of the national agriculture programs are neither effectively delivered nor felt by the farmers in the countryside. While progressive farmers and corporate farms do not need effective agriculture extension, the majority of small farmers and fisherfolk definitely do.
Unfortunately, when agriculture extension services were devolved to the Local Government Units through the 1991 Local Government Code, the municipal agriculture offices were no longer the recipient of appropriate agriculture extension. There was also no link between the municipalities and their respective provinces.
An effective extension delivery system was approved recently: the Province-led Agriculture and Fisheries Extension Service. Extension needs a much larger budget than that proposed for 2022. On consolidation, the clustering of farms to provide economies of scale is imperative. This is not just for production but for all other essential activities like borrowing, purchasing, selling, training and technology transfer. We must work with a global orientation and focus on key domestic products and export winners. Without consolidation, our products will continue to be replaced by imports from countries that have economies of scale.
Production with appropriate policy, planning and budget, coupled with the necessary extension and consolidation, is the answer to turning around agriculture from a loser to a winner.
The author is Agriwatch chair, former Secretary of Presidential programs and Projects, and former undersecretary of DA and DTI. Contact is [email protected]
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