How to make our agri products fit for export
Structure must follow strategy. That is, the strategy of improving our agriculture exports—already disastrous at this point—will fail, unless the Department of Agriculture (DA) immediately installs the appropriate structure.
Last Dec. 20, Trade Undersecretary Allan Gepty stated that our total negative trade balance in goods deteriorated from $42.2 billion in 2021 to $58.2 billion in 2022. In an earlier meeting of the public-private Philippine Council of Agriculture and Fisheries’ committee on international trade, it was noted how the number of exporters were cut by more than half from 8,575 in 2018 to 4,619 in 2022.Agriculture exports
For agriculture exports alone, the picture is more bleak. Our agriculture trade balance worsened last year by 33 percent to $118 billion. Though agriculture contributed only 10 percent to our gross domestic product, it contributed 20 percent to our trade deficit.
Furthermore, our agriculture exports of $71 billion was disturbingly low, compared to our neighbors in the region, such as Thailand ($42.3 billion), Malaysia ($33.4 billion) and Vietnam ($29.1 billion). These countries trailed far behind us before.
In addition, the government-approved Philippine Export Development Plan is targeting only $8 billion in 2028. This is extremely disappointing, and shows why we are so far behind Thailand. If we had given the same attention that Thailand gave their agriculture, we would be on a par with their $42.7 billion in agriculture exports last year. The figure is far greater than the $36.1-billion remittances that the Philippines needs to prop up the economy. There would then be no need to pay the high price of disrupting our family and social relationships.
Only four specific products contribute more than 50 percent of our exports. Instead of leading our export drive, all are losing except one. Consider the table below:
Today, the DA is more focused on the production of basic commodities, with little being done to promote exports. The department must therefore immediately set up a structure to reverse this disastrous decline in exports using three necessary components.
Leadership
The first is to appoint a high-ranking, experienced official reporting directly to the agriculture secretary. Someone has to be in charge, and be held responsible and accountable.
The second is to form a full-time task force to address the neglected issue of export industry development. They would not only formulate and implement a credible global export marketing plan. More importantly, they would focus on developing the priority export industries that are now losing their global competitiveness because of inadequate government support. How can you effectively market products when the same products are not competitive?
The third is to create an interagency committee just for agriculture exports. It will be chaired by the agriculture secretary to give the committee the necessary clout. There should be coordination, synergy and unity in our export drive. Unnecessary and burdensome regulations will have to immediately be addressed.
The culture will then transform from harassing to supporting our exporters. Our agriculture attaches say that they are dismayed at how we harass our exporters, while host countries show them the opposite.
Our agriculture export performance is a disaster. To state that our official target is to increase our agriculture export target from $7.1 billion last year to only $8 billion after five long years is equally disheartening, especially when our competitors are growing at such a fast pace.
We must reverse this trend. We can start by setting up the structure to support a credible agriculture export strategy. Without this structure, our agriculture exports will remain in the doldrums.
The author is Agriwatch chair, former secretary of presidential flagship programs and projects, and former undersecretary of the Department of Agriculture and the Department of Trade and Industry. Contact is [email protected]
