When we ponder the question of whether the Masagana 99 Program was a resounding success or an abject failure, it is customary to recall the face-off in Congress between Sen. Imee Marcos and former Finance Secretary Carlos Dominguez.
In that confrontation, the lady senator trumpeted the achievements of Masagana 99, the rice production enhancement scheme of her late father, former President Ferdinand Marcos Sr., in the 1970s. Specifically, she bragged about the dramatic increase in rice harvest to the point where we became a rice-exporting country.
READ: Bongbong Marcos orders revival of dad’s ‘Masagana 99’
Dominguez contested Marcos’ claim, pointing out the negative impact that Masagana 99 had on the program’s lending arm, the rural banks, which later on resulted in their bankruptcy.
So, what is the real score on Masagana 99?
Before making a judgment call, it is wise to first review what the program was all about and why it was implemented.
Background of Masagana 99
In the early months of martial law, Central Luzon, the country’s rice granary, was inundated by nonstop rain that lasted for almost 40 days. The dire situation was exacerbated by a severe outbreak of rice pests that affected many rice farms. Because of the flooding and infestation, the country’s palay production plummeted, resulting in a debilitating rice shortage. The problem came to a head when no available rice supply could be had from other countries.
Alarmed by the development, the government resolved to push for rice self-sufficiency as a target. The administration probably thought, and rightfully so, that to suffer such helplessness again would be totally unacceptable. President Marcos Sr. was even quoted as saying, “You should never gamble with the stomach of the people.” And since rice is our staple food, the government must ensure its availability, come what may.
The bright boys of the Department of Agriculture and the National Food Authority were called in to craft a rice self-sufficiency master plan. Some experts from UP-Los Baños and the International Rice Research Institute were also brought in to lend their expertise to ensure the program’s success. Thus, Masagana 99 was born. The number 99 in the program’s name actually stood for the target harvest of 99 cavans per hectare, which was the volume attained in a model rice farm in Bulacan.
Masagana 99 had several components, namely, the use of hybrid seeds, provision for machinery and equipment, application of inexpensive chemical fertilizers and pesticides, provision for credit and the availability of extension workers to assist the farmers. In effect, the program was a holistic approach to addressing the rice shortage.
In terms of objective, there’s no question the project was critical and indispensable. No right-thinking administration could stand idly by and do nothing after suffering a monumental rice shortage.
As for the design, the program was the best available at that time. Some components were still in the trial stage but were adopted and incorporated, nonetheless. The administration could not afford to dilly-dally; otherwise, a rice shortage might recur come the lean months of production. And this time around, the people’s patience might wear thin.
In just a year after its launch, the program was deemed a qualified success. Even if most of the farmers failed to deliver the 99-cavan harvest target, the main goal of rice self-sufficiency was achieved from 1973 to 1979. In fact, during the period 1977 to 1978, we even exported a limited volume of rice. Exporting rice was just a bonus of the program; it was never a target.
However, as far as sustainability was concerned, the program began to encounter headwinds in the second year, triggered by the low collection rate from the farmers. From a collection efficiency of 90 percent in the first year, it started to falter in the succeeding years, falling down to 35 percent or even lower. By the early 1980s, with the funds dwindling, the program faded away unceremoniously.
The two contestable failures of Masagana 99 were: one, the heavy use of chemical fertilizers and pesticides that were detrimental to the environment; and two, the bankruptcy suffered by many of the rural banks that served as the lending conduits of the program.
The first failure was excusable because the administration was hard-pressed to show immediate results. Using alternatives, like organic fertilizers and pesticides, would have taken some time to work and become effective. And back then, we didn’t have the luxury of time.
What about the bankruptcy of rural banks? Firstly, it is inaccurate to say that the more than 800 rural banks that participated in the program went under. A good number continued operating normally even after Masagana 99 had been discontinued. Moreover, there was no scientific study done to ascertain whether the rural banks’ financial trouble was due to Masagana 99 or to mismanagement.
More importantly, the credit risk of the program was borne by the government more than the rural banks because one of its features was a government guarantee of up to 85 percent of the amount loaned out by the banks.
But assuming the cause of the failure was the program itself, the government somehow made up for it when it implemented a rehabilitation program in the 1990s.
Lessons from Masagana 99
In hindsight, it would have been better if the program’s assistance to the farmers were outright grants, instead of loans, at least in the first two years of its rollout. Back then, the farmers had run up overdue debts because of the flooding. The additional income they derived from Masagana 99 in the initial years was not enough to cover repayment of those previous debts in addition to the new loans.
Another point to consider is that since the program was complicated with varied components, it would be difficult to execute even if it were undertaken by the private sector. If we are to do it again and there is no impending rice shortage in sight, it might be better to implement it in stages, like from one region to the next. This will allow the government time to fine-tune the program as it goes along.
Recalling the gravity of the rice shortage that engulfed the country before Masagana 99, one wonders if the critics had alternative programs in mind. Because one of the best ways to gauge whether one program is better than the other is to compare or benchmark the two. But decades after Masagana 99, no holistic approach has been tried to address our rice production problem. Everything has been piecemeal.
After considering the overall rationale and results of Masagana 99, the final judgment may not be conclusive. Nonetheless, it would be safe to assume that the program was more of a success and less of a failure. It remains the gold standard (or probably bronze standard) in implementing a rice self-sufficiency program.
This article reflects the personal opinion of the author and not the official stand of the Management Association of the Philippines or MAP. The author is member of the MAP Agribusiness Committee. He is also the adviser of the Philippine Disaster Resilience Foundation (PDRF) and the former president of UCPB-CIIF Finance and Development Corporation and UCPB-CIIF Foundation. Feedback at map@map.org.ph and edgardo.amistad@yahoo.com.