‘Structural transformation’ urged in agri sector

The International Food Policy Research Institute (IFPRI) is calling on the Philippine government to implement a “structural transformation” in the agriculture sector in order to allow a more progressive rural economy in the country.

The international food agency said the government should transform structures by pouring in investments in farm research and development, infrastructure, labor-intensive manufacturing and services, and land distribution.

IFPRI and the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) emphasized that policy transformation similar to what China adopted has played a huge role in rapidly lifting rural areas into progress.

“The design and implementation of institutions, policies and investments have influenced the path and speed of rural transformation and poverty reduction. Land reform, rural investments and sectoral policies have been decisive,” IFPRI said.

This is also in relation to the ASEAN region’s ASEAN Through Market Integration (ATMI) which aims to integrate small farmers into bigger business systems or value chain to make farmers more competitive as numerous small farmers’ production are consolidated into one bigger supply bulk.

The agency said agricultural transformation involves the simultaneous development of the processing industry, including food processing and services sectors such as logistics and marketing, through value chain development.

This will also include the development of the wholesale and logistics segment as public and private sector and foreign institutions pour investments, the advancement of the processing sector, as well as the expansion of e-commerce.

The government is also urged to focus on land distribution as it enhances productivity with farmers having the incentive to work hard if they have security of land tenure.

The international agency said there should be investments in more roads, land preparation and post harvest machines since these raise production of value added goods.

“Market and pricing policies should be encouraging for investments in agriculture to grow. It is important to adopt policies that give equal access to land, asset ownership, credit, education, health services, and other productive assets,” the agency said.

“As an end goal, integration as aimed in ATMI is considered successful when agriculture diminishes to just one of the many major sectors of the economy. Transformation happens as a country progresses from agriculture-based economy, to pre-transition, transition to urbanization, and developed stage,” it added.

With rural transformation, poverty in ASEAN’s developing countries has been reduced from 71 percent in the 1980s to 15 percent in 2011.