As ‘dark clouds’ hover, solon calls for rapid agri modernization

AN economist-lawmaker on Tuesday called for a Philippine agricultural modernization and a “second agricultural revolution” as he warned of “dark clouds” hovering over the global economy.

House Committee on Ways and Means Chairman and Albay Rep. Joey Sarte Salceda sounded the alarm over what he foresee could be a global economic downturn due to US monetary policies to curtail inflation.

Salceda issued the warning following his remarks during university convocation at the University of the Philippines-los Baños for the 47th anniversary of the Institute of Plant Breeding of the same institution last Tuesday.

During the forum, Salceda warned that a potential global economic crisis could descend if the US decides to dramatically addressinflationwithmonetarypoliciessimilar to those pursued during the early 1980s.

“We are now seeing the largest gap between Fed funds rate and adjusted core CPI [consumer price index] since the late 1970s, which prompted then Fed Chair Paul Volcker to purse aggressive disinflation policies,” Salceda pointed out from a National Bureau of Economic Research study released recently.

Quoting from the text, Salceda pointed out that “in order to return to 2 percent core CPI today, we need nearly the same 5 percentage points of disinflation that Volcker achieved.”

“Policies to create 5 percentage points of disinflation will be calamitous for the global economy. The global economy will shrink at least as much in output, and our GDP growth, in turn, will probably be lower by 3 percentage points when that happens,” he said.

“So, we better prepare. And there is only one sector that can absorb all the excess liquidity in the world. And regardless of what happens in the world, people have to eat,” he explained.

Salceda said the animated crisis-proofing strategies of the Arroyo administration, which he advised, followed a particular doctrine: “You must first make sure people have something to eat. The rest follows.”

Salceda said that agricultural modernization would be key to the preparations for these dark clouds.

Key policy

SALCEDA, meanwhile, recommended five key policy agenda items to modernize the country’s agriculture.

According to Salceda, the country needs to expand irrigation coverage and explore micro-irrigation options, as well as more targeted, and more purposive irrigation.

“That means farmers control the flow, the pressure, and the amount of water they irrigate theircropswith,unlikethecurrentsystemwhere the 6 percent of our land area that is irrigated is watered with surges of water sometimes, and nearly nothing in other seasons,” he pointed out.

Salceda added that the Philippines needs to govern water resources more effectively through the creation of the proposed Department of Water Resources.

“We also need to make agricultural support more proportional to production output and potential of sectors,” he added.

These, Salceda said, will include universal tariff-funded sectoral support programs, to provide more support to corn, banana, livestock and other high-output sectors, and proper use of the Coconut Industry Development Trust Fund of P75 billion, “which could be game changer for the coconut sector.”

Lastly, Salceda said the government should “encourage foreign scientists and technology transfer.”