Agribusiness and rural progress

This is the title of a book just off the press written by an esteemed colleague, Rolando T. Dy, who is professor and executive director of the University of Asia and the Pacific (UA and P) Center for Food and Agribusiness. It is a compilation of his recent articles/columns on the subject under the auspices of the Management Association of the Philippines and UA and P.

The book addresses the country’s greatest contemporary challenge: Eliminating poverty. While our ASEAN neighbors have successfully brought down poverty (Indonesia, 11.3 percent; Thailand, 10.5 percent and Vietnam, 13.5 percent), our poverty remains at the embarrassingly high level of 25.8 percent. And much of that poverty is among farmers and fisherfolk in rural areas.

Rolly Dy traces the roots of our persistent poverty to the unproductivity of traditional agriculture and fisheries due to lack of investments, weak institutions, poor governance, and unfavorable policies.

But beyond generalities which are common knowledge, the author provides succinct analyses backed up by robust data to explain why and offers concrete solutions moving forward. At every opportunity he benchmarks the performance of our agriculture sector vis-à-vis our neighbors who have comparable agro-ecologies to demonstrate what realistically could be done.

The book is conveniently divided into easy-to-comprehend stand-alone pieces and should be a good read for serious students of agriculture and rural development.

It is next to impossible to summarize and do justice to this comprehensive treatment of a very complex topic. Nevertheless the following three messages come out clearly, among others.

Farm productivity and diversification is key The principal message of the book is that rural poverty in the Philippines is unacceptably high due to low farm productivity and poor diversification. Rural folks are poor because they lack gainful employment. Only high farm productivity and wide diversification will create more jobs in farm and offfarm activities.

In crop after crop, our farm yields pale in comparison with our ASEAN neighbors. Among 20 crops, our farm yields were consistently the lowest. In a scale of 1 to 4 (with 1 being the highest) our aggregate farm productivity score was 3.30, compared with Indonesia, 1.85; Vietnam, 2.25 and Thailand, 2.32.

In terms of crop diversification Philippine agriculture is concentrated in rice, corn, and coconut which are relatively low margin commodities. On the other hand, our more successful neighbors have branched out to more profitable crops like oil palm, rubber, coffee, cacao, fruits (and aquaculture).

The measure of excessive concentration of our production (and hence our lack of diversification) is indicated by the following numbers. The share of the top three crops in the Philippines, Vietnam, Indonesia and Thailand are 84 percent, 70 percent, 63 percent and 59 percent, respectively.

The way forward therefore is to balance our efforts in rice, corn, and coconut with complementary initiatives in crops with high-value added (plus aquaculture).

Advocacy for tree crops The second recurring theme in the book is the author’s strong advocacy for tree crops. The bulk of the public resources for agriculture are devoted to irrigation and farm-to-market roads which are in the lowlands. Historically the greater part of the budget of the Department of Agriculture (DA) is devoted to rice, to the neglect of others, particularly tree crops, including coconut, which are in the uplands.

Indeed from the experiences of our neighbors who have invested heavily in oil palm, rubber, coffee, cacao, and increasingly in tropical fruits, we would have been much better off had we paid more attention to industrial tree crops.

It is not yet too late. The environment and the technologies to successfully and profitably grow these tree crops in our country exist. In any case we import huge volumes of palm oil, rubber, coffee and cacao products. At the minimum we can significantly expand our hectarage of these crops to substitute for imports while raising incomes of our farmers.

However, there are some caveats. Oil palm and rubber are susceptible to strong winds and are best confined to Mindanao and Palawan. For the rest of the country, coconut which is relatively typhoon-resistant, can be made much more productive by planting the coconut hybrids developed by our Philippine Coconut Authority (PCA) and adequately fertilizing them. Coconut lands can be made doubly more productive by intercropping with coffee, cacao, bananas, black pepper, and fruit crops.

We are world leaders in banana and pineapple production. Note however that our banana and pineapple industries are corporate-led, not small-holder based. Although we will be late comers in oil palm, rubber, coffee, cacao, we should be able to catch up if we reorganize our agriculture accordingly i.e. by scaling up and promoting contactgrowing by small holders with corporate integrators. Providing a smarter, more

enabling environment for Agriculture and Fisheries The third recurring theme in the book to explain our lack of productivity and poor diversification, and hence high rural poverty, is the lack of a proper enabling environment in the agriculture and fisheries sector.

In the first place, Rolly Dy laments the over-arching policy of self-sufficiency in rice, thereby grossly distorting priorities and resource allocations. He calls for a paradigm shift in national objective to increasing incomes of farmers by making them more productive and competitive, not necessarily just producing enough rice to meet our needs.

Improved technologies which are products of research and development (R&D) are important foundations for productivity, competitiveness and longterm sustainability. Our domestic R&D efforts in agriculture and fisheries in addition to being severely underfunded, lack focus and coherence.

Rural extension by and large has been weakened by devolution to local governments. However, Rolly Dy was careful to show that all is not lost because in his province-by-province analyses, some provinces like Ilocos Norte, Ilocos Sur, La Union, Pangasinan, and Bulacan are doing extremely well.

As a professional with a lot of consultancy experience not only in the Philippines but also in the rest of Southeast Asia in a wide range of commodities like oil palm, rubber, coffee, cacao, sugar, dairy, poultry, and swine, Rolly Dy bewails the weaknesses in project conceptualization, preparation, implementation, monitoring and evaluation of otherwise well-funded rural development projects. He calls attention to the continuing need for human resources development.

And finally, he proposes a revisit of the land retention limits under agrarian reform and the need to free land markets to allow entrepreneurs in the countryside to re-consolidate farm lands to achieve scale and higher levels of productivity.

For those interested, the book is available at the UA and P campus in Ortigas Center at R800 per copy plus delivery charges. Email cfa@uap.asia.

**** Dr. Emil Q. Javier is a Member of the National Academy of Science and Technology (NAST) and also Chair of the Coalition for Agriculture Modernization in the Philippines (CAMP). For any feedback, email eqjavier@ yahoo.com.