PH agriculture lags behind peers in Asean 5

Expert sees need to treat agriculture sector as an industry

PRIVATE sector leaders in Philippine agriculture deplored that the country has been lagging behind among its peers in the Asean 5 in terms of growth and development in agriculture, and solutions like consolidation, contract-growing and treating agriculture as an industry are needed to realize the sector’s vast potential.

Asean 5 comprises five nations from the Association of Southeast Asian Nations, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand.

In a press briefing on Thursday, leaders of the Philippine Chamber of Agriculture and Food Inc. (Pcafi) and the Coalition for Agricultural Modernization of the Philippines (CAMP) lamented the still high poverty incidence among farmers as well as the trade deficit in the country’s agriculture sector.

Citing data from the Philippine Statistics Authority (PSA), Pcafi President Danilo Fausto said that of the high 26 percent national poverty incidence as of 2018, the brunt of suffering goes to the farmers and people in the countryside. Poverty incidence among farmers were reported to be the highest with 31.6 percent, fisherfolk at 26.2 percent and individuals residing in rural areas at 24.5 percent.

Meanwhile, the trade deficit reached $5.9 billion that makes the Philippines the only net food

deficit country in the Asean Fausto added.

Fausto blamed the government’s “nearsighted” focus on what can be accomplished during its short, political six-year term, which has made Philippines the laggard among progressing neighbors.

He urged the government to plan on a long-term basis, not on a reactive basis on just what happens in the global economy.

“Government leaders come and go based on their term. But we, in the private sector, are invested in. Our children and our children’s children depend on agriculture for business and livelihood. My appeal is for the government to consider agriculture not as charity but as a sustainable venture,” said Fausto.

Food exports vs imports

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During the event, CAMP Chairman Emil Javier also highlighted that Philippines’ food export totaled to only $5.1 billion, a figure far exceeded by imports.

“All is not well in Philippine agriculture. We have food exports of only $5.1 billion but trade deficit of $5.9 billion (that makes Philippines’) dubious distinction of being the only net food deficit country among Asean 5,” he said.

Javier said the government should adopt strategies that will make small farmers become “bigger” as they are organized into groups or clusters. He said clustering is important because it will be the key to lifting small farmers and fisherfolk from poverty.

When clustered, small farmers can enter the global supply chain where margins are bigger. They can negotiate for higher prices in big supermarkets, even multinational ones. They can also haggle to buy cheaper inputs like fertilizers or seeds in bulk. Economies of scale can be achieved, bringing down cost, when services like transportation, irrigation, post-harvest facilities and storage facilities are delivered in bulk.

“Farm consolidation will enable farmers to mechanize field operations to reduce costs, facilitate acquisition of inputs as well as credit, embark on value-adding at the community level, diversification into crops and other livelihood,” said Javier.

Relatedly, he said contract growing will be the key to making small farmers bigger. “There should be promotion of contract growth as a business model. It involves buyerdriven value chains that are working in broilers, swine, banana, pineapple, papaya, tobacco, okra (industries),” Javier said.

Contract growing, he noted, provides incentives to agribusiness integrators — mills, food processors, exporters, supermarkets — to expand to other commodities.

Government should facilitate “social mobilization of farmers” and help in enforcement of contracts in a contract growing system, Javier added.

Furthermore, he expressed optimism over the country’s modern farm sector of progressive farmers and corporate farms with high productivity, profitable and competitive with imports.

As of March 2021, the agriculture sector employs 24.6 percent of Filipinos coming from the labor force and not in the labor force equivalent to 18.5 million Filipinos, with those in the labor force representing 48.77 million workers and not in the labor force of 26.26 million totaling to 75 million Filipinos.

According to a paper written by former socioeconomic planning secretary Cielito Habito, if one considers agro-processing and agricultural inputs, manufacturing and trading, along with basic agricultural production, about 40 percent of gross domestic product (GDP) and two-thirds of jobs in the economy arise from agriculture.

The total agricultural production for 2020 was at P1.789 trillion representing roughly 10 percent of the country’s GDP, based on PSA data.