The Duterte administration must take prompt and decisive steps to raise agricultural productivity if it is to make a dent on the 25 percent poverty rate that the previous administration failed to address, despite its claims of the country’s steady economic growth, according to UA&P Center for Food and Agri Business (CFA) Executive Director Dr. Rolando Dy.
Dr. Dy said the key to inclusive growth and a lower national poverty rate is “enhanced farm productivity,” since poverty is “an agricultural and rural phenomenon.” Poverty, he told a recent forum in Makati, is perpetuated by a vicious cycle of minimal farm productivity, lack of investments, and low income and savings for agricultural workers, resulting in widespread poverty in the countryside.
At the same time, this situation casts a domino effect on other sectors, Dr. Dy said. The dire state of agriculture also seriously affects the export business because inadequate harvests, coupled with limited product diversification, diminish the country’s competitiveness in the overseas market. In contrast, other members of the Association of Southeast Asian Nations (ASEAN), particularly Indonesia, Thailand, and Vietnam, have been making big strides in agricultural production and diversification over time.
“So when your economy has poor productivity, when your agricultural economy is not diversified, then agro-processing industries don’t develop and you get very low export intensity,” Dr. Dy said.
He also said the Philippines’s export scorecard in 2014 was dismal, compared with those of other ASEAN members. He noted that the country had only two products on the list of agricultural commodities that made over $1 billion in exports in a year—coconut and banana. On the other hand, Indonesia, Malaysia, Thailand, and Vietnam “had much, much more.” In fact, “Vietnam had eight commodities with over $1 billion in exports in a year” in 2014.
Raising the country’s farm output is not impossible to achieve, Dr. Dy said, because other ASEAN members have done it; he noted that even Myanmar is now making progress.
He recommended diversifying farmlands, reducing farm costs, cutting wastage, increasing value adding, and adopting modern technologies in agricultural production. He also pushed for higher taxes on idle lands so that vast tracks of unused areas would be utilized.
Physical infrastructure development, stronger institutions, and more incentives designed to attract private investments are other areas that the new President’s team should also look into, Dr. Dy said.
Read more at Market Monitor:
- Focus on agri development, experts urge Duterte (July 17, 2016)