The new administration must take immediate measures to raise agricultural productivity in order to cut the poverty rate in the Philippines, which remains among the highest in Southeast Asia, according to an agricultural expert.
Rolando Dy, executive director of the Center for Food and Agribusiness at the University of Asia and the Pacific, said the key to inclusive growth and a lower national poverty rate is enhanced farm productivity, since poverty is “an agricultural and rural phenomenon.”
He said poverty 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, said Dy in a recent talk in Makati City. Since the agricultural sector is unable to provide sufficient supplies of raw materials to agro-processing industries, investors are discouraged from establishing factories that could generate more job opportunities.
The dire state of agriculture also impacts the export business, said Dy, as inadequate harvests coupled with limited product diversification diminish the country’s competitiveness in the overseas market.
In contrast, peers in the Association of Southeast Asian Nations (Asean), particularly Indonesia, Thailand and Vietnam, have been making big strides in agricultural production and diversification over time, he continued.
“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,” Dy said.
He added that the Philippines’s export scorecard in 2014 was dismal compared to other Asean counterparts. He said the country had only two products included in the list of agricultural commodities that made over $1 billion in exports in a year—coconut and banana.
Meanwhile, Indonesia, Malaysia, Thailand and Vietnam “had much, much more.” In fact, he continued, “Vietnam had eight commodities with over $1 billion in exports in a year” in 2014. On raising Philippine farm output, Dy said it is not impossible to achieve because other Asean countries have done it, and noted that even Myanmar is now making progress.
His recommendations include 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 will be used.
Physical infrastructure development, stronger institutions and more incentives designed to attract private investments are other areas that the new president’s team should look into, Dy added.
(Philexport News And Features)