Support the backbone of Philippine economy

The world’s average chocolate consumption amounts to an estimated 0.9 kilograms per capita per year, according to the Center for the Promotion of Imports from Developing Countries. The big chocolate eaters are found in European countries. The largest consumers in the world are the Germans with a per capita consumption of 11 kg per year, followed by Switzerland with 9.7 kg, and Estonia with 8.8 kg.

Despite the pandemic, demand for cash crops like cacao has remained strong. Because of this, cacao prices have remained above $2,000 per metric ton, according to the International Cocoa Organization. On the New York market, cocoa prices averaged $2,413.33 per ton as of November 26, or $2.41 a kg.

Another cash crop that’s getting higher price quotations in recent weeks is coffee. A Bloomberg report said that extreme weather and global shipping congestion are putting pressure on coffee prices, particularly robusta and arabica. Coffee would always remain in demand, no matter the season, because it is one of the world’s most popular beverages.

Unfortunately, despite the fact that these two cash crops are grown in the Philippines, local planters have yet to fully take advantage of the good global prices. The country’s climate is suitable for these crops, yet farmers continue to prefer rice, corn and other crops that grow faster and can be sold immediately. Two years after Congress converted the quantitative restriction on rice into tariffs, the government has yet to entice more farmers to practice crop diversification.

The next president of the Philippines should keep these things in mind when crafting a strategy for the agri-food sector. Increasing the budget of the local farm sector is not enough; there must be a reckoning of the policies that have not been implemented properly, which effectively prevented the sector from increasing its contribution to the country’s economy.

Southeast Asia is replete with examples of what political will, data-driven policy decisions and higher budgets can do to enable the agri-food sector to significantly contribute to the gross domestic product of a country. Oxford Economics examined the agri-food sector of four Southeast Asian countries—the Philippines, Indonesia, Thailand and Vietnam. It found that Indonesia recorded the biggest contribution at 35 percent of GDP or $374 billion, and 50 percent of total employment.

More importantly, the report found that among the four countries in the region, only the Philippines recorded an agri-food trade deficit of $6.2 billion in 2019. The three Southeast Asian countries recorded a trade surplus in agri-food products, which means that their exports exceeded their imports. Thailand, dubbed the food kitchen of the world, recorded the biggest trade surplus at $21 billion in 2019.

Thailand’s agri-food sector got to where it is now by investing heavily in research and development and technology. The next set of government officials should look at Thailand and other food exporters in the region and find out how the strategies they pursued can help the Philippines increase its exports to wipe out its agri-food trade deficit.

Agriculture is considered the backbone of the Philippine economy because it employs about 40 percent of Filipino workers. Unfortunately, it only contributes an average of 20 percent to the Gross Domestic Product. For the longest time, government neglect of the sector has worsened the poverty situation in rural areas. We need to review our agriculture policies. The sector’s development is critically important to improving our food security. To our politicians, we say: Ignore Filipino farmers at your own peril.


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