The Association of Southeast Asian Nations summit and the bilateral talks with cooperating nations, from Japan to Australia, from the European Union (EU) to China, from South Korea to New Zealand, from the United States to India, have shown that the economic possibilities of the Asean economic community (AEC) are enormous, given its total GDP valued at $2.5 trillion and its economy growing at an average of 5 percent to 8 percent.
Given the Asean Vision 2025, it is now up to the 10 nations to implement the AEC fast and address the remaining issues, such as the opening the markets, creating Asean-wide regulations, the free flow of labor, etc. One area with problems is the agriculture sector, which will face very stiff competition once the quantitative restrictions, such as quotas, particularly on rice and tariffs on other products, such as sugar, are removed or lowered in compliance with the AEC. The Philippine government may have to look at shielding the farm sector for a short time while improving its efficiency and diversifying the crops.
This sounds easy, but will be difficult to achieve given the unfortunate fact that initiatives in agriculture in this country are slow in coming; there is plenty of talk but little improvement. There is no doubt that the government and the private sector have to come together to jointly address the issues that have been highlighted so many times over a long period. Private-sector participation should not be limited to farmer organizations; in my view, a big business that is making tons of money in other industries should effectively get involved in agriculture, with special emphasis on agri-food supply and value chains. All the conglomerates are talking about “inclusive growth” but are not really contributing to the much-needed change. If Thailand and Vietnam can do it—exporting rice, fish, coffee and other commodities/finished products, Philippine business should be able to copy and implement it.
Reading about the results of the bilateral meetings between the Asean leaders and with the leaders of cooperating countries, cooperation in the field of agriculture is almost always mentioned, being it technical support or opening the markets for specific agricultural commodities. The EU, Canada and the US have signaled strong interest in free-trade agreements, which will also be specific in terms of agricultural products, from commodities to finished food products.
Let me reiterate again that the poverty in the Philippines will not disappear without addressing agriculture. Support services to farmers and fishermen, such as financing, incentives, technology, irrigation, postharvest facilities, farm-to-market roads, improved logistics and integration in the supply chain to fully develop the potential of the agricultural industry to develop rural areas and the countryside, have to be delivered.As a consequence, some 20 million rural Filipinos can be lifted out of poverty. And the children of farmers will stop moving from rural areas to urban centers or become Overseas Filipino workers. Isn’t this what the 10-point socioeconomic agenda of the Duterte administration has in mind? Fighting poverty in agriculture? If this is part of the agenda of the administration, then it makes good sense to revisit the 10-point socioeconomic agenda of the Duterte administration: How high is agriculture on their agenda? Only 11 of the administration’s 75 flagship projects are for the agriculture sector. Given the encouragement the Philippines got from the Asean summit and the bilateral discussions, it makes sense to keep the momentum going and address the issues to finally integrate the agricultural sector into the AEC.
Comments are welcome; contact me via e-mail: Schumacher@mcasia.org.