Prior to 2008, the Philippines had little difficulty sourcing food from foreign markets to feed its growing population. This was evident in 1997 and 1998, when El Niño destroyed rice crops in many areas nationwide. The government effortlessly imported 2.2 million metric tons (MMT) of rice needed to meet national requirements.
The country’s membership in the World Trade Organization (WTO) opened the eyes of the Philippine government to many possibilities regarding its food sources. The lowering of tariffs and reduction of other trade barriers made it easier for the country to just import its food requirements. The Philippines acceded to the WTO at a time when “climate change” was an alien concept for many bureaucrats.
The relative ease with which the country was able to procure its food requirements abroad convinced a number of economists and policy-makers that resorting to imports would be cheaper than pouring money on the farm sector. Developing the sector would require huge resources given its numerous problems: low mechanization rate, farmers’ lack of access to affordable credit, limited number of irrigated farms, decline in productivity, and meager spending on research and development. Addressing these problems required more than lip service.
It did not help that politicians wanted to have their cake and eat it, too. This was evident in the government’s rice policy, specifically the quantitative restriction (QR) on the staple. The government heeded the farmers’ clamor to retain the protection on rice for another 12 years. But there was no clear plan in place to help them prepare for the lifting of the import caps and the government continued to import whenever there was a shortfall in domestic production.
The ills plaguing the sector reflect the government’s priorities in terms of spending. While the Department of Agriculture’s (DA) budget for 2018 breached P50 billion, the amount was way below the P213 billion it hoped to get. The volatility in the price of commodities, such as rice, in the international market in 2008 forced the government to increase the budget for agriculture in the succeeding years, but the amount given was still far from ideal.
This helps explain why growth in the agriculture sector has remained stagnant for many years. The problem is that bureaucrats seem to have turned a blind eye on the fact that the farming sector is no longer an attractive proposition for investors. Just look at the number of banks that are willing to provide loans to farmers. Farming is a risky business in the Philippines, so lenders usually avoid it. This should have given the government the impetus to invest in agriculture and make it more attractive to the private sector.
Simply pouring money on agriculture will not eliminate the ills plaguing the sector. Economic managers, including Budget Secretary Benjamin E. Diokno, have already announced that the government wants to encourage the planting of high-value crops. If this is the direction the Duterte administration wants to pursue for the agriculture sector, then it must do it with the same zeal it has exhibited in its war on drugs. Investing in human capital is a worthwhile endeavor but development would not be realized if people don’t have access to affordable food.