An incubus to economic development

ITOTALLY agree that there is a need to form a congressional agricultural committee (AgriCom) that will conduct a high-level study on how to promote the development of the Philippine agricultural sector, as suggested by former socioeconomic planning secretary Cielito Habito, a good friend of mine who also hails from Los Baños.

This is similar to the congressional education committee, which conducted a thorough analysis of the many challenges that confront our educational sector and came out with solid prescriptions on how to address them.

Just like our educational sector, which is in crisis, Philippine agriculture is in a deep rut. The unequivocal proof of this is that the country imports practically all key agricultural commodities that are indispensable in attaining food security. Worse, commodities where the Philippines was formerly an export leader have become part of the growing list of our imports. Among these are sugar, coconut and even fish, despite the country having a coastal area longer than the United States.

Also making for a rude awakening is that our banana exports have been overtaken by Vietnam based on reports last week. Inter-viewed by some reporters, I told them that we anticipated this even before Covid-19 outbreak in 2020 and cited three main reasons.

One, during the pre-Covid years, China was busy constructing a rail system that would pass through Myanmar, Laos, Cambodia, Thai-land and end in Vietnam. China's goal was to buy agricultural products from these Mekong River-traversed countries so as to ensure its food security. We knew then that the completion of the railway would reduce transport and logistics costs of bringing agricultural products from those countries to mainland China.

Two, our local banana industry was already suffering from the outbreak of Panama disease or fusarium wilt. Just like the African swine fever that hit our hog industry hard, we also knew that it was just a matter of time before the banana disease spread. And it did quite rapidly, particularly in small banana farms. The simple reason is that smallholder banana growers have difficulties in adopting biosecurity measures against fusarium wilt because the cost can prove exorbitant.

At the same time, the Department of Agriculture (DA) has a very limited budget for banana research as over half of its funds is de-voted to rice. The agency and our policymakers are so obsessed with attaining rice self-sufficiency that they forgot that there are other agricultural commodities that can give farmers higher incomes. Also, their thinking was that since the banana industry was mostly in the hands of the private sector, it would be capable of funding the needed research.

I agree with Habito that the disappointing performance of our agricultural sector for almost half a century now serves as an incubus to attaining higher economic growth. Data shows that for over 20 years, the average yearly contribution to overall inflation of food and nonalcoholic beverages is more than 42 percent. (There are 11 items considered when calculating the consumer price index.) Simply put, if our agricultural policymakers are able to manage our food inflation better, overall inflation will be halved annually.

High food prices have pernicious impacts on the welfare of our people. It has resulted in widespread malnutrition and a scandal-ously high incidence of stunting among children 0–5 years old. Almost 29 percent of Filipino kids in this age group are considered stunted. In turn, malnutrition and the high incidence of stunting have had a lasting impact on learning capabilities, because 90 percent of an individual's brain is developed during the formative years of 0–5 years old. It is no wonder that Filipino kids suffer from serious learning poverty.

In one of his speeches, current Socioeconomic Secretary Arsenio Balisacan — another previous colleague at Los Baños — declared that the way to develop the agricultural sector was to promote the growth of agri-processing. Firms engaged in agri-processing will generate greater value for our agricultural products, generate more jobs and provide greater income to rural folks. Developing the downstream industries in the agricultural sector is the way to go and indeed, Balisacan is correct on this matter. However, there is a major bottleneck that impedes the further growth and development of our agri-processing industry.

Being an adjunct professor at UP Los Baños, I am still active in conducting studies on agricultural economics and agribusiness pro-jects. I am currently engaged in one that attempts to promote the development of small and medium enterprises (SMEs) involved in agri-processing. The firms we are examining are engaged in the processing of high-value crops like cacao, coffee, durian, pili, etc.

Across these high-value commodities, the SMEs' common complaint is that further expansion is seriously impeded by the lack of adequate supply and quality raw materials. In turn, this problem can be attributed to low farm productivity, which is beyond their scope to address.

The immediate conclusion one can make is that throughout the years, our agricultural sector has been badly mismanaged as shown by the low productivity across agricultural commodities. Outside of the much-discussed and praised "green revolution" in rice in the late 1960s and early 1970s, there has never been any successful productivity-enhancement programs conducted for non-rice com-modities.

Which leads one to ask: What has DA done through all these years to raise farm productivity after all the billions, even trillions, of funds devoted to the agency? Is it about time that we form, just like in the US under President Trump, a DOGE (Department of Gov-ernment Efficiency)-like office to radically streamline the operations of the DA toward attaining better results and efficiency and great-er accountability?

This is an area that the proposed AgriCom should be tackling.

fdadriano88@gmail.com