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In order to transform Philippine agriculture into a high-growth sector, the World Bank and local economists said that achieving an agricultural growth rate faster than population growth should be sustained for several years.
In a briefing on Wednesday, World Bank senior agricultural economist Eli Weiss said the Philippines should strive to grow the agricultural sector above the country’s population growth for “several years” to significantly reduce poverty and poverty. inequality in the country.
Data from the Philippine Statistics Authority (PSA) showed that the population growth rate averaged 1.72 percent annually between 2010 and 2015.
“Yes, agricultural growth rate, and I meant it should be higher than the population growth rate,” Weiss clarified in an email to BusinessMirror. “The report does not analyze this aspect, but growth must be sustained for several years. However, growth must, on the one hand, be inclusive, so that small farmers can benefit from growth, and it must be environmentally sustainable.
Local economists, however, believe that growth in the agricultural sector should be even higher, around 4 percent per year, and should be sustained for at least a decade.
Philippine Institute for Development Studies (PIDS) principal investigator Roehlano Briones told BusinessMirror that agricultural growth should be high, 4 percent per year, but also inclusive.
For his part, the executive director of the Center for Food and Agroindustries (CFA) of the University of Asia and the Pacific (UA&P), Rolando T. Dy, told this newspaper that a growth of 4 percent for a period of two administrations it would be a good goal.
Dy said this can be a difficult task given that the agricultural sector has only posted 2 percent growth in the past. Last year, the combined growth of the agriculture, fisheries and forestry sectors averaged 1.2 percent and in 2018, 1.1 percent.
In 2017, PSA data showed, the average growth was 4.2 percent coming from a 1 percent contraction in 2016.
“The Philippine government has to increase the agricultural budget and attract private investment in the non-rice sector such as tree crops and aquaculture. We need at least two agricultural development presidents to reduce rural poverty, ”Dy said.
Agricultural transformation
In the report “Transforming Philippine Agriculture During Covid-19 and Beyond,” the World Bank said that the transformation of the country’s agricultural and food systems is even more important during the Covid-19 pandemic to ensure food value chains. strong, affordable and nutritious food, and a vibrant rural economy.
Ndiame Diop, World Bank country director for Brunei, Malaysia, Thailand and the Philippines, said that the transformation of the agricultural sector is a necessary component in the country’s growth and development as a high-income country.
Under AmBisyon 2040, the Philippines aims to become a high-income country by 2040 or 20 years from now. The World Bank estimates that a high-income country has a per capita Gross National Income (GNI) of $ 12,536 or more.
Currently, the Philippines is classified as a lower middle-income country with a GNI per capita of $ 1,036 and $ 4,045. The government’s goal was to become a
upper-middle-income country (UMIC), with a GNI per capita of $ 4,046 and $ 12,535, this year.
However, due to the pandemic, the National Authority for Economy and Development (Neda) said that becoming a UMIC could be possible next year.
“Modernizing the country’s agricultural sector is a very important agenda for the Philippines. Precisely transforming Philippine agriculture into a dynamic and high-growth sector is essential for poverty reduction, inclusive growth and reaching the next level of income and development, ”said Diop.
“With the exception of a few countries rich in natural resources, no country has successfully transitioned from middle to high income status without having achieved an effective transformation of its agri-food systems,” he added.
In a presentation, Weiss said agricultural transformation requires a shift from agriculture-focused and subsistence-oriented farming systems to a market-focused non-farm sector.
This will require sufficient investments not only in specific commodities in terms of subsidies for inputs such as fertilizers, planting materials, and machines, but also in other agricultural industries.
These public goods should include research and development (R&D), infrastructure, innovation systems, market information systems, and biosafety systems.
Weiss said that currently, the Department of Agriculture’s budget remains focused on rice. Rice represents 18 percent of the value of production.
In the 2020 budget, Weiss noted that rice accounts for 48 percent of production services; 53 percent for extension, education and training services; and 35 percent of agricultural equipment and facilities.
Weiss added that the government’s rice program also accounts for 49 percent of research and development, as well as 88 percent of irrigation services.
“The report suggests moving away from focusing on specific crops to improve the overall resilience, inclusiveness, competitiveness and sustainability of the sector,” Weiss said.
“(There is also a need to shift) to a more demand-driven sector, with adjusted modalities of government support, strengthened decision-making based on evidence, and greater focus on public goods. This would lead to a more diversified sector with strong food value chains, affordable and nutritious food and a vibrant rural economy, ”he said.
The report was prepared as part of the World Bank’s support for the Department of Agriculture’s “new thinking” on agricultural development, which suggests moving from a strong focus on specific crops to improving the overall resilience, competitiveness and sustainability of the rural sector. .
World Bank support to the Philippines includes long-term programs aimed at increasing agricultural productivity and reducing poverty in rural communities. A current example of this is the Philippines Rural Development Project (PRDP), which aims to increase rural incomes and improve agricultural and fisheries productivity.
Several projects are underway to help increase agricultural productivity, resilience, and market access for farmers and fishermen in selected ancestral domains in Mindanao; and improve the management of coastal fisheries resources in selected coastal communities.
