Private sector pressed government to plow in investments into agriculture as private enterprises put in 95% of investments

December 6, 2021

The private sector has pressed government to plow in investments into agriculture sector that drives economic development even as private enterprises pour in the bulk of 95% of investments in agriculture while government only contributes 5% to farm output.

   The Philippine Chamber of Agriculture and Food Inc. (PCAFI) has asked presidential candidates, given their election, to put agriculture sector as a priority investment venue given its significant contribution to the economy.

    That along with its potential to be a springboard for agro-industrial development as agriculture is the natural resource origin of food and beverage and many manufacturing industries.

   PCAFI just held Monday its “Halalan 2022 Para sa Agrikultura” with presidential aspirant Ferdinand “Bongbong” Marcos Jr. as as a way to engage potential future leaders to adopt PCAFI’s 12-point recommendation.

   “The private sector contributes 95% of the investment in the agriculture sector.  It should be provided with the right environment for people to invest in it. Government contribution to the total agricultural output is less than 5% yearly,” according to PCAFI President Danilo V. Fausto.

   Also proposing recommendations through the online forum are Alyansa Agrikultura Convenor Ernesto Ordonez and Federation of Free Farmers Chairman Leonardo Q. Montemayor.

   After long years of ignoring the Agriculture and Fisheries Modernization Act of 1997 (AFMA-Republic Act 8435), government should now implement it. 

   The AFMA-mandated Naitonal Information Data System (NIDS) should be put up to provide an accurate data on import, export, demand, supply, and prices of agricultural commodities. Such data is not provided by the Philippine Statistics Authority.

   Creation of the NIDS is critical so that excessive importation of agricultural goods that has been slowly killing the agriculture sector can only be resolved given accurate data.     

   ”Investors and food producers will have an informed business decisions (given this data),” said Fausto.

   Eighty Five percent of the country’s agricultural land is planted with just four crops–rice, corn, banana and coconut.

   Income from these crops traditionally planted on 1 to 2 hectares of land cannot adequately feed a family of five members.

   “Our small farmers can earn more by planting other crops (through intercropping) with greater value like vegetables, legumes, fruits and even ornamentals in rotation with rice and corn. Farm produce can be further processed into various products far more valuable than the raw form and create additional employment in the process,” he said.

    Importation has become the Department of Agriculture’s (DA) long prevailing system in ensuring food security, hurting many Filipino farmers.  Thus, PCAFI has asked for the implementation of laws to curb importation that only benefit importers and traders.  

   The Safeguard Measures Act (SMA– Section 13, RA 8800) indicated that “in reaching a positive determination that the increase in the importation of the (imported) product is causing serious injury or threat  directly to competitive (local) products,” an increase in duty on the imported product may be imposed.

   The SMA also provides that if importation poses threat on the local industry, a decrease in the quota (minimum access volume or MAV) on the product may be implemented.  MAV is an importation program that carries lower tariff rate.

   “The initiation of international negotiations to address the underlying cause of the increase of imports of the product, to alleviate the injury or threat thereof to the domestic industry (should be done),” according to the PCAFI position paper.

   RA 8751 is the law that sanctions imposition of countervailing duties on imported subsidized products “in order to protect domestic industries from unfair trade competition.”

   Whenever any product is “granted directly or indirectly by the government in the country of origin” any kind of subsidy upon its production, and importation of such product causes material injury to a domestic industry, countervailing duties must be imposed.

   Ra 8752 also provides that anti-dumping duty may be imposed whenever any imported product has a price less than its “normal value” and causes threat to a domestic industry.

   Dr. Emil Q. Javier, national scientist and chairman of the Coalition for Agricultural Modernization of the Philippines (CAMP) also filed with presidential candidates the following recommendations:

1. Farm consolidation to attain economies of scale

   Prospective solutions may be to a) promote farm leasing by small unproductive farmers to more progressive farmers or to corporations; b) promote contract farming as a business model between small growers and  integrators; c) support rural cooperatives, irrigators associations ( IAs), and agrarian beneficiaries organizations ( ARBOs). 

   The government may also consider raising limit to farm holdings under agrarian reform from 5 to 20 hectares.  It should consider creating a Bureau of Agro-industrial Cooperatives under the DA.

2. Promotion of value-adding and processing to increase farmer incomes , create more jobs and expand exports

   This will generate more margins derived from the processing, marketing and distribution stages of the  value chain.  Farmers directly involved mainly in farm production stage face risks that are highest  while margins are often the least.

3. More efforts to expand access of small farmers to timely and affordable credit.

   “The government should consider creating a Land Bank subsidiary exclusively dedicated to small farmer lending.  It should also improve operations and raise capital of the Philippine Crop Insurance Corp.,” said Javier.

4. Creation of a separate Department of Fisheries and Marine Resources

   “Fisherfolk and coastal communities are the poorest among  Filipinos.  Fisheries and marine resources are severely underfunded and largely under-utilized.  Fisheries tend to be neglected and crowded out by crops and livestock in DA.”

5. Reform of rural extension

   “Agricultural extension should be the task of local government units (LGUs) to bring extension services closer to the people,” Javier said.

   This LGU function has weakened for lack of direction, manpower, operating funds and expertise in the poor third to the sixth class municipalities where most of agriculture production is located.

   Therefore, it is better to locate the locus of planning, coordination and extension delivery at the provincial level. A Province-led Agriculture and Fisheries Extension Service ( PAFES) should be created.

6. Promotion of multiple cropping to create more jobs, produce more food and raise farmer income

   It is imperative that a shift from monocropping to multiple cropping must be done for economic and environmental sustainability.

   “Intercropping, relay cropping feasible with most crops, have more control on amount and time of availability of irrigation water.  We need to invest more in small irrigation systems to supplement large irrigation systems.   The National Irrigation Administration must also be returned to the DA for proper coordination of irrigation development, management and maintenance,” said Javier.  (Melody Mendoza Aguiba)

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