WE all know what can lift the agriculture sector from its Slough of Despond, and end, with finality, the ever-recurring story of rice shortages. Give Secretary Manny Piñol and his Department of Agriculture P100 billion a year for capital outlay until the end of Mr. Duterte’s term. Then push the Land Bank of the Philippines to go back to its roots, which is to be a bank for small farmers and agrarian reform beneficiaries. And away from its high-horse commercial bank mandate.
Within the medium term, and that’s about the exit year of Mr. Duterte from the presidency, we will see the inevitable, with the two stated conditions fulfilled: the stabilization of the agriculture sector via modest achievements and the flow of competitive farm credit into the producers that need it most – the small farmers and the agrarian reform beneficiaries.
There will be no “renaissance” for the agri sector. But, at the very least, there would be the stabilization of food production and supply, especially the basic stuff such as rice and corn. The media will be the loser, no more screaming headlines on rice shortages and soaring prices, scary stories that are easier to report than the deep and ugly underbelly of the neglected agriculture sector.
Secretary Manny, after presiding over the rare, modest gains for the sector, will have two options. Run for the Senate or go back to North Cotabato to reassume his role as political kingpin.
You might want to ask this question? Why would two tweaks in the agricultural ecosystem – the shift of LBP to its original mandate and P100 billion a year for DA’s capital outlay – radically alter that ecosystem? I will elaborate via a story that has come back to life—the status of the Philippines as the Asean laggard in agriculture support, which is painfully true. Which has been the narrative for more than a generation.
Nothing can better explain the laggard status of Philippine agriculture than the figures from Senator Recto on the state of the country’s farm mechanization. We all know that Thailand leads the Asean in farm mechanization. It tops the Asean in the number of sophisticated combines, harvesters, threshers, tractors, silos, etc. And it is the most efficient, most prodigious agricultural producer and exporter in the Asean region.
The regional laggard in farm mechanization? Your Philippines, as expected. And why not. For 2018, according to Mr. Recto, farm mechanization has a budget of P344 million with only P124 million for capital outlay. The P124 million is the cost of one house in the exclusive Quezon City villages where dozens upon dozens of congressmen—who write the budget and pass it—live.
What are the brutal wages of that lack of support for farm mechanization? Around 2.5 million tons of rice lost yearly due to lack of harvesting, drying and storage facilities. Farm implements that are sorely needed in a harvesting and storage context like the Philippine context, sala sa ulan, sala sa init.
The Philippines is the only Asean country with 30 percent of its work force in agriculture where the only farm mech tool available is the kuliglig, the small and unreliable tractor.
(Full disclosure. I am a farmer. When I tend to my crops I use two things: my bare hands and my hoe. Yes, as in Edwin Markham’s “The Man with the Hoe.” In my younger years, when I farmed full-time, and when typing for newspapers was just a distant dream, I had my carabaos, plow and harrow. Horses were our threshers.)
If you give the DA P100 billion in capital outlay a year, at least P5 billion of that could be dedicated to the mandate of the PhilMechs, whose long name is Philippine Center for Postharvest Development and Mechanization. This would spread out to the countryside much-needed tractors, silos, drying and storage facilities, sophisticated threshers and combines. (This is just an aside but it is important to the discussion. We import more Porches than deep-plowing tractors year in and year out.)
With these, the country can keep post-harvest wastage to the minimum, say from 2.5 million metric tons of rice a year to 250,000 MT. Turn-around time for harvesting and storage will meet modern standards. Silos and storage facilities would boost the onion producers and producers of other cash crops prone to spoilage.
Ok, another thing. The country’s agricultural engineers, instead of selling veterinary drugs and farm tools hawked by the multinational corporations, will have ample opportunities to build sophisticated farm machinery and equipment. The lack of incentives for agri engineers was probably the reason why the current UP president, Mr. Concepcion, left agricultural engineering to become a lawyer.
What would the re-assumption by LBP do to the agricultural sector? Farm credit would flow where it is most needed, the small farms and the small farmers, the original constituency of the LBP before it shifted to commercial banking. The LBP was also mandated to lend at competitive rates to small farmers, which in the current environment, at single digit rates, or between 5 to 8 percent a year, even small farmers can afford to repay.
Just two policy tweaks and the agriculture sector will be in a position to post decent gains. What if the state were to give the sector its full support? I will answer that. We will be writing the story of an Asean miracle.