Why Philippine agriculture fails

Ben D. Kritz

Ben D. Kritz

THE agricultural sector of the Philippines is a millstone around the country’s neck.

Despite accounting for more than a third of the country’s workforce the sector contributes less than 15 percent of the total economic output. Poverty incidence among agricultural families is, as a result, much higher than the national average; not only does this impose significant social costs, it reduces productivity.

This, in turn, makes agriculture an unattractive sector to invest in for both agribusiness investors and individuals; because of the rather poor existence farming offers, many potential second- or third-generation farmers instead look for income in urban areas or overseas.

An example of why the Philippines fails in agriculture is the most recent installment of the long-running feud between the government and coconut farmers over the handling of the bloated, Marcos-era Coconut Levy Fund, now worth some P71 billion. In the latest drama, the Confederation of Coconut Farmers Organizations of the Philippines (CCFOP) last week filed a petition at the Supreme Court to block implementation of two executive orders issued by President B.S. Aquino 3rd. One (EO 179) orders an inventory of the coco levy deposits and assets as preparation for privatizing them, while the second (EO 180) authorizes the use of the funds for the benefit of coconut farmers.

The CCFOP would certainly disagree, but the details of their complaint with this pair of directives are not really important; not when wrangling over the coco levy funds has been going on for three decades. The fund was ostensibly created as a way to bankroll coconut sector development, but turned into a slush fund for those during the Marcos era who were well connected to politics but perhaps not so much to ethics.

With proper ownership of the fund finally established (it belongs in full to coconut farmers, under stewardship of the government), one would presume the active management, and more importantly, productive use of the fund would quickly follow. Having grown so suspicious over the years of the government’s intentions with the large and tempting amount of money accumulating in the coco levy fund, the coconut farmers have made doubt a habit, even if the proposal being put forward has some promise.

Philippine agriculture fails because both the government and the agriculture sector’s public advocates have a tendency to look at the issue in primarily social rather than economic terms; this, after all, is the perspective behind the Philippines’ largely disastrous land reform program. Planning for use of the coco levy funds or any other government-controlled resources is almost invariably couched in terms of “inclusiveness,” or “empowerment,” or “uplifting the farmer,” with very few concrete details or targets to define those rosy-sounding aims.

EO 179 and EO 180 might not have raised such a protest if they provided a clear vision with measurable outcomes for the coconut farmers to consider; instead, the two orders were issued according to the bad habit this government has developed of writing the details of laws into the implementing rules and regulations, where they escape virtually all of the scrutiny ordinarily applied to the underlying bill through the legislative process. The coconut farmers quite understandably do not know what to expect, and are not reassured that “all stakeholders will be consulted” during the process to develop the implementation program.

Nearby countries like Japan and Korea that produce an agricultural surplus despite being at a distinct geographic disadvantage achieved that result by treating agriculture as though it were an industry; land reform was carried out swiftly and firmly, and beneficiaries were properly supported to give them the best chance to be productive. Productivity was not, as it is here, considered an inevitable by-product of land ownership.

Within the next few months, the last few remaining barriers to agricultural trade within Asean will practically disappear, putting greater competitive pressure on the Philippines in markets for products that are, for better or worse (coconuts may not be a winner economically, as will be explained in an upcoming column), mainstays of the country’s agricultural economy.

The knowledge that P71 billion which could be used to boost the coconut sector will continue to be unavailable due to court challenges and a lack of implementing instructions is distressing; by the time the positive impact of any application of the coco levy funds is felt—something that would realistically take several months to perhaps, a year or more, if the process began right now with a favorable Supreme Court ruling—countries like Malaysia and Indonesia might very well capture a significant part of the Philippines’ market, including the domestic market.

Agricultural strategy and planning—examples of the so-called “road maps” Philippine bureaucracy is fond of creating—need to be developed more quickly and in much more useful detail. If EO 179 and EO 180 are as legally sound as the government believes them to be, then the Supreme Court should dispense with the challenge to them as quickly as possible, and allow the use of the coco levy funds for their intended purpose.



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  1. The ghastly state of our agricultural sector is correctly linked to our agrarian reform programs as also pointed out by our national scientists, agricultural institutions, captains of industry. Etc.

    Poverty is an economic problem and economic problems need economic solutions. It becomes a social problem when the answer of government becomes political; like forcing a round screw through a square hole.

    When dealing with the Left/CBCP, it is unspoken but Philippine agriculture became the proverbial sacrifice and agrarian reform conveniently became government’s political carrot.

    Lets walk down memory lane…

    1972 – Imposition of PD 27 (covering rice & corn lands) – goal: quell a growing insurgency problem(2,000 armed rebels). It failed to do so because when Marcos fled in 1986 it ballooned to 26,000. The dictator was the number one recruiter.

    June 15, 1988 – CARP became law. It wasnt because it was going to uplift the lives of farmers but because Cory’s security forces shot dead 13 rallyists and injured 300. To avoid a bloody conflict they entered into a deal. Cory’s hacienda Luisita is to be exempted via the Stock & Distribution Option(SDO) and the Left in exchange gets their expanded agrarian reform program.

    Mid 1990’s – Part of our uncompetitive agri sector is opened to free trade which led to government importing agricultural products. Today, half of what we eat is imported and our perennial top importing status of rice in the world.
    By 1998, the Left were so effective misleading the public and pressuring the sitting administration with their rallies and propaganda that the government who wanted to be re-elected had no problem extending it for another 10 years.

    Around 2006, various studies conducted by DAR(DAR-GTZ), Negros Provincial Study, Cuervo Study, CPES survey, exposed the real situation but these were again set aside for the political needs of PGMA with the agreement(with the Catholic Bishops Conference of the Philippines-CBCP) that an extension was going be the last (5 years).

    [2009-2014] CARPer was implemented and schools like Central Mindanao University explains that our farmers have been leaving the agri sector and directing their children to work in the urban areas because farming was a dead end. DA’s usec. Dante Delima, in charge of rice research tell us that the average age of rice farmers have risen to 59 years old. And all these are seriously compromising our food security and self-sufficiency. Even the World Bank points out the agrarian reform deepens poverty.
    [2014-2015] PNoy thinking of surviving his retirement, fate of Mar Roxas, fate of the BBL, and exacerbated by his uncontrollably rating nosedive (SAF 44 massacre), does a Cory. He prioritizes another extension without asking for any review to appease the infiltrated CBCP, and the Left. Even the anti-agrarian reform Visayan bloc who branded CARPer as a total failure does a 180 degree turn after attending a CARPer emergency meeting in Malacanang. And the message was simple.Just like the BBL the congressmen were offered millions in projects and a little bit of cash through the Bottom-Up-Budgeting(new pork barrel system).

    And all these for what? So we can become permanent net importers of agricultural products and for foreign interests to take over via Filipino dummies?.

  2. laila hermosa on

    Mr. kritz, Philippine agriculture fails not simply because of flawed govt economic measures, but primarily because—as you rightfully zeroed in on—all Philippine administrations hae invariably been duplicitous and corrupt. Yung two EOs ni Noynoy Aquino, dissect them, klaro na the got would want to dip their dirty fingers into the coco levy fund. If people don’t still know it, puro korap at magnanakaw din ang mga pnoy people. To cite a two-day example: yung dinemolish na calaanan compound sa Caloocan near monumento, lahat ng dapat langisan, nilangisan ng landgrabbers na sila alfredo yao at egay erice para matayuna nila ito ng call center daw. The first, yao, e appointed ambassador ni cory Aquino noon, so napakalakas ke pnoy; yung si erice, fawning tuta ni Aquino, and it is this asslicking tactic which erice uses para makaraket siya. Chief hitman, bagman si erice ni yao, at yung tandem nila, kinorap ang register of deeds ng aloocan, yung two judges na nag-isyun ng demolition order, si mayor malapitan ng Caloocan, at ncrpo gen almoria, na kunyari ay nagsabi sa mga residente na wala pang demolition order o police assistance silang ginagawa. Puro sila hypocrite.

    • You are correct Laila but I think Mr. Kritz is focusing on what we dont often talk about. We are made to believe that graft and corruption is the beginning and the end of the story but it is not. In fact, wrong government policies is our main problem(not corruption) not just in agriculture but in other areas of governance as well. Other countries are not spared from corruption but why are they flourishing?. Because while they are stealing, money is still being generated by their successful policies. We are different. We stopped focusing on wealth generation and concentrated on wealth distribution. When we run out of other people’s money we are toast.

    • Amnata Pundit on

      This is the most precise analysis I have ever seen so far. To borrow Clinton’s words, IT’S THE POLICY, STUPID, not the corruption !

  3. Amnata Pundit on

    If there was anything criminal about the coco levy- a scam is a criminal act by definition- why were all the cases filed civil in nature only? Because they could not find a trace of any crime at all is the only explanation. If anybody got scammed, it was the coconut oil mills who paid for the levy, not the farmers. The greedy yellow Coristas could not wait to get their itchy fingers on that money, but the brilliant way it was tied up has prevented them from doing so up to now. I am willing to bet they will sell that to a crony at a fraction of its face value, and the usual crocodiles in the Lapiang Palpak(LP) will pocket the proceeds. Who will buy those shares at face value when they have no voting rights?

  4. Vic PenetranteVic on

    Will we ever have a farmer-President?
    Education is not solving the poor perception of the farmer.
    The Department of Agriculture’s only solution whenever there is short food supply is to ‘import’.

  5. As a farmer in the Philippines, I can attest to the fact that the agriculture sector in the country is in a sad state of affairs. The average Philippine farmer lives in extreme poverty, a fact that a trip to Manila proves valid. Over population and lack of technological change has driven many agricultural people to urban areas to seek a better way of life. But that need not be the case. With a modest improvement in the percentage of funds allocated to farm communities instead of the pockets of politicians, farmer education in the basic principles of farming, and access to micro loans, the Philippine farmer could contribute substantially to the wealth of the country. I can prove this from my farming experience, as I have made a consistent return of over 10% on my investment in farming. Eventually I hope to obtain a 30% return on my investment once my farming practices are fully implemented. All this will be done with “old school” practices that any Filipino farmer can adopt. I readily share information to my fellow farmers, so they too can benefit from sound agricultural principles.

    • I am in total agreement, Bao. Although not a direct member of the agricultural sector, many of my immediate family members are. The biggest frustration in the Visayas is that more often than not, Government programs (supposedly for the benefit of farmers) is only passed on through second/third-hand information…..often not totally correct, or distorted by the time it’s passed around. For those of us with access, the Internet helps, but does not help the majority of farmers that the information would benefit.