THERE is news about Philippine agriculture almost every day, and virtually every headline heralds some grim development. In recent months, many of the news stories have been about the dire economic conditions for three of the country’s most important agricultural sectors, rice, sugar, and coconuts.
All three of these sectors have for some period of time been suffering from historically low prices for their main products, milled rice, refined sugar, and copra, respectively. The rising volume of complaints in the past few weeks may give the public the impression that there is a full-blown crisis in progress, but it is largely due to the change in leadership at the Department of Agriculture. Having been disappointed in many ways by former Agriculture Secretary Emmanuel Pinol, farmers and their advocates naturally want to get the attention of the new guy, particularly since Dr. William Dar has a not-undeserved reputation as a bit of a miracle worker.
As skilled as Dr. Dar is, however, there is probably no hope for rescuing the three persecuted sectors along the lines they seem to prefer, which is to somehow improve their lot without significantly altering their “traditional” farming and value chain models. Successive administrations have been banging their heads against that particular wall for decades with little positive result, and there is no reason to believe that a different team of people doing exactly the same thing is going to achieve anything different.
What the concerned parties in each of the three sectors need to internalize if they are to have any hope of returning their crops to profitability is that their problems are not external. The low price of palay is not primarily due to the Rice Tariffication Act. The low wholesale price of sugar is not due to increased imports or the nefarious dealings of middle traders. And the low price of copra is not due to there not being enough of it (which seems to be the inexplicable policy conclusion of the Philippine Coconut Authority) or the lack of variety of copra-based products. All those factors simply aggravate the weaknesses that already exist. Addressing those factors puts policymakers in the impossible position of having to favor farmers at the expense of consumers; this can never work, because the farmers themselves are consumers.
The real solution lies in innovation. Developing solutions will require a great deal of study and experimentation, and will take some time, because what innovations can be applied to each sector depend on factors unique to the crops as well as to the farmers who produce them. What works for rice farmers in Luzon might not be the answer for farmers in Mindanao, for instance.
Fortunately, there do seem to be some people in each of the concerned sectors who are willing to think beyond simple protectionism in suggesting ways to improve their businesses. The coconut sector provides a couple of examples of possible solutions, and how they can be tested.
Recently, the PCA divulged details of a couple of its key initiatives, primarily boosting the yield of coconut farms and supplementing farm output through intercropping. PCA chief Gonzalo Duque, who is also relatively new on the job, said that his agency was seeking areas, mainly in Luzon, in which to plant new coconut farms, the implication being that older areas in the Visayas, Mindanao, and southern Luzon have exceeded their useful life. The new farms would most likely be planted with better, higher-yield trees that can produce nearly ten times more than the varieties found in existing plantations.
This idea obviously does not help solve low copra prices at all; in fact, the added volume of supply would drive prices even lower. It would, however, improve the productivity of the coconut sector over the long run. To compensate for low prices in the short run, farmers would be encouraged to plant additional crops among their coconut trees to give themselves additional sources of income, and the PCA is supporting the creation of “coco hubs,” centralized wholesale markets that would, in theory, facilitate the production of a wider variety of products from copra – the bulk of it now is used to produce coconut oil and animal feed.
One potential shortcoming of the PCA’s plans is the uncertainty of whether markets exist for new coconut products; there is an assumption that there would be buyers for products such as coconut sugar or “special” dried coconut meat, but there has not been detailed market research to back that up. An alternative idea that does have a well understood market, however, is to substitute oil palms for coconut palms.
The PCA is apparently also supporting this idea, but in a lukewarm way; after all, converted farms would no longer be within the PCA’s purview, strictly speaking, unless Congress could be encouraged to add “palm oil” to the agency’s mandate.
All these ideas may be successful, or none of them might; the important thing is that testable ideas are being proposed while self-ordained farmers’ advocates content themselves with carrying placards and demanding that the government “just make rice/sugar/copra prices higher, somehow.” The more farmers and agricultural stakeholders who can be convinced that maintaining the status quo is not the answer, the better chances farmers will have of actually earning a living they deserve.