Most of us are quick to point out that the Philippines is blessed with rich soil and great weather that if you throw a seed right out of your window, it will grow into a healthy plant just like Jack and the Beanstalk.
Our tropical climate with almost year-round rain makes it easy for anyone to grow vegetables and other crops.
People would then ask me, why — with all the resources that we have, and with our GDP strongly dependent on agriculture — are our farmers, and the industry in general, the poorest in the Southeast Asian region?
We used to pride ourselves of being the best in the industry in the early days. The International Rice Research Institute was right in our backyard, and had started developing superior rice varieties 50 years ago, way ahead of everyone else in our side of the world.
Thailand, Indonesia, Vietnam and our other neighbors would come and study at our universities, as we were offering state-of-the- art technology in farming. They came and learned from us.
Fifty years onward, our country, with one of the highest consumption per capita in the world, is also the highest importer of the product.
Our politicians realize this, and so when P-Noy was elected to the highest position in our government, he related to us in his first SONA that one of his visions in the National Development Plan for 2011 to 2016 is to have a “competitive sustainable and technology-based agriculture and fisheries sector, driven by productive and progressive farmers and fisherfolks, supported by efficient value chains and well-integrated in the domestic and international markets, contributing to inclusive growth and poverty reduction”.
Suffice it to say that food sustainability is one of the country’s main agenda. However, this is not evident in the policies and issues that we tend to talk about on a daily basis.
So what are our failures? How do we get back to the top, or at least become self-sufficient in our food production?
Allow me to relate some of the challenges that our farmers are facing.
Farm inputs such as fertilizers account for about 20 to 30 percent of the total production cost, while around 70 to 80 percent account for the feeds and medication cost in livestock production.
Any changes on the cost will translate directly to the prices of agricultural products sold in the market stand. Question is, would this translate directly to the farmer’s income?
The middle man gets to double the price, and by the time the product gets to the retail store, the price would have increased by a large margin. The typical farmer who gets majority of the risk gets to have the lowest earnings.
A majority of our farmers who were recipients of the Comprehensive Agrarian Reform Program, or those who previously owned small parcels of land, ended up selling back, or leasing it back to the original owners the land they had acquired.
Now why would they do that? The government awards three hectares of land to farmer-beneficiaries.
The Bureau of Agricultural Statistics reports that for a farmer to sustainably farm a hectare of this land, he would need around P50,000 to 130,000 to grow vegetables and other crops.
Now, farming a hectare of land isn’t rocket science. However, a subsistence farmer who has been a land tenant all his life could not afford to have the machineries and equipment, nor would he have the mental adroitness in making the land productive by himself all of a sudden. After all, he was used to being funded by the landlords, and just getting a percentage of whatever he harvested at the end of the season.
The typical thing to do is to till the land just enough to support his family, or to fallow it for years, and then sell it back to the previous owners after the 10-year holding period allowed by government. How then should this be alleviated?
Highly-industrialized countries provide direct subsidies in the form of lump-sum payments, or cheap loans to farmers who cannot compete well against imports. These subsidies are purported to “protect” local farms, and to help them adjust to the world markets. I’m sure our government would claim to have this system in place in their National Development Plan.
However, in a report provided by the National Economic Development Authority, the annual proportion of agro-fishery and forestry loans to total loans granted by banks was at a very low average of 2.5 percent.
The limited access to credit by small farmers, despite the banks reporting large amounts of funds available for them, has been due to the farmers’ lack of track record, lack of knowledge in accessing bank financing, particularly in putting up the documents needed in accessing the loan and the lack of collaterals.
According to the Agricultural Credit Policy Council, the banks aversion to high-risk and low-income agricultural projects, the high cost of administering small loans, and poor repayment performance of agricultural loans, among others, have constrained the provisions of credit to farmers and fisherfolks.
We end up pointing fingers at each other. If you ask a farmer why he isn’t producing, he would be quick to say he isn’t getting any help from the government. If you look at the government’s economic agenda and policy, you would see a great plan in improving the stakes of our farmers but then, would be quick to point out that the farmers are resistant to these policies that are meant to help them. They don’t pay their credits and loans, which makes the programs unsustainable.
In the end, it becomes more sustainable for our government to import agricultural products from our neighbors who used to learn from us.
Perhaps the reason for the sugar-free tariff in 2015….
Mark A. Espedilla
Dean, College of Agriculture
Foundation University
