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Action for Economic Reforms

FARM SECTOR STRATEGY ONE YEAR AFTER EDSA 2

The author is the team leader of the advocacy component of the ADB-DA Grains Sector Development Program and Agriculture undersecretary for policy and planning, 1988-92.


This piece was written on Jan. 24, 2001 – at the time that President

Gloria Macapagal-Arroyo assumed office in the wake of EDSA 2. It is

useful to revisit the recommendations outlined here for the recovery

and growth of the rural and agricultural sector, one year after the

entry of the post-Estrada administration.


Equity in access to land resources for all, food security and rapid

rural growth are important goals for any administration. What makes the

critical difference for success is focus and implementation.


Success in the implementation of the strategy outlined below will

secure not only the completion of land transfer as mandated under the

CARL, adequate, cheaper food, more jobs, increased incomes and reduced

poverty, but also rapid and sustainable advances in national growth.


Basic Problems and Constraints


The fundamental causes of food insecurity and poverty in the

Philippines have been intensively analyzed. The key factors are lack of

public investment and weak governance in the areas of irrigation, rural

infrastructure and agriculture and fisheries technology. The

antecedents of these ills include the:


  • Near cessation in new public investments in irrigation since the early 1980s;

  • Drastic drop in public investments in other rural infrastructure especially rural roads since the early 1980s and their weak recover only in the 1990s; and

  • Inadequacy in public investments in technology development and dissemination, exacerbated by the fragmented management and allocation of such resources.


The CARP still has to be completed. Originally, the program was to have

come to a close in 1998. But poor performance and the continuing

concern for equity enabled the extension of the life of the CARP into

the new millennium. Furthermore, inadequacies in support services

endangered the limited gains achieved.


Reversing the downward trajectory of agriculture sector productivity

and completing agrarian transfer has been made much more difficult by

weakness in the governance of the agriculture and fisheries bureaucracy

due to discontinuous, fragmented authority and responsibility, and the

unresolved effects of devolution. Weak governance has also allowed

substantial waste – exemplified in: (a) non-targeted subsidies provided

through the NFA, (b) sluggishness in implementation at the NIA and (c)

divided leadership and roles in rural development and agrarian reform

between the DA and the DAR.


These infirmities were at their worst during the first half of the

1980s. Between 1986 and the present, the administrations of both

presidents Corazon Aquino and Fidel Ramos were in most cases able to

only “hold the line” on these problems. At their best, presidents

Aquino and Ramos achieved some advances but their efforts still fell

short when compared to our ASEAN neighbors. Worse, there has been

backtracking in recent years, particularly in agricultural trade policy

– involving especially rice, sugar and coconut. Finally, during the

brief period under president Joseph Estrada, prospects for agriculture

sector recovery only worsened.


The government, particularly the DA and the DAR, must focus, focus,

focus on the fundamental problems and finally defeat these – once and

for all – to succeed in attaining food security and alleviating poverty.

The problems of inadequate public investment in/and weak governance of

the agriculture and fisheries sectors are paramount and should be

attended to, first and foremost.


Certainly there are many other concerns in the agriculture and

fisheries sector. However, most of these other problems are symptomatic

of, or are rooted, in the fundamental inadequacies in public investment

and governance. Therefore, the government, the President and the DA

must not be distracted from attending to the fundamental issues, since

the resolution of these root causes will greatly reduce the effort

required to deal with the other and more peripheral concerns.


Focused Agenda


The specific thrusts that must be executed to rapidly attain the overall goals of food security and poverty alleviation are:


  • Strong and unified leadership of DAR and DA – public resource for agricultural and rural development, particularly those for support services, are split between the DAR and DA, which needlessly compete and sometimes work at cross purposes. The leadership of both departments should be unified – so that institutional resources are not only properly allocated between land acquisition and transfer and support services, but also that the management of such functions is closely coordinated. Unification can be achieved by simply appointing a single secretary to lead both DA and DAR, and having DAR focus purely on land transfer functions and DA on support services for all farmers, whether agrarian reform beneficiaries.

  • Irrigation – major expansion and acceleration of the construction and rehabilitation of irrigation facilities, especially private, farmer-owned systems and communal irrigation co-financed with LGUs. Put strong management into the NIA, focusing it on engineering and contract oversight – not actual construction. Enable technical assistance and policy reforms to encourage farmers to set up private irrigation systems. Measures include refocusing of NIA from construction to technical assistance, liberalized trade in pumps, shallow tube wells and other irrigation equipment. Government’s role will be limited to aquifer identification, engineering specifications and contract oversight. In the short run, the construction and commerce arising from irrigation programs will push rural employment. In the long run, irrigation will ensure plentiful, cheaper food and, thus, higher wages for all.

  • Rural roads, ports and transport – major expansion and acceleration of the construction of rural roads, particularly through local contracts administered by LGUs and the DPWH. These construction programs must be complemented by accelerated liberalization of policies in land transport, interisland shipping, cargo handling and telecommunications. The focus on transport infrastructure will bring down production and marketing costs across all sectors, not only in agriculture.

  • Technology budgets, clear accountability for R&D and rapid international technology transfer – substantial increase in the budget for technology development – to achieve the one percent of GVA in agriculture benchmark of about P1.83 billion. R&D resources must be distributed across commodities according to the share of the commodities in GVA. The management of R&D resources must be consolidated into the DA. The most efficient way to access world technology and push HRD is to multiply the provision of graduate-level scholarships, research grants, continuing education and academic chairs. Given the growing disenchantment of the academic and science community with the government, these support opportunities will build not only technology, but also solidarity with the scientific elite.

  • Partnership with LGUs to revitalize local agriculture – technology and support services must be delivered to farmers, fishermen and rural households. The central government cannot handle the task alone and thus must mobilize the entire nationwide network of LGUs, schools and universities, NGOs, POs and the private sector to rapidly and effectively extend the resources for productivity and rural income generation. The co-financing by DA of LGU agricultural development plans and programs is extremely important, and will also build a nationwide support network for agriculture and rural development.

  • Immediate reductions in food prices and targeted food subsidies to the poor – the NFA has maintained its monopoly of rice imports. Rice imports are unavoidable in the medium term because population growth is rapid and agricultural productivity will take time to recover. We should take advantage of the currently very low world prices of rice. The NFA can bid out import contracts to many more private traders and also earn much-needed revenue. Also, the distribution of cheap imported rice should be targeted at the poor through joint efforts with NFA, DSWD and LGUs. Thus, simultaneously achieved is the reduction of budget support for NFA, improved revenues, targeted support for the poor and partnership among NFA, DA and DSWD.


Attitude and Opportunity


In all of these initiatives, the unified DA and DAR must lead and be supported by the rest of the government, including Congress. The government must set directions and devolve authority, responsibility and funds to its partners and implementors – the LGUs, NGOs, POs, universities and technology institutions.


The President and the unified leadership of DA and DAR must not waste this opportunity. Strong, determined leadership is critical. The leadership must focus, focus, focus like a laser on the basic issues from day one, and not waver until the task is done.

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