Francis N Pangilinan, Secretary, Office of the Presidential Assistant for Food Security and Agricultural Modernisation: Interview

Interview: Francis N Pangilinan

To what extent can agricultural development reverse rural unemployment and reorient focus toward farmer-centred development?

FRANCIS N PANGILINAN: As the Philippines is a largely agricultural economy, agricultural development plays a significant role in curbing rural unemployment. One-third of the Philippine population is directly employed by the agricultural sector; however, if one counts allied services, such as milling, post-harvest or transport, nearly half of the country’s labour force would be directly or indirectly employed in the agricultural sector. Similarly, if one counts the contribution of agricultural allied services, whether manufacturing processes, industrial activities or services, in addition to agricultural production, estimates suggest that agriculture-related activity accounts for up to 40% of GDP.

Considering that agriculture is the backbone of our economy, in order to pursue modernisation in a sustainable way, we must invest in agriculture. Unfortunately, agriculture in the Philippines has been neglected over the past three decades. Though the country led the region in terms of agricultural development in the late 1960s, the underlying structural reforms needed to make its development sustainable were not established. As a result of this, at one point the average farmer was 57 years old and only had a fourth-grade education. Both indicators demonstrate the level of neglect and reasons for poverty evident in the country. Even today, in terms of exports, the Philippines is a net importer of agricultural products to the tune of $2bn, whereas Thailand is net exporter at $18bn and Vietnam exports approximately $4bn.

Agricultural development can serve as a vehicle to reorient focus toward farmer-centred development. Such a development strategy needs to be income-based to enable farmers to access markets, packaging, value-added processes and post-harvest facilities. The government and the private sector need to shift their focus from yields to farmers’ incomes. The strategy of regional agricultural powerhouse nations like Thailand, Vietnam, China and Malaysia is to use an income-based indicator to measure agricultural development.

The Philippines is still in the early stages of benchmarking incomes as a fundamental growth development strategy. While annual farmer incomes are around P23,000 ($518), coconut farmers often earn as little as P50 ($1.13) per day, making farming unsustainable as a viable economic activity. One would need to put the farmer first in order to achieve better yields and create a robust agricultural economy.

What strategies can be employed to increase agricultural and economic output for farmers?

PANGILINAN: Per the theory of economies of scale, cost advantages can be achieved as the size of an enterprise increases. As such, creating agricultural clusters and building farming communities means not only increasing outputs, but also reducing the cost of operations. The average size of a Philippine farm is around 1.5 ha, which is not viable for achieving economies of scale and therefore clustering should be encouraged.

Overall, the best way to make farming more attractive, both for the farmers themselves and for private sector investors, is to make it viable. This requires a transformation of the country’s agricultural landscape from subsistence farming into self-sustaining farming enterprises. A wide range of agricultural interventions are needed, such as approaching small farmers and creating clusters; fostering viable farming enterprises; providing government support; encouraging stronger private sector partnerships; and mobilising resources around farming communities.

On coconut farms, for example, greater use of intercropping can boost income and productivity. Fertilisation is also key, as it can increase the yield of a coconut tree by 25-50% in the first year and 50-100% in the second. Replanting is another effective intervention, as around 30% of the country’s trees are old. Lastly, there needs to be a greater focus on enterprise development by engaging farmers in value-added processes.