Agriculture has been ironically the laggard sector in the economy despite accounting nearly for 26 percent of the total employment in the Philippines.
Its contribution to the gross domestic product in the third quarter of 2018 was negative even as the Philippine economy registered a respectable growth rate of 6.1 percent. The farm sector’s output in the period declined 0.4 percent, compared with services and industry, which expanded 6.9 percent and 6.2 percent, respectively.
Something is clearly wrong clearly in the agriculture sector. Palay production declined 5.4 percent in the third quarter year-on-year, while corn output fell 14.4 percent in the same period. The lower production, especially that of palay, resulted in a rice shortage that, in turn, mainly caused the country’s inflation rate to spiral and a hit a nine-year high of 6.7 percent in September and October.
Finance Secretary Carlos Dominguez III, as head of the country’s economic team, reiterated last week that the agriculture sector would continue to be one of the top priorities of the Duterte administration to raise farm productivity and achieve rice sufficiency.
He says the government will keep its focus on the farm sector to help avoid a repeat of the supply problems in rice and other major food items that led to the elevated inflation rate in the second half of 2018. Echoing the sentiments of the private sector, Dominguez says improving the agricultural output and raising farmers’ incomes through education and the use of new farm technologies will be given attention next year.
The rice tariffication bill, which essentially liberalizes rice importation, will address the supply shortage. But the liberal rules will not result in increased local production.
The government, thus, must find ways to expand agriculture production through better post-harvest facilities, more farm-to-market roads to bring the commodity straight to the market and not the middlemen, and increased irrigation facilities.
The agriculture sector and its dependents in the countryside will be at the forefront of the government’s goal to achieve an inclusive economy. This objective will remain elusive if the state fails to improve the productivity of the sector.
