One cannot help but be left with the impression that our farmers are now too poor to be proud of what they do. Pride in work, and in how they feed the country, plays second fiddle to survival. A lot of big farms flourish, for agriculture is still a business. But small farmers, which account for majority of agricultural workers, remain poor and desperate.
Meantime, our education system seems to have geared itself to producing graduates for supply particularly to the global workforce. Why else synchronize our school calendar with the school season abroad? Perhaps, with the realization that the present state and size of our economy is not capable of producing enough well-paying jobs locally, we still need to turn to labor export.
If I am to list the government’s most urgent concerns, I believe them to be agriculture, education, health, and environment. This is in line with the model that nourished, educated, and healthy people — living in a clean and healthy environment — are better suited to bring about economic development. And development will bring peace, and peace will bring order.
It is in this line that I share with you a short note from a good friend, Gary Teves, who once served as president of Land Bank of the Philippines, which took the lead in financing the acquisition of land for agrarian reform beneficiaries, and was also Secretary of Finance in 2005-2010. Gary’s family had also been in the sugar milling business for decades.
Gary believes the agriculture sector deserves more help, and notes that putting tariffs on imported rice will help raise more funds “to improve the competitiveness of Filipino rice farmers through mechanization, financing, subsidized inputs, education, R&D, etc.” But for the tariff plan to be more effective, he says rice traders should no longer be required to get import licenses.
He also notes that “three decades of agrarian reform have shown that merely giving a farmer ownership of land will not significantly improve his life.” In this line, he says, “Congress should give Agrarian Reform Beneficiaries (ARBs) the flexibility to lease their lands to agro-entrepreneurs, provided that the latter provides the necessary farm inputs that will increase land productivity and raise small farmers/agrarian reform beneficiaries’ incomes. Manpower can be provided by the ARB under a profit-sharing arrangement with the agro-entrepreneur, resulting in a win-win situation.”
As for agricultural financing, he notes that big banks can now tap more accredited rural and cooperative banks for wholesale lending or investment, so these smaller banks in turn will have more funds to lend to farmers and cooperatives. Lending or tapping these rural banks allows bigger banks to comply with the legal requirement to lend more to farmers and fisherfolk.
He insists that there is still money to be made from agricultural financing. He notes that in 1998, about 68% of the bank’s loanable funds were allocated to commercial borrowers and only 32% to small farmers, fisherfolk and micro, small and medium enterprises (MSMEs) as well as rural infrastructure and agribusiness. But by 2004, this was reversed with 65% already going to small farmers, fisherfolk and MSMEs, and 35% to commercial borrowers. And despite the shift, the bank’s profit still continued to grow.
As to the contentious issue of whether or not we should open the agriculture industry to foreign investors, Gary says doing so can give us access to capital, technology and expertise to develop agriculture. “Lifting the constitutional restriction will also allow landowners who don’t have the capability to develop their land to sell their property to foreign or local investors who can then make it more productive,” he says.
But, to address concerns regarding too many foreigners owning land, he adds that Congress, in the future, can impose restrictions or regulations by ordinary legislation. “For instance, only land outside Metro Manila would be opened to foreigners to help decongest the metropolis and spur economic development in the countryside,” he says.
While I have my own concerns regarding allowing foreigners to own land, Gary may have a point in looking into alternatives, rather than just completely shutting down the idea. My argument is that land is scarce resource, and a finite one at that. And given our growing population, I believe we need to keep land for ourselves.
On the other hand, drive around the countryside and one will realize that we have plenty of “unproductive” and idle land all around. If, perhaps, a portion of that land can be repurposed, and be made productive through the help of foreign capital and technology and access to foreign markets, then maybe the idea is worth considering.
Perhaps under very strict conditions that such land can be used only for farming, food production, and housing particularly for the poor. At the same time, to make their Philippine property productive and profitable, foreigners should make substantial investments in development or production. The investments should result in jobs, wages, and taxes.
But all such initiatives may still be for naught unless the government creates what Gary refers to as a “cohesive master plan” on how to develop the agriculture sector. And this can be done through closer coordination among government agencies and the private sector to come up with a long-term plan to further develop agriculture.
And other than rice, he says, the government also needs to seriously consider more high-value crops in which we have more competitive advantage, like cacao and coffee, to give particularly smaller farmers more income security.
Giving more attention and resources to agriculture, Gary says, will help increase productivity, generate more jobs, and, hand-in-hand with the private sector, enable it to become a primary mover of the economy. He notes that a higher agricultural growth rate is needed to grow the economy faster and to attain more inclusive growth and development.
I can only hope that within my lifetime, I will still see a government administration that will truly and sincerely prioritize agriculture and education over everything else. That a long-term masterplan can be put together for succeeding administrations to pursue. I still believe that agriculture and education are the two key areas that require from the government the most attention, the most resources, the best planning, and the best minds.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council