THE AGRICULTURE industry suffers from lack of scale stemming from restrictive land policies, as well as insufficient infrastructure, causing it to lag neighbors like Thailand and Vietnam, according to Mercedita A. Sombilla, a former Agriculture undersecretary who also served with the National Economic and Development Authority.
Speaking at a Fireside Chat at the BusinessWorld Economic Forum on Monday, Ms. Sombilla, currently the director of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture, said growth in agriculture remains “elusive,” citing negative trends in the industry’s gross domestic product (GDP) contributions.
“Vietnam for example was able to take advantage of economies of scale, and Thailand was able to improve its infrastructure, training, and cold storage.”
The weak contribution to GDP means the industry is underperforming relative to the size of its workforce. Agricultural workers made up nearly 20% of the overall workforce, numbering 9.36 million as of March.
Ms. Sombilla said that reforms should enable smallholder farmers to exert more control of their land and offer them opportunities to expand beyond their current five-hectare land limit.
“If these farmers could lease their land, and control bigger pieces of land, then that can improve their economies of scaleonomy.”
Ms. Sombilla advocated for more investment in infrastructure such as irrigation and cold storage.
“We are facing right now El Niño and geopolitical tensions… but we also have the lingering effects of avian flu and African Swine Fever (ASF).”
Ms. Sombilla said that solving land fragmentation could encourage the private sector to invest in agriculture.
“The private sector cannot get into agriculture because of this fragmentation of land. If we can solve that, and let farmers decide how they want their land to be developed, then I think the private sector can really come in.” — Pierce Oel A. Montalvo
