ASEAN agri-food sector intensities: The Philippines in catch-up mode
In my past columns, comparative metrics on ASEAN agriculture were discussed. They included growth, diversification, export patterns, and total factor productivity, among others. These factors happen to influence rural poverty reduction.
For this article, the focus is on gross domestic product (GDP) and land area, as well as exports, both land- and aqua-based.
GDP-LAND RATIO
Malaysia, a tree-crops based agricultural economy (specifically, oil palm and rubber), ranked first in terms of GDP-land ratio, followed by diversified Vietnam. Both are highly export-oriented. The Philippines ranked third, a bit ahead of Indonesia, while Thailand landed last.
The third-place ranking of the Philippines is a surprise. This can be partly explained by the high proportion of commodities with high farm prices due to tariff protection. These are rice, sugarcane, livestock and poultry. This is so because most of the crops have low productivity and aquaculture is in the doldrums.
The low ranking of Thailand is an enigma. It has a diversified agriculture and a leading exporter.
LAND-BASED AGRICULTURE EXPORTS
Malaysia, Thailand and Vietnam are ahead with way over $1,300 exports per hectare. The Philippines is trailing at barely $400 per hectare. The Philippine export intensity is only one-sixth of Malaysia and only one-fourth that of Thailand and Vietnam.
AQUA-BASED EXPORTS
Vietnam led in export intensity of aqua-based exports, followed by Thailand. Both have short coastlines. Vietnam is huge in catfish/dory fish export from ponds fed by the Mekong River as well as shrimps. Thailand is big in prepared fish.
The Philippines, despite its very long coastline, ranked last. Its exports are only one-eighth of Vietnam’s and one-fifth of Indonesia’s, another archipelagic country.
WHAT NOW?
There are two faces of the poor Philippine scorecard. One, the Philippines has to move fast when it comes to productivity and diversity. It will be a long haul before it catches up.
Another is that it has greater potential to grow given its low base and under-utilized resources.
Vision, mission, and strategies are important. But greater still are two key implementation hurdles.
First is how to bring more private investments to the countryside. The five-hectare land limit under agrarian reform is a major hurdle. Good farmers cannot expand while the poor landholders are mired in poverty due to low productivity. Most are better off working in modern farms and agri-processing plants.
Second is how to bring implementation teams to speed at the Department of Agriculture (DA). The agency, in contrast to the other departments, suffers from lack of continuity and poor institutional memory.
The DA suffers not only from weak managerial capacity, but also from the mismatch of the requirements of the technical positions with personnel capability. If these mismatches are not addressed, Philippine agriculture will further trail behind, and rural poverty will persist. President Duterte’s target of reducing rural poverty to 20% in 2022 from 30% in 2015 will hang in the balance. Reducing poverty can be his greatest legacy.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
Rolando T. Dy is the Co-Vice Chair of the MAP AgriBusiness Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.
