Farm dep’t signals shift in focus to meeting domestic demand

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THE Department of Agriculture (DA) said the farm industry’s export focus is overdone, resulting in an underserved domestic market.

“Right now we are too focused on export markets, forgetting that we have a country of 105 million people. This is a big market that is not served by local producers,” Agriculture Secretary Emmanuel F. Piñol told reporters last week.

“How much are we producing sa milk? We’re only producing 1.8% of national requirements. Garlic, how much are we producing? Seven percent of national requirements. Onions, 30%. Why are we even contemplating coffee exports. We are importing coffee, meat. Why dream of being an exporter when we cannot even supply the needs of our people,” he said.

As such, the agency will be reordering its priorities by reducing marketing engagements abroad.

“In fact, for 2018, we will be selective with foreign marketing expos. We will participate in countries where we actually sell produce. All the others will be scrapped,” he added.

Economist Rolando T. Dy, executive director of the Center for Food and AgriBusiness of the University of Asia & the Pacific, said that foreign trade does not necessarily threaten domestic food supply, noting that the export market “is a major force in rural poverty reduction.”

“Exports are where the large markets are. If we competitively expand cacao, coffee, palm oil, etc., the domestic market won’t absorb them,” Mr. Dy said.

“Do you think Thailand, Indonesia, Vietnam and Malaysia could have massively reduced rural poverty without agri export development? Under productive and diversified agri fishery?” Mr. Dy added.

“How will this strategy reduce rural poverty from 30% in 2015 to 14% in 2022?”

Mr. Dy in an e-mail interview noted that the country regularly imports rice, coffee, cacao powder, palm oil, dairy products, garlic, onions, and peanuts, among other commodities, to make up for domestic production shortfalls.

Importing these commodities does not always point to low productivity but also due to many other factors including land suitability and climate, among others.

“The Philippines under the present trade regime cannot be competitive in dairy as it is a temperate enterprise. Today we are at 1.8% self-sufficiency. Doubtful if we ever reach 5% by 2022,” Mr. Dy added.

According to the Philippine Statistics Authority (PSA), agricultural exports expanded by 23.9% to $1.338 billion in the second quarter of 2017.

The share of agricultural exports to total export likewise rose to 8.5% from 7.7% a year earlier.

“The main cash crops – cavendish banana, pineapple, coffee, cacao, oil palm, tobacco, etc., account for only 5% of total farm land in the Philippines. Total physical farmland [is] 10 million hectares [while] rice, corn and unproductive coconuts occupy some 80% of all farm land in the Philippines,” Mr. Dy added.

Mr. Piñol has expressed a preference for self-sufficiency in the major staples such as rice, a view which has led him to lobby for outsized budgets to promote the wider planting of high-yielding hybrid varieties.

The country’s chief economic planner Ernesto M. Pernia had suggested that the DA abandon its 2020 rice-self sufficiency target along with the spending associated with it.

To attain rice self-sufficiency, rice production needs to hit 21.67 million metric tons.

For 2018, the DA has said it needs some P21 billion to hit 20.34 million metric tons for rice production.

The PSA reported last week that the Philippines in 2016 achieved 95.01% self-sufficiency in rice, up from 88.93% in 2016. – Janina C. Lim