NEDA pushes 3 agricultural policy reforms for ASEAN integration

Chrisee Dela Paz

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NEDA pushes 3 agricultural policy reforms for ASEAN integration
NEDA says the Philippines needs to improve production, boost spending in research and development, as well as shift to tariffication from the current QR agreement to prepare the agricultural sector

MANILA, Philippines – The National Economic and Development Authority (NEDA) is scouting for lawmakers who will help them push 3 key policy reforms that will better prepare the Philippine agricultural sector for the Association of the Southeast Asian Nations (ASEAN) integration.

NEDA Director General Arsenio Balisacan said during a forum in Mandaluyong City on Friday, September 18, that his office is seeking the help of lawmakers in proposing 3 reforms to improve the present conditions of the country’s agricultural sector.

This is to address the country’s declining agricultural sector, which only contributes a meager 10% in overall economic growth as of end. This is compared to its 20% share way back in the 1970s.

The agricultural sector is “critical to poverty reduction,” Balisacan said, as one-third of the total employment falls under the sector.

NEDA started pushing policy reforms for the agricultural sector as early as 2000, but its chief said it will only likely choose potential political advocates after the elections in May next year.

Promote trade and production

One of the key policy reforms proposed is the promotion of trade domestically and internationally through increased competition and economic diversification. (READ: Pangilinan: Want economic growth? Put farmers, fisherfolk first)

“The key element in this is the reduction of transaction costs. Wages of farmers in the Philippines are very high compared to its ASEAN counterparts…We should have regulatory measures through this reform to influence the cost of doing business in the country, particularly in the agricultural sector,” Balisacan said.

Shift from QR to tariffication

NEDA, according to its director general, is advocating the “use of predictable, transparent and market friendly instruments to control prices” of commodities.

Citing rice crops as an example, Balisacan said NEDA is urging the government to relax “quantitative restrictions (QR)” in rice imports and replace it with tariffication measures for “a more transparent and predictable market.”

To make this possible, Balisacan said the QR agreement between the Philippines and the World Trade Organization (WTO) needs to be changed.

The QR agreement between WTO and the country limits importation of rice in the country and is valid only until 2017.

Before 2017, Balisacan said, the tariffication measures should be in place to support local farmers from future foreign players coming in.

“This is much more transparent and predictable than the practices of QR at present that opens possibility of monopolistic deeds of local farmers by imposing higher prices to consumers,” the NEDA chief explained.

Balisacan said the safe tariffs for rice will be at 30% which can be a “much better regime.”

“We can better negotiate with other ASEAN economies than the 40% tariff indicated within the WTO agreement,” Balisacan said.

“Nothing can happen unless the law is reformed. This is the challenge for the next administration. From now on to 2017, we can prepare legislators, farmers and ourselves to advocate the reform from QR to tariff,” he added.

CHALLENGE. NEDA's Balisacan says 'nothing can happen unless the law is reformed. This is the challenge for the next administration.' Photo by Chrisee Dela Paz/Rappler

Boost R&D

According to the socioeconomic planning secretary, the third measure is to boost research and development (R&D) in agriculture, by spending 0.5% to 1% of the country’s gross domestic product (GDP).

The Philippines currently spends 0.1% of the country’s GDP for R&D. 

“We should invest more in innovations in R&D. Unfortunately, as we have done improvement in budget, what is required is greater than what we have [allocated] there. If there is a need, then we will increase appropriations,” Balisacan said.

“We need to deepen these reforms to achieve sustainability [in growth],” he added.

The Department of Agriculture targets a 3% to 3.5% growth in agriculture this year, which is “unattainable”, according to Balisacan.

“The Philippines saw a negative growth in the sector for the first half of the year,” he said.

“This year, the sector is yet again confronted with another climate change phenomenon, the El Niño, which is likely to primarily affect agricultural production,” he added, adding that the brunt of the phenomenon is likely to peak by November this year until January next year.

Historical data from the DA showed that agricultural productivity has been hit by yearly super typhoons like Typhoon Pepeng or Parma in 2009, Typhoon Sendong or Washi in 2011, Typhoon Pablo or Bopha in 2012, Super Typhoon Yolanda or Haiyan in 2013, and Typhoon Glenda or Rammasun in 2014. –

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