This is the second and final part of a series on Philippine agriculture that focuses on the anti-agricultural bias of technocrats and economists that is turning the countryside into a wasteland. You can read the first part here.
While being the central cause of the crisis of Philippine agriculture, WTO-imposed liberalization was not the only problem. Another was a state that was content to leave agriculture in a state of neglect, benign or otherwise.
The absentee State
As other developing countries, such as Thailand and Vietnam, poured money into subsidies, research and development, and infrastructure, the Philippines skimped on spending. A good part of the reason is that the structural adjustment programs imposed by the World Bank and the IMF, beginning with the presidencies of Corazon Aquino and Fidel Ramos in the late ’80s and early ’90s, left very little money for capital expenditures after spending for personnel and operations.
Also robbing the country of resources for capital expenditures was the Automatic Appropriations Law requiring that repaying foreign creditors must be prioritized in the budget, which meant that some 20 to 40% of the budget annually was allocated to foreign debt service in the period from 1986 to 2015.
From 5.5% of the total budget during the Marcos regime, funding for agriculture dwindled in succeeding administrations, coming to 3.6% during the nine-year reign of Gloria Macapagal Arroyo. By the end of the Arroyo administration, the area under irrigation, at 1.3 million out of 4.7 million hectares, was practically the same as that under Marcos a quarter of a century earlier.
Crop yields sagged across the board: the average of 2.8 metric tons of rice per hectare was way below the yields in China and Vietnam. Farm-to-market roads are key to agricultural productivity but by the end of the 1990’s, only 17% of the Philippines’ road network was paved, compared with 82% in Thailand and 75% in Malaysia.
The parlous state of government support was underlined by the fact that although the Agreement on Agriculture allowed countries a rate of subsidization of 10% of the total value of production, the Philippines could only manage an average of 4% overall, with government market price supports for rice at a measly 5% and for corn at 1%.
Another major reason for the crisis in Philippine agriculture has been the uncertainties surrounding the agrarian reform program. After nearly 35 years, the agrarian reform program has stalled. As of 2015, some 700,000 hectares remained undistributed — about 450,000 of which were private lands that were among the most productive in the country.
The backlog in land redistribution was not the only problem. Support services were severely underfunded and, in many instances, not provided at all to land reform beneficiaries. Equally problematic was the lack of security of tenure. Many land reform beneficiaries were actually nominal titleholders for landlords seeking to maintain effective control of “redistributed” lands. Moreover, in many parts of the country, landlords brought cases against beneficiaries who had already received certificates of land ownership (CLOAs) in an effort to regain their lands.
Pervasive insecurity of property rights discouraged smallholders from investing to make their land more productive and banks from providing credit to them. As a result, as one study put it, “Large numbers [of farmers] have been abandoning the countryside for what they see as the lack of opportunities resulting from persisting inequalities and the absence of incentives. Their logic is compelling: better to take your chances in Saudi Arabia than scratch a living from land from which you can get evicted any time.”
Agrarian reform need not be a drag on development. In fact, it can be the engine of development, as was the case in South Korea and Taiwan. The Philippines, in contrast, is an object lesson on the perils of halfway or indecisive agrarian reform.
The anti-agriculture mindset
The parlous state of agriculture is also connected to the fact that the most dynamic sectors of the economic elite appear to have lost interest in agriculture as a source of wealth. As sociologist Kenneth Cardenas has argued, Filipino capitalists value land as a source of wealth, but instead of using it as a base for agricultural pursuits, they are using it for real estate development not just in the old urban centers but in the suburban periphery. The highest rates of return on investment come from shopping malls, office buildings, middle and upper middle class housing, and tourist attractions in what used to be rice fields.
Where land has not yet been transformed into malls, rural elites often leave them empty and unplanted, waiting for land values to rise as suburban expansion stretches to the rural hinterland, then selling at the “right price” at the “right time.” You just need to travel north and south of Metro Manila to realize that what used to be thousands of hectares of productive farmland in Calabarzon, Bulacan, and Pampanga in the 1990’s have, in the twinkling of an eye, been turned into an urban landscape.
There appears to be more than narrow economic calculus at work in the decline of the countryside. Much development thinking among technocrats, economists, and the business sector is centered on improving the atmosphere for business activities in the city, promoting a dynamic real estate industry, supporting the growth of financial services, and attracting more investment in BPO (Business Process Outsourcing) activities. Development is anchored on servicing the needs of a growing globalized middle class. In this mindset, agriculture is an afterthought, and food security is one that can be met with increased imports.
In this paradigm, the over 50% of the population that rely on agriculture or agriculture-related activities for their living are caught up in a low-value-added enterprise that is not a dynamic source of development, the main engine of which is seen to be urban economic activities fueled by foreign investment, financial services, and billions of OFW remittances. From this perspective, the bulk of the population that remains in agriculture is “excess baggage” constituting a drag on development, the main solution to which is not to make them more productive but to siphon their ranks to overseas work to earn dollars that can then be recycled to their families to spend in urban consumption.
What is to be done?
For those who believe that agriculture is critical to our economy, our society, and our culture, there are important measures to be taken to revive this neglected sector.
First, it is important to find ways to stop or reduce the dumping of foreign agricultural commodities on our agricultural markets, using both those mechanisms allowed by the WTO and those that may not. Owing to US unilateralism, which has paralyzed the dispute settlement system, the WTO is today a much weaker body than it was 26 years ago. Skillful legal navigation can enable us to escape fulfilling many of its onerous impositions without incurring penalties, as many countries, such as Vietnam and Thailand, are doing, despite protests from the US and the WTO.
Second, agrarian reform must be decisively completed and supported with adequate support services, and strong legal action must be made available to prevent landlords from retaking land. A prosperous agriculture based on successful land reform converted the countryside in Taiwan and Korea into a beehive of prosperous smallholders whose demand triggered their industrial take-off in the 1960’s and early 1970’s. With enough political will, the Philippines can follow in their footsteps.
Third, government must no longer be simply a passive force but serve as an active developmental agent that furnishes the support for small and medium landholders that mere market incentives cannot provide. This support should be in three forms: one, programs such as direct assistance and credit support that enable farmers to improve their performance; two, legal assistance to secure security of tenure, and three, leadership in providing a vision of a dynamic agricultural future and assistance in organizing farmers as an effective pressure group.
Four, we must abandon the anti-agricultural bias of neoliberal technocrats and economists, who see agriculture in narrow terms as a loss-making activity that entails a large opportunity cost from more profitable ventures, and make it serve instead, with the right policies, as the engine of a development process that brings about prosperous, equitable, and sustainable development. In short, we must get rid of a mentality that results in agrocide.
Finally, and perhaps this is the most difficult challenge, our agriculture must be adapted to the needs of an era of rapid climate change and environmental crises. With its low-carbon intensity, small-scale agriculture that combines ecologically resilient traditional technology with advanced technology has increasingly been seen as the best way to do agriculture in the era of climate change. The economic interest of small farmers and the well-being of the climate are increasingly converging, and government can play a positive role in accelerating their convergence.
Philippine agriculture is dying. It will take decisive steps to save it. – Rappler.com
Walden Bello is chairperson of the Board of Rights, a farmers’ support organization and senior analyst at the Bangkok-based think tank Focus on the Global South. He is the author of The Food Wars (2009) and co-author of Development Debacle: The World Bank in the Philippines (1982), The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines (2004), and State of Fragmentation: The Philippines in Transition. This article is drawn from a seminar he gave at the Development Bank of the Philippines on August 5, 2021.