This is the second part of last week’s column titled “Seven systemic things the DA should consider reforming.” In the first part, economist Cielito F. Habito outlined seven challenges that keep the Department of Agriculture (DA) from being truly practitioner and agribusiness-oriented. Now, he puts forth suggestions to help get the Department on the right track.
His main premise for “the way forward” is “Copy our neighbors.”
Look beyond the farm gate. Names are more important than we realize. A name can remind people of what an organization does. Habito cites Malaysia’s Ministry of Agriculture and Food Industries, which “looks into the food value chain as well,” and Vietnam’s Ministry of Agriculture and Rural Development, which encompasses “all the other industries in rural areas” as examples of organizations whose names reflect the areas they cover. Contrast this to our Department of Agriculture, where “they’ll tell you that anything beyond the farm gate is the problem of the Department of Trade and Industry,” which wouldn’t be a problem if “they can coordinate very well.”
Cluster and consolidate farm management. The power of the agriculture cooperative, both for its members and for the country’s agricultural output, should not be underestimated, given that a lot of the country’s producers are smallholder farmers. Habito calls to mind Thailand’s Ministry of Agriculture and Cooperatives, “which reflects how the Thai regard cooperatives as central to developing their agricultural sector.” He also cited Korea’s National Agriculture Cooperatives Federation, an organization so successful that it now owns Nonghyup Bank, a farmer’s bank that is one of the top three in Korea. What’s interesting is that they learned about cooperatives in UP Los Baños’ Agriculture Credit and Cooperatives Institute in the 60s.
Ample financing for small farmers. This, Habito says, is the most important point. The need to make farmers bankable has been a cry for the longest time. Giving them access to a legitimate source of funds will help mitigate the high interest cycle many of them are trapped in. He argues that to do this, Landbank should stick to its mission of financing small farmers, which in practice, may often run counter to its current thrust of earning money for the government. He cites Thailand’s Bank of Agriculture and Agricultural Coops, which has been successful in financing small farmers. “This is a bank that periodically is being recapitalized by the Thai government… so it can operate and do its mission of financing small farmers,” adding, “As an economist, I… argue that small farm finance is a public good. Everybody benefits if farmers are financed.”
Let provinces lead. The Coalition for Agrifisheries Modernization in the Philippines led by former Science Minister and former UP President Dr. Emil Javier, of which Habito is part, has “been at the forefront for pushing for a province-led agriculture and fisheries extension system,” with an emphasis on proper organization and execution. “[If we] give [Municipal Agricultural Officers] authority to [lead in their localities], and then let the DA constantly provide these Provincial Agricultural Offices with technical supervision, technical upgrading, [and] capacity building, then perhaps things will work much better. This is the kind of situation in Vietnam and in Indonesia that we can copy.”
Separate fisheries. There’s an ongoing recommendation to create a separate department for fisheries, “because they have become the orphan in the DA bureaucracy,” Habito said. “Their budget is so pitifully small, it’s no wonder that fisheries’ output has been actually slowing down, if not declining right now.” Added to this is the issue of fishing boats being restricted from fishing grounds due to maritime disputes. “We only need to copy Indonesia, which has a Ministry of Marine Affairs and Fisheries. I believe there is much support within the government now for this and we may be seeing this happen in the foreseeable future.”
Raise agriculture budget to ASEAN norm. Many agriculture groups have been calling for an increase in the national budget, pointing out that agriculture makes up less than 2 per cent of the Philippines’ budget, compared to Indonesia’s 3.4 per cent, Thailand’s 3.6 per cent, and Vietnam’s 6.6 per cent. However, this has to be accompanied by the proper framework to distribute and keep track of said funds. “You have to fix the absorptive capacity of the DA first,” Habito said, suggesting sending funds straight to provincial coffers and incentivizing local governments to prioritize agriculture by matching agri expenditures with a corresponding amount.
“We really have to begin looking outward. Start being more aggressive with opportunities to grow our economy and generate much more jobs,” he concludes. “The way to break out of this trap is through outward orientation. To do that, again, we simply have to copy our neighbors’ good practices that have made them export far more than we are able to do.”