President Tharman of Singapore, in his recent state visit to the Philippines, showed a special interest in the food security program of the Philippines, which was given the highest priority in the last State of the Nation Address (SONA) of President BBM.  In fact, President Sharman took time in his busy schedule to travel to Los Banos, Laguna to visit the International Rice Research Institute (IRRI).  I am glad I was privy to the brief presentation about the state of Philippine agriculture that was made by the CEO of Century Pacific, Chris Po, who is part of the agribusiness advisory body of President BBM.  I would like to elaborate on the main points he raised in his brief presentation. I always value advice coming from top business leaders about the industry to which they belong.  Century Pacific is one of the largest agribusiness enterprises in the country involved in the production and marketing of diverse consumer products like canned tuna, canned milk and meat, coconut water and other processed food products, as well as in the restaurant business.  The views of business people are very important in complementing the studies of people in the academe.  They always contribute the practical and on-the-ground insights that we in the academe may ignore or of which we are unaware.  In this regard, from what I have observed so far in the decisions he has made, Secretary of Agriculture, Francis (Kiko) Tiu Laurel, was a perfect choice.  As a street smart and very experienced entrepreneur (he was CEO of Frabelle, one of the largest fishing ventures in the country), he knows how to make productive use of the talents from U.P. Los Banos and other agricultural schools and think tanks.  I was especially impressed with the emphasis he gave to data analytics at the very start of his tenure at DAR.

            As a CEO honed in the practice of strategic planning, Chris Po started with the usual SWOT analysis that is essential to formulating a long-term plan for an organization or industry.  He cited the only too well-known fact that Philippine agriculture has been the laggard, or as some say, the Achilles’ heel of our economy.  To illustrate, Philippine GDP figures for the first half of 2024 show that while the overall economy grew by 6.0% agriculture contracted by 0.6 %, pulling down our growth.  Over the last five years, there have been more quarters characterized by negative than positive growth in our agricultural sector. In fact, if President BBM is still determined to accelerate our GDP growth to 8 % by the end of his term, he has to make sure that agriculture can grow annually at 3 to 4 %, the average yearly growth in agriculture that our more progressive neighbors like Thailand, Vietnam and Indonesia have been able to attain.

            It is easy to demonstrate macroeconomically the backwardness of Philippine agriculture.  The sector’s low productivity is evident in its labor force contribution.  While agriculture employs close to 25 % of our labor force, it only contributes about 10 % of GDP.  Another telltale sign of our lagging agricultural sector is our underperformance in agribusiness exports which total a measly $8 billion compared to about $40 billion each of Thailand and Vietnam.  This underperformance cannot be explained by our paucity of natural resources.  Given our favorable climate, fertile soil ad extensive coastlines, we should be doing much better in Agriculture, Fisheries and Forestry.  We can only conclude that our lackluster performance in the AFF sector can be explained by poor management, flawed policies and underinvestment. 

            Let me just elaborate on flawed policies and underinvestment.  As the late Dr. Rolando Dy maintained consistently for more than two decades, it was an erroneous policy for successive governments to try to achieve 100 self-sufficiency in rice.  As Chris Po remarked  in his talk at the Makati Business Club, no discussion on food security can be had without mentioning rice, the staple food of every Filipino family.  Rice accounts for 9% of the  Consumer Price Index (CPI).  The most recent inflation estimate was 4.4%, with rice prices going up by about 20 % year-on-year, contributing nearly 2 index points to overall inflation.  Simply put, if we solve the rice issue, we solve inflation.  Unfortunately, our former obsession with 100 % self-sufficiency led us to the wrong track. We spent some 70% of all the resources we invested in agriculture on rice and yet even today we still have to import 15 % of our rice requirements.  We should have listened to Dr. Rolando Dy who insisted since the 1980s that despite the best efforts to produce rice most cost effectively, we did not have the capability to match the cost effectiveness of the rice sectors of Thailand  and Vietnam whose rivers are like oceans and thereby endow on these two countries a great competitive advantage in producing rice because water is the most crucial ingredient in producing palay.   The advice given by Dr. Dy as early as the 1980s was to set a more modest goal of being only partially sufficient in rice production (say 75 to 80% sufficiency) and develop a very efficient and equitable system for importing rice from our more cost-effective neighbors.  Just consider the case of Singapore that does not grow even one grain of rice but has rarely suffered from high food prices.  What their government officials have done is to perfect a system of rice imports together with the complementary tariff system and regulatory rules governing the traders so that hoarding and smuggling can be prevented.  It is a good sign that our government officials no longer consider rice imports anathema and are gradually perfecting the import tariff system and the regulation of traders to avoid hoarding, smuggling and other anti-competitive practices. 

            There is no reason to be ashamed of the fact that we are among the largest importers of rice in the world.  We have a huge population with  a large per capita consumption of rice.  What we have to do is to focus on the bright spots mentioned by Chris Po. Some of these bright spots can provide the needed resources for us to pay for our rice imports.    He celebrated the following facts as opportunities we have to exploit more fully:   The Philippines is one of the top three producers of coconut in the world.  We can build on this strength by improving the low productivity of our coconut farms as shown by the sad fact that we are producing an average of only 45 nuts per tree  as compared to a potential of 200 to 300 nuts per tree achieved by India and Brazil ,  two of the top producers of coconut in the world.

            Fortunately, President BBM is giving the greatest importance to the coconut sector in his plan to improve agricultural productivity and attain the 3 to 4% average annual growth in agriculture needed to accelerate our GDP growth to 8 % annually.  In a recent meeting with officials of the Philippine Coconut Authority (PCA), he instructed them to do “whatever is necessary” to improve the production and export of coconuts.  Going beyond making this pious statement, the President approved an additional P1 billion for the PCA’s massive planting and replanting of coconut seedlings, and P2.5 billion for their fertilization for 2025.    According to PCA Administrator Dexter Buted, these additional funds will allow the government agency to plant 15.3 million coconut trees in 2025.  Under the PCA plan, the government set a goal of planting 100 million coconut trees until 2028.  This replanting program has to be backed up by a proposed budget of P102 billion over a 10-year period.  The 100 million coconut seedlings will be planted across 700,000 hectares of land in order to increase the country’s coconut production by 4.7 billion nuts, which are estimated to be worth P33.1 billion by 2034.  To be continued.