It would be totally understandable if Agriculture Secretary Francis Tiu Laurel Jr. is having nightmares wondering whatever made him agree to take on a mission impossible in Philippine agriculture.
Calamities – man-made and natural – have conspired to make it a horrible year despite his best efforts to turn the sector around.
Sec. Tiu Laurel is hoping for one to two percent growth in agriculture this year. What happened instead is a 3.7 percent contraction in agricultural output for the third quarter of 2024, the steepest decline in four years.
The Philippine Statistics Authority (PSA) reported that agricultural output fell by 2.2 percent in the nine months to September, reversing the slight growth seen in 2023. The PSA attributed the slump to drops across major subsectors, including crops, livestock and fisheries.
Crops, which account for more than half of the total farm output, plummeted by 5.1 percent in Q3. The decline was primarily due to a 12.3 percent drop in palay (unmilled rice) production, aggravated by El Niño and La Niña.
PSA data showed sugarcane plummeted by 83.8 percent during the July-to-September period. Lower output was also seen in mango (-11.2 percent), banana (-1.1 percent), pineapple (-0.4 percent), and coconut (-0.1 percent).
The value of livestock output dropped by 3.5 percent in the first nine months, primarily due to African Swine Fever (ASF).
El Niño has resulted in a staggering P4.39 billion in damage to the Philippines’ agricultural sector, according to the Department of Agriculture (DA). Data from the Department of Social Welfare and Development (DSWD) showed that approximately 2,116,420 individuals, including farmers, fisherfolk and their dependents or families, have been affected by El Niño. It is miserable out there.
Then there’s typhoon damage. The combined effects of the southwest monsoon and Super Typhoon Carina (P4.73 billion in damage), Severe Tropical Storm Enteng (P3.77 billion) and the combined effects of the enhanced southwest monsoon and tropical cyclones Ferdie, Gener and Helen (P1.09 billion), according to DA estimates. Damage due to Severe Tropical Storm Kristine is estimated at P6 billion. And there’s Pepito.
The biggest setback for Sec. Tiu Laurel is the continued rise in retail rice prices. BBM and Tiu Laurel followed recommendations from economists to lower the tariff on imported rice to bring down the retail price which persistently was in the P55-to-P60 per kilo range. But months after implementation, the retail prices remained high. The secretary is now saying the full impact of lower import tariffs will be felt in January 2025.
Rice importers and traders effectively sabotaged the DA’s best intentions out of self-interest. Many kept their imports at the piers, choosing to first dispose of rice stocks bought at the higher tariff rates and at high domestic farmgate prices. And when they started selling the rice brought in at lower tariff, traders maximized their profits instead of passing on the promised savings to consumers.
Farmers also got screwed. “Traders are afraid the fresh harvests will coincide with the arrival of cheap imports, resulting in oversupply. So, they play safe by buying low from farmers,” said Raul Montemayor, Federation of Free Farmers Cooperatives, Inc. national manager.
The Philippines is keeping the distinction of being the world’s top rice importer this year, with shipments expected to increase to 4.1 MMT. According to the International Rice Research Institute (IRRI), the Philippines has been importing rice almost every year since 1869.
Why can’t we produce enough rice to feed our people? Two things: land and water.
Agriculture experts blame our geography. We are an archipelago without any major river deltas. Thailand and Vietnam have lots of land and river deltas suitable for rice farming. Thailand, for example, has four times the arable land per person versus the Philippines.
We are also the number one in the list of the most disaster-stricken countries in the world. We are hit with numerous typhoons every year, which, according to IRRI, makes rice production riskier and more difficult. It’s another geography-related issue that Thailand and Vietnam don’t have to worry about.
In terms of economics, our rice sector has high production costs. Increasing the productivity of our rice sector has been the claimed objective of the DA for decades, for which billions of pesos have been poured into farm mechanization and the use of advanced technology like hybrid seeds… but with little discernible gains.
The government has also paid lip service to providing good post-harvest facilities for farmers from dryers to storage. A farmers group claims that almost 95 percent of farmers cannot meet the NFA’s quality specifications due to the lack of drying and other post-harvest facilities. DA says 15 percent of rice harvest worth P8 billion is lost yearly due to lack of post-harvest facilities. The real figure is probably a lot more.
The agrarian reform law has also fragmented land ownership that makes it difficult to introduce economies of scale in rice production.
And farmers are dependent on the traders for credit to get the planting season started. They are resigned to being screwed by the traders than having to deal with the paperwork in borrowing from government facilities. The commercial banks, on the other hand, would rather pay the fine than lend to farmers.
The country’s rice self-sufficiency ratio, or the percentage to which the country’s domestic production can meet its domestic requirement, was at 85 percent in 2020. It was down to 81.5 percent in 2021 and fell further to 77 percent in 2022, the lowest in nearly a quarter of a century. BBM wants a 97-percent self-sufficiency by the end of his term in 2028, another aspiration in BBM’s list that includes P20 per kilo rice.
Some say we should recognize our geographic and natural limitations and stop dreaming of 100-percent rice self-sufficiency. But rice is a political commodity. And we have more and more mouths to feed each year. Depending on imports puts us at the mercy of rice exporters who can jack up prices or even withhold exports.
Is the Agriculture Secretary on a mission impossible? Sec. Tiu Laurel’s nightmares continue.
Boo Chanco’s email address is bchanco@gmail.com. Follow him on X @boochanco.