Where is Philippine agriculture headed? This was the question posed by former Philippine Agriculture Secretary Senen C. Bacani during the Fourth Annual JD Drilon Agribusiness Lecture Series conducted last 14 June at SEARCA. His lecture, entitled Quo Vadis: Philippine Agriculture, showed that after more than a decade, the state of agriculture has declined and the country has gone from a net exporter to a net importer. To get over the slump, Mr. Bacani points towards agro-industrialization with support services amply provided by government as the answer.

Mr. Bacani said the nation is unconvinced that agriculture should be "top priority and last fallback." As such, there is severe underinvestment in agriculture from both public and private sectors. Hence, agriculture has grown by only about 2% per year, a growth rate lower than the increase in population (2.36%).

The Key: Agro-industrialization

Agro-industrialization is the key to effectively develop the Philippine economy to a higher growth path. The move towards agro-industrialization is based on two premises. First, it has to develop the agricultural sector - the sector with the highest population, the widest reach, and the most potential for sustainable and equitable growth. Second, agro-industry should be viewed as a major means of adding value to agricultural exports.

Government should address priority concerns like: (a) provision of support services particularly infrastructure and access to credit; (b) review of the implementation of agrarian reform; (c) calibration of tariff protection for local agricultural producers based on the premise of available safety nets.

As the need to act is very urgent and compelling, former Sec. Bacani proposes a simple but controversial scheme of raising money to fund government initiatives: Pay only half of the interest payment on public debt for a period of two to three years with the balance capitalized as part of the principal. This scheme should provide an additional P150 billion per year that could then be used to develop not only the agriculture and fisheries sector, but also health, education, and public works.

Once the private sector sees government taking serious steps in addressing agricultural constraints, it would start to look for investment opportunities in the countryside. Mr. Bacani believes that once private sector investments starts pouring in, broad-based development would follow.

With government extending its support, the business sector reaching out and committed to share its competence, and the people determined to help themselves, Philippine agriculture could look forward to a brighter future.

(Bacani, S. 2004, Quo Vadis: Philippine Agriculture. Paper presented at the Fourth J.D. Drilon Jr. Agribusiness Lecture Series, SEAMEO SEARCA, Los Baños, Laguna. 14 June 2004)