Higher farm output to make PHL competitive in Asean (Business Mirror (Philippines))

The dismal state of the country’s agriculture sector must be addressed immediately, as higher farm output is key to ensuring that the Philippines would remain competitive in an integrated Asean, according to Asia-Pacific Economic Cooperation (Apec) CEO Summit COO Guillermo M. Luz.

At the signing of the media partnership agreement between the BusinessMirror and the Apec CEO Summit held recently, Luz said the integration of Association of Southeast Asian

Nations (Asean) countries will exert a great competitive pressure upon the country’s farm sector.

The agriculture sector will be under great competitive pressure. We need to execute better on production, because it’s hard to compete in food manufacturing and processing if we don’t have a production base. Otherwise, we have to import everything, he said.

The Philippines is considered as a net importer of food. The Philippine Statistics Authority (PSA) reported that last year, the country’s agricultural trade deficit expanded by 78.72 percent to $2.73 billion, from $1.53 billion recorded in 2013.

The PSA said the country’s farm deficit widened last year, as the growth in imports of farm products outpaced that of exports.

The country’s top agricultural imports include soybean oil/cake meal, wheat and meslin, milk and cream, rice, fertilizer, meat of bovine animals, palm kernel olein, coffee, urea and corn.

While the gross domestic product (GDP) of the Philippines has been expanding in recent years, data from the Philippine Statistics Authority (PSA) showed that agriculture’s contribution to GDP is the smallest and continues to shrink. This, despite the fact that many of the poor rely on the farm sector.

Experts said cuts in the tariffs of farm products traded among Asean countries would exacerbate problems confronting local farmers. Lower tariffs could discourage farmers from producing more as the entry of cheaper food from neighboring Southeast Asian countries could depress local prices.

The Apec CEO Summit will bring together in November hundreds of CEOs from the private sector and decision-makers in the governments from the Asia-Pacific region to discuss and address opportunities and threats to the economies in the region. Luz outlined some of the measures that can allow the Philippines to increase food production and compete under an integrated Asean.

For one, he said the agrarian-reform program must be revisited. Luz said the program has not benefited the economy because small farmlands do not produce as much agricultural products as much as bigger ones.

We need to take a serious hard look at agrarian reform on whether it has worked for us. Some of the big plantations in Mindanao have produced

rather good volumes, but the smaller, not so much, he said. In Vietnam, Luz said there smaller farmlands but its production per hectare is bigger than in the Philippines because farmers have access to better technology.

He said the Philippines must also cut logistics costs to make it easier to move goods within the country and to export products to other countries.

Under the old cabotage law, foreign ships can only have access to ports in Manila, thus making it necessary for goods for export to be shipped to Manila first before it can be shipped abroad. But the amendments to the cabotage law enacted recently now allow foreign ships access to other ports throughout the country aside from Manila ports.

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