WB says RP farm policy deepens poverty

Agence France-Presse

Posted at Aug 20 2010 12:46 PM | Updated as of Aug 20 2010 09:06 PM

MANILA, Philippines - Misguided farming policies, including land reform, are keeping millions in the Philippines poor, according to a report released by the World Bank this week.

The report said only the manufacturing and service sectors, which require huge capital and skilled workers, had grown significantly over the last decade while agriculture, which employs most of the non-skilled, faltered.

"These productivity trends reflect a growing scarcity of land and a progressive reduction in the amount of land per worker, aggravated by agrarian reform policies," the World Bank said.

The Philippines passed a land reform law in 1987 to break up large agricultural estates owned mostly by the ruling elite and give land to millions of farmhands.

Last year parliament extended the program by five years amid widespread landlord opposition, which has kept a number of big corporate farms intact, including one controlled by the family of President Benigno Aquino.

The World Bank urged the government, among others, to set up a commission to review its current agrarian reform policy so farm land is not tied up and can be used more freely as capital.

The government says one in three people in the country of 95 million are poor, with most living in rural areas. The farm sector employed 32.5 million people in April, the latest official data available.

Productivity among Philippine farms has stagnated over 30 years due to falling investment in public infrastructure such as irrigation, as well as reduced farm sizes owing to rapid population growth, the report said.

"This decline in farm size has been intensified by agrarian reforms that have negatively affected the functioning of land markets and made access to land more difficult for small-scale farmers," it added.

The report said other policies over the period brought only short-term relief to select groups though not necessarily the rural poor.

Efforts by the Philippines, now the world's largest rice importer, to grow all of its needs merely stifled the efficient allocation of resources and hindered families from earning incomes from other farm activities, it said.