World Bank urges Philippines to hike investments in agriculture

Warren de Guzman, ABS-CBN News

Posted at Dec 07 2022 08:24 PM

MANILA - The World Bank has called on the Philippines to increase spending on agriculture, saying food security will be critical for poverty reduction efforts in the country. 

Apart from improving local food supply and reducing inflation, World Bank Senior Agriculture Economist Anujar Kar noted that the sector is responsible for roughly a quarter of total employment in the Philippines.

She said for a sector this big and this important, agriculture has received a surprisingly small budget from Philippine lawmakers. She said she hopes this trend will change under the current administration. 

"Agriculture share in the total budget has been consistently declining. We are very positive and hopeful seeing the 2023 budget where the spending has gone up,” Kar said. 

She said government spending on agriculture declined from a 2.6 percent share of the total government budget in 2015 to just 1.3 percent in 2019, which she said “is pretty low." 

Apart from this, Kar noted much of the past spending was too focused on specific crops, without producing significant results. 

“There is a lot of emphasis on commodity-based banner program, out of which obviously the national rice program dominates the entire program. And the spending of course is approximately 47 percent of the budget which is astonishingly high. Even there, a large part of support is going again to the production level support, subsidizing the sector which is not really generating results.” 

The World Bank’s recommendations include not just more farm sector spending, but smarter spending. For example, an allocation shouldn’t just be put for the increased production and protection of rice. Instead, it should be used for improving the overall resilience, competitiveness, and sustainability of farms in general.

Examples given include agricultural research and development and farm-to-market roads which are currently underfunded. Agricultural diversification so that farmers are not reliant on a single crop and can be profitable all year round is another suggestion.

The farm sector was the biggest job loser in October, both quarter-on-quarter and year-on-year. It lost 511 thousand jobs quarter-on-quarter, and 197 thousand jobs year-on-year.

National Statistician Undersecretary Dennis Mapa attributed this to seasonality, with fewer planting activities for rice or palay and banana.

President Ferdinand Marcos Jr heads the Department of Agriculture (DA) and promised during his election campaign that he would bring down the price of rice to around P20-P30 per kilo.

Prices of commercial rice currently start at P38 per kilo in several markets in Metro Manila, according to the DA.