7/4/2017 - The Philippines has made impressive progress in reforming the agricultural sector, but more can be done to ensure that farm policy helps further reduce poverty and ensure greater food security, according to a new OECD report.
Agricultural Policies in the Philippines shows that while the value of Philippine agricultural output increased by 73% over the 1990-2013 period, the growth rate was slower than that seen in most Southeast Asian countries. The report underlines the link between low productivity of agricultural workers – which is only one-sixth of workers in the industrial sector – and low incomes of farm households.
“The agricultural sector in the Philippines is an important part of the economy and provides a livelihood for one in three people,” OECD Director of Trade and Agriculture Ken Ash said during the release of the report in Quezon City with Philippine Secretary for Agriculture Manny Piñol. “A reformed policy environment, consistent with measures included in the most recent Philippine Development Plan 2017-2022, would help ensure the sector contributes to improved food security and poverty reduction. Restructuring government support away from self-sufficiency targets, in particular for rice production, towards measures that strengthen productivity and overall farm profitability on a sustainable basis will be critical.”
The report finds that government support to agriculture – representing about 25% of farm revenues, according to the OECD’s Producer Support Estimate - is higher than in other countries in the region, and the highest among all emerging economies covered by OECD indicators. Market price support and budgetary transfers accounted for 3.3% of GDP over the 2012-14 period, but often failed to meet policy objectives, the OECD said.
For example, price support for rice – which increases consumer prices – actually increases the number of undernourished people by an estimated 3.2 million people. Refocusing this support away from specific commodities would encourage diversification towards higher value commodities, which would raise rural incomes and improve food security, the report said.
Improvements to productivity could be achieved through increased on-farm investment, but this is currently impeded by insecure property rights and restrictions on land-market transactions, according to the report. Policies that enable further consolidation of farm operations could also boost productivity.
With the Philippines already prone to natural disasters, the report includes a special focus on adapting to climate change. It calls for enhancing ongoing efforts to improve co-ordination across national and regional levels of government to ensure a more consistent focus on priority policy actions.
Effective implementation of the reform proposals will require improvements to agricultural institutions and governance systems. The OECD recommends strengthening co-ordination between the Department for Agriculture and other relevant departments and calls for greater transparency and accountability to be built into publicly funded programmes.
For further information, journalists can contact OECD Senior Agricultural Policy Analyst Andrzej Kwiecinski (+ 33 6 24 56 01 20) or the OECD Media Office (+33 1 4524 9700). The report can be read here from 9:00 local time: http://www.oecd.org/countries/philippines/title-agricultural-policies-in-the-philippines-9789264269088-en.htm