One year after taking the secretary post, the agriculture sector continues to be in shambles on a macroeconomic scale under the leadership of President Ferdinand “Bongbong” Marcos Jr.
A few days into his term, Marcos appointed himself as agriculture secretary supposedly to decisively address the severe problems confronted by the sector. He would go on and promise to increase local production, control inflation, and decrease importation with a prosperous agriculture sector.
But the agriculture sector has only been worse off since he became secretary – a sentiment shared by farmer groups – who have expressed disappointment with his inaction and incompetence in governing an agency responsible for the most basic sector of the economy, which is in a worsening chronic crisis.
Many of Marcos Jr’s promises have gone unfulfilled, resulting in a notable lack of progress. One notable instance is the persistently high food prices under his leadership. Throughout his tenure as Department of Agriculture (DA) secretary from July 2022 to May 2023, the average inflation rate for food was at a disconcerting 9%. This is in stark contrast with the same period last year, wherein a notably lower inflation rate of 3.4% was recorded. Food and non-alcoholic beverages also had the third fastest inflation rate among commodity groups as of last May.
The promised Php20 per kilo rice, a resonating campaign pledge, also remains unfulfilled. Prices for well-milled and special rice varieties have remained stagnant at Php43 and Php53, respectively, while the price of regular-milled rice has shown no change at Php40 since April last year, when compared to the previous year’s prices.
Marcos also expressed aspirations for achieving food sovereignty. However, the current state of affairs has led to a proposed plan for food stamps, which can only be seen as a demeaning position to the ongoing food crisis. While food stamps are not inherently problematic, Marcos has yet to put forth a comprehensive long-term plan to achieve food sovereignty. Hence, the government’s importation policy continues without any discernible indication of improvement in the near future.
Apart from the evident failure to achieve the proclaimed targets in the agriculture sector, the glaring absence of willing candidates for the position of DA secretary speaks volumes about the feeble leadership of Marcos Jr.
Given the paramount importance of this department, Marcos Jr should appoint someone sufficiently competent to spearhead the industry’s development, rather than shouldering the responsibility alone. As the president, his focus should be on overseeing the government as a whole rather than engaging in micromanagement by assuming a secretary post within the DA. The attention of a dedicated secretary is indispensable, especially for a critical department like the DA, and such a divided focus is inevitably detrimental to effective leadership.
The DA also lacks the consolidation that is much needed at this point. For instance, the termination of sugar regulator Leocadio Sebastian had resulted from his unilateral decision to import sugar to meet demand and prevent soaring prices in the short-term. Consequently, officials within the agency are now reportedly hesitant to make significant decisions, fearing they may suffer a fate similar to Sebastian’s. Such internal dissension only serves to deepen the concerns surrounding Marcos Jr’s leadership in the agricultural sector.
Slowing down and declining
Key indicators for agriculture declined relative to previous periods. Agriculture growth seemingly rebounded to 2.2% in the first quarter (Q1) of 2023 as compared to the decline of -0.3% in the fourth quarter (Q4) of 2022. Notably the grains sector, both palay and corn, ‘recovered’ from their slump at -2.5% and -7%, respectively in Q4 2022. But sugarcane plunged from a positive16% to a negative 17% growth. Fishing is almost stagnant with a 0.3% increase from -3.4% in Q4 2022.
On an annual basis, the agriculture, forestry, and fisheries sector has remained almost stagnant with only about 0.5% growth in 2022, which is a lot slower than population growth, if we even think about food security. The most significant decline may be observed in sugarcane, but it is still disconcerting to note that palay and fishing are shrinking.
All the while, the government continues to import thousands of metric tons of sugar while allotting only 1% of the Sugar Regulatory Administration (SRA) 2023 budget for financial assistance and subsidies.
Moreover, in the last six years or so, one of the undeniable indications of the chronic crisis is that agriculture has considerably shed jobs. It was already bad enough that almost half a million (406,000) jobs were lost in 2016-2021 and another 15,000 from 2021 to April 2023. Now, the latest month-on-month employment numbers as of April 2023 indicates an 863,000 reduction in agriculture employment. This is what farmers call tiempo muerto or dead season, which only shows that jobs in the sector have remained seasonal.
Record-high trade deficit
The country’s chronic agricultural trade deficit has worsened; the Marcos Jr administration has only continued the passive policy of importation. From 2021, the trade deficit increased further from US$8.92 billion to US$11.79 billion in 2022, the biggest in 28 years. The difference since Marcos Jr took over, US$2.87 billion, is also the biggest recorded addition to the trade deficit since 1980.
The worsening trade deficit indicates that the country is importing more and more foreign agricultural goods as a matter of policy. This, despite the Philippines being an agricultural country. Data for Q4 2022 reflect this reality, showing a 15% decrease in exports relative to Q4 2021, while imports grew by 13.9% for the same period.
The president, also DA secretary, cannot speak of food sovereignty if he has not lifted a finger in countering our severe food import dependency, especially on the country’s staple – rice. Despite having the land and capacity for production, rice continues to be the country’s top food import. Marcos Jr actually imported more rice in April 2023 (US$166.6 million) than the average of all Aprils under the Duterte administration (US$110.5 million).
Develop the countryside
If we want to develop local agriculture and be self-sufficient, our farmers must be supported in production. By providing subsidies and other forms of in-kind assistance, the government can enable an environment of productivity for agriculture. Even more so is this crucial, especially with the imminent El Niño, which will surely affect harvest.
But subsidies are not enough. The government must not be complacent in importation and proactively regulate it. Liberalization policies such as the Rice Tariffication Law (RTL) and the Regional Comprehensive Economic Partnership (RCEP) must be suspended, reviewed, and repealed, as the administration shifts its priorities from import-dependence to food sovereignty. Such policies only weaken the agriculture sector. Protectionist measures such as quantitative restrictions must be set in place again so that markets will not be flooded with imported agricultural goods that could have been provided had the government sufficiently supported the sector in the first place.
Consumers will be protected by these measures as well. When production is supported and importation is regulated, a steady supply of food will be readily available in the market. This makes food prices less volatile, making consumers less susceptible to hunger and malnutrition.
Marcos Jr must prioritize the facilitation of land access and ensure that production resources are not only readily available, but also affordable for farmers. It is crucial that all stakeholders along the value chain are spared from exorbitant transfer costs, particularly everyday Filipino consumers, who find themselves at the tail end of this chain. The government must be serious in addressing agrarian reform by regaining control in favor of smallholder farms and cooperatives, as opposed to favoring large-scale agro-corporations.
One year into the new administration and the DA has done neither. Subsidies remain small and the country’s importation spree continues. Land and inputs remain inaccessible to farmers. The DA needs someone who is competent and focused to resolve the country’s food and agricultural issues; Marcos Jr does not fit the basic criteria.