Selections from the book (1): “The Philippines Is An Agricultural Economy, But It’s Uneconomic” – Ex-NEDA Chief Cielito F Habito

Surprise! Ex-NEDA head Cielito F Habito, PhD, says, “Many Filipinos think of our country as an agricultural economy. It is not.”

I did not know that! and I am a BSA graduate, UP Los Baños 1965; published writer since 1975; and an explorer of the Internet since 1991.

Doc Ciel makes that eye-opening statement in his book: No Free Lunch (Essays On Philippine Agriculture), coming out Friday, 01 Dec 2023, according to his Facebook post of Sunday, 19 Nov 2023.

Well, teachers are not exempted from re-learning!

The particular source of that statement is Doc Ciel’s 19-year old Inquirer essay, “Raising Farm Incomes” dated 19 April 2004, the year President Gloria Macapagal Arroyo (GMA) won a second term. GMA was herself an economist.

Here is the first paragraph of that essay as part of Doc Ciel’s Inquirer long-running column “No Free Lunch:”:

Only one-fifth (20%) of the economy’s total output, as measured by gross domestic product (GDP), actually comes from agriculture. And yet the sector accounts for more than one-third (37%) of total employment. In contrast, services now account for almost half (45%) of our economy’s output, while taking up also about half (47%) of our workers. These numbers indicate that there must be something wrong with labor productivity in agriculture. No wonder farmers and farm workers are poor.

In other words, to put it kindly, “Agriculture is under-performing!”

“There must be something wrong with the labor productivity in agriculture. No wonder farmers and farm workers are poor.” Doc Ciel attributes poor productivity in farms not to the farmers themselves but to inputs, technology, and facilities. He says:

It is not the farmers’ or farm workers’ fault that output per worker is low. They are simply working in an industry where lack of modern inputs (seeds, fertilizers and machines, to name some) and of support facilities (irrigation, post-harvest facilities, communication facilities and roads) severely limits how much they can produce. As a result, our average rice and corn yields are much lower than that of most of our neighbors, being only half that of China and two-thirds that of Indonesia, for example.

Doc Ciel is saying the modern inputs that are lacking in PH agriculture include seeds, fertilizers and machines; the support facilities include irrigation, postharvest and communication.

“What would it take to boost our farm productivity and incomes?” I will quote 2 precious bits of advice from Doc Ciel:

Local responsibility – Resources and responsibility for raising productivity on the farms must be given to the units of government closest to the problem, and not be centrally managed from Manila.

Agricultural cooperatives – the way to achieve greater efficiency through economies of scale is for farmers to band together into cooperatives. This would permit them to gain bargaining strength and lower unit costs… both in the procurement of their inputs including access to credit, and in the marketing of their produce.

I gather Doc Ciel’s lesson in Agricultural Economics: “Economics is for the greater number for the greater good!”@517