By LALA RIMANDO

abs-cbnNEWS.com/Newsbreak

The Arroyo administration needs to invest in farmers’ productivity and raise their level of profitability to be competitive, a leading agricultural economist said.

Arsenio Balisacan, former agriculture secretary and currently professor of economics at the University of the Philippines, and director of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture, told abs-cbnNEWS.com/Newsbreak that government has to invest in appropriate irrigation systems for the farmers and link them up with the markets.

“There is no way we can get our farmers out of poverty and be competitive in the world if we don’t invest in their productivity,” Balisacan said.

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He added that government  needs professionals in the agriculture bureaucracy “who can appreciate and support continuity of programs.”

Balisacan traced the roots of the current rice crisis to the country’s fast growing population and low productivity. This is exacerbated by the soaring food prices worldwide.

“Demand for food is growing fast not because our incomes are growing -- our incomes have not been growing as fast as our neighbors, so we have not shifted to other crops – but because our population is growing at 2.3 percent a year. That’s almost two million additional mouths to feed every year,” he said.

“Our agricultural land is fixed. So the only way to catch up if we want the price of rice to remain stable is to increase productivity on a sustained basis. That means increasing farmers’ output with the same amount of inputs. You do that through investments in research and development, proper irrigation, proper understanding of the needs of the farmers,” Balisacan explained.

The rest of the interview follows:

What led us to this current rice situation?

This is a global problem, not only a local one. On the demand side, there are sharp increases in growing economies like India and China. As income rises, the usual consumption pattern is to shift to more expensive food like meat. It then pulled the price of wheat and then corn and soybeans, and other feedstock for animals.

Attracted by the higher price of these crops, farmers allocated more land for planting them, in the process eating up the land used for planting rice. So the price of rice also increased. 

This sharp increase in food prices is unprecedented in the last 20 to 25 years. Four years ago, the world price for rice was in the order of $250 per metric ton. If we’re seeing $700 now, things are very serious.

The second factor is the price of energy, which affects the structural side of supply. Agriculture is supported by energy. The production of fertilizers, tractors, chemicals are all dependent on energy. Then the high price of oil encouraged substitutes so more are planting crops for biofuels instead of for food. There are also intermittent ones, like the drought in Australia, frost in Latin America, and other weather disturbances.

Why is the Philippines becoming an icon in discussions about the world food situation?

We are a major rice importer. And when exporting countries see a depletion of stocks, they see an opportunity to hold on to their stocks for now until they can sell it at a higher price. The world is reacting, and so is the Philippines.

Rice has remained our staple food. Demand for food is growing fast not because our incomes are growing -- our incomes have not been growing as fast as our neighbors, so we have not shifted to other crops – but because our population is growing at 2.3 percent a year. That’s almost two million additional mouths to feed every year.

Our agricultural land is fixed. So the only way to catch up if we want the price of rice to remain stable is to increase productivity on a sustained basis. That means increasing farmers’ output with the same amount of inputs. You do that through investments in research and development, proper irrigation, proper understanding of the needs of the farmers.

What should be done to increase and sustain farmers’ productivity?

We need to invest in research and development, and we need professionals in the agriculture bureaucracy who can appreciate and support continuity of programs.

For decades, we have not put enough money on developing technologies, in understanding and generating technologies that are responsive to the constraints raised by farmers. In some cases, the government has good intentions but unfortunately it does not understand how things work in practice.

The irony is that we know our problem. The scientific and economic communities have well studied the agricultural sector. There are so many studies with almost the same recommended solutions.

No way are we going to make our farmers get out of poverty and be competitive in the world if we don’t invest in their productivity. And that involves raising their level of profitability by investing in appropriate technology, getting the appropriate irrigation systems for them, getting those networks that they could link up to the markets.

What about having IRRI and the PhilRice in the country?

There is a wrong appreciation of what farming technology is all about. IRRI (International Rice Research Institute) produces generic technologies. From IRRI, the foreigners do their own further tests at the country and regional levels.

Thailand, Indonesia, and Vietnam have been good at it. They come to IRRI, learn technology which they developed further in their own fields. They acclimatize the seeds and tinker with it until they develop a variety that is fitted and will survive under a particular stressful condition and the soil configurations in their own countries. That’s the role of our local version, the PhilRice (Philippine Rice Institute).

In the Philippines, we cannot have a rice program across the entire country. We’re an archipelago. The climate, soil, distance to market centers, presence of infrastructure support is very varied. Farming technology in Ilocos is not expected to work in Samar where there are always typhoons, or in Mindanao where there are no typhoons.

Agriculture is not like manufacturing where you produce in a self-contained environment. In agriculture, the agro-climatic conditions are varied, so the science community has to tinker.

Before modern genetic engineering, it usually takes 10 years to do develop one variety that can be commercialized. Now it has been shortened to three to five years. But our politicians and the bureaucracy are looking for immediate results because they stay only for three years.

We were early starters (in rice technology). Then we got distracted by political process and did not have the resolve of going back and start the building process again.

Besides, apart from R&D, there is also need to address the complementary issues like education, health, rural and irrigation development, lending. At this point, we are reaping years of neglect. These have caught up with us.

How much will these cost us?

There is no need for new money. It’s just a matter of re-orienting our ways of doing things. If we spend billions in subsidies that are never sustainable, why not use the same amount of money to develop research systems that are responsive to the needs of the farmers? These are all very doable.

You were in government once. Why are these not being addressed up to now?

There is little appreciation of investing for the long term. What has been happening in the past decades is patchwork.

Traditionally, the government would increase production by simply adding or increasing inputs, like subsidizing fertilizers and pesticides to induce farmers to increase production, subsidizing hybrid rice seeds, building big dams, giving output subsidy to the [National Food Authority], giving money for post-harvest facilities and cloud seeding. So yield may increase but only while the subsidies are there.

If there are no subsidies, the farmers shoulder the loss. In the end, these don’t necessarily translate into more income for the farmers.

It has been band-aid economics. The wound is still there. And the wound is now a cancer because we have identified this problem decades ago. This rice situation should be a wake up call to us. Even if this global crisis will disappear, our crisis will not disappear.