Mending the agri safety net

In the recently concluded Cancun talks of the fifth World Trade Organization, Philippine representatives scored a tactical victory for the agricultural sector of developing countries by underscoring unfair competition practices of developed countries.

Sadly, however, the battle is far from over. The sooner we come to our senses and seriously put our act together, the better for the country’s farmers and fishermen. As sure as the sun rises in the east, borderless trade will be the world’s future order.

Which is why it seems such a waste that after a decade of setting up safeguard measures and safety nets to prepare our country’s agricultural and fisheries sector for the inevitability of globalization, we continue to fall behind our neighbors and competitors.

In the case of the Agricultural and Fisheries Modernization Act (AFMA) enacted in 1997, increased profits and incomes were promised for small farmers and fisherfolk by transforming their sectors from a resource-based industry to a technology-based industry.

The process was supposed to include adopting policies that would encourage industry dispersal and rural industrialization, and at the same time providing incentives to local and foreign investors.

After hype, implementation falters

However, as in previous fully-hyped programs of past administrations such as the Ginintuang Ani Program and the Makamasa Program, the vision looked good in paper, but implementation was a different story altogether.

Admittedly, AFMA had a difficult start. For one, it was not implemented on the first year after the law took effect because Congress failed to provide the initial P20 billion required for its first year. Out of a supposedly yearly budget of P17 billion for the subsequent years of its implementation, the actual allotment from 1998 to 2002, averaged only P14.1 billion yearly.

In the grassroots level, with the devolution of agricultural extension work from the Department of Agriculture to local government units (LGUs), the critical task of determining targets and resources to bring the ACEF funds to farmers and fishermen was not competently handled.

As a result of faulty design and half-hearted enforcement of reforms and regulatory instruments spelled out in AFMA, agricultural growth continued to be erratic. Clearly, AFMA failed to get off the ground; we are now helpless in the face of the onslaught of cheap imported agricultural goods.

More dependence on imported produce

Instead of achieving food security, the country has become a net importer of cheap agricultural produce, from vegetables, to frozen livestock and poultry products.

Year after year, data reflects an increasing reliance on imported rice from Thailand and Vietnam resulting from the inability of domestic rice farmers, to plant better-yielding and disease-resistant varieties.

Secretary Luis ‘Cito’ Lorenzo of the Department of Agriculture has highlighted recent successes in the rice sector, although this still was not sufficient to dramatically turn the tide.

As a result of poor infrastructure and expensive transport costs, local corn farmers are powerless to compete against lower-priced imported corn that feed millers and poultry and livestock producers now prefer.

Last ditch efforts?

With AFMA expiring this year, Secretary Lorenzo is urging Congress to extend the law and its funding by another five years. Similar action is being recommended for the Fisheries Code (FC), which is due to end next year.

There is also a pending bill in Congress to extend duty-free incentives for importation of agricultural inputs and machinery for another five years. These privileges lapsed earlier this year.

The agriculture department is also launching several programs in support of AFMA, focusing on increasing farm and fishing harvests and the modernization of agricultural practices and methods to conform to international standards.

Mending the holes in the safety net

AFMA is certainly not the cure-all for the problems hounding the agriculture sector. During a recent chat, Sec. Lorenzo passionately discussed the urgent need for some radical actions.

As a starter, he says that we are treating with kid gloves the smugglers in this country. The activity is so lucrative and pervasive that existing lenient penalties for perpetrators are definitely not sufficient deterrents. The secretary believes that more extreme penalties should be put in place to reduce smuggling particularly in the agri sector.

Secretary Lorenzo is also requesting Congress to hasten the passage of the bill that will make agricultural land acceptable as collateral for loans. And finally, he is urging the private sector to lead and be more active in the commodity boards.

And of course, the country needs to keep its vigilance in the international arena. There will be more "Cancun" battles to fight. Because no matter how much we do internally, if developed countries continue to extend preposterous subsidy levels to their farmers, we will never be able to compete.

Labor code issues on TV

"Isyung Kalakalan at Iba Pa" on IBC-13 News (4:30 p.m. and 10:30 p.m., Monday to Friday) starts today the episode entitled, "Labor Code – Ok Pa Ba?" Thousands of labor disputes piling up at the National Labor Relations Commission (NLRC), several violations of the Labor Code being looked at by the Department of Labor and Employment (DOLE), and concerns about the increasing number of companies resorting to "contractual labor" rather then regularizing employees are some of the issues that will be presented this week on the IBC-13 news segment entitled "Isyung Kalakalan at Iba Pa." Watch it.

‘Breaking Barriers’ with Sec. Cito Lorenzo

"Breaking Barriers" on IBC-13 (every Wednesday, 10 p.m.) will have Secretary Luis "Cito" Lorenzo of the Department of Agriculture as featured guest this week. Farmers and fishermen are complaining about the inadequate safety nets provided by the government. Smuggling is rampant and food and agri items of questionable quality are flooding the market. Join us as we break barriers and get better insights into the challenges facing the administration as it tries to put back life into the agriculture sector.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. If you wish to view the previous columns or telecasts of "Isyung Kalakalan at Iba Pa," you may visit my website at http://bizlinks.linkedge.biz.