MANILA, Philippines — The government must resolve persisting trade and production issues and hike its financial support to key high value crops (HVC) like bananas to boost their export performances, according to the Senate Economic Planning Office (SEPO).
In a report, SEPO listed the revealed comparative advantages (RCA) of some of the country’s agricultural exports in recent years.
The RCA quantifies a country’s trade advantage by using opportunity cost associated with producing a specific good, according to the SEPO.
“To illustrate, having a comparative advantage for Product A means a country can produce more of Product A by giving up less of other goods compared to another country,” SEPO said.
SEPO noted that preserved pineapples, fresh or dried bananas and fresh or dried crabs have been laggard in the world market, meaning they show declining export volumes and shrinking market shares.
Meanwhile, pineapple juice and preserved tuna were considered as underachievers because of their declining market share despite growing export volume, according to the report.
Dessicated coconuts and manufactured tobacco were identified as achievers as they post declining exports but expanding market share.
Crude coconut oil, fresh or dried pineapples and carrageenan have been identified as champion agricultural export products because of their growing shipments and expanding market share, based on the SEPO report.
“Despite having RCA over these top exported products, the trade map indicates that there may be industry –specific issues which are causing declining shares and contractions,” according to the Senate department.
SEPO urged the government to address “underlying” issues surrounding trade in bananas and pineapples including pests and diseases, tariff barriers as well as typhoon damage.
The Senate unit added that the government must analyze the underachieving and laggard industries “to determine appropriate support interventions.”
The government should also increase its budget allocation for the agricultural commodities with high RCA like HVC to support their sectoral expansion.
“While a substantial portion of the Department of Agriculture’s budget goes to rice (a trade deficit contributor), it is crucial to allocate a significant share toward developing HVCs,” SEPO said.
“This allocation will enhance competitiveness and productivity to help reduce the trade deficit,” it added.
The government should also consider enacting laws aimed at reducing farmers’ production costs and improving the quality of their products, according to SEPO.
Agriculture Undersecretary Cheryl Marie Natividad-Caballero said HVCs have been underinvested despite the passage of Republic Act 7900 of 1995 or the High Value Crops Development Act.
Natividad-Caballero, who oversees the HVC portfolio at the DA, said they plan to secure higher funding for HVCs.
“Our goal is to secure more funding for the production of quality planting materials to ensure commercial scale production to meet local consumption and processing to address wastage and promote product value addition,” she told The STAR.
The agriculture official said they would also conduct consultation with industry stakeholders to strengthen public-private collaboration and come up with a “strategic” industry direction toward sustainability and improved productivity.
The DA is currently seeking an eight-fold increase in its budget for its HVC program next year to improve the productivity of around 30 commodities and expand exports of key commodities.
Based on its budget proposal, the DA wants P16.772 billion for its HVC program in 2025, about 765.54 percent higher than its P1.937-billion budget this year.