phil dev plan (2011-2016)

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10Competitive and Sustainable Agriculture and Fisheries Sector04Competitive

andSustainableAgricultureand Fisherie

Sector

Organic balangon bananasTupi, South Cotabato

Photo by: Milo Alto Paz

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102 Philippine Development Plan 2011-2016

The agriculture and sheries sector provides food and vital raw materials for the restof the economy. It is itself a signicant market for the products and services of the non-agricultural economy. As the sector grows and modernizes, it releases surplus labor tothe industry and services sectors. Rising productivity and efciency in the sector arecritical in maintaining the affordability of food and purchasing power, especially amongthe poor. The sectors development is therefore vital in achieving inclusive growth andpoverty reduction as well as attaining the targets under the MDGs.

The country, however, exhibits a slower structural transformation than other East Asiancountries. The shares of agriculture in GDP and total employment have continued to

decline, but the transfer of the labor released from this sector to higher-productivityjobs in industry and services has lagged owing to low skill levels among agriculturalworkers and distortions in other economic sectors.

Increasing demands on the sectors output have also put pressure on its naturalresource base. Unsustainable practices employed to improve yields have resulted inland degradation and problems of water availability. Climate change has exarcebatedthe inherent vulnerabilities of the sector. Development efforts need to focus ontransforming the sector into one that is not only highly productive but also climate-resilient, environment-friendly, and sustainable.

Competitive & SustainableAgriculture & Fisheries Sector

Assessment

Sector Performance

The sector remains an importantpart of and contributor to theeconomy.

Contribution to output and employment.From 2004 to 2010, agriculture andsheries contributed an average o 18.4percent to GDP and the sector grew atan average rate o 2.6 percent annually.

Tis perormance was signicantly belowthe target o the previous Plan. Amongthe regions, the top contributors in 2009have been Region 4-A (12.1%) ollowedby Region 3 (11%), Region 6 (10%),Region 10 (8.2%) and Region 12 (8.0%).In terms o employment, the sector

employed an average o 11.8 millionpeople. Tese account or almost 35.1

percent o the total work orce (able4.1). I the whole agriculture valuechain is considered, the contributionto GDP and total employment wouldreach 35 percent and 50 percent,respectively.

Contribution o subsectors. Te sectorsgrowth was driven primarily byshery (1.21%), palay (0.40%), corn(0.31%), banana (0.22%) and poultry(0.22%) as shown in able 4.2 in thenext page.1 Growth in the sheries

sector is partly due to the expansiono aquaculture and robust demand orcommodities such as seaweeds. Teproductivity o municipal sheries,such as small-scale capture sheries(less than 3 gross ton boats), has

1 Te values in parenthesis reect growth rate as weighted against commodity share in the Agriculture, Fishery and Forestry(AFF) gross value added.

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103Competitive and Sustainable Agriculture and Fisheries Sector

AFF Sector 2004 2005 2006 2007 2008 2009 2010 Average

Performance (in %)MTPDP Target 4.0 - 5.0 4.2 - 5.2 4.2 - 5.2 4.0 - 5.0 4.3 - 5.2 5.1 - 6.2 5.2 - 6.2 4.4 - 5.4

Actual Growth 5.2 2.0 3.8 4.9 3.1 0.01 (0.5) 2.6

Agri Gross ValueAdded (in Php M)

226,417 230,954 239,777 251,495 259,410 259,424 258,081 246,508

% share to GDP 19.6 19.1 18.8 18.4 18.3 18.1 16.8 18.4

Agri Employment (in'000 persons)

11,381 11,628 11,682 11,785 12,030 12,043 11,974 11,789

% share to totalemployment

36.0 36.0 35.8 35.1 35.3 34.3 33.2 35.1

Table 4.1 Agriculture and Fishery (with Forestry) Perormance and Contributionto Economy: 2004-2010

Source: BAS, NSCB, 2011Note: Revised growth target or 2008 and 2009 based on August 2008 DBCC Meeting

Sector% contribution to growth

Average2004 2005 2006 2007 2008 2009 2010

Palay 1.3 0.1 0.8 1.0 0.6 (0.5) (0.5) 0.40

Corn 1.0 (0.2) 1.0 0.7 0.2 0.1 (0.6) 0.31

Coconut 0.0 0.1 0.0 (0.0) 0.1 0.1 (0.0) (0.02)

Sugarcane 0.2 (0.2) 0.2 (0.2) 0.5 (0.2) (0.4) (0.02)

Banana 0.1 0.3 0.2 0.3 0.5 0.1 0.0 0.22

Other crops 0.1 0.2 (0.02) 1.3 (0.3) (0.4) 0.4 0.16

Livestock (0.1) 0.3 0.3 0.3 (0.1) 0.1 0.2 0.13

Poultry 0.5 0.0 (0.0) 0.0 0.5 0.2 0.4 0.22

Agricultural Activities 0.2 0.1 0.2 0.2 0.1 0.1 (0.1) 0.11

Fishery 1.9 1.3 1.3 1.6 1.3 0.6 0.4 1.21

Table 4.2 Contribution o Sub-Sectors in Agriculture and Fishery Growth: 2004-2010

Source: BAS, 2011

been declining, however. Tis can bepartly attributed to overshing andpoor enorcement o shery laws.

Te national stock assessment othe Bureau o Fisheries and AquaticResources (BFAR) suggests that two-thirds o the 12 major shing bays inthe country are already overshed.

Te positive perormance o palay andcorn is due to the use o quality seeds,increase in yield, and rehabilitationo irrigation acilities. For banana,this is due to an expansion in area, anincrease in yield, and good demand inthe local and export markets.

Contribution to global trade. Between2004 and 2010, agriculture and sheriessector exports rose rom US$2.5 billionto US$4.1 billion. Te top agriculturalexports, in terms o value are coconut oil,resh banana, tuna, pineapple, tobacco,and seaweeds. Te overall balance o tradein agriculture has become increasingly

passive, with the decit widening romUS$837 million in 2004 to US$3.2billion in 2010. Te country recorded aavorable trade balance in some items,however, namely, vegetable and ruits(US$634 million), shery products(US$497 million), and crude rubber(US$31.7 million) in 2010 (able 4.3).

Tere was no signicant change in thestructure o exports in the period.

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Item2004 2010*

Export Import Trade Balance Export Import Trade Balance

Meat and Meat Preparations 4.3 150.9 (146.5) 39.4 381.6 (342.3)

Dairy Products and Bird's Eggs 75.1 482.5 (407.4) 142.1 743.7 (601.6)

Fish and Fish Preparations 413.4 37.0 376.4 633.8 136.8 497.0

Cereal and Cereal Preparations 44.5 659.2 (614.7) 98.5 2,446.3 (2,347.8)

Vegetables and Fruits 783.4 102.9 680.5 916.6 282.7 633.9

Sugar and Sugar Preparations 102.3 70.2 32.1 105.1 369.5 (264.4)

Coffee, Tea, Cocoa, Spices 14.1 90.0 (75.9) 13.0 237.6 (224.7)

Crude Rubber 36.1 31.9 4.1 55.9 24.2 31.7

Fixed Vegetable Oils and Fats 581.3 71.0 510.2 1,269.8 39.1 1,230.7

Others (e.g., tobacco, fertilizer, machinery etc.) 452.1 1,647.7 (1,195.6) 823.6 2,669.6 (1,846.0)

Total Agricultural Exports/Imports 2,506.7 3,343.5 (836.8) 4,097.6 7,331.2 (3,233.6)

Table 4.3 Value o Philippine Agricultural Exports and Imports: 2004 and 2010 (in million $US)

Source: BAS, 2011Note: *2010 fgures are preliminary

Share to total land area and number o armers. In terms o land area, a totalo 4.8 million agricultural arms in thecountry occupy 9.7 million hectares (2002Census o Agriculture and Fisheries).

Tese account or almost 32 percent othe total land area o the country. Te topour crops with the highest hectarage arecoconut (3.33 million hectares), ollowedby rice (2.47 million hectares), corn (1.35million hectares), and sugarcane (0.36million hectares). In terms o number oarmers and sherolk, about 1.61 millionarmers are engaged in shing (25.1%),1.4 million are in coconut (21.7%), 1.35million in rice (21.0%), 0.68 million incorn (10.6%), 0.07 million in sugarcane(1.0%) and around 1.32 million in othercommodities (20.6%).

Agribusiness land development.Trough the eorts o three ruraldevelopment agencies, namely the DA,DAR and DENR, under the NationalConvergence Initiative (NCI), over

1.83 million hectares o land have beendeveloped or agribusiness, generatingabout 2.67 million jobs between 2005and 2010 (able 4.4).

Te NCI is a strategic developmentapproach that can contribute tosustainable development in thecountryside through complementationo eorts in the rural sector. InDecember 2010, the three agenciessigned the Joint Memorandum Circular( JMC) adopting a shared Policy andImplementation Framework or the

Agency

2005-2007 2008 2009 2010 Total

Areas JobsGenerated Areas JobsGenerated Areas JobsGenerated Areas JobsGenerated Areas JobsGenerated

DA 812,096 1,334,678 335,948 479,747 295,524 436,677 30,408 52,767 1,473,976 2,303,869

DAR 247,493 237,387 19,579 27,492 31,605 41,981 2,106 2,106 300,783 308,966

DENR 8,759 8,759 1,967 1,967 50,024 50,024 - - 60,750 60,750

TOTAL 1 ,068,348 1,580,824 357,494 509,206 377,153 528,682 32,513 54,873 1,835,508 2,673,585

Table 4.4 Agribusiness Lands (including Agroorestry) Developed: 2005-2010

Source: National Convergence Initiative Secretariat, December 2010

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Enhanced National ConvergenceInitiative among DA, DAR, andDENR.

Extension o land reorm. Teaccomplishment o land acquisitionand distribution (LAD) or theperiod 2004-2010 compared to the

unded target is at 88 percent. Onthe other hand, the accomplishmentin terms o the previous Medium

erm Philippine Development Plan(MPDP) 2004-2010 target isaround 65 percent (able 4.5). Tetarget projection in the previous Planstates the commitment to nish landdistribution by the end o 2008, the last

year o the 10-year extension providedunder the Comprehensive AgrarianReorm Program (CARP). A total o807,298 hectares were distributed to

524,749 agrarian reorm beneciaries(ARBs) during the period. From1987, the cumulative area distributedhas now reached 4,113,347 hectares.

Extending the CARP or the secondtime was a challenge unlike the rst

when RA 8532 was passed by thelegislative branch beore the RamosAdministration ended on June 30,

YearMTPDPTarget(in ha)

FundedTarget*

(in ha)

Accomplishment

Hectares No. of ARBsin %

Per MTPDPPer Funded

Target

2004 212,121 110,046 104,069 71,682 49 95

2005 122,931 130,000 131,069 88,152 107 101

2006 214,000 130,000 125,177 72,280 58 96

2007 214,000 130,000 134,041 94,807 63 103

2008 220,453 130,000 146,275 90,738 66 113

Sub-total 983,505 630,046 640,631 417,659 65 102

2009 - 85,764 59,488 43,792 - 69

2010 - 200,000 107,179 63,298 - 54

Total 915,810 807,298 524,749 88

Table 4.5 Land Acquisition and Distribution Perormance: 2004-2010

Source: DAR, 2011Note: *Targets based on approved/reenacted budgets

1998. Tis time, no second extension lawwas passed by Congress ater the 10-yearextension period. From July 1, 2008 to

June 30, 2009, CARP continued to beimplemented only under a Joint House-Senate Resolution. On August 7, 2009,RA 9700, otherwise known as the CARPExtension with Reorms or CARPer, was

signed into law mandating the completiono land distribution in ve years. It alsoprovided an additional appropriation oPhP150 billion or the implementationo the major components o CARP.

Gains in the sector have beenachieved, but its full potential isunrealized.

Growth below target. During the period2004-2010, the average growth, whilepositive at 2.6 percent annually, has

been below the target o the previousPlan, which is a sustained growth o 4.4percent to 5.4 percent. Te occurrenceo the global nancial crisis, a uel pricespike in 2008, and climate-related eventsin 2009 (e.g., El Nio, typhoons) allcontributed to the nonattainment o thetarget. Te devastation rom the typhoonsOndoy and Pepeng resulted in damageto agriculture and sheries estimated at

During the period 2004-2010, theaverage growth, while positive at2.6 percent annually, has beenbelow the target of the previousPlan, which is a sustained growthof 4.4 percent to 5.4 percent. Theoccurrence of the global nancialcrisis, a fuel price spike in 2008,and climate-related events in2009 (e.g., El Nio, typhoons) allcontributed to the non-attainmentof the target.

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PhP24.7 billion in 2009 pulling downthe sectors growth to only one-tenth o

a percent in the same year.

Declining productivity and competitiveness.While the productivity o the agriculturalworkorce has increased annually by anaverage o 1.66 percent rom PhP19,894in 2004 to PhP21,553 in 2010, landproductivity in terms o yields otraditional crops (e.g., rice, corn, sugarcaneand coconut) has stagnated or declined.

CommodityLand Productivity, 2009 (in mt/hectare)

Indonesia Malaysia Philippines Thailand Vietnam

Rice (paddy) 5.0 3.7 3.6 2.9 5.2

Corn 4.2 5.6 2.6 4.2 4.0Coffee (green) 0.7* 0.6* 0.8 1.0 2.2*Banana 59.7 21.8 20.2 13.6 14.3*Coconut 6.6* 2.8 4.6 5.8 7.9*Mango, mangosteen & guava 11.6 4.1 4.1 8.0 7.1Abaca 1.0* no data 0.5 no data no dataPapaya 85.1 10.0 19.6 17.0 no dataPineapple 74.2 34.7 37.4 20.9 13.0Sugarcane 63.1 46.7 56.8 71.7 58.6Vegetables (fresh) 10.6 13.2 8.0 8.4 12.6

Table 4.6 Land Productivity in Selected Southeast Asian Countries

Source: Food and Agriculture Organization Corporate Statistical DatabaseNote: *2008 data; 2009 is preliminary data

Te Philippines ranked ourth in rice,coconut, sugarcane and th in corn

out o ve ASEAN countries namelyIndonesia, Malaysia, Philippines,Tailand and Vietnam (able 4.6).In terms o price (producer price),rice in the Philippines is the mostexpensive (US$318.8/M), whichcan be attributed to the lack o actorendowments such as a contiguousland area and big river systems.Furthermore, the growth o total

CommodityRCA in 2007

Indonesia Malaysia Philippines Thailand Vietnam

Rice (milled) 0.002 0.000 0.001 23.423 37.510

Corn 0.117 0.002 0.010 0.507 0.003

Coffee (green) 4.173 0.005 0.002 0.085 30.556

Banana 0.011 0.035 26.329 0.082 0.039

Coconut (desiccated) 11.618 0.472 66.303 0.033 0.000

Fruits (dried) 0.458 0.038 0.372 10.716 2.759

Tropical fruits (dried) 0.000 0.000 251.868 0.000 0.000

Mango, mangosteen & guava 0.145 0.058 11.972 3.834 0.162Abaca 0.155 0.000 30.805 0.000 0.000

Papaya 0.007 1.754 7.417 0.157 0.000

Pineapple 0.050 0.241 47.533 0.628 0.038

Sugar (raw) 0.000 0.000 2.220 5.453 0.204

Vegetables (fresh) 0.110 0.807 1.598 5.163 0.504

Total Agri Products 2.393 1.003 0.975 1.880 1.854

Table 4.7 Revealed Comparative Advantage (RCA) in Selected ASEAN Countries: 2007

Source: Habito et al., 2010

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actor productivity (FP) growthin agriculture has remained at a lowlevel in the Philippines, namely 0.2percent per year over the past twodecades, compared to 1.0 percent per

year in Tailand, 1.5 percent per yearin Indonesia, and 4.7 percent in China(WB, 2010).

Comparative advantage not ullyexploited. Te country actually hasa revealed comparative advantage(RCA)2 not only in its lead exports suchas coconut, banana, mango, pineapple,but also in sugar, abaca, papaya, driedtropical ruit, resh ruit and resh

vegetables (able 4.7). Despite theexport potential o these commodities,however, particularly the emergingcrops, the countrys share (8.3%) and

value o agricultural products (US$3.2billion) to total exports is amongthe lowest in comparable ASEANcountries.

Te country also continues to be theonly agricultural net-importer amongcomparable ASEAN members,

with an agricultural trade decito US$2.4 billion in 2009 (able

4.8). Te total value o agriculturalimports amounted to US$5.6 billion,the top six agricultural imports beingrice, wheat, soya bean products, milkand cream products, tobacco, and

urea. Te value o agricultural exportsin 2009 or the Philippines was onlyUS$3.2 billion3 (WO, 2010). Tis issmall compared to those o Indonesia,Malaysia and Tailand which had over

US$20 billion each.

Elusive rice sel-sufciency.For the period2004-2010, domestic rice production hasmet only 84.71 percent o the countrysannual average rice requirements,notwithstanding substantial publicinvestments in the rice sector (DA, 2011).During the global ood crisis in 2008, thePhilippines imported some 2.4 millionM o rice valued at US$1.9 billion tosupplement its domestic rice stocks.

Increase in ood commodities prices.Teaverage increase in the prices o riceand corn were the highest among basiccommodities or the period 2004-2010, at7.8 percent and 7.5 percent, respectively(able 4.9). Tis is largely due to theglobal ood crisis in 2008 which sawthe retail price o rice increased by asmuch as 29.1 percent. Te 6.4-percentination in selected ood commoditiesprices is higher compared to the nationalheadline ination rate o 5.6 percent.

Higher prices o ood commodities erodepurchasing power, especially among thepoor, and highlight the grave threatsto ood security due to extreme shocks,aecting not only production, but alsomarketing systems.

CountryExport Import Trade

Balance2009

Value 2009(in US $ B)

% Share Value 2009(in US $ B)

% Share2000 2009 2000 2009

Indonesia 25.3 11.9 21.1 11.4 13.1 12.4 13.9

Malaysia 20.9 8.2 13.3 12.3 5.6 10.0 8.5

Philippines 3.2 5.1 8.3 5.6 8.4 12.2 (2.4)

Thailand 28.0 17.7 18.4 9.4 7.2 7.0 18.6

Vietnam 10.7 27.3 18.7 9.3 8.1 13.2 1.4

Table 4.8 International Trade o Agricultural Products: 2000 and 2009

Source: World Trade Organization

The country actually has arevealed comparative advantage(RCA) not only in its leadexports such as coconut,banana, mango, pineapple,

but also in sugar, abaca,papaya, dried tropical fruit,fresh fruit and fresh vegetables.Despite the export potential ofthese commodities, however,particularly the emergingcrops, the countrys share(8.3%) and value of agriculturalproducts (US$3.2 billion) to totalexports is among the lowest incomparable ASEAN countries.

For the period 2004-2010,domestic rice production hasmet only 84.71 percent of thecountrys annual average ricerequirements, notwithstandingsubstantial public investmentsin the rice sector. During theglobal food crisis in 2008, thePhilippines imported some 2.4million MT of rice valued atUS$1.9 billion to supplement itsdomestic rice stocks.

2 RCA is the share o a product in total Philippine exports as a ratio o the share o the same product in total world exports.3Tis is slightly higher than the value o exports in able 4.8 since WO category is broader than the gures released by NSO.

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Stagnant poverty headcount. Despitepositive growth and gains in productivityin some subsectors, there has been almostno change in the welare o almost 6.4million armers, sherolk and other

workers dependent on the sector. Tepoverty incidence o amilies has changedslightly between 2003 and 2009 at 20.0percent and 20.9 percent, respectively(able 4.10), while poverty in terms

o population has increased rom 24.9percent to 26.5 percent, respectively. Tisis despite an increase in average incomeo the bottom 30 percent o amilies o8.3 percent in real terms rom 2006 to2009.4

Challenges

Growth in production andproductivity faces formidableconstraints.

High Cost of Production Inputs

Inputs such as ertilizers and pesticidestypically account or 20-30 percent ototal production cost while livestock andpoultry eeds account or as much as 70

ItemPoverty Incidence (%) Magnitude of Poor (in M) Change in Average Real

Income (bottom 30%)

2009 vs. 20062003 2006 2009 2003 2006 2009

Families 20.0 21.1 20.9 3.3 3.7 3.9 8.3

Population 24.9 26.4 26.5 19.8 22.2 23.1 no data

Table 4.10 Poverty Incidence and Magnitude in the Philippines: 2003, 2006 and 2009

Source: NSO, 2011

percent. As such, any variability inprices directly translates to an increaseor decrease in the prices o agriculturalcommodities, especially at the armlevel. Te increase in internationalprices o commodities and the uelprice spike in 2008 contributed tothe high prices o domestic ertilizerand corn. Te price o ertilizer roseby as much as 135 percent in 2008

compared to 2007 and contributedto a decrease o 2.2 percent in palayproduction in the ourth quarter o2008.

Inefficient Supply Chain andLogistics Systems

Inefciencies along the agriculturalsupply chain result in postharvestlosses, higher transaction anddistribution costs, and lowerproductivity. Te Philippine logistics

system has been characterized asbeing cost-inefcient, unresponsive tocustomers and market requirements,and unreliable. Compared todeveloped countries, distribution andprocessing costs in the country are 20-30 percent higher with logistics costs

Country 2004 2005 2006 2007 2008 2009 2010 AverageRice 2.6 7.0 3.7 3.4 29.1 7.5 1.1 7.8

Corn 10.7 5.5 4.7 4.4 23.2 6.1 -1.8 7.5

Eggs 5.4 3.5 5.6 6.8 6.9 6.8 2.7 5.4

Fish 8.0 6.6 5.2 3.3 9.1 6.1 3.1 5.9Fruits and Vegetables 6.0 5.0 8.8 2.9 11.7t 5.9 0.5 5.8

Meat 13.0 5.9 2.4 2.6 8.9 5.4 4.1 6.0

Average 7.6 5.6 5.1 3.9 14.8 6.3 1.6 6.4

Philippines(headlineinfation)

6.0 7.6 6.2 2.8 9.3 3.3 3.8 5.6

Table 4.9 Ination Rates by Commodity or All Households (in percent)

Source: NSO, 2011

Despite positive growth andgains in productivity in somesub-sectors, there has beenalmost no change in the welfareof almost 6.4 million farmers,sherfolk and other workersdependent on the sector.

4 Te poverty estimation methodology was rened by the NSCB in February 1, 2011. However, urban-ruraldisaggregation is not yet available when the ofcial poverty statistics was released last February 8, 2011.

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accounting or almost 30-40 percento total marketing costs (NEDA-UNDP, 2005).

Te ineective logistics services

coupled with inappropriate postharvesthandling have, likewise, resulted in hugepostharvest losses. For rice and corn,about 14.75 percent and 7.2 percento the total production are lost duringpostharvest operations, respectively.Losses are even higher in horticulturalcrops: losses in ruits range rom 5 to48 percent, while losses in vegetablesrange rom 16 to 40 percent. Tesepostharvest losses, when translated intomonetary values, sizeably reduce theincome o armers and their households(BPRE, 2010).

Inadequate Provision ofIrrigation Infrastructure

As o 2009, the total area providedwith irrigation service is 1.54 millionhectares wherein 765,000 hectares areunder the National Irrigation Systems(NIS). Communal Irrigation Systems(CIS) cover around 558,000 hectares.

Te total service area represents 49

percent o the potential irrigable areao 3.126 million hectares. However,the pace o irrigation development inthe country has been estimated at lessthan 1 percent per year. While quick-gestating irrigation developmentactivities such as rehabilitation andimprovement o existing systems andacilities were envisioned to asttrackirrigation development, the sectorremains hampered by lack o unds tosustainably operate and maintain theseirrigation systems, inadequate technical

capacity o Irrigators Associations(IA) and the National IrrigationAuthority (NIA) eld personnel, as

well as inadequate water supply. Tesucceeding Chapter 5, InrastructureDevelopment, oers a detailedassessment o rural inrastructure,particularly irrigation bottlenecksand narrates strategic directions toovercome these bottlenecks.

Low Rate of Adoption ofTechnologies, IncludingMechanization

Despite the availability o science and

technology packages and productssuch as organic ertilizer, high-yielding

varieties, cost-reducing arming practices,and value-adding technologies, adoptionby armers has been slow because o:(a) weak links between technologyproducers and extension workers andarmers/sherolk; (b) lack o media andpublic awareness o the benets o thetechnologies; and (c) nancial or capacityconstraints o intended users.

Similarly, the use o mechanization inPhilippine agriculture has been low. Tecurrent mechanization level o the sector,

which is 1.68 horsepower (hp)/hectare, isar below other Asian countries such asKorea (4.11 hp/hectare) and China (3.88hp/hectare). Among rice and corn armers,only 21.7 percent have mechanized whilethe rest continue to use manual laborand arm animals in production activities(UPLB, 2009). Te inadequacy o atersalesservice, substandard machinery, and thesporadic, ragmented and disorganized

implementation o agricultural and sherymechanization have contributed to lowmechanization in the sector.

Limited Access to Formal Creditand Financing

From 2004-2009, the annual proportiono agrishery and orestry (AFF) loans tototal loans granted by banks was at a lowaverage o 2.5 percent. Te limited accessto credit by small armers and sherolk,despite the banking sectors reported large

amount o unds available or lending, hasbeen due to: (a) the lack o track recordamong armers; (b) lack o knowledgeon accessing ormal or bank nancing,particularly putting together the requireddocuments; (c) lack o acceptablecollateral; delayed release o loans; and(d) numerous documentary requirementsthat ormal lending institutions requirerom armers upon commencement o

Inefciencies along the

agricultural supply chain resultin postharvest losses, highertransaction and distributioncosts, and lower productivity.

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transactions. On the part o the banks,their aversion to high-risk and low-income agricultural projects, the high costo administering small loans, and poorrepayment perormance o agricultural

loans, among others, have constrainedthe provision o credit to armers andsherolk (ACPC, 2010).

Competing uses of agricultural lands.Agriculture, together with the naturalresource sector, has been adverselyaected by shits towards competinguses. Particularly sensitive or itsimplication or ood security is theconversion o prime agricultural landsto nonagricultural uses (i.e., residential,commercial and institutional) and therising demand or industrial crops (e.g.,biouel). Alternative land use activitieshave also encroached upon ecologicallyragile lands. Tese point to the needor a national land use policy that willrationalize the optimal allocation o landamong competing uses.

Households dependent onagriculture are especiallyvulnerable to climatevariability and extreme

events.Climate Change

Te Philippines has long been vulnerableto weather risks, a act exacerbated byclimate change. Since the 1980s, thegrowth in agricultural gross value-added(GVA) has been erratic partly owing tothe impact o severe weather risks andthe periodic occurrence o the El Nioand La Nia phenomena. Aside romtyphoons Ondoy and Pepeng, the El Nio

in 2010 caused damages to agricultureand shery estimated at PhP8.4 billionover a total area o 355,986 hectares.

Te DOS-PAGASA scenarios or 2020and 2050 project widespread warming inmost parts o the country. Longer hotdays and shorter cold days are expected.

Te number o days with maximumtemperature o more than 35 C is

expected to increase in all parts o thecountry in 2020 and 2050. Projectedseasonal mean temperatures in thePhilippines are expected to rise byabout 0.5-0.9 C or 2020 and 1.2- 2.0

C by 2050. Extreme rainall is alsoprojected to increase in Luzon andthe Visayas while a decreasing trendis projected in Mindanao (MDGF-1656, 2010).

Tese changes bring urther pressureson agricultural production, whichis already stressed by other resourcescarcities and economic challenges.Changing rainall patterns, risingtemperatures, increasing requency andintensity o typhoons and dry spells,and sea level rise are expected as a resulto climate change. Tese impacts willspell a dierence in terms o croppingcalendars, unpredictability o yields,pest pressures, crop losses, livestock andsheries production, and damages toexisting inrastructure. Sea level rise isalready being experienced in parts o thecountry, reducing the productive coastalareas or agriculture and sheries. Salt

water intrusion in the lowlands and inaquiers or irrigation and domestic uses

is also already being experienced.Environmental Degradation

O the countrys total land area, 5.2million hectares (about 17%) areseverely eroded and another 8.34million hectares (27.3%) are vulnerableto drought, alternating with oodsand typhoons on an annual basis.In the lowlands, continued use ounsustainable production practicessuch as the extensive use o chemical

inputs, expansion o grazing lands, slashand burn practices, and deorestationespecially in watershed areas haveresulted in land degradation (i.e., erosion,declining soil ertility) and problems o

water quality and availability. In theupland ecosystem, climatic drivers andhuman-induced activities have resultednot only in land degradation but also inthe loss o biodiversity (BSWM, 2004).

The Philippines has long beenvulnerable to weather risks,a fact exacerbated by climatechange. Since the 1980s, thegrowth in agricultural grossvalue-added (GVA) has beenerratic partly owing to theimpact of severe weather risksand the periodic occurrenceof the El Nio and La Niaphenomena. Aside fromtyphoons Ondoyand Pepeng,the El Nio in 2010 causeddamages to agriculture andshery estimated at PhP8.4billion over a total area of355,986 hectares.

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Agricultural developmentis also undermined byflawed policies andinstitutions.

Weak Agricultural ExtensionService

Devolution o agricultural supportservices and extension, beset bylack o LGUs absorptive capacities,has resulted in weak extensionservices. Te decentralization o theagricultural extension service waspursued on the premise that theconstraints to production and servicerequirements o armers and sherolk

would be best addressed through anLGU-led, NG-supported agricultureservice system. Te devolution,however, has been beleaguered withpoor absorptive capacities o LGUsto take on the task o extensionservice provision. With the social,inrastructure, and economic sectors,agriculture has been less prioritizedin the development agenda o manyLGUs. Hence, unding allocation isminimal and oten times dependenton the support o the DA. Tis has

resulted in inadequate manpowerand weak extension services olocal agriculture ofces, both atthe provincial and municipal levels(Balisacan, 2006).

Contradictory Rice Policy

Vested with the unction o stabilizingthe supply and prices o rice, thecountrys staple, the NFAs operationsaim to raise armgate prices to securearmers prot, and at the same time,

maintain retail prices at an aordablelevel or consumers. Governmentintervention on both sides o themarket has led to huge public losses,increased the volatility o domesticprices, reduced the welare o bothconsumers and producers, anddiscouraged the private sector rominvesting in distribution and storageacilities (Balisacan et al., 2006).

Te NFA support price has on averageled to an increase in consumer pricesin ten regions o the country andcontributed little to price stabilization(Purdue University, 2005). It is worth

noting that among NFA rice consumers,only 46.6 percent are considered poor. Inaddition, among all poor households whoare supposed to benet rom NFA rice,only 24 percent have been able to accessthem (Reyes et al., 2009).

Incomplete Implementation ofAsset Reforms

Te long period o implementation andpending completion o the CARP hasresulted in underinvestment in the sector,largely owing to the uncertainty aced bylandowners. Landowners are reluctant toinvest while their arms are undergoingacquisition processing. On the other hand,or lands that have been awarded, supportservices to the ARBs are insufcient toimprove productivity. Te implementationo asset reorms must thereore becompleted in the next ve years as providedin RA 9700, including the allocation andrelease o the PhP150 billion budget orthe program. Te ull implementation o

the CARPer will acilitate asset reormand serve as an incentive to armers andother stakeholders to invest in rural areas(Habito & Briones, 2005).

Limited Investments in PublicGoods

Public goods are important because theirbenets are shared by the community;they yield high social returns oninvestment and have long-term impacts,and they are not readily provided by the

private sector but important to societyas a whole. On the other hand, otherinterventions, such as subsidies onertilizer have benets limited to targetgroups, have impacts which are short-run,are costly to government, and do compete

with or crowd out the private sector. Tecurrent spending on agricultural researchand development (R&D), a public goodo demonstrated benets, is a mere 0.10

The current spending on

agricultural research anddevelopment, a public goodof demonstrated benets,is a mere 0.10 percent ofagriculture GVA. This isone-tenth of the 1.0 percentbenchmark suggested byinternational practice.

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percent o agriculture GVA. Tis is one-tenth o the 1.0 percent benchmarksuggested by international practice.In the case o rice (which is indicativeo the pattern or other products), the

contribution o R&D, inrastructure andextension to rice production is estimatedat 2.5 percent, 40 percent, and 15 percentrespectively, while returns on investmentsare: (a) 77.1 percent or R&D; (b) 80percent or extension; and (c) 18 percentor irrigation (Balisacan, 2006).

Public good provision must considerquality. Many inrastructure andpostharvest acilities deteriorate rapidly.Field reports document the poorquality o at bed dryers and rice strawchoppers or organic ertilizers. Gratand corruption eat up a large part o theoutlays.

In 2004-2010, unds allocated ormarketing assistance accounted oronly 1.1 percent o the average annualbudget o the DA. Tis is 7 percentlower than the prescribed allocationunder the AFMA o 1997. Te timelyaccess and dissemination o market andmarket-related inormation is critical to

making optimal business decisions thatin turn impact on revenue, consumerprices, and supply conditions. Likewise,the availability o real-time marketintelligence is useul in identiyingpotential markets as well as inormationon supply requirements.

Limited Investments onCommodities with ComparativeAdvantage

While public investment or the rice

sector has been substantial in the pastyears, amounting to almost 60 percent(PhP22.56 billion) o the 2009 AFMAund, the allocations or high value andexport commodities such as ruit trees,

vegetables, tree crops and sheries havebeen inadequate. Net returns rom

vegetable and ruit tree production arehigher than rom rice production by arange o PhP5,000-100,000 (BAS, 2009).

Te opportunity cost o underinvestingin other commodities is thereore

very high. Focusing on commoditieswhere we have comparative advantagewill not only result in increasing

income but also improving access toood, higher purchasing power, andenhanced overall welare o the ruralsector.

Incomplete Implementation ofthe Strategic Agriculture andFishery Development Zones(SAFDZs) and Preparation ofIntegrated Development Plans(IDPs)

Te identication o SAFDZs asprovided under AFMA has notbeen ully implemented (AFMAReview, 2007). Programs in thesector should also ocus on areas ohigh agriculture potential to avoidspreading investments too thinlyresulting in small impact in therural areas. Te SAFDZs will alsoacilitate prioritization o investmentprogramming in the sector. Teidentication o these areas shouldbe initiated by LGUs, with technical

support rom the DA and DENR toensure that priorities are consistentwith local development thrusts andstrategies, as well as aligned with thenational policies.

Delay in the Implementation ofRationalization Plans

Efcient and eective institutions andbureaucracy are essential to creating anenabling environment that encouragesprivate, LGU and oreign investments

in the economy. However, the countrysagricultural bureaucracy is continuouslybeset with problems related toovercentralization, ragmentationo agencies, weak coordination,overlapping o unctions, politicizationand corruption, making it ineectivein spurring growth and developmentor the sector (Habito and Briones,2005). At the national level, there is a

Food security exists whenall people, at all times, havephysical and economic accessto sufcient, safe and nutritiousfood that meets their dietaryneeds and food preferences foran active and healthy life.

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need to rationalize the DA to ocusits core unctions on public goods andservices, such as R&D extension, andregulation; and maintain its steeringrole in the development o the sector.

Strategic Framework

Vision

Te Plans vision is a competitive,sustainable and technology-basedagriculture and sheries sector, drivenby productive and progressive armersand sherolk, supported by efcient

value chains and well-integrated in thedomestic and international markets,contributing to inclusive growth andpoverty reduction.

Goals and Strategies

Within six years, through prudent useo resources, the agriculture and sheriessector shall have attained the ollowing:(a) improved ood security and increasedrural incomes; (b) increased sectorresilience to climate change risks; and(c) enhanced policy environment and

governance.Goal 1: Food Security Improvedand Incomes Increased

Tis Plan takes the view that oodsecurity exists when all people, at alltimes, have physical and economic accessto sufcient, sae and nutritious oodthat meets their dietary needs and oodpreerences or an active and healthy lie(FAO, 2002).

Tis goal will be urther eshed outwith the release o the Food StaplesSel-Sufciency Roadmap (FSSR)2011-2016. Te FSSR aims to attainsel-sufciency in staples by ocusing onirrigation and instituting reorms in theNFA.

For the sector to ulll its role in reducingrural poverty and to achieve ood securityin the long term, increased incomes,productivity and production shall beprioritized. Increased investments and

employment are to be ostered and ARBstransormed into protable entrepreneurs.

Strategy 1.1 Raise productivity5 andincomes o agriculture and shery-basedhouseholds and enterprises.

Raising productivity and incomes is animportant rst step towards modernizingthe sector. Productivity enhancements willmake agriculture and shery products morecompetitive, contributing to the growth othe other economic sectors. Chapter 3 onCompetitive Industry and Services Sectorsurther reinorces the important linkagebetween the agriculture and non-agriculturesector, especially in the promotion oagribusiness and exports. Te increasedincome o agriculture and shery-basedhouseholds and enterprises shall lead tothe improvement o the quality o livesand capital accumulation or investments.Below are the measures that shall be takento implement the above strategy:

a) Diversiy production: Facilitate and promote diversication

o production and livelihood options;

Update SAFDZs as bases oridentiying investment areas;

b) Complete the delineation o municipalwaters or better shery resourcemanagement;

c) Improve rural inrastructure and

acilities:

Establish climate-resilient agricultureinrastructure through enhancedtechnical design o irrigation anddrainage systems and acilities, arm-to-market roads (FMRs), postharvest

Raising productivity and

incomes is an important rststep towards modernizingthe sector. Productivityenhancements will makeagriculture and sheryproducts more competitive,contributing to the growth ofthe other economic sectors.

5Productivity reers to land, labor and capital.

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acilities (PHF), trading posts, amongothers;

Provide irrigation services andacilities ocusing on rehabilitation

and restoration o national irrigationsystems; maintain existing systems andestablishment o small scale irrigationsystems; enhance cost-sharing/counterpart mechanisms or nancing

with LGUs; and adopt an integratedwater resource management approachto ensure water supply;

Increase the eectiveness6 andefciency o the rural inrastructuresystem, including agriculturallogistics and various acilities suchas arm-to-market roads (FMR),postharvest and inormation systems(see also Chapter 5: InrastructureDevelopment); based on a masterplan, identiy priority FMR projectsthat strategically link production andconsumption areas; and

ap private sector participationin the construction o the neededsupport inrastructure or the sector;

d) Develop markets and sharpenregulatory competence:

Provide eective market assistance,marketing support and inormationsystems, product development,market intelligence, and encourageparticipation in product promotionactivities, both in the domestic andinternational markets;

Provide trade acilitation, includingprovision o trade and scal incentives

to encourage participation andinvestments rom the private sector.Tis will, likewise, entail reorms andlaw enorcement o agriculture tradepolicies, and strengthen market accessinitiatives and technical assistanceto SMEs and cooperatives, amongothers; and

Sharpen regulatory competencethrough technical and legaltraining, improvements inlaboratories and equipment,and alignment o domestic with

internationally accepted standards,including those or organic inputs,ood, and Halalcertication;

e) Strengthen Research, Developmentand Extension (RD&E):

Update databases and inormationsystems or the ormulation o areliable and responsive NationalRD&E agenda;

Increase investments in integratedRD&E programs that promoteproductivity enhancement,develop environment-riendly andefcient technologies throughoutthe value chain, in partnership

with selected higher educationinstitutions, LGUs, private andbusiness sector;

Harmonize all agricultural andsheries mechanization programsand projects o all concerned

national government agencies,LGUs, and higher educationinstitutions;

Rationalize and strengthen theextension system to improvecomplementation o national, localand private sector entities alongthe value chain in the provision oextension services;

Expand and sustain the sectorshuman resource base (see also

Chapter 8: Social Development);and

Encourage the participationo armers, sherolk and theirorganizations in research andpromotion activities;

6Eectiveness reers to cost eectiveness, applicability in the area or suitability with the needs o end-users.

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) Improve the sectors credit access:

Form stronger partnershipsbetween government and privatenancial institutions;

Strengthen the AFMA-mandated Agro-IndustryModernization Credit FinancingProgram (AMCFP);

Implement capacity buildingprograms to improve the credit-

worthiness o armers, sherolkand their organizations;

Promote long-term nancingor long-gestating crops such ascoconut, rubber, oil palm, coee,cacao and ruit trees similar toIndonesia, Malaysia and Tailand;

Develop and pilot test innovativenancing schemes that wouldtarget armer and sherolk whohave no collateral and credit trackrecord; and

Intensiy inormationdissemination o credit, guarantee

and insurance programs.g) Secure ood availability and

aordability:

Ensure the availability o oodstaples (rice, white corn, andother starchy ood) at reasonableprices at all times;

Focus on long-term productivity-enhancing measures oragriculture and sheries such as

irrigation, R&D and extensionservices instead o short-terminterventions (i.e., direct inputsubsidies);

Engage proactively with LGUsand the private sector toprovide strategic agriculturalinrastructure and services;

Optimize productivity in maricultureparks and broaden the aquaculturebase;

ransorm the NFA into an agency

ocused on addressing extreme shocksto ood supply and prices, whilemaintaining a predictable regulatoryenvironment or rice trade; and

Management o consumption anddiversication o staples.

Strategy 1.2 Increase investments andemployment across an ecient valuechain.

New investments are particularlyimportant since the sector employs alarge share o the labor orce and accountsor a majority o the poor population.Making the sector competitive andmodern, however, may render some

workers redundant, as in the case omechanization. For the released rural

workers to nd gainul employment inthe industry and services sector, capitalaccumulation must rise sufciently suchas in agroindustries and agriculturalservices (e.g., marketing and logistics).

In addition, complementary educationand training can make rural workersmore adaptable and exible. Expandingthe markets o agriculture and sheryproducts through value-adding andscaling-up o operations can also provideadditional employment opportunities.

a) Create job opportunities by expandingexisting markets, aggressivelyexploring new markets and promotingprivate investments on agroindustries,agriservices (i.e., custom-hiring),

agroorestry and sheries, in both PPPand private sector-led modes;

b) Localize agricultural promotionand development in accord withthe subsidiarity principle. Regionalstrategies must take precedence inchampioning local commodities andpromoting sector competitiveness;

New investments are

particularly important sincethe sector employs a largeshare of the labor force andaccounts for a majority of thepoor population.

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c) Promote more value-adding intoproducts and develop the capacitieso stakeholders or value-chainmanagement;

d) Promote vertical and horizontalintegration o input, production,and marketing (e.g., agroindustryclustering);

e) Strengthen the countrys agriculturalexports by ocusing resources on high-

value crops (ruits and vegetables,ornamentals, rubber, oil palm, coee,coconut, etc.) and shery products(e.g., grouper, seabass, seaweeds, etc.),

where comparative advantage is high;and

) Expand investments in aquacultureand other ood production areas.

Strategy 1.3 Transorm agrarianreorm beneciaries (ARBs) into viableentrepreneurs.

Te CARP intends to improve theliving conditions and wellbeing othe ARBs, liting them out o povertyand empowering them to improve

their socioeconomic uture. Awardedagricultural lands, the ARBs basicinput or their economic activities, mustthereore be harnessed or this purpose,taking into consideration ecologicalsustainability and gender equality/equity.It is important to strengthen ARBscapacities or agricultural productionand transorm them into entrepreneurscapable o improving the productivityo the awarded lands, adding substantial

value to their produce, engaging in o-arm endeavors, and improving their

access to the markets:

a) Achieve land tenure stability othe ARBs in the CARP-awardedlands, preerably through individualcerticates o land ownership award

(CLOA) or at least throughcollective CLOA;

b) Strengthen the organizationalcapacity o ARBs and ARB

organizations to develop andmanage agrienterprises;

c) Scale-up microenterprisesinto ormal and viable SMEsthrough the clustering o ARCsand establishing networks oenterprises;

d) Liberalize access to credit byARBs;7

e) Provide enterprise-based legalsupport or ARBs and ARBorganizations to strengthen theirstructures and mechanisms; and

) Establish physical inrastructure(FMR, irrigation systems andpostharvest acilities, amongothers) in strategic ARCs andclusters.

Goal 2. Sector Resilienceto Climate Change Risks

IncreasedTe resiliency o the countrysagriculture sector is threatened byclimate change and extreme weatherevents. Damage to rural inrastructureand losses to crops, livestock andshing grounds, water allocationand the competing priorities inthe use o water supply are a ewemerging problems that should bedealt expediently. Sound scienticadvice is needed regarding appropriate

crop varieties, cropping patterns,and climate-vulnerable structures,including irrigation systems.

7 In compliance with Section 14 o Republic Act 9700

It is important to strengthen

ARBs capacities foragricultural productionand transform them intoentrepreneurs capable ofimproving the productivity ofthe awarded lands, addingsubstantial value to theirproduce, engaging in off-farmendeavors, and improvingtheir access to the markets.

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Strategy 2.1 Reduce climatechange-related risks and thevulnerability o natural ecosystemsand biodiversity through ecosystem-based management approaches,

conservation eforts, and sustainableenvironment and natural resources-based economic endeavors such asagri-ecotourism.

a) Adopt Integrated Water ResourceManagement (IWRM) andSustainable Land Management(SLM) echnologies in thedevelopment o water, land, andrelated resources;

b) Promote environment-riendlyand sustainable productionsystems that use the armingsystems approach, employ goodagriculture/aquaculture practices,and promote organic agriculture,as embodied in RA10068 or theOrganic Agriculture Act o 2010;

c) Improve the climate changeresilience o sheries through therestoration o shing grounds,stocks and habitats and through

investment in sustainable andclimate change-responsive shingtechnologies and products; and

d) Strengthen sustainable,multisectoral and community-based resource managementmechanisms.

Strategy 2.2 Increase the resilienceo agriculture communities throughthe development o climate change-sensitive technologies, establishment

o climate-resilient agriculturalinrastructure and climate-responsive ood production systems,and provision o support services tothe most vulnerable communities.

a) Strengthen R&D or theimprovement o crop, livestockand shery varieties (i.e., resistant

to temperature increase, drought-tolerant, resistant to stresses such as

water logging and pests);

b) Promote viable and competitive crop,

livestock and shery varieties that cantolerate climate variability;

c) Establish climate-resilient agricultureinrastructure through enhancedtechnical design o irrigation acilities,FMR, PHF, etc. that take climaterisks and extreme climate events intoaccount; and

d) Strengthen agricultural extensionand support services to raise armersknowledge and capacity to adoptclimate-sensitive arming and shingtechnologies.

Strategy 2.3 Strengthen the agricultureand sheries insurance system as animportant risk sharing mechanism.

a) Improve risk-reducing mechanisms(i.e., guarantee, insurance) toencourage more banks and otherlending conduits such as cooperativesand NGOs to lend to agriculture and

sheries; andb) Introduce innovative risk-transer

mechanisms such as weather-based/index insurance systems.

Strategy 2.4 Incorporate naturalhazards and climate risk in theagricultural land use plan or theComprehensive Land Use Plan (CLUP)

a) Pursue the passage o a National LandUse Law as a basis or eective land

use policy and planning; and

b) Use land use planning at nationaland local levels to identiy hazardousareas and as a basis or implementingadaptation and mitigating measures inclimate risk- and disaster-prone areas.

The NCI is a multisectoral and

integrated planning approachadopted by the DA, DAR,and the DENR towards moreefcient use of resources.Through the NCI, the threerural development agenciesundertake joint planning,programming and budgetingas well as monitoring andevaluation in the achievementof the sectoral goals andtargets of the Plan.

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Strategy 2.5 Strengthen the capacity ocommunities to respond efectively toclimate risks and natural hazards.

a) Conduct IEC campaigns and capacity

building activities or the purpose atthe local level; and

b) Establish community-based earlywarning systems, agrometeorologystations, automatic weather stations(AWS) and climate eld schools.

Strategy 2.6 Continue vulnerabilityand adaptation assessments especially inood production areas.

a) Produce updated weather-baseddynamic cropping calendars to addressthe irregularity o wet and dry seasons,and develop optimal planting windowsbased on medium-range weatherorecasts; and

b) Undertake a study to assessgroundwater resources availability and

vulnerability to ensure ood securityduring period o drought.

Goal 3. Policy Environment and

Governance EnhancedAs a complement to the preceding goals,the policy environment and governanceshall be enhanced through: (a) the NCI;(b) the use o an eective commonmanagement strategy among agenciesconcerned; (c) budgetary reorms; (d)PPP; and (e) a review o laws and policyissuances.

Strategy 3.1 Rearm the mechanismsand objectives o the National

Convergence Initiative (NCI).

Te NCI is a multisectoral and integratedplanning approach adopted by the DA,DAR, and the DENR towards moreefcient use o resources. Trough theNCI, the three rural development agenciesundertake joint planning, programmingand budgeting as well as monitoring andevaluation in the achievement o the

sectoral goals and targets o the Plan.Te objectives o the NCI include:

a) Accelerating the completion o theCARPer up to 2014;

b) Rationalizing land use policiesand strengthen the system o landproperty rights;

c) Promoting sustainable agricultureand preserve the land resource base;

d) Enhancing the investment andopportunity climate or agribusiness;

e) Promoting sustainable uplanddevelopment and orest management;and

) Initiating CCA and mitigationmeasures.

Strategy 3.2 Adopt Managing orDevelopment Results (MDR) asa common approach among ruraldevelopment agencies.

MDR is a management strategy thatocuses on development perormance

and sustainable improvements inoutcomes, providing both rameworkand practical tools or strategic planning,risk management, progress monitoring,and outcome evaluation (OECD PolicyBrie, March 2009). By ocusing on clearand measurable results, governmentresources are translated into programsand projects that deliver developmentoutcomes.

Strategy 3.3. Implement budgetaryreorms.

Te current budget system or thesector is commodity- and production-oriented and is not geared to promotingcompetitiveness. Funding or keyunctional areas under the AFMA, suchas market and inormation services,regulatory unctions, research, etc.,is currently allocated to commodityprograms, which are centrally managed

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and lack the ability to prioritizestrategically across the entire sector.

A revised budget ormat shall correctthis shortcoming by introducing a

system based on priorities, unctionalresponsibilities and market needs,consistent with the AFMAs goals. Terevised ormat will also provide or agreater alignment between the planningand budget processes. Tis budgetaryreorm is also inherently linked with theMDR strategy.

Strategy 3.4 Pursue PPP especiallyor inrastructure and value chaindevelopment.

Te private sector will be tapped toparticipate in governments eorts indelivering immediately the neededinrastructure and services in theagricultural and sheries sectors. Amongthe projects that may be eligible underPPP include irrigation inrastructure,ood supply chain and postharvestservices (i.e., bulk handling acilities,ood/grains terminals and processing,storage, handling and port/transportacilities), production centers or various

arm inputs, sh arming inrastructure,and market and trading centers.

Strategy 3.5 Review critical legislation(i.e., AFMA, Fisheries Code) andpolicy issuances (i.e., sugar trade).

A review o laws and policies shallbe a continuing activity to ensure theresponsiveness o such issuances tocurrent developments in the sector. TeAFMA o 1997 and Fisheries Codeo 1998, mandates a mandatory review

every ve years. Corn and sugar tradepolicies will also be reviewed, to takeinto account the latest global trendsand market orces, and to ensure supplyadequacy supply, price stability, andaordability.

Legislative Agenda

Pursue the Passage of aNational Land Use Law

Te passage o the bill, pending or twodecades now, is expected to provide legal andother mechanisms not only or land reormareas, but also zoned areas or water and

water uses, especially or agriculture. Tis isespecially important in anticipation o theend o the agrarian reorm program andthe subsequent opening o the land market.Further, it is envisioned that the policy shallserve as guide to the optimum allocationo land among competing uses within theramework o sustainable development.It shall also provide a mechanism orresolving land use policy conicts takinginto consideration the principles o socialequity and economic efciency.

Institute Reforms in the NFA

Te NFA Reorganization Act will urtherrationalize grains-sector trading. Itrestructures the agency by separating itsregulatory and proprietary unctions. TeNFA shall grant import permits or rice

to all applicants as a ministerial unction,subject to the payment o applicable taxes,duties, and service ees. Te quantitativerestriction on rice must be reviewed inlight o the WO exemption that expiresin 2012. Te proposed law enables NFAto engage in activities consistent with itsrenewed mandate.

Rationalize DA, DAR and DENR

Te agriculture bureaucracy should berationalized through the efcient and

eective convergence and complementationo the agriculture, agrarian reorm andnatural resources (AARNR) serviceagencies and related ofces by takingmeasures to sort out institutional overlaps.

Te convergence eort will operationalizesustainable development by integratingthe social, economic, and environmentalaspects o rural development. Te proposedlegislation will rationalize and strengthen

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the provision o extension services towardsimproving national, local and private sectorcomplementation.

Work for the Accelerated

Irrigation ActUnder this law, the NIA shall undertake asix-year accelerated irrigation program toconstruct irrigation projects in the remainingunproductive but potentially irrigable landsnationwide to an extent to be determinedin a ull inventory o potential areas orirrigation, and o potential irrigation projectsin accordance with technical, economic, andenvironmental criteria.

Work for a Food Safety andFood Labelling Law

Tis measure puts in place a coordinatedood saety and certication system, clearlydening the unctions and mandates othe agencies concerned; establishing asystem or public laboratories to ensure thecredibility o test results; and strengtheningthe participation o ood supply industriesin the global ood trade, among others.Consumers right to inormation should alsobe protected through proper labelling o raw

materials and ingredients o processed oodproducts, including those sourced romgenetically-modied organisms.

phil dev plan (2011-2016)

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