IBON Foundation — April 27, 2010 — The last three decades have seen ever greater attacks on the livelihoods and welfare of Filipino peasants. Neoliberal policies of ‘free market’ globalization have been implemented amid long-standing problems of landlessness and monopolies on rural resources, credit and power – agricultural trade liberalization, state neglect of small rural producers, and promoting the interests of foreign and domestic agri-business.
These have resulted in severe economic displacement, crop and land use conversions, deepening rural poverty, diminishing food self-sufficiency and the agricultural sector failing to generate jobs, raise countryside incomes and act as a foundation for economic development. Elites in corporate agriculture have meanwhile continued to profit at the expense of the sector’s direct producers. The return of sharply rising global food prices this year only further underscores the dangers for the people, economy and the country if the liberalization-induced agricultural decline is not arrested.
The Philippines – including its agricultural sector – has been progressively liberalizing since the 1980s ostensibly to improve the efficiency, productivity and incomes of domestic producers. The first phase of the Tariff Reform Program (TRP) started in the early 1980s, followed by the second phase in 1991 and the third phase in 1995. When the country acceded to the World Trade Organization (WTO) in 1994, quantitative restrictions even on sensitive agricultural products (except rice) were replaced by nominal tariffs which were themselves systematically lowered. In 1996 a tariff quota system for sensitive agricultural products was instituted including Minimum Access Volume (MAV) provisions.
Nominal agricultural tariff rates have consequently fallen from an average of 23.6% in the period 1990-1994 to some 14.4% since 2005. By 2007, the Philippines trade-weighted agricultural tariffs were among the lowest in Asia and lower than those in Thailand, Malaysia, Vietnam, India and even Japan.
The share of agriculture in the economy has fallen from an average of 21.6% of gross domestic product (GDP) in the period 1991-1995 to just 13.9% in 2010. Over the same period, the share of direct agricultural jobs in total employment has also steeply fallen from 44.9% to 33.2% in 2010 (although considering the whole of the agricultural value chain would increase the share of agricultural jobs to well over 50%).
There have been major shifts in agricultural employment in the country since the mid-1990s. While jobs in the sector increased slightly by 398,000 from 11.65 million in 1996 to 12.04 million in 2009, five predominantly rural regions in the country saw agricultural employment fall: the Davao region saw a 263,000 fall in jobs, Bicol a 145,000 drop, Eastern Visayas a 127,000 drop, Western Visayas a 99,000 drop, and Caraga a 76,000 drop (while NCR saw a 15,000 drop). Per capita rural incomes have been falling since 2000 and rural poverty now accounts for three-fourths of the poor in the country.
Nominal wages of Filipino farm workers supposedly increased from PhP131 in 1999 to PhP193 in 2009. However the continuous increase in the price of goods and services has drastically eroded the value of this and the real wage of all farm workers in the country (measured in 2000 pesos) has actually fallen steeply from the peak of PhP136 in 1999. This fell to PhP124 in 2001 and then further to PhP121 in 2009; in the Cordillera Autonomous Region (CAR), for instance, the real agricultural wage in 2009 was down 14% from a decade ago. In contrast, agriculture, fishery and forestry corporations in the Top 1,000 saw their net incomes increase more than three times from PhP674 million in 2001 to PhP2.3 billion in 2009.
The share of the national budget going to agriculture has fallen from 6.2% in the decade 1990-1999 to 5.4% in 2000-2009, falling further to just 4.9% in 2011. The PhP79.9 billion budgeted for the sector in 2011 is just slightly more than the PhP77.5 billion allotted for defense, and not even a tenth of the total PhP823.3 billion to be spent on debt service (interest and principal). Small Filipino farmers have been denied trade protection, subsidies, extension services and price supports. Among others this for instance explains why irrigated land as a percentage of arable land has fallen from 15.3% in 1988 to 14.5% in 2008. The poor government support for the sector explains declining land productivity with declining yields in rice, corn, sugarcane and coconut.
The country’s self-sufficiency in key food commodities has been undermined particularly since the early 1990s by agricultural liberalization and state neglect. Import dependency on rice has increased from an average of 2.4% in the period 1990-1994 to 15.5% in 2005-2009, corn from 1.3% to 2.6%, pork from 0.1% to 3.5%, dressed chicken from self-sufficiency to 5.2%, beef from 11.4% to 18.3%, onion from 0.1% to 25.4%, coffee from self-sufficiency to 27.5%, carabeef from 2.7% to 38.7%, mongo from 35.5% to 54.2%, and on garlic from 1.9% to a massive 80.3%. Domestic food production per capita has consequently fallen to even lower than in the early 1970s. Palay production for instance has fallen for two straight years now from 16.8 million metric tons in 2008 down to 16.3 million in 2009 and then further to 15.8 million in 2010. Among basic commodities the highest average increase in prices have been in the case of rice and corn – greatly contributing to the declining purchasing power especially of the country’s poor.
The rush of imports – especially of rice which now takes up over a third of all agricultural imports – has driven soaring agricultural trade deficits. Largely trade surpluses before 1994 turned into a US$287.4 million deficit in 1994 which continuously increased to reach US$3.2 billion in 2010 (down from a recent rice-import-driven peak of US$3.8 billion in 2008). The biggest agricultural product deficits were in cereals, dairy products, meat, and coffee, tea, cocoa and spices.
The WTO talks have been at a standstill for many years now. The global crisis since 2008 has prompted many advanced and backward countries alike to either reserve the right to more actively protect their economies or to already do so, including but not only in their agricultural sectors. Yet the desire of the big capitalist powers to enter, dominate and capture markets for their agricultural exports is undiminished.
The multilateral WTO talks are still nominally progressing but the big powers are apparently choosing to use bilateral and regional trade agreements, with which they can more fully exercise their clout to extract one-sided deals, to further liberalize farming sectors. They out to take down not just tariff walls but also other non-tariff barriers like health and environmental standards. They also still seek to strengthen the control of agribusiness corporations over seeds, biotechnologies and intellectual property, and to facilitate foreign investment in domestic food production and land. The European Union (EU) for instance has renewed its efforts to enter into a free trade agreement (FTA) with the Philippines and, if possible, with other Southeast Asian countries or even ASEAN as a whole.
The big powers are also opportunistic in using the global food crisis to make further inroads into domestic food sectors of underdeveloped countries. The G20 for instance directed the World Bank (WB) to create a US$1.0 billion Global Agriculture and Food Security Program (GAFSP) in April 2011 to provide financing for market-based agricultural activities. This is on top of WB agricultural programs steadily increasing in size since 2000 and already worth US$4.1 billion in 2010.
Philippine agriculture and Filipino peasants have suffered brutal so-called market forces due to agricultural liberalization. As it is, millions of small peasant farmers and their families are mired in poverty, landlessness, and rural backwardness and drive them to wage vital agrarian struggles. The most important are those against traditional landed and other rural elites in wide areas of the countryside – against the flawed Comprehensive Agrarian Reform Program (CARP) and CARP extension with reforms (CARPer), for the distribution of the 6,453 hectare Hacienda Luisita, some 5,000 hectares in Negros Occidental (claimed by Eduardo Cojuangco) 5,000 hectares in Batangas (Sobrepeñas and Sy families), 430 hectares in Leyte (Vicente Veloso), 400 hectares in Laguna (Yulo family and real estate developers), 348 hectares in Bulacan (Luis Villaferte), 311 hectares in Bulacan (Gregorio Araneta, III), 208 hectares in Pampanga (Pineda family), and 11 hectares in Pangasinan (Humberto Solis). Organized farmworkers in Bukidnon are also campaigning against high land rent and usury, as well as for higher farm wages, and farmgate prices.
Organizations under the national peasant federation Kilusang Magbubukid ng Pilipinas (KMP) are undertaking bungkalan (cultivation) campaigns – affirming the political nature of the agrarian struggle and the centrality of organized peasant action, aside from giving concrete economic benefits for farmers and their communities. These bungkalan efforts among others already covers 2,000 hectares of rice farms and hundreds more hectares planted to fruits and vegetables in Hacienda Luisita in Tarlac, and 1,381 hectares also planted to rice, fruits and vegetables in Negros island by former sugarworkers.
These frontlines of agrarian struggle are the surest political foundation of campaigns against agricultural liberalization. They are also among the most vital building blocks to wider social change – and the strongest basis for challenging the foreign domination and elite rule by a few families and powerful economic interests that have kept Filipinos in wretched conditions for so long.###