1. Marites M. Tiongco De La Salle University Manila, Philippines

2. Profile of the agriculture sector Evolution of agricultural input policies, highlighting the seed and fertilizer policies Policies that facilitated the transformation of the Philippine agricultural sector 3. -10.00 -5.00 0.00 5.00 10.00 15.00 AnnualChange,Percent GDP Agriculture Industry Services 4. Employment by Industry Group Average 2009 2010 2011 2012 ALL INDUSTRIES 100% 100% 100% 100% AGRICULTUR E 34% 33% 33% 32% INDUSTRY 15% 15% 15% 15% SERVICES 51% 52% 52% 52% 5. 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2,000,000,000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Total Agriculture 6. High cost of production inputs; quantitative restrictions Inefficient supply chainshigh transaction and distribution costs; poor infrastructures and lack of transport facilities Weak agricultural extension servicelinks between technology producers and extension workers and farmers Financial or capacity constraints of intended users lack of credit facilities Inappropriate government regulationslack of incentives Climate change 7. 0 20 40 60 80 100 120 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Riceself-sufficiency(%) RiceProductionandconsumption(mt) Rice Production (mt) (paddy) Rice Consumption Self-sufficiency ratio Note: Self-sufficiency ratio=Production/Production + Exports-Imports*(100); ratios closer to or over 100.00 indicate the countrys capability to produce its own requirements and generate export earnings 8. Country 2005- 07 2006- 08 2007- 09 2008- 10 2009- 11 2010- 12 Brunei Darussalam < 5.0 < 5.0 < 5.0 < 5.0 < 5.0 < 5.0 Cambodia 34 32.5 32 31 29.3 27.1 Indonesia 24.6 23.2 21.7 19.7 17.8 15.8 LaoPeople's Democratic Republic 41.9 40.9 39.1 38.3 38 38.3 Malaysia 7.1 7 6.8 7.1 7.1 6.9 Myanmar 34.6 33.4 32.9 31.7 31 29.5 Philippines 25.5 23.5 22.5 22.7 23.4 23.8 Thailand 18.8 19 19.1 18.5 16.6 15.5 Timor Leste 37.9 39 38.6 37.7 42.1 46.1 Source: Food and Agriculture Organization (FAO) 9. Indicators Urban Rural Overall Households with sufficient food for the past 6 months (as % of total) 19.73 37.69 28.74 Cereal self-sufficiency (%) 4.40 14.42 9.32 Rice self-sufficiency (%) 4.84 14.57 9.67 Per capita food expenditure (%) 28.43 27.98 28.20 Share of nonstaples in food (%) 65.34 60.12 62.72 Share of animal products in food (%) 32.73 29.53 31.13 Per capita food expenditure (Php/mo) 3,688.07 2,274.55 2,979.02 Source: Analysis of data from the 2009 FIES. Note: Three indicators of food self-sufficiency using the FIES 2009 are shown: 1) home-produced food as share of all food consumed; 2) home-produced cereals as a share of all cereals consumed; and 3) home-produced rice as a share of all rice consumed 10. Government efforts during this regime include imposing tariffs on manufactured goods, overvaluation of the currency, export taxes on agricultural commodities, and price controls, which had a deleterious effect on the agricultural sector, making the sector relatively unprofitable. It was during this time when the Philippines briefly achieved self-sufficiency in rice and became one of the rice exporters in Asia (Rosset, Collins & Lapp, 2000). High adoption rate of MVs of rice Increased Productivity and Profitability of farmers Brought by the introduction of the green revolution technology (Increased use of fertilizers & pesticides, Improved irrigation systems, adoption of MVs, associated management skills) But Large farmers were the main beneficiaries. 11. This regime is characterized with a growth in participation of the private sector, reduced public sector roles, market interventions, and protection of local industries from imports through tariff or non-tariff policy such as the tax exemption for fertilizer import. The Agricultural and Fisheries Modernization Act (Republic Act 8435) Objectives: Food security; Poverty alleviation and social equity; Income enhancement and profitability, especially for farmers and fisherfolk; Global competitiveness; Sustainability Strengths: Amended to further strengthen the expected impact; amendment included exemptions for enterprises engaged in agriculture from paying tariffs and import duties on importations of all types of agriculture and fisheries inputs until 2015; Fertilizer imports as well as hybrid seeds by direct users were granted total tax exemption Weaknesses: Hybrid rice technology is 'quite new' to farmers and 'difficult' to follow; Rice is susceptible to pests and diseases, has high cost of production and is prone to seasonal variations in yield 12. FIELDS Program Objectives: Beef up rice production; Attain self- sufficiency in rice by 2013 Strengths: Provision of subsidized fertilizer; Specified budget for roads, irrigation facilities, labor and research development, agriculturual credit, and post-harvest facilities; Seed subsidy and stock procurement of fresh harvest Weaknesses: Use of certified rice seeds and hybrid seeds over good seeds 13. Food security policy thru the Food Staples Sufficiency Program (FSSP) Objectives: Self-sufficiency; Food security; Raising rural incomes; Improve farm productivity; Enhance economic incentives; Enable mechanisms; Manage food staple consumption Strengths: Provision of adequate economic incentives and access to credit and crop insurance; Guaranteed reasonable returns for farmers; Less government intervention on retail prices Weaknesses: NFAs role will be reduced to rice distribution and importation; Focus on buffer stocking and domestic procurement 14. Green Revolution (1960s-1980s): Fertilizer manufacturing was subsidized; Increased use of fertilizers due to adoption f modern rice varieties and expansion of other crops: (including sugarcane) Growing fertilizer demand was mostly met by increasing domestic production supported by incentives and price policies Fertilizer Industry Authority was established in 1972 to regulate prices, imports, production, and marketing, quality and safety of agricultural chemicals Two-tier pricing of fertilizer, with producers able to access fertilizer at a lower administered price Government subsidy (thru Masagana 99) in the form of distribution of discounted fertilizers to rice producers and sugar planters coops Two-tier policy was abolished but price-targeting policy remained, i.e., control imports thru QRs allocated to domestic producers and authorized importers; producers of fertilizer were exempted from control sand import duties of raw materials. Government paid cash subsidies to losses of local fertilizer producer incurred from administered pricing Tax exemption for the importation of all kinds of fertilizers but later limited to imports of capital equipment 15. Liberalization (1990s to 2000s): Deregulation of fertilizer trade (cheaper fertilizer) Discontinuance of the issuance of FPA Import Permit for fertilizer importations and FPA focused on developmental support and maintaining product quality and standards Tariffs reduced (1%-3% if from ASEAN country 0%; superphospahtes at 7%) AFMA allowed tax-free importation of fertilizers by agricultural enterprises No more subsidies, but sale and importation of fertilizers are exempted from the 12% value added tax Removal of procurement control (i.e. determination of import requirements, conduct of bidding and allocation of import volume); Scrapping of the price-setting function of the government; . Post Global Food Price Crisis (2008-present): Improvement of organic fertilizer production; Maximize and develop what is currently available and affordable for the local farmers; Subsidized Fertilizer with budget of 0.5 Million pesos 16. Green Revolution (1960s-1980s): Direct Subsidy on seeds; Free Distribution of MV Inbred Seeds; Liberalization (1990s to 2000s): Granted total tax exemption on Hybrid seeds by direct users; Adoption of Hybrid Rice Seeds; Provide incentives to hybrid seed producers Additional subsidies for other farm inputs; Government buys at guaranteed price; Government sells hybrid seeds at half the price during purchase, with the remainder to be paid after harvest Post Global Food Price Crisis (2008-present): Removal of direct subsidy on seeds; Promotion of use of certified rice seeds and hybrid seeds over good seeds; Seed subsidy through community seed banks; 17. Agricultural input policies of the Philippines are geared to achieving high agricultural productivity, food staples sufficiency and food security, and sustainability Open trading system; greater dependence on market Tariff exemptions for a wide range of imported items generally used as production inputs; lowest applied tariffs on some goods High sugar protection prevented the inflow of lower priced sugar imports, and resulted in high domestic sugar prices. Reduction in sugar tariffs in the Philippines and in the rest of the ASEAN may potentially increase the flow of sugar trade within the region (Cororaton, 2013) because some countries are net sugar exporters (Thailand) while others are net importers (Indonesia) 18. The government has developed a policy environment that strongly supports private sector participation Economic structural adjustments geared toward opening the economy to competition and leveling the playing field of enterprise. A clear policy and institutional framework to permit tangential flow of private resources into the governments development programesp. for the infrastructure sector Examples: improvement of existing postharvest processing and trading centers; establishment of a cold chain system; multipurpose reservoir dam 19. 1. Increase (and sustained) investment in agriculture , esp. R&D, infrastructures, and smallholder productivity resource-efficient technologies, such as integrated soil fertility management using a combination of fertilizer and manure/compost; low-cost irrigation Public-Private Partnership infrastructure initiative Capacity building: education, training and extension 2. Improve access to inputs such as fertilizer and seedsseed and fertilizer prices must be low enough for the farmers to afford and for the distributers to offset their costs and 20. 1. Overcome institutional constraints Land titling and use; safeguard rights of farmers Access to credita new paradigm of community banking (with private actors) Effective regulations or control mechanisms on input and output markets: privatization of SOEs