Effects of agricultural liberalization on farmers Multiple liberalization

Effects of agricultural liberalization on farmers

Multiple liberalization policies ► IFI Sructural adjustment prescriptions § For Philippines first SAP in 1980 ► WTO Ao. A ► AFTA

Philippines response ► Social safety nets ► Modernization – Agriculture and Fisheries Modernization Act § Reduction of cereals production § Promotion of HVC § Agribusiness – farmer-peasant nexus ► Problems § Framework on agricultural development § Resources and government capacity

Philippines agriculture performance under trade liberalization Philippine Agricultural Production (1990 -2003) Volume in million metric tons; growth rates in percent Year Volume Growth. Rate 1990 61. 57 1991 64. 11 4. 13 1991 1992 63. 84 0. 42 1993 65. 77 3. 02 1993 1994 68. 53 4. 20 1994 1995 62. 16 -9. 28 1995 1996 69. 13 11. 20 1996 1997 68. 30 -1. 20 1997 1998 57. 93 -15. 18 1999 65. 76 13. 51 1999 2000 68. 11 3. 58 2000 2001 68. 00 -0. 17 2001 2002 67. 02 -1. 43 2002 2003 71. 61 6. 85 2003

Agricultural Production Per Capita, 1990 -2003 ('000 metric tons)

Balance of Agricultural Trade (FOB Value in million US dollars)

Agricultural Employment (1990 -2003)

Assumed Implications on agricultural sector ► Import surges and dumping ► Price competition ► Pressure on farmgate prices ► Restructuring in agricultural production ► Restructuring in control over land

ACTUAL EFFECTS – Different levels of development - not just between countries - but also among crop and agricultural sectors

Different levels of agricultural development in Philippines ► Subsistence and commercial food production by small farmers ► Traditional export crops ► Modern corporate agribusiness

Subsistence and commercial food production by small farmers ► Subsistence food production § Cereals and tropical vegetables ► Small scale commercial domestic food production § Small scale, relatively low input commercialcrops such as vegetables, poultry and livestock ► Negative effects of dumping and import surges of cheap imports ► Cumulative effects of cheap imports on farmgate prices without reducing production costs

Subsistence and commercial food production by small farmers ► Farmer bankruptcies further complicated by resulting increasing tenurial issues and merchant dominance, further reducing profitability for small farmers ► Restructuring through crop conversion combined with contract growing, plantation leases and corporative schemes lead to peasant and farm worker economic and even physical displacement

Traditional Commercial crop production ► Traditional export crop § Predominantly produced in small farms § Relatively low input export crop production such as sugar, coconut oil, hemp ► Economic failure due to uncompetitive-ness in international markets and even in domestic market ► Bankruptcies for small farmers and inefficient mills, displacement of farm workers ►

Expansion of TNC agribusiness ► Modernization program and thrust for efficiency and competitiveness essentially favorable for TNCs without resorting to high government intervention in technology, capital, trading ► Increase or re-concentration of land to TNCcomprador/landlord concerns through various schemes