Call centers are great but let's not forget the farms

It used to be that whenever events like a “national summit” to solve some pressing problems is held in the Metropolis, politicians and media organizations come in droves to participate in the gabfest. Last week, the Department of Agriculture held a national agriculture and fisheries extension policy summit in Makati supposedly to solicit inputs from experts for the proposed National Agriculture and Fisheries Extension Act of 2006. The event however came and went like mists in the morning. Media and politicians largely ignored it. Senator Ramon Magsaysay, the chair of the Senate Committee on Agriculture, was supposed to give pep talk to inspire the participants, but did not show up. He had more important things to do.

If there’s one thing that the supposed national summit proved, it’s the truth that agriculture and fisheries issues are no longer in the radar screens of most policy makers. It’s bad because about half the number of people in this country is still dependent directly or indirectly on the farm sector. The country is paying dearly for this neglect.

It appears that the “political market” for initiatives in the farm sector is no longer there. The reason for this is that the mass movement for rural development as well as agrarian reform seems to have dissipated. Do we still hear about the “peasant movement” and their supporters from the middle class? Nobody seems to care when peasant organizers were slaughtered at the Hacienda Luisita a few months back.

During the time of President Fidel V. Ramos, some economists and management experts from the academe thought that the Philippines could leap-frog the development process by focusing the energies on the services sector. Never mind the agricultural sector, they say. It’s too unpredictable. It’s subject to the tender mercies of weather. Bankers think its “un-bankable.” Focus on services: Filipinos are gracious, always smiling, speak good English, could do efficient pencil-pushing at very low rates, sing and dance well, flip hamburgers better, and do not mind working long hours down the hot and humid bowels of oil tankers and cargo ships. It’s our “competitive advantage,” they say.

Indeed, the country’s services sector has been growing exceptionally (6-7 percent growth rate in gross value added) in the last five years, driven particularly by the transport, communications, and storage; trade; and financial services. Never mind that the government, preoccupied with improving the country’s balance sheets and paying off foreign debts, has not been investing in health, social services and infrastructure. Lately, industry leaders from the Business Processing Association Philippines claimed the country is expected to generate at least US$2 billion, half of which came from call centers. They also say the industry now employs more than 140,000 workers and still counting. These trends, they say, tend to support the view for a services-oriented development strategy, especially so that dollar remittances from overseas Filipino workers tend also to buttress urban-oriented service enterprises.

Or so they thought until the National Economic and Development Authority (Neda) told us last week that the local economy grew only but 4.1 percent despite the double-digit growth of dollar remittances in the last ten months, the lowest since 2002. The reason for that, according to Neda, is that families of OFWs are saving their money. Personal expenditures are flat thus the overall level of economic activity has not improved. That’s probably true except that if one looks at the numbers, the real reason lies with the fact the farms were doing badly in the last four quarters.

Neda has been blaming bad weather but its not admitting another truth: that owing to the continuing fiscal problems, government has not been putting much money for the farm sector. And if they indeed spent huge sums for fertilizer, these expenditures may not have benefited the farmers but some bureaucrat’s bank accounts.

What we are saying is that call centers are great, that the vibrancy of the services is important to the economy. After all, the service sector accounts for 44 percent of the GDP. But let’s not forget the farms. That’s where many of the poor people are. They can’t work in call centers and medical transcription firms. Their “competitive advantage” is in the countryside. The truth is that the Philippine economy usually grows stronger in times when the farm sector was doing as well.

Where should we start? Policymakers should look at the results of that national extension summit. That gathering was intended to sharpen the country’s strategy to bring practical knowledge on how best to grow crops, raise animals, and do aquaculture. Next year, besides doing the usual politics, legislators would the nation a great service if they could pass the proposed national extension law. And provide funds for it. They should put money where the food is.

(Note: I wrote this editorial piece for the BusinessMirror, 7 December 2005).