Effects of agricultural liberalization on farmers

Multiple liberalization policies ► IFI Sructural adjustment prescriptions  For Philippines first SAP in 1980 ► WTO AoA ► 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 ( ) Philippine Agricultural Production ( ) Volume in million metric tons; growth rates in percent Volume in million metric tons; growth rates in percent YearVolumeGrowthRate YearVolumeGrowthRate Average Average

Agricultural Production Per Capita, ('000 metric tons)

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

Agricultural Employment ( )

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 TNC- comprador/landlord concerns through various schemes