Agri sector lacks investment

Economists based at Philippine Rice Research Institute (PhilRice) found in their studies that low investment in research and development (R&D) slows down agricultural productivity.

In a volume of the 12-monograph series in Productivity Growth in Philippine Agriculture authored by Flordeliza Bordey and Sergio Francisco of PhilRice Socioeconomics Division, they stated that the country’s ability to feed an increasing population or total factor productivity is declining.

Reports from the budget division of the Department of Agriculture showed that R&D had a 0.08 percent-share of public spending compared to infrastructures, regulatory services, and production support in 2001. This less than a percent-share declined to half in 2002 and 2003. It increased to 0.06 percent in 2004 and 0.05 percent in 2005.

Published late last year, the book showed that the country has low public investment in R&D compared with Indonesia, Malaysia, India, and China.

In 2002, Indonesia spent USD 177M; USD 424, Malaysia; USD 1,355M, India; USD 2,574 M, China; while the Philippines only spent USD 141M.

“The conclusions from the studies imply that the decline in productivity growth is caused by the inability of the country to allocate its resources efficiently, and to policies that intervened in the process of resource allocation,” the authors said.

With their findings, they concluded that R&D investments in agriculture in general have not received priority attention from the government.

“The continued under investment would have a negative implication on productivity. This needs to be addressed to realize the high benefits from agricultural R&D,” the authors said.

In the case of rice, the economists found that among public investments in R&D, extension, production subsidy and irrigation, only R&D generated cost savings or was able to spend less money than the expected cost. Despite spending less, R&D activities had improved agricultural productivity through researches and technologies.

The monograph series was supported by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture, the Bureau of Agricultural Research, and PhilRice. (PhilRice)