BOOSTING agriculture and manufacturing could generate more employment and help achieve inclusive growth in the country, according to an economist.
Addressing the attendees of the Mandaue Business Summit on Wednesday, Aug. 14, 2024, economist and former Socioeconomic Planning Secretary Cielito Habito stressed that strategic investments in agriculture and manufacturing are crucial for the country to achieve sustainable growth, even in the face of economic challenges.
Habito said that these sectors are vital not only for job creation but also for driving inclusive growth.
“What we need to do is look at more agri-based manufacturing because there’s so much potential. The problem really is lack of investments and interest to invest in agri-based industries,” he said.
Habito cited as an example the raw materials, like crops going to waste because they can’t be sold likely due to a lack of demand, poor market access, or insufficient infrastructure.
“The additional market they (industry) need is the processors who will turn them into more valuable products that can, in turn, be exported. So just looking at the marriage of agriculture and manufacturing, there’s a great deal of potential we can still tap there,” he added.
After experiencing growth during the Covid-19 pandemic, the agriculture sector has reverted to being a laggard, hindering the country’s overall growth. The sector’s declining performance is evident in the loss of hundreds of thousands of jobs.
In the recent second-quarter performance, the agriculture sector experienced a year-on-year decline of 2.3 percent, with the sector adversely affected by the El Niño phenomenon.
Agriculture and forestry shed 916,000 jobs in June, according to the Philippine Statistics Authority.
“Agriculture really requires a lot of attention, and I hope investors and the big conglomerates in our country look at agriculture and agri-business,” the economist said.
He said that what stops them from investing is the land fragmentation and landholding restrictions.
Habito said one of his suggestions to the government is to leave land ownership ceilings for agribusiness investors.
“Nobody else but the agribusiness investors, you can have as much as 100 hectares or more, if that is what you need to have the confidence to invest in agriculture processing or agri-based businesses,” he said.
Habito, who is also the chairman and founding partner of consultancy think tank Brain Trust Inc., calls the agriculture sector the “backbone of the Philippine economy.”
“When agriculture does well, another segment of our population geographically benefits from that growth. And that’s why, if we really want inclusive growth, as everybody likes to say nowadays, a growth that includes everybody. Agriculture is the way to push for more inclusive growth,” he said.
Moreover, the economist also called for the integration of artificial intelligence in boosting the agriculture sector. Leveraging AI technologies could enhance productivity, reduce inefficiencies and modernize farming practices
“Our government should not be only looking at increasing production per se, at no matter what cost, but producing as much for the least by making our farms much more efficient and productive. And this is where all the AI that we’ve been hearing about should come in now. And indeed, there are a lot of applications for AI blockchain, even in agribusiness, that are making it much more exciting, especially for our young people,” he said.
Farm financing should also be made accessible to make agriculture and agri-entrepreneurship appealing to the younger generation. The country, he added, should also be more open to trade and ease restrictions on foreign companies that want to invest in the sector.
This year’s Mandaue Business Summit is anchored on the theme “Future Unleashed: Seize the Chance.” / KOC