MANILA, Philippines 鈥� Many factors such as tariff rates and high taxes hinder the private sector from investing in the agricultural sector, thus contributing to low farm productivity, an economic expert said.
鈥淭he limited private sector investment in Philippine agriculture, which is evident in the small percentage of establishments 鈥� only one percent engaged in the sector 鈥� contributes to consistently low farm productivity,鈥� Foundation for Economic Freedom Fellow Dr. Fermin Adriano said.
He made the statement in a forum organized by think tank group Stratbase ADR Institute on October 16 named 鈥淐ultivating Investments in the Philippine Agro-Industrial Manufacturing for Food Security.鈥�
Adriano added that high tariff rates in the country of farming commodities such as animal feed contributed to the limited private investment in agriculture.
鈥淔or those who need imported materials as raw materials, they complain about the high tariff rates of certain commodities. For example, if you鈥檙e involved in animal feed milling, the tariff rate is about 35 percent lowest and it can go as high as 40 percent or above compared to Vietnam which is only about two percent,鈥� Adriano said.
鈥淲ithout heavy private sector investment, our agriculture sector will not develop because the resources in the hands of the government are limited. The bulk of resources in this country are in the hands of the private sector. If they are not going to actively participate, I don鈥檛 see a future in the agriculture industry,鈥� he added.
Meanwhile, Stratbase Group Chief Operating Officer Rupert Manhit said through encouraging agricultural investments, the quality of agricultural commodities will rise, thus strengthening the country鈥檚 supply chain.
鈥淟arge-scale corporate farming and other agricultural investments should also be encouraged to increase production and improve the quality of agricultural commodities used as raw materials for animal and human food manufacturing, which, in turn, will strengthen the country鈥檚 overall agricultural supply chain,鈥� Manhit said.
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