lSsN

0l15.8007

IBON
Fqcts
&FiEure
v o l . 2 4 . N O S . 2 3& 2 4 1 5 & 3 1 D E C E M B E2RO O I

TheProspedsof
Food
Philippine Security
Under theWTO
O t hasbeentoutedthat tiberaLization non-tradeissues.Daysbeforethe WTO
! of agricutturewoutdfostereconomic countriespresentat the Wor(d
lv{inisterial,
I growthanderadicategtobathunger. FoodSummitin '1996witl reassembte in
Butsix yearsafter the inc€ptionof the Rometo take stockof the progress madein
Agreement on Agriculture(AoA)undertie reducinghungerin the pastfive years.
World Trade Organization (WIO),peasants, Forits part, the Phitippines
hasfaithfutty
advocates, civiI societyorganizations,andeven fotlowedthe prescriptions on ag.icuttural
ThjrdWorld governments are raisingthe vitaL tiberatization.Thisissuetook5into the impactof
question:Canthe problemof foodsecurityin gLobatization poticieson the country'sfood
deveLoping countriesbe pursuedin the context secunry.
of a "gtobatized agricutture"?
In November 2001,two internationaL
events witl convene world teadersto
openup new roundsof negotiations
relatedto agrjculture.TheWToshall
hotdits i inisterialConference in
Doha,Qataron 9-13November to
djscuss the expansion andrefinement
of theAoAfor furthertrade
liberatization,amongothernewand
 AHungry
Country
Foodis themostbasic
necessityto nourish
oneselfandto perforn
productivefunctions
for survival.Thus,a
siatethat is sincerein
fighting hunger due to pov€rty must
addressthe problemof scarce,coslly,
unstableandunsafefood supply.
By responding to the food problem,
govemmentalsomeels,astheworid Ba,rt
notes,"the basicrequirementof social
ha|mony,economicgrowth, and by
extension, politicalstability."Thisis why
food securiryfinds prominencein every
gov€rnmentagenda,particularlyin the increases, warsor seasonal unemployment, Is FoodAYailable?
Philippinesx herepovertyis prevalen! and leavepeoplewlnerable.Laslly,available
hungeris its mostextrememanifestation. loodmustbesensitive to culturesbecause Accordingto the FoodandNutrition
Ill certainfoods,food combinations or ResearchInstitute (FNRI), an averag€
handlingnethodscan be preemptedby Filipinoneeds2,036kilocalories and51.5
food Security grams of protein to
perform production
Foodsecurity,asdefinedby theWorld activiti€s per day or
Food Sunmit in 1996,is a siruationin a recommended
which:I ) foodis availableal all times;2) dietaryallowance
all peoplehaveaccess to food;3) foodis (RDA) consistins of
in adequatesupplyandofsufiicient quality 773 garns ol
and variety;and 4) food is considered vegetable originand
6cceptable by specificcultures. Basedon 258gramsofanimal
this definition,the FoodandAgricultwe origin.(SeeTable1)
OrganiarionoftheUniredNations (FAO) Isl
has sei four crucial faclors in achieving In 1999, the
food securjty.These are availability, country's Food
accessibility,stability,and cultural Balance Sheet
acceptabilityoffood supply.I2l (FBS),thebalance of
Availability neans tbat a socieg'has foodrequirementsto
enoughfood to ensurethat eachpelson's religiousor culruraltaboos.[21 actualfoodsupply,showeda 105.6%food
daily energyandnutrientneedscanbemet. Food securityin any societymay be sufiiciency- Thismeantthatthecountry's
Evenwith adequalesupplies,however, realizedby the€fiiciencyofthe society\ food supplywas ampleenoughto sustain
food securityis not met when people foodsysten.Afood systern isthechainof theRDA.(SeeTabl€2) Ontheorherband,
cannotaffordto buyor produce/growiheir foodproductionandpost-harvest (or catch) supplyoverconsumption ratiosfor eners/,.
own food. Accessibility,therefore,means such as storage, processing and protein and fats, on fhe average,were
that socieryhasequitableincone growth distribution. Accordingto FAO,th€ food estimated at 130.7,I 31 andI 32.5percent,
thalallowspeopleto acquirefoodneeds. systemshouldhave the capacityto resp€ctively,from 1997 to 1999.(See
Food suppliesshouldalso be stable produce, storeandimportsufficientfood. Ttble 3) This meantmorethan enough
becauseseverefluctuationsin food Il musthavemaximurnautonomyandself- foodsupplypercapitaconsumption.
availabilityor accessibilitycausedby determjnation.lt must be reljable, However,alftoughihetotalavailable
factorssuchasdrought,flood, sharpprice sustainable andequitable. [21 percapitafoodsupplyexceededthe RDA

IBON Facts & Fi9ures

in 1999asshownin Table2, supplyfrom
foodgroupsofanimaloriginsuchasmeat,
frsh,milk andeggswas22% shortofthe
RDA. Foodsupplytromthevegetables and
ftuits food group was 33% shortof the
RDA while that of cerealsand cereal
productswas 22.9 gramslessthan the Food Groups 1,031.0 1,088 105.6
RDA. Cerealsand cerealproductsplus
vegeiables3ndfruits makeup 6 I % of the L VeserobleOnsin 773 888 I 14.9
Filipiro'sdiei. Ceredls/Products 334 333 99_6
In 1999,toial domesticsupplyof StorchyRoots&Tube6 73 52 71.4
cerealsand cerealproductswas l8% S0gor ond Syr0ps 24 189.8
imported and24%for non-foodutilizatlon. 17 3l 182.8
This translated to a localproductionthat Vegetoblesond Fruils 297 200 67.5
Fots,Oilsdnd Others 2A 226 808.3
was34%shonofthe RDA. In padicular,
rice was 12% imported.Total domesiic It Animol Orisin 254 200 77.5
supply of meat was 5% i.nported.In Meot ood Fish P.oducts 151 183 121.2
partieular,beefwas22% imporled.Fislron Mlk ond Milk Producls 82 8 9.4
the orherhand was 3% imported,4% for 9 37.5
export.and 6% for non-foodulilization.

Is FoodAccessible?

Theminimumwagefor theNational lnstead,govemmeni reducedthe levelof whicbncansthateachFilipinoneedsonly

CapitalRegion is P250,a sumthatcolers
only 48.5% of tbe daily cost of living
(DCOL), which IBON estimatesat
P515.24 as of Septenber 2001.In other
words,a breadwinner who earnsihe
minirnumofP6,500a month meets only
42yoof rh,eP15,15',7.20 costfor a family
ofsix to live decently.
But the govermentsloppedthe use
of DCOL as a measurein 198? and
scrappedihe concep!of decenlliving.
Percopitoper doyenergiy supply(kcol) 2,226.0
Percodio enersyconsumpnon
Supply/consumplion(%)
Percopito per doy p.otein supply (s)
Per€opito prorein consumpiion(s)
Supply/consumplion(%)
Pei.opito per doy fois supply (s)
Percopito fois consumplion(kcol)
supply/consumplion(%)
a/ Bosedon the resuttof FNRI'DOSTFourthNotionol Nutrilion Su ey of 1993
b / 1 9 9 3 d o t do n d o ' l yp e r c o p i t oc o o s u m p l i o ins o s s u m e dl o b e t h e s o m ef ' o m 1 9 9 7 r o 1 9 9 9
living to mere subsistence, and in the suchamounlto meethis or herdaily dietary
process redefinedpoverty. requiremenis.Thistmnslatesio anabsurdly
Acco.dingto the NsiionalAnti- low food$resholdofP8.38permeal,and
PovertyCommission,rhe per capita only peoplefalling below this amount,
poverlythreshold is P38.12,whichmeans accordingto the government,may be
thatonlyrhepercontyithlessrhanP38.12 considered poorandhunsry.
a dayfor bothfoodandnon-foodneedsis Despitethe ridiculously low food
consideredpoor by rhe Phiiippine threshold,daraliom tle NationalStatistics
Officeshowthat 21% of the Filipino
The per capita food thresholdor families(or I6.5 million peoplc)still fell
subsistence tkesholdis peggedatP25.15, belowthethreshold in 2000,a figur€that
waseven12%higherthanlbe
recordin 1997.[17]
But the whol€point in
redeliningpovertyis to set a
low stardardin detenniningthe
minimum wage. Thus, the
2,145.7 minimum wage in th€ country
Fcol) 1,684.0 o/ bar€ly coversthe cost of food
anddecentliving.
138.4 130.7
The lack ofa living wage
67_0 65.8 69.3 65_4 is further aggravatedby the
€ontinuing increases in the
i34.3 I31.8 138.9 I31.0 prices offood andorher basic
commodities- Theinflationrat€
40.6 37.6 for food movedup to 5% in
July 2001 cornpared to 2.3%
143.1 132.5 the pr€viousyear. Prices oa
eggs and fish, the cheapesi
sourcesof prot€in-energy
nutrients,continu€to shooiup
alongwith the pricesof rice,
corn, fruits and v€geiables-

I 5 & 3 1 D C C E M B E R2 O O I
(seeTable4)
The lack of a food distribution
networkalsocompounds theproblemsin
foodpricesanddepressedincomelevels

Is FoodAdequtte?

obviously,theaverage incomeofthe
Filipinoscannotmeet the cost of their
caloric and minimum nutrient
requjrenents.Aside from the fact that
Filipinoscamot atrordtheir food needs,
they are also threatened with shrinking
localfoodsupplydueto effaticpoductlon
From 1992to 1999,iherehasbeena
noticeableinstabiliryin agricultural
produclion. (SeeTable5)
Domesticfoodproduciionmustgrow
consislenlly with the growingneedsof a
growingpopLrlation. But on a yearly
average, Philippineagriculture hasgown
by only 1.1% whjle ihe Philippine
populaiionhasincreased b)-2.3 percent
From1995-1999, clopPrcducron lYas
unslabie, recording onLyanannualaverage
growthrateof2.08percent. Palayandcom
productionwaseffatic,plungingeveDby
2l% in 1998.Fisheriesproductionwas
dis al, strugglingby a yearlyaverageof
0.2? percert. Ahhough increasing
consistendyfor four years,lhc poultry
sectorplungedin I 999.Onlythelilestock
secrofhasbeensteadil)increasirgby an
a n n u a la v e r a g eo f 3 . 4 4
percent(SeeTable6)
The P hi l i p pi n e
gov€mmentattributesthe
poor performance of
agriculture. pallicularly crop
production. lo cropshifting.
The BurcaLr of Agricullural
Statisljcs expLains thatcrop
shiftingoccurswhen local
producerslvant lo take
advantageof increased
demandin the world market
for agriculturalgoodsor io
avoidlosses liom decreased
demandof traditionalfood

Governmenthas also
cited the dual effectsof La
NinaandEiNiflo, andother
weatherdisturbances as
reasonsfor the low tumout

In truth, however,

4 IBON Facts & Figures

 trosion
of
agnculturehasbeenin chroniccrisisasfar
back as the 1970s.Th€ featuresofth€
agrjculturalcrisisarestructuralin nature-
iolv technology,smalleconomiesofscale,
landlessness,andlandmonopoly,to name

SelfSufficien
a few. Thesefeaturescontinueto cripple
productionandagriculturaldevelopment.

FoodIns€c[re

Foodinsecwity js detued by FAO as

a situationof "low level of food intake,
which can be transitory, seasonalor
chronic."FAOindicato offood insecurity
are:l. und€mourishment - estimatesofthe
numberofpeoplewhosefoodhtakedoes TheljN FAO countsas
not provide enoughcaloriesto meettheir one criterion of food
securirythe stability of
basic €nergy requirements;and 2.
food supplyeven in
mdemulrition- prolongedlow lev€l of
food intakeand/orpoor absorptionoffood times of natrral, m?in-
made, or €conomic
consumed.The manifestationsof
disasters. Inslead ofciting self-reliance in
undemukitionare wasting,sluntingor
food as an important factor, however, the
underweight, reducedcognitiveability,
poor health status,and low productiviry. FAOempbasizesthe importance ofa food
systemthat hasth€ capacjtyto produce,
I8t
Accordingto UNICEFreports,28% storeandimpoilsuf}]cient food.
The Pbilippine governrnent likewise
ofFilipino chil&enunder5 yearsold are
lookr at the question ofslability in supply
moderatelyandseverelyunderweight,6%
wiih the same myopic view. ln its is fourtimeslongerthanthatofthe United
dre moderatelyand severelywasted,and
stunted. agricultural plan, the Agriculiural and States.On€-thirdofdr€ comtsy'slandarea
30%arenoderatelyandseverely
Fisheries Modemizalion Act (AFMA) of is fertile andsuitablefor food production
In simpler tems, one out of every three
1997- the government declares dependence andanimal gazing.
Filipino childrenis undernourished.
viable policy But aqalreadymentionedin relation
lncluding adults,FAO estimatesFilipino on food importationas a
at 1i.6 rnillionpeoPle.l9l option. Food secwity, according to theplan, to inadequacyof food supply,Philippine
undemutsjtion
canbe achieved through: 1 . self-sufficiency agiculture is essentiallycharacteriz€dby
Il01l8l or by ensuringadequate food suppliesfion backwardness, peasantlandlessness,
Food insecurity is a Paradox in
production; 2. self-relian€€or by existing€xploitatit€relations,land and
Philippine society.With fertile soils, domestic
adequat€food suppliestkough a resourcemonopoly,etc.'Ihesef€atwesare
abundantmadneresources,andaboutone- ensuring
combinationof domesticprgduction and alsoth€rootsofinstabilityoffood supply
ihird of its labor force engagedin
and3. pure impotatjon. [111 in the country.
agricultural productioD,food insecurity importation;
Wlat is noticeable aboutthedefinition Agriculturalmechanization is still way
shouldnev€rbea persistentproblemofthe
is the downright insislerce of FAO and behind the .echnology used in
cormary.
institutionsthat food industrializedcountries.An esnmaied?I %
BeyondFAO indi€ators,the irony. othermultilaleral
s€curity is all about enough foodsto€ksand of the farms still use th€ classicplow
however,is thattherural poprllaiionwhose
that it can be achieved through inportation, insteadofhard tractorsasfarm€quipment.
livelihood is relatedto direct food
productionis the most hungry anong the even by Thftd World countries that have INSOIAs of 1999,irrigationcoversonly
been iraditiolrally and natumlly capable of 42%ofpot€ntial irrigableareas.tsj Arable
s€ctorsofPhilippine society.Th€National
attaining self-reliance in food- on the landsare larg€ly rain-f€dand still un-
Anti-Potefty Commissionreportsihat the
manyThird Worldcountrieshave mechanizedwjth a rating of 0.3% per
mostntunberofhouseholdswhoseincomes contrary
camot blry a nutritious meal come from eroded their self-sufficiencyprecisely hectare mechanization versus a IJNDP
tirough decades of import liberalization. recommendationof 0.5% per hectarefor
largelyag cultural areas.Toppingthe list
are the AutonomousRegion in Muslim developing countries.I l4l
AlthoughtheUNDP analysisis biased
Mindanao,WestemMindanao,Bicol, and BasicCrisisFeatures
Cental Visayas.Thesearothe areaswhere for industrializedmechanizedagicultxre,
foodinsecwityismostrife. [7] ! The country's natual resourcesare the fact rcmainsthai the low poductivity
abundantto feed the populaiion. lts ofPhilippineagriculture is mainlydu€to
coastlinewheremarin€resoucesabound the pevailing low technolog/.

I5 & 3I D E C E M B E R2 O O I
 dosagesof import€dinputs.This was
complemented by the big credit program
thatallowedfamers to purchase the inputs
bui pushedthemto perpetualind€btedness.
Underthe SABdrecountryevennrally
eliminatedcredit,productionand price
subsidies,liberaliz€dagriculturalirnports.
andderegulatedmarketingoffood crops
suchasrice, com, sugarandcoconut.By
the end of 1992, only 2l agricultural
commoditieshadprice controlsout of 632
in 1970.The SAP pavedthe way for a
compreh€nsivetrade liberalization
program,which cut dowr tariff rates,
reduced thenumberoftariffied goods,and
r€movednon-iariff rcstrictions.[61
By the 1990s,th€ countrywasunder
anotherSAP,dubbedas"hilippines2000,
which amongoth€r things prioritized the
production of High Value Crops(HVC),
export cropsthat commandhigh pricesin
ihe world market.Examplesare pili nuts,

f.,rla
Sevenout of 10 peasants stjll do not
o\l! thelandtheytiL Only 5% ofthe land-
owningfamiliescontlol43%ofthe total
agriculturalland. Ir5l Th€ countryhas
alr€adyhadthreelandreformprogramsin
five decades,but nothing much has
changedin the ownerslip structurein
agriculrure.
Merchantsandusurerscontinu€to sell
modeminputsandmachineryathigh costs,
ofler creditwith tall interestrates,and
underpricep€asants'produc€.
Govemment,on the otherhand,does
not havepdceandFoduction subsidiesfor
fanners,Allhoughgovernrnentencourages
farm mechanization to increase
productivity,ii is mostly in the contextof
importationoftecbnologyandat the same
time incr€asingexport crops to earn
dollars, Government is currently
inhoducirg so-cailedmarket-oriented land
reform,but this is mainly in the cont€xt of
a globalizedagriculture. 1990 1,083,958 627,951 n4,4A6
1991 1,245,133 809,082 436,O51
The Crine of Liberalizstion 1992 r,t4r,4rl 1,016,925 121,186
1993 1,337,332 I,t 68,208 169,121
Govemmentpoliciesto implement 1994 r,342,080 1,385,575 113,195)
"globalization"have exacerbated food 1995 1,351,279 1,891,848 (540,569)
1996 1,404,123 2,273,555 1469,132)
instabiliry. 1997 1,342,017 2,241,170 (939,r 53)
For instance,the structuraladjustinent 1998 1,273,605 2,245,609 1972,OO1)
prograrns(SAP) under the Intemational 1999 l,l83,l t3 2,O12,271
't,965,735 @29,158)
MoDetaryFund and the World Bank 2000 1,290,777 1674,958)
compelled the Philippines to transform
subsistence farmsto modemonesthrough Nol€:For 1990,imports
theuseofHigh YieldingVarieties(HYV)
of rice and com, which required healy

6 IBON Facts & Figures

 onFood
maigoes,casheq cassava,cofee, castor
bean,asparagus,

landlords to plant
andculflowers.
To encourageagribusiness
lryC, the govemment
hasprovidedincentives,ta{ holidaysand
technicaland infrastructuresupportand
and
Impact
other perks.For export crop production,
governmenihas also promoted contract
growing,whichaltowsdiect participation
of iransnationalcorporationsin food
production.[6]
Sincerice and com are no longer
Securitv U
profitable,accordingto the govenment,
landallocatedfor cerealsis beingreduced
in favorofHVCs.Riceandcom landsof
7-l millionhectares in 1990shft-nk to 6 6
million hectaresin i999, resultingm a
decrease in agricuhuralproducrionlBASl
Yet, govenmenthopeslo reducerice and
corn landsfurther to 1.2 million and
700,000heclares,respectively-[6]
Recently,the Deparhnenlof Agricuhure
hasbaredits planto devotecloseto one
million heclaresof farmlandsto HVC
production.This shall convertfirther
landsallocatedfor food ploduciion 116l
As a result of the overall thrust On€ of the But the AoA is apparentlygoing
for €€onomicliberaljzation, specifically contloversialeffects againstthe basicprinciplesof$e World
government'sattractionof foreign of the AoA is the FoodSummii.
in industialand aPParenttnreat 0n a
estatesdevelopment projects, iand use global scaleto food Dealhto SmallFarns
conversionFom agdcultural to industrial security of nations,
usesor real estatehasbecomerampantrn particularlydevelopirgcountries.The Food import bills of the dev;loping
recentyears.From 1979-1989, lotal WTO is clrrently beingblamedby activists countrieshaveincr€asedby an averageof
approvedapplicationsfor land use worldwidefor lhe failure of the world 20%sincetheAoA. Dependence on food
conversion totaled9 I 3.86hectares. Aft€r Food Sumnii to achiev€its goals, imports has grown especiallyin Latin
a decade,the figur€ balloon€dto paricularly the reductionofworld hunger America and sub-Saharan Afiica, both
30,800.43hectlres.(SeeTable7) Thereal byhalfin 20i 5.TheWTOis beingblamed historicallynetfood exporters,whichhave
€xtent of land use conversion,howev€l botb by governments and aclivistsfor now becomenet jmporters.In the
is indetermimbleb€causeothercasesare endangeringfood securityin the nameof Philippines,food import biil incr€ased
simply achievedtluough land grabbmg so-calledmarketaccess, from $43.5million in I 994to $972million
andcancellationofso-called landreform in 1996,l€ad€rsof 186countriesin in 1998whenit washighes!.[NSO]
certificates.[6] the Worid Food Summitcommittedto As alreadymentioned,the entry of
Th€ basic featues of the crisis in ensurethatfood tradeandtradepolicies cheapsubsidizedfood productsthreatens
Philippine agriculturc are intensifiedby would foster food securityfor all. the very survivalof small fams. Since
thegiobalization policies. Tbe QuebecDeclarationof the cheapimport€d crops and foodstuffs are
Gtaring among the effects of summitrecognizesthe right to producein available,locally producedonesar€
liberatization is the int€nsification ofthe a sustainablemanner from a sound displaced in thedomesticmarket.
colonial trade pattem, which erodes the economjcbasis,securityof tenure,and Small farns, subsistenc€and
comtry's self-reliance in food- h€althy soils, with reduceduse of householdlevel, are the majorityin the
The country has been importing agrochemicalsand pesticides.It also developirg countri€s, and a large
food since 1953.As a result of trade recognizes the needfor equitableaccess percentageofthe populationrangingfiom
libemlizationandthe emphasison lrnpoft to, and control over, land and other 60 to 80percentcontinuesto €ngagein this
dependenceinsteadof solving basic productiveresources by fam€rs, fisher non-comrnercial!?€ ofagriculture.I3l In
pro6lemsof domesticproduction,the folk andotherdhectproducers.It proposes thePhilippines, subsistenc€farmsemploy
Philippineshasbetomeanetfoodimporter that ownershipanduseof land shouldbe 33%ofthe laborforceard around70%of
in the lastdecade.(S€€Tsbl€ 8) r democratized. [5] th€farmingpopulalion.Theincreasedfood

& 3 1 D E C E l | A B E2n0 0 r
importscompetedirectly with the only speculationand monopolypricing.
thing the subsistencefarmershaveto sell This goesagainsipublic interestof
- the minusculesurplusesof locally pr€dictingfood shonagesand price
producedfood- fluctuaiions
for thesakeofconsumers-
ln reality,aroundonly 10%global t3l
food productionjs traded.Food Becauseof the phaseout of public
securityfor most countriesis stockholdingandtrading,purchaseshave
achieved lhrough domestic been increasinslyfrom comm€rcial
production,oft€n by subsistence sources while access to food ai
farmerswithout anyofthe taxpayer- concessionalpriceshavebeenlosr,and
6mdedtechnical subsidies
assistance, this situation has conlinuousl)'
and cr€ditsavailableto large-scale foodprices.In 1998,the
increased
ftuinersad transnationalagribusiness. FAO estimatedthe priceincreases
dueto manipulaiionin thenetfood
This reality is the very nature of importingdevelopingcountriesat an
Philippine agriculturelrom which the average of20 percent.l3l
country derivesits food secu ty that th€
AoA has threatened.The AoA erodes Pric€Distortions
traditionalPhilippineagriculture,which in
tum deatesfood insecurityandpolitical The w'thdrawal of governm€nt
instability.The shift from subsisrence support also fails to reduce price
farming to a markel and wage econony distortions. levelsin theUSand
Production
through trade liberalization has the EU remainhigh evenifworld p ces
marginalizedthe majorit the famers - evencontroloverlocalmarketing ofrice
andleftth€p€oplelessableto affordfood was also reducedasthe NFA had to rely This is becauseofthe fact thatthe US-
due to declining incomesand loss of mostly on scarcebudgetaryallocations EU have naintainedhish subsidies.Farmers
livelihood. ratherthaneamingsftom import tariffs. in Japan, the EU and the US receivean
Recenily,NFA functionssuch as average ofUS$20,000 peryearin domestic
PriceManipulation controlling the supply, prices and suppon while poor fanners in thedeveloping
distributionhave been reducedto countries are already being €xcludedFom
Th€ withdrawal of gov€rnment marketingandtbe agencyis actuallydue govemment swpolt. The Filipino fanner,on
supportin agicultwe disablesfamers and for privatization underthe $175-million the av€rag€, receives $121 a year. [DBM]
consumerslo continue operating the ADB loan for the Grains Sector As world prices fall, the US and EU
supply-consunptionnenvork. DevelopmentPlan. The specific automaticallyincreasetheir subsidiesand
In addition,Third Worldgovernments, conditionsto theloanincludedereguiation continuelo selltheirfoodstuffsat lessthan
throughvariousloanconditionalitiesby the ofNFA pricingmechanism, liniiing NFAs thecostofproduction,bothdomesticallyand
WorldBankandthe AsianDevelopment annualprocurement to 30 daysby July 1 abroad.[3] In theprocess,tbeycushiontheir
Bar*, aremadeto privatizeandderegulate each year inclusiveof governmenl local producersand Focessorsand more
their tunctionsin agriculturein tune with lmporls, lifiing of resiricijonson rice importantlybenefii the TNCSthat condu€t
trade liberalization. Third world importation,and privatization of the trade and enjoy rnassiveprice advantages
gov€fimentshad iraditionallyplayeda ag€ncy'stradingandmarketingtunctions. over producersand processorsin other
significantrole in food djstributionby I20l
interveningin marketing,subsidizing lmport controlswill be relaxedin
piices that b€nefitedboth farmersand 2004.Meanwhile,publicwarehouses werc BrokenFoodChain
consumers. This would typically b€ rnaize already leasedto theexistingrice cartel -
in Afiica andric€ in Asia. This would go theverytaden r€sponsible for the 1995 The FAO citesa strongfood systemas
on for mostdevelopingcountriesuntil the ricecrisis. an imporlant elementin achievingfood
structuraladjustment programs of the Th€ privatization of food trading security. But food systemshave be€n
1970sand1980s,or until theWTO mad€ r€duces price transparency in themarkel. severely impairedunderelobalization.
son€ofthe polici€sillegal.[3] For instance,despitedecreasing world This hasbeenmainlybecause of the
In thePhilippines,govenmentcontrol prices, local prices €speciallyfor net "consolidation" of each part of the food
ov€rintemational tradewaslinited to rice importingcountriessuchasthePhilippines chain. From national bufier stocks, food
in fte late-1980sastheAquiro govemment processing supermarkets, cultivation,down
dismantled several of th€ direct For instance, themajorgrainholders to feftilizerandpesticides production - food
govemmentpfice andmarketregulations. are the kading companiesthems€lves, systems have long lost their autonomy to
Interventionwaslimited to the role played which can control supplya,ndprice monopoly rule. [3] The most affectedby
by theNationalFoodAuthority (NFA).But informationand gain immenselyfrorn suchareThird World counldeslvhosefood

IBON Facts & Figures

systemsareinh€rentlyweakduero agrarian despitepossiblehazardto humanhealth (despite low worldpric€s)to increasetheir
backwardness, landtenwe system,iack of and the €nvironment.The Philippine exportsanddominatethe market,and in
and
industrialization,import dependenc€, governmentrs set to approve the the processrestriclpoor couniriesfrom
slackgovemmentsupportand regulatory productionand importationof food inplementinga policy of food self-
productscontainingGMOSaswell asfood sufiiciency.Wlat is happeningsofar is that
Consolidalion is carried out producedvia geneticengineering. In line everythinghas been for the benefit of
principallyby TNCS,whichdominate th€ with this, tbe National Committee on transnarional agribusiness which has
-
foodchain productionsubcontactingand Biosafel ofthe Philippineshasapproved tremendously increased its scopeandsize
tradeandinvestnentin agriculturalinpuls l0 sitesin Bukidnon,SouthCotabato, since ihe WTO. Market-oriented
andproduce,not lo assurefood securiry lsabela,Camadnes Sur,andPangasinanfor agriculturaitrading systemand industrial
for all, but to assurethemselvesofprofits. fi€ld experiments
on GMOS.U9l andconnercialagriculture haserodedtlle
I4l productionsystemof the subsistence
Oneexampleis the consolidation of Threat to Sover€ignty fanners,threaten€dfood security,and
Cargill (a promodity seedtader and the increasedpoveny and hunger,all for the
largestprivatecompanyin th€ US) and Dependence on food imports is benefitof hugetransnational agribusiness€s
Monsanto(a chemicalcompanYmade growrng yet export revenues are of developed couniries.t
famousby its promoiionof genetically continuouslydeclining.Thus the usual
engineer€d are
crops).[3] Otherexamples argument lha!poorcountriesshouldfocus
the mergersofagro-chemicalgiantsDow on exponingto raise foreignexchange
Chemicaland Union Carbide and of life eamingsto enablethen to buy the food
sciences/a$o-chemicalgiants AgoErvo th€y need fron world marketsis not
andRhonePoulenc.[4] happening-On the contrary,poor
Co$olidation in thefoodchaincreates countriesare fast becomingn€t
problemsin pricetransparencyard markel importennor onLyof foodbut also
distortions.For exanple, consolidated of othercommoditles as well,
food systen in chickenproductionin the leadingto urprecedentednational
US canbring abouta Philippinelanded banlsuptc'es.
cost of P22 per kilo. Whenimportedin \lhat is happeningsofar is
massivequantitieslast yeat chickenlYas that agriculruraiexporlersof
sold only at P60p€r kilo compared with the developed courhiesbave
thelocalchickensoldat P80perkilo. [1] the favorableconditions

Other Market Manipulations

The abuseof the Sanilar] and

Ph)losantiary m€asures of the AoA has
also marginalized Third World food
produclsfrom the intemationalmark€t.
AustraliaandBelgiumfor exampleprotect
their na*ets by hidingbehindconsumers'
interests.ln 2000, Beigiun pulled out
Philippine cannedtuna fiom ils grocery
shelv€sdueallegedlyto the poor quality
ofPhilippinecansusedfor the products.
The Depafimentof Agriculturebeli€ved
this was a retaliatorymeasur€wh€nthe
Philippinegovenmentimposeda banon
Belgian meat and dairy producls

.YN
corlaminatedlvith dioxin,a cancer-causing
substance. AustraliadelayedtheFocessing
of the countrf's export applicationsto
Philippine mangoes,bananasand
pineapples ailegedlybecausethey failedio
passintemaiional standards. U8l
Meanwhil€,TNCSof the developed
countiiesaresecuringthemarketsfor their
genetically modifi€dorganisms (GMOS)

l5 & 31 DECET
BER 200r
 A0A:TheFinal
Blow
Mainty responsible
for lhe worsening
food situation is the
adventofthe AoA, of
which ihe Philippine
Sovernmenl
signatory. The AoA is on€ of the
components ofTradein Coodsioneofthe
six pafs of the GeneralAgreem€nlon
Tariffs and Trade - Uruguay Round,
which, whencombinedwith the p.evious
GATT agre€ments beginningin 1947,are
betterkno*n asthe wTo Agreem€nts.
The WTO Agre€m€ntscover
traditionalareaspieviouslyr€sistanlto
multilateraltradereform(Tradein Goods,
GATS,TRIPS,TradePolicy Review
Mechanism, Disput€ Settlement,
Plurilaleralagr€enents).TheAoA thusis Tariffs are customdutiesor taxes the tarifls may still be quite high, such
most comprehensive in liberalizing imposedon imponedgoodsto protect conrnitmentsstill allow cheapimportsto
agriculturaltade. domesticindustriesand production. competeagainsthigh-costdomestic
Aside ftom its expansivescope,the Likewise, tariffication bars the entry of products,
AoA is aho &o mostcontroversialbecause foreigngoodsthatmaybeproducedlocally. In subsidies,developingcountrieshad
of two rnajor kinds of issues.One, it is Subsidiesarestate-support mechanisms io alreadyusedminiial subsidiesin th€past
Fobably the most imbalancedagreement producersin the form ofresearchand or hadbeenaskedby intemationalcreditors
amongothermultilateralandbilalemltrade development,infrastructure,direct to r€duces bsidiesaspart ofliberalization.
agr€em€nts. Two, it has probably the procurement, incomeand pric€ support Som€ countries such as the Phitippines
greatest impact on th€ developing ev€nhad zero"levelsubsidiesprior to the
countries,particularlythe farmersandtbe All of theseprotectlocal industries AoA. Thus, when th€y cornrnittedto the
ftom directunfaircompetitionwiih foreign AoA, their percentag€s were alreadytwo-
products.But theAoA bansthe useofany thirds of their existing subsidies.
Th€ mostimbalanced of thesemechanisms. Meanwhil€, perc€ntag€sof reductionfor
The AoA is said to be the most dev€lopedcountriesrepresented only a
The AoA provides for: 1. increased imbalancedbecause,asidefiom exposinS smallportionoftheir existingsubsidies.
marketaccess ihrough tariff binding the wlnerable feat res of Third World In fact, the United Stat€sand rhe
(naintainingtarifirat€s prior to theAoA), agriculturesto unduecompetitionwith EuropeanUnion succeededin excluding
tariff reduction,and tariffication (the high{ectnologyhighly subsidizedFirsr Fom reductionseveraltypes of subsidie3
conve$ion of all quantitativer€strictions World agricultures,the concessions or such as US direct paymentsand EU
intotaritrs,whichwill be eventuallyphased specialand ditrerentialtreatmentgivento compensation pa)ments,aiongwith a long
down); 2. th€ withdrawalof domestic the developingcountriesare not enough list of other non-actiorablesubsidy
productionsupport;3. the reductionof for them to cushionthe impact of trade programs-Developingcountriesmanaged
budgetaryoutlaysfor exportsubsidies;and liberaiizarion. [6] to gain minimal special and diff€iential
4. the har-monization of sanitaryand As a result of minimum acc€ss treatmentand exemptf€w subsidiessuch
phytosanitary measures based on commilnents,countrieswill haveto import asinvestmentandinputsubsidies,butth€se
intemadonally accepted andscientifically modestanounts of their most protected ar€minimal ifcomparedto theUS andEU
justifi abiestandards.[6] agdculturaland food producrs.Although

t0 IBON Facts & Figures

 The US and EU also succeeded in
exemplingcertainsubsidiesfiom "due
restraint" aclion by the WTO. The AoA
provides countervaiiingmeasures,
otherwiseknownas"due restrainf' actions
againstsubsidies,but the US andthe EU 1990 1,701 1,555 146
put in severaltypesof subsidiesin the l99t 1,845 1,260 s85
GreenBox, Blue Box, AmberBox, etc., 1992 1,866 1,560 307
which are €xemptedfrom countewailing 1993 1,918 1,626 292
1994 2,072 2,114 -12
measur€s.Thus, investmentand input -150
1995 2,499 2,649
subsidies for thedevelopingcouJrtries
are -7a9
1996 2,307 3,096
not exempifrom countervailingmeasuJes 1997 2,334 3,102 -764
while governmeniservices, direcr 1994 2,225 2,495 -670
payments,etc.for the developedcountries
areinmuneliom suchmeasures. [l7]

The gravestimpact
Departmentof Agriculiurehas also anyimportedfoodproduct comesout200lo
Theimpactoflhe AoA hasbeenmost declaredrhaiPhilippinegarlicandonion moteexpensive thanils landedcost.[241
severe,especiallyin the developing fannsaredeadbecause Chinadumpedits This is because one of the issuesof
countries.Major official issuesincludethe ownn thecounby.[4] dumping,especiallyin Third 'tr'orld
lack of marketaccessfor Third World For the farmers,this has spelled countrieswberelocaltradingcartelsstiil
ag culluralproducers, as arguedby the banklptcy andhungersincetradersand proLiferatein cahootswith fo.eign
developing counldes. Trademinisr€rs and middlemenno longerpurchase thefamle|S' agribusiness corporations, aremonopoly
ofiicial negotiatorsalso complainabout produce, or if everat a]l,theydepress the pricingandspeculation. PficedereguLation
insuflcienland undeffunded safeiynets farmgatepricesrin 2000 alone,farngate has allow€dtradingmonopoLies and
and the iack of capacityto properly pricesof food cropsin the Pbilippines tr'ansratjonal
corporations to haveabsolute
declinedby asmuchas9%, ibrcingcom control ovef food commoditiesand to
Fromthesideofthenational economy, farmersfor instance to foregohanesting. manipulate pricesandsupply.Thisin tum
theAoAhasintensified thecolonialtmde Philippinecom is 200%moreexpensive hasincreased theaireadyhighproduction
pattemand erodedself-sutrcjency. The thanAmericancorn.[241 cosissincecanelsalsocontroltherrade of
Philippineshasbecomea consislent nei For the consumers, this has meant impotedseedsandfertilizers.
importerof agricultural productssincethe disempowelment in theirchoices, whether The AoA has resulted in a
AoA. (SeeTable 9) As alsoshownin Table cullurallyor intermsofenvironmenlal and continuously shrinkinglocalproduction in
8,thecllronicnegative balance oftradein healthissues. 071 Third World agrjculturesand national
foodstartedwith fie implementationofthe But aren'tcheaper foodcommodities economies thathaveincreasingly become
and agriculturalproductsfor consumers net impo ers of food and agricultural
From the side of the farmersand supposed to be the benefilsof trade products.Itbasalsoprovidedopportunities
consumers, theAoA haspavedthe wayfor liberalization? Despiiethedelugeofcheap suchasimpof allocaiions andtakeoverof
thedumpirgofcheapsubsidizedgoodsthal imports,corsumersin the developing governmentagricultural and food
direcllycompetewith high-production-coslcountiessuchaslhe Philippines arenot marketing corporationsto landlords,
localagricultural andfoodproducts. In the enjoyingcheaper food.Onthe traders,andTNCS,displacing tenanr
Philippines,for instance,the locai sarlic average, theretailpriceof farmersin theprocess. I
costsP110perkilowhiletheoneimported
frorn Taiwan is only P40 per kilo; iocal
meatis 68%more€xpensive thanU.S.or
Canadianmeai; and locally produced
chickenis 61% more expensivethan the
oneconingfton theU.S.[6]
In the first senesterof2000, almost
all Philippinepoultryfarmscloseddown
becausethe U.S. nade a killirg by
exportingits chickenparts lower than
domesticpricesand the Filipino raisers
could not survivewith farmgaieprices
lower than their productioncost. The

1 5 & 3 1 D E C E TB E R 2 0 0 1 TI
 Continuingalization
Glob
The new Presidency
ofGloriaMacapagal-
Arroyo promisesto
eradicatehungerand
poverty throughn\e
implementation ofth€
AgriculruralandFisheies Modemizatjon
Act (AFMA). AFMA in realiiy is the
implementingframework of the AoA. Il
invok€sfood security,poverryalleviation,
socialequiryand incomeenhancemeni
"wirhin the contextof the wTo".[lll
Thus,it is aplanrepletewith conbadicting
goals.
Thegovernment allocat€sP20biilion
annualfimd for agriculturalmodemizahon.
[21]Modernizaiion, on theotherhand,is
basedon continuingliberalizationof
foreign capital, inputs and productsinto
Philippineagriculture.lt is likewisebased
not on govemmentsupponandregulation AFMA continuesto promoteHVCS In lieuof subsidies,thegovernment is
but on the privatizationof agricultural and H\rys, in theprocessreducingLheland introducingcredit and financing schemes
servic€s andliberalization ofthe sectorto areadevoted to foodproduction.Itis also allegedly to protect farmers from
TNC andbig local agribusiness. the guiding f(amework fbr NFA increasingglobalconpetition.[22] But
To attracl foreign investmentsin privatization. rheseschemesare off€red at high rates,
agriculture,which is the main stategy of Under AFMA, the Arroyo whicbpeasants cannotafiorddueto low
AFMA, govemmentofiers incentivesto governmentlargetsto acceleratethe incomeand producrion.Only th€ local
investors.AFMA exemptsthe private impienentalion of StrategicAgicultural merchants, landlords,andTNCSb€nefitso
€nterpris€sftom paymentof fariffs and and Fishefies DevelopmentZones far from the credit institutions.
duti€sfor the importalion of all typesof (SAFDZ) for the establishment of In the fisheriessector,the Aroyo
agricultureandfisheriesinputs,equipment "ag culfureor fisheriesinfrasrucore. government pursues the ful1
andmachinery.AFMA alsogranlsthese industrial complexes,productionand jmplementationof the FisheriesCode,
importingenterpdses thesoleuseoftheir processins zones".SAFDZSalsoinclude which promotesthe liberalizationof
impods,defeating iheavolvedpurposeof the esiablishmentof Agricultuml Reform fisheriesand the reconcentration of
makingthesegoodsacc€ssible to poor Communities.ThesehaYebeen the distributed aqua-farmlandsto landlords
peasants. [ll strategyto reconcentrate djstributedlands andTNCS.[23]
Farm mechanization, which is the for IryC and IryV production.In effect, Obviouslt govemmentsolulionto the
maingoalofmodemjzationunderAFMA, AFI4,4facilitateswide-scale land-useand worsening foodinsecurityandhungerhas
is actuallyan integralpa{ in agricultural cropcorve$ion.tll I been basically the continuationof
development. productionand
It accelerates President Anoyo hasalsopromised globalization policies,which in th€ first
minimizeslossesliom naturalplague.But to bring affordablefood items lo the place have erodedth€ country's self-
farrn mechanizationis only eff€ctive in consumersby fielding 116 rnits of sufiiciencyin food.UnlessthePhilippine
countrieswhere there is a genuine "Tindahanni GloriaLabandera" rolling governm€ntveersawayfiom the dictates
compreh€nsiveland refomchamcterized stor€s.[2ll This is impossiblehowever of multila!eralinstitutionsand the
by distribution of land without pay, since the governmenthas actually prescriptionson economicliberalization,
existenceofcooperatives,andtheabsence committedto cut domesticsubsidies. hungerandpov€rty shall conlinueto grip
of colonial trade patt€rn and feudat Moreover tlis will jusr be a cosmeticstep the Filipinopeople,especially the direct
exploitation. to lhe chronicpriceinoeases. foodproducers.

l2 IBON Facts & Figures

 Asserting
FoodSovereign
The perspective that
self-sufilcjency is the
besi food security
policy is sharedby
many developed
countrieslike Japan,
KoreaandNorway.Not only is it a cost
efficientway to feedthe population,it is
alsoa practicalapproachin dealingwith
uncetaintiesin supplyand pricesin the
\.,orldmarket.Uncertaintiesmaybe caused
by war or variouscrisesevenduring
peacelimesuchas ecologicalor drastic
changes in globaldemand andsupply.lr3l
ln timesof war,for instance, relianceon
foodimportation lrlayimpedethecountiy
to deiermineits allegiancebasedon an
independent foreignpolicy.
Sadly,howeverbecause oftheregr,ne
of globaltradeliberalizationunderthe
WTO,Third world countriessuchasfie
Philippines arenotallowedto talreonsuch
perspective. ThirdWorLd countries areheld
hoslageto the food and agibu\inessof
TNCStoserveasmarkets fo. the l\-'C food
producls, in theprocess erodin-q theirself-
sufficiencyandsovereignr-'-.
Foodsecuriqis oneofthe legitimate
"non-h-ade" concems of agricultural policy,
accordingto lhe FAO andthe tr/orld Food
summit.This alsomeansthar rhe AoA
should be in harmon! with human
developmenland hunger reduction
programsof governments. ln praciice,
however, AoA is onlyconcemed withhow
ro applythedisciplines ofrhe wTo. And
experiencehas shownrhar agricultural
tradeliberalizationhasonly aggravated the
colonialtradepaiternandthreatencd local
production andpeople'slivelihood-
It is in this sensethat peasant
movements like La Via Canrpesina (The
PeasantWay.an inteflrationalassociation
ofpeasanis roundtheglobe)andKilusang
Magbubukidng Pilipinas (Peasant
Movementofthe Philippincs.a national
allianceof peasanlorganizationtare
baftlingro rale andpushtheWTO out of
agicultue to assertfoodsovereignty.
The concepiof food sovereignty
emphasizes ihe centrality{f naiional
decision-mal'ing struciures in detemining
foodandagricultural policy.Tberole for
n-adein this sirateg/ is left up to national
eo\'ernment ratherthan to international
Food sovereignty is the right of
peoples to defineiheilownagricultural and
food policies, io protect and regulate
domestic agriculturalproduciion andlrade
in order to achieve sustainable
development objectives,
andro determine
rhe exrenrro whichtheywanito be self-
reliant,As longasforcigncorporations and
local eliies continueto be the sole
beneficiariesof so-calledagricultural and
food policies,food sovereignty is not
achieved.Nor until the ientaclesof
monopoliesare cut, therefore,food
sovereignty remainsa dream.
For the Filipino people,solutionro
povert),andhungerstill revolvesaround
the issuesof genuineland reforn and
breakins theshackles offoreignmonopoly
control.Onlyby changing a backward and
coLonial economvtoan industrialized and
sovereign oneshallequitable dlsiribution
of rveallhaDdincomebecomepossible.
Only thencan food be availablefor ail.
OnlythenshalltheFjlipinopeoplebelree
fiom hunger
I5 & 3I D E C E M B E R2 O O I t3
 dtruLJiqwJ

EqchFilipino Owes P31,000

iguresrecenttyreteasedby the Bureauof : automaticatly appropriatedfor debt service,

the Treasuryshowthat the country's : Forthe first sevenmonthsof 2001,debt service
outstandingtotaL debt has reached P2.352 : amounted to P157.74bitLion.
trill.ionasof Octoberlast year (SeeTable). : Thismeanslessspendingfor vitaLsociaL
Giventhe country'sestimated 76 mitUon popu- : services suchashealth,educationand housing.
:
lation,this meansthat everyFiUpinohasa debt Andfor the poor,it meanslessaccessto these
of P31,000. : vitatservices.
0f thi5amount,domesticborrowingac- . Thegovernmenthasto reassess its priori-
countsfor P'1,22 bittionor 52.03% of the total : ties and re-focuson what is reattyimportant:
debtwhiteforeignloansgrewstightty : the wetfareof its peopleratherthan the
to P1.'128
biltionor 47,97% of the totat. satisfactionof the country'screditors.
Underthe 2002nationat budget,P360.2 JosephS.'/u
bittion,or 46.1%, of the P780.8 total budget.is :

Total 2,163,404
l. Domestic 1,224,196 1,010,111
A. DirectLoans 1,207,321 1,00J,601
1. Government Securities 1,192,001 992,038
2, Availedby agencies 15,320 15,563
B. Assumed Loans 16,875 27,510

ll. Foreign 1,128,548 1,133,293

A. DirectLoans 656,907 686,011
a. Avaitedby agencies 567,O25 588,456
b. Retentto GOCCS 89,882
B.Assumed Loans 11,845 13,967
C. ForeignDenominated Loans 459,796 433,315

fub|bhtdlodiighi'b'l'o[rodh4
Moiih. r'noiroddFi ediloF@ibon
@
tur. N4. 13 ?7 37,713 27 ?e ood 7r3 0e r? (ciedioilForTr6 0r 0s
Fnhcd todnisr ts tid!rq5 nqir nqd€

rlox Fdrd"d', !'a ho& rie . shr5r

l4 IBON Facts & Figures