Volume llI, No.

3 MAY - JUNE 1985 ISSN 0115-9097

IIH II IIIIII

AGRICULTURAL POLICIES FOR DEVELOPMENT

TOWARDS SUSTAINED PHILIPPINE EDITOR'S NOTE: The Philippine Institute for Development Studies has long been
AGRICULTURAL GROWTH: POLICY engaged in serious studies on agriculture as this is viewed as a critical sector in overall
ISSUES AND SUGGESTIONS* Philippine development. Way back in September 1983, the Development Research
News featured a special issue on agriculture. The articles in that issue made clear that
The agricultural sector is a key sector
of the Philippine economy. Taken to- the potentials of agriculture couM very well be developed on equal terms with the
commercial and industrial sectors.
gerber,
activitiesagriculture,
account forfishery, andaforestry
more than quarter In this issue, the Development Research News presents brief summaries of the
papers presented during a two-day seminar on Agricultural Policy hem on May 3-4,
of the total
product (or value of the gross
considerably moredomestic
ff the 1985. Our guest writer, Dr. Ponciano fntal, Jr., Chairman of the Department of
Economics at the College of Development Economics and Management (CDEM) of
gross valuewereadded
processing to befrom agricultural
included), com- the University of the Philippinesat Los Ba_os, introduces these summaries and suggests
pose more than two-fifths of total ex- two broad themes that weave the papers together. The last article, also written by
ports, and provide more than half of Dr. lntal, calls for increased support fbr agricultural research and improved public
administration.
total employment. Thus, the growth per-
formance of the sector has a tremendous The seminar-workshop on Agricultural Policy was eonducted at the Southeast
impact on the rest of the economy. At Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) in
the same time, however, the growth per- Los Baztos, and was jointly sponsored by the Center for Policy and Development
formance of the agricultural sector is Studies ( UPLB.CPDS), the Philippine Institute for Development Studies (PIDSJ, the
heavily influenced by the policy environ- Philippine Council for Agriculture and Resources Research and Development
(PCARRD), the International Rice Research Institute (IRRI), and the Agricultural
ment within which the sector operates. Development Council (ADC).

II I IIIII III II I II II IJI

TABLE OF CONTENTS POLICY ISSUES IN THE PHILIPPINE COCONUT

TOWARDS SUSTAINED PHILIPPINE INDUSTRY
AGRICULTURAL GROWTH: POLICY ISSUES BY C. HABITO ......................... 7
AND SUGGESTIONS THE COCONUT REPLANTING PROGRAM
BY PONCIANO INTAL, JR............... 1 BY J. SANGALANG ...................... 8
RICE PRICING AND MARKETING POLICY POLICY ISSUES FOR THE PHILIPPINE SUGAR
BY F. LANTICAN AND L. UNNEVEHR ........ 2 INDUSTRY
ISSUES IN IRRIGATION WATER MANAGEMENT IN BY I. PABUAYON AND S. CATELO ........... 9
THE PHILIPPINES
BY MA. C. CRUZ, R. SlY AND W. CRUZ ........ 3 A CALL FOR INCREASED SUPPORT FOR
IRRIGATION AND RICE PRODUCTIVITY: THE AGRICULTURAL RESEARCH AND IMPROVED
PHILIPPINE SETTING PUBLIC ADMINISTRATION
BY J. SISON ........................... 4 BY PONCIANO INTAL, JR ................. 9
POLICY ISSUES ON RICE CROP PROTECTION
BY C. BANTILAN AND E. MAGALLONA ....... 5 PIDS UPDATE:
AZOLLA: A POTENTIAL SOURCE OF NITROGEN
FOR LOWLAND RICE CULTURE SEMINARS 10
BY E.T. CASTILLO, P.C. PAYAWAL, ET AL ..... 6
FERTILIZER AND PHILIPPINE RICE PRODUCTION PIDS PUBLICATIONS AVAILABLE ............. 11
BY A. TE ............................. 7

....... II I III IIIIIII II IJ I

PIDS DEVELOPMENT RESEARCH
1[ III
Several recent papers, the majority of
which were wholly or partly funded by
the Philippine Institute for Development
Studies (PIDS), have examined the policy
environment of Philippine agriculture,
Most of the papers were written by the
members of the Agricultural Policy Wor-
king Group.** The papers of the Group
contain a number of policy recommen-
dations which are aimed at improving the
policy environment of Philippine agri-
culture to make the sector a vigorous
anchor of the country's economic reco-
very and sustained growth,
There are two broad themes that
weave the papers together. The first is
that government trade and financial poll-
cies have unduly hurt agriculture. For
the 1970s, this theme is best shown by
David et al. (1983) and is reemphasized in
Intal, David and Nelson (1985). Lamberte
et al. (1985) indicates that the burden of
the macroeconomic adjustment during
the past two years was shouldered more
by the private sector, specifically the
agricultural and export sectors, than by
the government. In general, since these
sectors can be expected to be logical
anchors for economic recovery, the
disproportionate burden imposed on
them partly explains the difficulties in
adopting the macroeconomic adjustment
process. Towards stimulating the econo-
mic recovery, it may be well to take a
short-term macroeconomic strategy of
further fiscal discipline and a more expan-
sionary monetary policy stance vis-_ -vis
the private sector,
The second theme that is pervasive in
the studies is for government to deem-
phasize its direct intervention in the con-
trol of the domestic and international
marketing of agricultural output. The
papers of Lantican and Unnevehr, Pabua-
yon and Catelo, Habito and Te indicate
that government intervention in market-
ing during the 1970s had, on the whole,
an adverse effect on farmers' income and
= relationships in the coconut and sugar
*This article draws heavily from the over-
view paper written by C. David, G. Nelson
and P. Intal, Jr. for the May 3-4, 1.985 seminar-
workshop on Agricultural Policy, U.P. Los
Banns_
**The Agricultural Policy Working Group is
a project of the UPLB Center for Policy and
DevelopmentStudies, involving individualstaff
members mainly from the UPLBand IRRI. The
group has been cooperatively funded by PIDS,
PCARRD,IRRI, ADC and UPLB Office of the
Director for Research.
IIIII III III
NEWS 2 ....
marketing efficiency. The challenge to
policy making, now and in the future, is
to consider more carefully the appropriate
level and form of market intervention. In
this regard, the four principles to guide
the process as spelled out in intal, David
and Nelson (1985) are worth mentioning
here:
(1) Markets should be presumed to be
functioning well, unless it can be
clearly demonstrated that they are
not. Price variability and large
marketing margins are almost al-
ways evidence not of monopoly
practices but rather of an under-
developed market structure.
(2) The private sector is almost
always more efficient than the
public sector. Being driven by the
profit motive, the private sector
can be expected to use resources
more efficiently than the public
sector,
(3) The government should only in-
terfere where public benefits of
intervention are much larger than
public costs,
(4) The government need not buy and
sell directly in order to influence
prices. The use of variable export
and import taxes, for example,
can provide domestic price stabi-
lity (Lantican and Unnevehr).
The papers argue that government
efforts could be more fruitfully directed
towards improving the institutional frame-
work of, and infrastructural support fbr,
farming and agricultural marketing. Pubhc
investments in market infrastructure (e.g.,
farm-to-market roads, ports), market in-
formation dissemination, and the proton-
tion of competition in agricultural
trading can reduce marketing margins
and price uncertainty (Lantican and Un-
nevehr, also Habito).
Habito, Pabuayon and Catelo argue
for a serious examination of the tenurial
industries, including the feasibility of
instituting land reform in these industries,
In the area of irrigation, there are persua-
sive arguments for continued government
subsidy even as the National Irrigation
Administration has further streamlined
its operations and strategies for cost
savings and greater operational effect-
ivity (Cruz et al.; Sison). All the studies
argue for increased government support
llll
MAY-JUNE
, ,, ,,=,,
1985
i| i
for agricultural research and extension
(e.g., the development of azolla ecotypes
appropriate for local conditions, Castillo
et al.), as well as a call for research on
methods for maximizing fertilizer effi-
ciency and alternative sources of organic
fertilizer (Te), and on the proper use and
impact of pesticicles (Bantilan and
Magallona). In the last paper, lntal notes
that government investment in agricultural
research (in real terms) during the 1970s
barely grew in the Philippines in contrast
to the significant expenditure increases in
the agricultural economies of the ASEAN
region.e
Z I| Ill
RICE PRICING AND MARKETING
POLICY
by: F.. Lantican and L. Unnevehr
Domestic rice prices have followed the
long-run trend in world prices. This is not
surprising since both explicit budgetary
costs and the implicit social efficiency
costs of deviating from world price trends
are large. Keeping domestic rice prices
close to world price trends encourages
the most efficient allocation of domestic
resources.
The short-run variability in world
rice prices creates the need for some
type of policy to provide domestic price
stability. The central price policy issue is
how to manage trade or stocks to provide
tbr gradual adjustments to world market
trends. The thin world rice market means
that participants must bear substantial
search and transaction costs, which will
be particularly true for the Philippines in
the near future, since the country is like-
ly to continue to shift from being a mar-
ginal exporter to a marginal importer and
vice versa. Thus, trade and buffer stock
policy must be flexible to handle both
surplus and deficit years.
The government has relied on the con-
trol of international trade to influence do-
mestic prices, but this has had some un-
expected effects on the market. During
the importing years of 1961 to 1973,
imports frequently arrived after the new
harvest had already begun. Government
delays in contracting and disbursing
imports meant that supplies were not
available during the lean season when
they were needed, and this had led to
unusual seasonal price fluctuations in
deficit years.
III II
PIDS DEVELOPMENT RESEARCH
': . . . The government has relied on
the control of international trade to
influence domestic' prices, but this
has had some unexpected effects on
the domestic market.. _"
,, =,,,
During the surplus years of the late
1970s, the government monopoly on in-
ternational 'trade prevented world quality
premiums from being reflected in dora-
estic prices. Private millers did not have
the incentive to meet world market
standards for consistent blends of head.
rice and brokens or to develop quality
control institutions within, tile private
trade. This reduced the ability to export
profitably because the government in-
curred reprocessing costs to meet export
standards,
On the other hand, government is to
be commended for reacting to the shor-
tage of domestic supply in 1984 with the
timely disbursal of tinports. Past ex-
perience does suggest that in the medium-
'to long-term, some redefinition of the
government's role in rice trade is needed,
The goal of providing price stability
could be achieved through relying more
on the private sector and using wtriable
export/import taxes. A domestic price
goal (i.e., a Manila reference price) could
be set and then a variable export tax
could be imposed that would be equalto
the difference between the domestic price
goal and the actual world price_ The pri-
vate sector could then undertake what-
ever traffic would be profitable_
An analysis of domestic market inter-
vention shows that defense of the ceiling
price has beenmore effective than defense
of the floor price_ Disbursements have
been determined byhighrice prices, while
procurements have not been concentrated
where prices are lowest. Domestic floor
and ceiling prices are not defined with
respect to location, and in the case of
ceiling prices, neither with respect to rice
grade. The recent redefinition of ceiling
prices to allow for grades may be un-
wieldy to administer, particularly if
grades do not agree with consumer
preferences.
The difference between ceiling and
floor prices is ,rot enough to allow private
traders a reasonable return to storage
between harvests, particularly now when
capital costs are very .high. Thus, an im-
plicit goal of intervention remahls to be
IIIl
NEWS
the replacement of private storage with
subsidized public storage. Since inter-
vention did not hold actual market prices
within official price bounds, private
traders are still able to store .rice.
,,, The results suggest that the government
needs to reconsider its domestic marke-
ting role carefully and to set more expficit
intervention goals. One alternative would
be to set a reference Manila price that
would follow world market trends. Dora-
estic marketing costs would then deter-
mine other prices throughout the country,
In the domestic market, the government
could then compete with the private
sector, either when farm prices are lowest,
or whenever retail prices are highest. On
the other hand, in defining a domestic
market strategy, the government needs to
decide whether subsidizing marketing
costs is desirable or feasible. An explicit
budget allocation to cover the stated goals
of intervention could then be made, rather
than financing operations from implicit
capital subsidies and monopoly rents,
Given tile sheer magnitude of the rice
trade in the Philippine economy, it is
likely that the government's role in trade
will be small. Therefore, the govermnent
,ll
".. _ The government
its scarce resources
domestic marketing
instead of creating
market. "
' '
needs to use its scarce resources to pro-
mote domestic marketing efficiency, in-
stead of creating a segmented and in-
efficient market,
In the long run, all rice producers and
const, mers willbenefit from the reduction
of rice marketing costs. This can be
achievedthrough the government's role in
infrastructure investments (i.e., trans-
port and comnmnications); as well as
through agricultural reseaJ'ch to reduce
postharvest losses and the development of
financialinstitutions. •
_, ,,,
,,
. . .Ttle resulls
governmen[ needs to reconsider
its domestic marketit,g role care-
fully and " to set more explicit
intervention goals... " _.
In IIIII I IIIII
3 MAY4UNE 1985
IIII I II 1111 III I
ISSUES IN IRRIGATION WATER
MANAGEMENT IN THE
PHILIPPINES
by. Mr. C. Cruz, R. Siy and W. Cruz
The responses of tile National Irrigation
Administration (NIA) to cutbacks in the
irrigation budget and to the rising costs of
irrigation operation have been: (1) to
reduce the rate of increase of new areas
for irrigation; (2) to shift investment
priorities to rehabilitation versus new
construction; (3) to increase the develop-
ment of small-scale communal projects
relative to large-scale national systems;
(4) to improve water fee collection rates
and increase the total mnount to be
charged for irrigation services in.the future;
and (5) to gradually shift operation and
maintenance (O&M) responsibilities from
NIA personnel to water user organiza-
tions through greater farmer participation
in O&M system activities_
Two key policy issues become im-
mediately apparent from these responses.
The first issue raises the question of
whether, in fact, there is a case for subsi-
dizing irrigation development, and what
the potential impacts of the subsidy on
agricultural production, and income dis-
,., tribution are. If the benefits on an irriga-
needs to use tion project are spread over a wider class
to promote of people it will be infeasible to assess
e.¢ficiency, charges against indirect beneficiaries
a segmented and unfair to have fa,'mer-irrigators bear
the full burden of repaying project costs.
A fee schedule, when devised, should
scale water charges only against in-
creased net incomes arising from irri-
gation (as compared to rainfed conditions).
An issue that is closely associated with
water charges is the enforcement or
collection problem. NIA has introduced
several collection schemes which in-
trod.uced institutional controls by water
user associations, in both the collection
of fees and the actual, operation of the
system.
While repayment forms part of the
process of development borrowing, it
does not follow that direct beneficiaries
of the project must bear the full burden
........ of recovering total project costs. This
higldights tire distinction between pro/eel
suggest that the administration which runs and administers
the project and .financial administration
which, negotiates and pays for the loan.
The former is the job of NIA, while the
latter is the job of the Finance Ministry.
II IIII ii llil iii i •
PIDS DEVELOPMENT RESEARCH NEWS
I II I II
The second issue has to do with the
need to make water charges correspond
more realistically to actual irrigation
delivery services. Since full irrigation
potentials are seldom achieved, programs
for improving water management and for
reducing inefficiencies in irrigation de-
livery will have to be devised.
The problems associated with poor
irrigation water management include: (1)
incompatibilities between irrigation
system design and actual operation
(which are reflected, for example, in the
problem of intensive vs. extensive water
distribution); (2)problemsofwatertiming
relative to crop needs (such as the under-
estimation of land preparation duration);
(3) prevalence of unequal access to water
within a system (e.g., between upstream
vs. downstream users); and (4) inadequate
organization for operation and mainte-
nance,
In view of the above discussion, the
following policy proposals are recom-
mended:
1. Creation of alternative pricing strate-
gies. Differential water charges, for
example, between regions and within
irrigation systems, and the provision of
price support to agricultural produce are
necessary to increase the ability to pay of
farmer-irrigators,
2. Improvement of"operation and main-
tenance (O&M} of national systems. This
can be done through (a) conversion of
smal! and financially marginal national
projects into communal systems, and
(b) gradual shifting of responsibilities for
irrigation operation from NIA project
managers to water-user organizations,
3. Maintenance of NIA's financial viabi-
lity. To increase NIA's operating budget,
new ways of improving fee collection
rates (to recover part of O&M costs) will
have to be devised. Also, NIA will need to
explore new sources of income such as
rental of equipment and other services,
4. Transition from construction-oriented
agency to an O&M-oriented agency. New
capabilities and skills in project admin-
'" '"
"The problems associated with
poor irrigation water management
include. incompatibilities between
system design and practice; water
timing, unequal access, and inade-
quate organization... " yields in irrigated areas may not be attain-
IIIII IIII I IIII,
4 MAY-JUNE 1985
istration and widespread institutional
reform will be needed to go beyond
construction, and enhance administrative
capability.e
IRRIGATION AND RICE
PRODUCTMTY:
THE PHILIPPINE SETTING
by: J. Sison
The Philippine government's efforts
toward the attainment of increased pro-
duction are reflected in the large invest-
ments made in irrigation construction and
rehabilitation during the last two decades.
These investments are generally made by
the National Irrigation Administration
(NIA), which is responsible for the super-
vision, operation and maintenance of
irrigation systems in the country,
A tremendous expansion in the service
area occurred from 1950 to 1982. How-
ever, in spite of this rapid expansion, irri-
gation development in 1982 covered only
42% (or 1.32 mfllionhectares) of the total
3.1 million hectares of agricultural land
which are potentially irrigable.
Considerable improvements in rice
yields and production were observed in
the period of irrigation expansion, mainly
due to complementarities among modern
rice varieties, fertilizer application, and
expansion, and improvement of irrigation
facilities. Future rice production increases
depend on the performance of individual
irrigation systems in minimizing opera-
tion and maintenance costs while pro-
viding dependable water delivery seivice,
In many sites, the communal type of
irrigation system seems to be most cost-
effective in terms of lower construction
cost per hectare and per unit of output,
as well as of lower operation and main-
tenance costs. Cropping intensity and
yield are lower than with the other types
of systems, but the communals are con-
siderably less expensive to construct,
Thus, they are the most effective systems
in providing incremental production. Fur-
thermore, communals (and gravity
systems in general) have relatively high
economic efficiency due to low invest-
ment, operation and maintenance costs.
It should be noted that the heavy
burden on irrigation of increasing Phil-
ippine rice production through improved
II IIIII
IIIII
able in the near future unless major prob-
lems besetting the irrigation machinery of
the country are resolved. These problems
relate to:
(1) The design and planning of systems.
There is incompatibility between the irri-
gation system design and the actual
method of water allocation and distribu-
tion, and this affects the level of operation
and maintenance (O & M) in terms of
activity and costs. With some systems
being either underdesigned or over-
designed relative to crop water requirer
ments, and the manner by which water
is delivered to the benefitted areas, the
magnitude of cost requirements for
O & M is quite considerable.
(2) Operation and maintenance. NIA's
severe shortage of funds and equipment
to properly maintain specific irrigation
facilities, together with the lack of
physical facilities, has led to the inability
of individual systems to ensure adequate,
equitable and timely distribution of
water to farmer-beneficiaries.
(3) Water management problems.
Effective water management essentially
requires
NIA a close
and the coordination between
farmer-beneficiaries through
the community organizers and farmer
associations. However, the success of the
participatory approach in water manage-
ment largely depends on: (a) the perceived
need of farmers to participate in farmer
associations, and Co) the perceived need
of NIA regarding farmer assistance in
water management.
problems In general,
of efficient water the
management
arise from the complex relationship in-
volving technical, socio-economic and
institutional factors.
(4) Collection of irrigation service fees.
The water ,management problems being
experienced by systems, particularly 'the
national systems, arising from poor O & M
performance has led to a lack of credi-
bility of the NIA with farmer-beneficia-
ries, as reflected in the low irrigation
service fees collected. Unfortunately, this
has led to a vicious cycle of decreased
funds for O & M -- less O & M, greater
farmer frustration, and lower payment
of fees.
(5) Current economic environment.
The current economic environment which
may persist over the succeeding years
may preclude the attainment of NIA's
yearly target of additional irrigated areas.
Such a pessimistic forecast may be at-
I I
PIDS DEVELOPMENT RESEARCH NEWS
I II IIII III I II
tributed to: (a) the shift in the govern-
ment's emphasis on sectors other than
irrigation; (b) delays in the release of
project funds which have resulted in the
delayed prosecution of a considerable
number of systems, thus setting back
implementation timetables; (c) the rising
costs of irrigation development; and
(d) NIA's increasing emphasis on rebabi-
litation projects as well as on the cons-
truction of communal systems,
The NIA is aware of the prevailing
problems within its environment. Such
awareness is reflected in the policy
measures which the agency has adopted,
and intends to adopt, to curb these
problems in order to facilitate the efficient
operations of the NIA irrigation mach-
inery.o
' ' ' plementation of this measure is the limited
POLICY ISSUES ON RICE CROP
PROTECTION
by: C Bantilan and E. Magallona
Man's efforts to increase rice product-
ion to meet growing food needs is ham-
pered by the increasingly serious problem
of protecting the rice crop from pests,
Through the years, alternative pest corn
trol strategies have been developed and
recommended. These varied from the use
of chemicals or pesticides, various cultural
practices, biological controls, and a corn-
bination of these. The task of this paper
is to present and evaluate important issues
involved in the problem of pest control,
and attention is focused on two topics:
(a) pesticide use, and Co) pest manage-
ment in the Philippines.
A. Pesticide Use
With regard to pesticide use, four issues
are addressed as follows: (a) problems
with pesticides, (b) the efficiency-pro-
ductivity issue, (c) regulation of pesticide
use and its implementation, (d) confiden-
tiality vs. right to know, and (e) local ma-
nufacture of pesticides and nationalism in
trade,
Problems with Pesticides
Pesticides have proved to be a power-
ful tool that can be brought to bear
quickly on a pest l_opulation outbreak,
However, extreme reliance on this method
of pest control, coupled with the tempo-
rary nature of its effectiveness and ira-
5 MAY-JUNE
I IllllllI
proper use, generates problems and ad-
verse side effects such as ecological dis-
ruption, environmental contamination,
residues on food and feed, toxic and other
adverse effects on man and other non-
target organisms, This two-sided nature of
pesticides brings up several interrelated
questions such as:
i) Are we satisfied with the current
state of affairs?
ii) Even on the assumption that we
are, could additional measures
result in a safer envkonment?
iii) What are the constraints in our
having a safer environment?
iv) Are we doing something about the
problem?
One measure calls for a more rigid
evaluation of pesticides for registration,
However, a hindrance to the effective im-
expertise of the Fertilizer and Pesticide
Authority (FPA) with respect to evalua-
tion. For example, the FPA does not have
enough expertise in toxicology, which is a
critical area for evaluation,
Other measures suggested to attain a
safer environment with pesticide use are:
(a) substitution of highly toxic corn-
pounds with less hazardous substitutes;
and (b) dissemination of information
about the hazardous effects of pesticides,
and guidelines with respect to the proper
handling of these compounds,
Efficiency-Productivity Issue
On the one hand, the application of
pesticides has proven to be effective in
the prevention ofcroplosses, thus assuring
(to some extent) stable rice supply and
price levels. On the other hand, the high
cost of chemical inputs and the cost of
application cannot be ignored. The
following question is raised: "How eco-
nomically profitable is it to prevent yield
losses with pesticides?"
The basic finding of the studies under-
taken to resolve this question was that
high levels of insect control added more
to production cost than to the value of
the yield. Using the ratio of added returns
to added cost as a measure of economic
profitability, it was found out that the
lowest level of application was most profit-
able.
"[he paper notes that the conclusion
obtained in these studies is limited because
it does not include the farmer's level of
application. Since underdosing (applying
below recommended levels) is a common
1985
IIII II
practice among farmers, a further study
that includes the farmers' level ofapplica-
lion in measuring profitability may in-
dicate more interesting implications. For
example, it may show whether or not un-
derdosing (which is the usual practice of
farmers) achieves control at an econo-
mically profitable level. If so, farmers
may be shown to be using a dosage level
which is more economical than that made
in standard recommendations.
Regulation of Pesticides and its Imple-
rnentation
The FPA has been mandated with the
immense task of regulating and monitor-
ing pesticide use in the Philippines since
1977. To start with, there was a low level
of expertise on pesticides in both the
government and private sectors, and FPA
operated with limited staff support and
resources. After eight years of operation,
the agency is still faced with similar cons-
traints. There is still a dire need for
support mechanisms and experienced
personnel to help develop and implement
its various functions and programs. The
paper reiterates the importance of the
following measures to help FPA attain.
its mandated objectives. Some of these
are:
i) A coordinated plan under which
professionally trained and ex-
perienced personnel from agencies
that are directly or indirectly in-
volved in the pesticide industry
may be tapped to mininlize the
cost and maximize the efficacy of
FPA;
ii) The training of laboratory and ex-
tension personnel at all levels of
agricultural management;
iii) The continuing inspection and in-
vestigationofpesticideuse,licenses
and marketing samples with en-
forcement or legal action as a final
resort to ensure safe and effective
programs;
iv) Closer attention to the field
aspects of regulation to protect
the small farmers. For example,
there is a need for the establish-
ment of necessary checks on the
classification or mislabeling of
pesticides.
Confidentiality vs. rightto know
While the need for confidentiality in a
regulatory agency is recognized especially
as it applies to commercial secrets and
PIDS DEVELOPMENT RESEARCH
I III
proprietary data required for registration,
there are data generated by FPA, or at its
instance, which cannot be justifiably
labeled as confidential. For example, the
vast amount of residue data on our vege-
table and lake ecosystems cannot be jus-
tifiably made confidential because (1)
'there are no interests tobe jeopardized by
making the information public, and (2)
these data are generated by public funds
so that the public has the right to demand
an "accounting" of this expenditure by
way of having the data made public. Thus,
there is a need for settling tile issue of
who is supposedto decide on what things
are to be kept confidential or declas-
sifted, and on what grounds it is justified
to hold these data.
Local Manuf'acture of Pesticides and
Nationalismin 7Yade
The local manufacture of pesticides
has its advantages and disadvantages. On
the one hand, the establishment of a local
facility to manufacture pesticides could
easflyleadtopricereduction as experienced
by Malaysia with paraquat, wherein, alocal
pesticide facility can utilize the by-pro_
ducts of existing manufacturing facilities.
On the other hand, the local manufacture
of pesticides could be a possible source
of environmental contamination problems
resulting tkom by-products and wastes of
the plant. The issue that needs to be
settled is whether or not we are techno-
logically prepared to inil_mize the poilu-
tion potential of a local pesticide faci-
lity so that what happened in Bhopal
would not be repeated_
With. respect to the policy on natio-
nalism in trade, a positive step that has
been reiterated is for FPA and its support
agencies to assist Filipino entrepreneurs
in the registration of their products, and
to facilitate access to available tecb.nical
data and consultation services, tb.rough
govermnent institutions and universities,
B. On Pest Management
Pest management is a control strategy
that combines chemical, biological and
natural agents in controlling pests in order
to balance yield loss, environmentalsafety
and farmer's capabilities and resources,
The basic idea ofpest management has
gained wide acceptance but its effective
implementation has barely started in the
Philippines. There is a need to expand
.research and development programs on
pest management systems. Areas that
II IIIII
NEWS 6 MAY-JUNE
I II
need careful study include pest biology
and population, dynamics; natural enemies
of pests;forecast of pest population levels;
and determination of economic threshold
levels. In. addition training and support
is needed for person.nel who can help ira-
plement pest management programs at
the farmer's level. Finally, the develop-
ment of a pest management approach
which is compatible with local .resources
technical skills and the small-scale labor
intensive farming technology of the Phil-
ippines, should fill file gap between
research and extension.o
' ' ""'
"After eight years of operation, the
FPA is still faced with similar
constraints . . . There is still a dire
need for support mechanisms and
experienced personnel to help dev-
elop and implement its various
functions arm programs.. _"
,, ,,,,
AZOLLA: A POTENTIAL SOURCE
OF NITROGEN FOR LOWLAND
RICE CULTURE
by: E.T. Castillo, P.C. Payawal and
other members of the National Azolla
ActionProgram, U.P. in Los Ba_:os.
Exper,-nent station results and the
experience of some farmers suggest
that azolla has the potential to be an
important source of nitrogen for low-land
rice culture. Based on available informa-
tion, az.olla use can. reduce the need
for inorg.anic N, farm chemicals and labor
in hand weeding, all of which contribute
to increases in.the income of rice farmers,
generate savings of foreign exchange from
the importation of inorganic fertilizer,
and help avert a possible drop in rice pro-
ductivity due to inadequate application
of inorganic fertilizer,
Azolla technology can "also be an
answer to the problem of supplying in-
organic fertilizer to inaccessible areas
since azolla can be produced on the farm_
The application of _olla can be made to
coincide with :farm operations like land
preparation and rotary weeding so that
its use will not entail adjustment in farm
operations, capital outlay and unwar-
ranted increases inlabor input,
Current adopters of azolla, however,
are generally farmers with technical
IIII III IIIIIIIIIIIII
1985
II I I
command of rice farming. The value of
today's azolla technology for less skilled
farmers has yet to be documented. The
most notable area in the country that has
successfully adopted azolla technology on
a large scale is South Cotabato, while
other areas have reported limiteduse.
Three types of problems have been
encountered in the process of promoting
the use of azolla particularly in lowland
rice culture - biological., socioeconomic,
and administrative.
Biological. Success in the use of azolla
at the farm depends to a large extent on
the ecotypes available in the country_
Theoretically the limits of azolla's use-
fulness are defined by its suitability to
local conditions.
At the moment, the ecotypes available
are mostly of foreign origin. Obviously,
the performance of these materials will
differ from their performance at the place
of origin, particularly if the origin has a
temperate climate. Among others, the
growth of azolla depends on temperature,
relative humidity, sunlight water, and
phosphorous; and azolla will not thrive
very well unless the optimum conditions
for growth are provided. The azolla
programs in the Philippines has recog-
nized these limitations by adopting short-
run measures, such as priority dissemina-
tion of the technology in irrigated areas
with. relatively high levels of available
phosphorous. Long-run measures should
also be undertaken to maximize the bene-
fits from the technology. The most im-
portant of these is the development of
ecotypes appropriate for localconditions.
There is a need, therefore, to expand
basic research on genetic development
and on the ecological implications of
spreading the plant species.
Socioeconomic. Farmers are rational
producers; they adopt innovations pro-
vided that in their own. terms, the eco-
nomics of their use is clear. So far, there
have been successful users of azollawho
could serve as models in the use of the
technology, but the success story has not
as yet involved a larger number of poten-
tial users. Also the processes involved in
the successful use of azolla are not clear
to many of the designated change agents.
Consequently, this limits the aggressive
extension of the technology. Thus, it is
imperative to educate the change agents
on the short- and long-run potentials of
the technology for both the rice farmers
PIDS DEVELOPMENT RESEARCH
III
and the economy, other than under,
standing potential users' perception of
azolla. These perceptions can provide
basic researchers with information that
is useful in the development of appro-
priate technology.
Administrative. The rate of' dissemi-
nation of the technology depends partly
on the administrative structure of the
program. At the moment, there are two
azolla programs and both perform re-
search and extension. For efficiency and
economy, there is a need to streamline
the administrative structure of the
programs.o
,=
FERTILIZER AND PHILIPPINE
RICE PRODUCTION
by:A. Te
With the production of the semi-
dwarf, fertilizer-responsive, photoperiod
insensitive rice varieties in the Philippines
in 1966, fertilizer became a very im-
portant ingredient for achieving high pro-
duction. Recognizing the critical role of
fertilizer, the Philippine government had
intervened actively in the fertilizer pricing
policy through direct and indirect sub-
sidles since 1973 with the intention of
providing cheap fertilizer to the farmers,
However, except for the years 1974
and 1975, it is very questionable whether
farmers had actu_y benefitted from the
large amount of money spent on the sub-
sidles,
The effect of small changes in ferti-
lizer prices on the amount of fertilizer
use by farmers is debatable. Other fac-
tors such as availability of credit, well-
controlled water supply, palay price and
fertilizer efficiency are believed to be
more important in determining the level
of fertilizer use by farmers. Hence, it is
recommended that it would probably
be better for the government to mini-
mize its direct intervention in the opera-
tions of the fertilizer industry and in-
stead, concentrate its efforts in strength-
ening its research capabilities, in search of
methods for maximizing fertilizer effi-
cieney and alternative sources of organic
fertilizer. In addition government will do
well to build its training and extension
program. If direct subsidy were to be re-
sorted to again as a policy instrument, it
I III I I III
NEWS 7 MAY-JUNE
! II IIIII
should be as a very short-term measure
and should be lifted as soon as possible.*
' " • _
POLICY ISSUES IN THE PHILIPPINE
COCONUT INDUSTRY
by." C. Habito
The coconut industry is currently un-
dergoing rapid changes. Presidential De-
cree No. 1960 which reopened coconut
oil exportation to competitive forces has
just been added to thelonglist of govern-
ment measures which started with Public
Act 2598 in 1916, pertaining to the coco-
nut industry,
The long history of legislation at'fect-
ing tile industry attests to its significant
role in the Philippine economy, a fact
which has been recognized by generations
of lawmakers. Whether this significant
role will be maintained in the decades
ahead rests heavily on policy directions
taken today. For this reason, enlightened
public discussion of policy issues within
the industry is of great importance at
this time.
In production, low productivity and
the resultant low incomes have been the
main problems of concern. These pro-
blems have both an agronomic and a
socioeconomic dimension, and govern-
ment policy must address both. "['hena-
tional hybrid replanting program is the
appropriate response to the agronomic
aspect of the problem, but it is important
that its implementation be efficient (both
in the technical and economic sense) as
well as equitable. Changes that appear
warranted in the program include:
1. Promotion of other hybrid varieties
besides the MAWA variety which is cur-
rently the exclusive choice of the pro-
gram;
2. Strategic dispersal of hybrid seed-
nut farms among the various coconut re-
gions of the country, using varieties best
suited for each particular region;
3. Market provision of seednuts (i.e.,
voluntary purchase and planting by far-
mers), accompanied by an active nation-
wide campaign to demonstrate the pro-
fitability of hybrid replanting;
4. Improved loan assistance to farmers
who engage in hybrid replanting; and
5. Increased and continuous research
to identify, develop and evaluate pro-
mising new hybrid varieties.
IIII
1985
I
The provision of farm credit will as-
sume even greater importance as coconut
farming becomes more input-intensive as
a result of the hybrid replanting and
intercropping programs. This must be
undertaken with new and creative mecha-
nisms to overcome past problems expe-
rienced in credit programs for rice. Seek-
ing to supplant traditional credit sources
especially the "suki" system does not
appear warranted_ These credit-marketing
tie-ups have become a way of life in the
coconut industry (as well as in other crop
sectors) and fill a real need in the indus-
try by providing farmers with a ready
source of credit when formal credit is
inaccessible for economic or practical
reasons. Credit policies in the coconut
industry must be--formulated on the basis
of lessons learned from the experience
with the rice industry. One such lesson
is that credit policies in a particular
crop sector cannot be taken in isolation
from those in the rest of the economy,
considering the scarcity of capital and
the need to find the most productive
uses for it. Second, it should be recog-
nized that the problem is not so much
one concerning interest rates, but of
credit delivery mechanisms. This is the
greater chaUenge that should be faced by
farm credit experts.
, , ,
"In
production, low productivity
and the resultant low incomes have
been the main problems of concern
.... these problems have both an
agronomic and a socioeconomic
dimension, and government policy
must address both .... "
II I I I II
The need for extension services like-
wise becomes even more important as
the hybridization and intercropping pro-
grams make the coconut less a "lazy
man's crop," and more a component .0f
an intensive farming system. Share te-
nancy continues to be a barrier to in-
creased productivity on coconut farms,
suggesting the need for the renewal of
agrarian reform efforts in the industry.
Any effort to improve the lot of mem-
hers of the coconut industry must also
consider the plight of the sizeable group
of landless workers who have been largely
overlooked by government policies.
Many of the policies that have affected
I II II II
PIDS DEVELOPMENT RESEARCH
coconut farm incomes in recent years
are directed to the trading and processing
sector of the industry. The vertical Lute-
gration program, while originally con-
ceived to benefit the farmers, has largely
failed to deliver tangible long4erm bene-
fits commensurate with the costs which
farmers have shouldered to finance it.
Reopening the coconut off industry to
competitive forces seems a logical step,
after the recent years' experiments with
market control through UNICOM, which
have failed to yield convincing benefits
for the farmers who nominally own it.
The attempts to promote the coopera-
tive marketing of copra through COCO-
MARK have likewise failed to gain signi-
ficant headway due to the farmers'
preference to deal with private traders
who extend advance credit, as well as the
conflict of interest facing the COCOFED
trader-members who are often tasked
with managing COCOMARK operations,
These problems suggest that cooperative
marketing efforts can only succeed if the
buying stations operate in the same way
as traditional "suki" traders, and if these
are controlled by producers themselves,
UNICHEM promises long-run benefits to
the industry by expanding the market for
coconut products and adding more value-
added to the domestic coconut industry,
However, any such benefits must ulti-
mately redound to the farmers, and not
just to the few who hold control over
these firms' business operations as trustees
of the farmers. Thus, there is a need to
reexamine the granting of monopoly
rights over the importation of petro-
chemical to UNICHEM.
Tangible benefits could be provided
to coconut producers by simply ira-
proving their links to the market through
better market information and trans-
portation facilities. Such improvements
can be expected to result in better prices
for farmers by helping reduce monop-
sony power in copra trading at the farm
level. While the importance of market
infrastructure and information improve-
ments has long been recognized, there
continue to be insufficient investments in
these areas of the industry. A proposal is
to set aside at least part of what remains
of the huge sums raised by the coconut
levy for these purposes,
In the long-run, much depends on the
industry's capability to increase its pro-
ductivity. In a market where the coun-
IIII
NEWS 8 MAY-JUNE
try is essentially a price-taker, this is the
only way to increase the income of the
industry, particularly of the farmers
and landless laborers who account for the
_' "'"
".... In a market where the country
is essentially a price-taker, in-
creased productivity is the only
way to increase the income of the
industry..."
vast majority of its members. This is also
a logical response to similar moves on
the part of countries producing closely
competing oils to coconut oil, especially
palm oil and soybean oil. Long-run gains
in productivity cannot translate into im-
proved welfare for the vast majority of
the members of the industry unless this
is accompanied by a well-functioning
market system.e
,,,,,=, , possible.
Tangible benefits could be
provided to producers by simply
improving their links to the market
through better market information
and transport facilities .... " performs well.
, , , The susceptibility of the foreign by-
THE COCONUT REPLANTING
PROGRAM
by: J. Sangalang
Results from the Pilot Hybrid Farms
and PCA research centers indicate that,
under recommended levels of inputs
the foreign hybrids perform somewhat
better than the local talls and hybrids in
terms of nut and copra yield/hectare,
although there are some local hybrids and
cultivarswhich show promise,
The University of the Philippines at
Los Bafios has several tall cultivars
and at least 10 dwarfs and 25 hybrid
crosses; PCA has a least 39 local culti-
vars and around 42 hybrid crosses in their
research stations. Other local institutions
like VISCA and TRRC are also doing
some coconut collection and breeding
work. All of these institutions need sup-
port to test their hybrids and cultivars
under varied environmental conditions,
These institutions already have qualified
personnel to conduct crop improve-
ment work. A highly coordinated, inter-
llIllIII
1985
agency breeding program would definitely
facilitate the speedy development of
alternative planting materials if adequate
financial support were available.
The coconut authorities should be
commended for recognizing the need to
have several hybrid .alternatives for re-
planting. The project on Regional Testing
of Promising Coconut Hybrids and Cul,
tivars (PCARRD-Special Project) involves
the testing of up to 10 promising coco-
nut hybrids and one local cultivar in
various locations in the country.
Of the five participating institutions
that entered their hybrids for testing,
however, only one showed the capability
to produce and distribute large quantities
of seednuts in the event that its entry is
picked over the others. If another agency's
entry were to be found superior, there
would be no mechanism for the corn-
mercial production of the seednuts. Thus,
it is important to fill this gap as early as
Research results show that the per-
formance of different hybrids varies
according to location. This suggests that
a given hybrid can be recommended only
to a particular location/region where it
brids to strong winds observed during
typhoons should serve as a warning. It is
very risky to plant these in the typhoon
belt. In this connection, research on the
identification and selection of hybrids/
cultivars which can withstand strong
winds is needed. This involves the screen-
ing of hybrids arid cultivars for a more
balanced development of roots, stems,
leaves, and bunches, and the anato-
mical characterization of the strength
of the fibers of their leaf petioles.
The abandoned pilot farms are appro-
priate sites to observe the performance
of the hybrids under the level of manage-
merit provided by the farmers. The pest
and disease reactions of the palms in
these abandoned farms should be moni-
tored regularly. No one knows when a
new or unusual disease may appear on
those palms and .regular observation can
provide an immediate warning.
Existing data indicate that the foreign
hybrids perform relatively better than the
local tall cultivars and hybrids given
optimum cultural management practices.
They were not tested, however, under
varied environmental conditions.
IIIII I I
PIDS DEVELOPMENT RESEARCH
This kind of research is indeed of high
priority since we need to identify the
planting materials that are appropriate
to the low levels of inputs that are likely
to be used by farmers,
Should the government proceed with
the replanting program using the foreign
hybrids, a mechanism to support the
input needs (fertilizers, pesticides, etc.) of
the hybrids must be instituted. With the
present tight economic situation, this
might be very difficult to provide.*
,, =,
POLICY ISSUES FOR THE PHILIPPINE
SUGAR INDUSTRY
by: I. Pabuayon and S. Catelo
The sugar industry, which is one of the
country's oldest and most important in-
dustries, has received considerable govern-
ment attention, regulation and support.
There are two distinct periods of policy
environment after World War II: first,
the years preceding 1974, and second,
1974 and thereafter. During the first
period, government intervention consisted
primarily of policies that governed
sugar trade with the U.S. After 1974, the
government assumed more direct control
of the industry through full takeover of
domestic and export marketing,
Government intervention has had
varied effects. Both policy environments,
though distinct from each other, had
little effect on sugar productivity which
has remained low. Credit policies resulted
in the sugar hrdustry having the biggest
share in total agricultural credit, and since
the amount of the production loan was
based on the planter's estimated volume
of production, the large sugar planters
received the bulk of sugar production
credit_ On the other hand, fertilizer
price policies have not been favorable to
producers. On the average, farmers have
paid more than the world price for ferti-
lizer.
Until 1974, sugar marketing and
pricing policies were closely tied to U.S.
sugar trade policies, and maintained pro-
ducer prices above the world price for
sugar on average. On the consumer side,
government policies have reduced price
variability but appeared to have a mini-
mal effect on consumer demand,
The government had mixed success in
its attempts to interfere directly in inter-
II I i
NEWS 9 MAY-JUNE
nUll II i InIII i li
national trade. Although lOng-term con-
tracts made in 1980 with foreign buyers
proved beneficial, earlier marketing stra-
tegies led to unprofitable sales. Heavy
investment in sugar mills, for example,
in the mid-1970s, resulted in unpro-
fitable milling capacity.
Recent domestic and international
developments suggest the declining irn-
portance of the sugar industry in Philip-
pine foreign trade and its limited poten-
tial to provide growth in incomes and
employment opportunities. The industry
is saddled with problems of high produc-
tion costs and interest rates, low sugar
prices and the recent inability of NA-
SUTRA to make full payments to
planters. Furthermore, world market
developments indicate that poor prices
will continue to prevail in the near future,
with little indication of any significant
price improvement in the long-run.
In view of these developments, there is
a need to reduce production. At current
world prices, most sugar production is un-
profitable and crop diversification is
essential to counteract the potential nega-
tire consequences of reduced sugar pro-
duction. Diversification of some form
(e.g., intercropping, diverting some sugar
lands to the production of other crops, or
sugarcane-livestock integration) could re-
suit in higher production value per hec-
tare and has the potential to increase
employment through the planting of
crops that are more labor-intensive than
sugar. For crop diversification to gain
momentum, issues related to land reform
and possible forfeiture of credit lines with
banks when planters shift to nonpriority
crops must be resolved,
For the industry as a whole, there is a
need for minimum government inter-
vention. The recent announcement of the
government to subsidize the sugar indus-
try by paying the producers a liquidation
price of P300 per picul through the
Philippine Sugar Marketing Association
(PHILSUMA) deprives the consumers of
the benefits of low world sugar prices. It
is not clear why the consuming public
_ould bear the cost of the subsidy which
benefits the big, efficient planters. With
respect to international trade, the govern-
ment .should sell the U.S. quota to produ-
cers. The proceeds of the sale could be
used to finance programs that would help
solve short-run dislocation problems re-
sulting from industry adjustments. A
i Bill IIII il
1985
I I
possible restructuring of the processing
sector could include a government deci-
sion to reduce excess milling capacity in
the inefficient, publicly-owned mills.
Such mills could be offered for sale to
interested domestic and foreign buyers.
In summary, the most important role
of the government should focus on the
following areas:
1. Sale of the U.S. quota to producers
and use of sale proceeds to finance
programs that would avert short-tun
industry adjustment problems;
2. Resolve issues related to" land
reform and credit problems to encourage
diversification among sugarcane faims,
3. Provide market information and in-
frastructure to enable producers to make
sound production and marketing deci-
sions and improve the marketing system
in general; and lastly,
4. Fund research to improve farm and
processing productivity and sugar output
diversificatione
, ,,,, ,,
A CALL FOR INCREASED SUPPORT
FOR AGRICULTURAL RESEARCH
AND IMPROVEDPUBLIC
ADMINISTRATION*
by Ponciano lntal, Jr.
One "public good" that the govern-
merit should have provided more, but
has not, is research and extension. Tech-
nology development, which calls for
research and extension, is needed before
agriculture becomes a vigorous leading
sector of national development. Research,
both agronomic and socioeconomic, is
the best and, ultimately, the cheapest way
to be competitive internationally and to
generate (and maintain) food self-suffi-
ciency.
In a review of resource allocation to
national agricultural research in Third
World countries during the 1970s, con-
ducted by the International Service for
National Agricultural Research and the
International Food Policy Research Insti-
tute, the Philippines ranked behind India,
Indonesia, Malaysia, Korea, Bangladesh,
Thailand, and Pakistan in agricultural
research expenditures as a percentage of
the agricultural value added (using 1980
data). The Philippine agricultural research
expenditures at constant prices barely
increased during the 1970s. In con-
III lilll i in
PIDS DEVELOPMENT RESEARCH
in hrdonesia, Malaysia and Thailand
increased tremendously during the same
that the The
period_ Philippines had a indicated
same review comparatively
also
low growth of scientific staff during the
decade and that the country's scientists
were paid lower compared with many
other LDC scientists,
The adverse hnpact of the relative
neglect of agricultural research in the
Philippines can be illustrated by the
following two examples. Rice research
has not been a top priority of government
research funding institutions, thus, fund-
ing for rice research has been especially
meager. As a result, the Philippines lost
its topmost rice breeder to IRRI and
Burma, and undertook only few research
studies on other rice varieties that can be
better suited to Philippine conditions and
input availabilities. As another example,
the recent success of Malaysia in propa-
gating a higher-yielding palm 'tree (using
tissue culture) cml be expected to reduce
further the conrpetitivencss of Philippine
coconut in the world oil market. Given
that productivity increases reduce prices
and, further, that palm oil is the closest
competitor of coconut oil, the medium-
term prospects for Philippine coconut
would be secularly declining prices and a
lower Philippine share in the world vege-
table oil market (Barker 1985).
Mainly because of the 1ocational speci-
ficity of crops, Philippine agricultural
growth (perhaps more than industrial
growth) requires a vigorous domestic
research community. Furthermore, much
of agricultural research is not patentable
or cannot be internal_ed by firms; thus,
government support of agricultural re-
search isnecessary,
2ublic Administration. Although not
strictly a "public good," one form of
"intervention" which the government
should do more is hnprove d public
administration and more responsive ad-
ministrative structures/mechanisms. To-
ward this end, there is a need for decen.-
tralization of government decision-
making, for example, in infrastructure.
This could reduce bureaucratic red tape,
allow local governments to decide on
what infrastructure is needed in their
localities even if the key technical expert-
ise may come from Manila, and increase
the flexibility of local governments/
•bodies in dealing with distinctly local
III IIIII
NEWS 10
tralization to become more effective,
it would be advisable to allow local
trol a larger portion toof handle
bodies/governments the totaland
govern-
con-
ment budget than they are now receiving.
A related need is policy delinkage.
There is a need to minimize the tie-in
of the implicit taxing power of some
national government entities with the
supposed developmental function of the
entities. It would be better if explicit
and implicit taxation were done within.
the framework of the overall tax program
of the government. Similarly, it would be
better if budgetary allocation were.
undertaken within the context of the
overall expenditure program of fie
government.
Another related issue is the govern-
ment's mechanism in relending foreign-
sourced funds. Currently, there are agen-
cies other .than the Central .Bank, public
banks, and private financial institutions
wherein tbreign-sourced funds (soft
loans) are coursed (e.g., TRC). It is
doubtful whether it would be efficacious
to turn some government agencies to
quasi-financial institutions. Furthermore,
to the extent that the soft loans carry
interest rates that are lower than prevail-
ing market rates, and the agencies do not
tic their lending rates to the prevailing
market rates, then the government agen-
cies can be expected to be faced with
pressures to allocate the funds to "fa-
vored borrowers" even if the proposed
projects yield marginal benefits based on
the current market returns to capital. It
would be better if foreign loans were
coursed through the Central Bank to bc
on-lent through the financial system or
coursed through some link with the
(hopefully less cumbersome) general
budget processe
,,
*This article i.san extension of the paper
presented, dm'ing the May 3-4 1985 Agricultural
Policy Workshop held i_ U.P. Los Bafio_-
I IIIIIII
MAY-JUNE 1985
LSEMINARS ]
SEMINAR ON "A NUMERICAL
GENERAL EQUILIBRIUM MODEL
OF THE PHILIPPINE ECONOMY"
A seminar was held recently to discuss
Dr. Ramon Clarete's paper on "A Nume-
rical General Equflibrnm Model of the
Philippine Economy." Dr. Clarete is a
research fellow at the Resource Systems
Institute of the East-West Center in
Hawaii.
The study was jointly sponsored by
the Philippitle Institute for Development
Studies and the Philippine Tariff Coin-
mission.
_ =
SEMINAR-WORKSHOP ON
"AGRICULTURAL POLICY"
A two-day seminar-workshop on "Ag-
ricultural Policy hnperatives" was re-
cently conducted at the Southeast Asian
Regional Center for Graduate Study and
Research in Agriculture (SEARCA) in
U.P. Los .Bagos. Other than the Institute,
the seminar is co-sponsored by the Center
for Policy and Development Studies
(UPLB-CPDS), the Philippine Council for
Agriculture
Development and(PCARRD),
Resources Research and
the Interna-
tional Rice Research Institute (IRRI)
and the Agricultural Development Coun-
cil (ADC).
A number of papers on agriculture
policies specifically focusing on rice and
commodity trade practices were pre-
sented to workshop participants who be-
long to various agencies involved in agfi-
culture. Attendees to the seminar were
either academicians, practitioners, admin-
istrators or planners ha both private and
government sectors.
Majority of the papers presented
are summarized in this particular DRN
issue.
,, ,,, _,"_,
SEMINAR ON "ECONOMETRIC
FORECASTING MODEL OF
THE PHILIPPINE ECONOMY"
The P1DS-sponsored research project
on. the "Econometric Forecasting Model
of the Philippine Economy" was high-
 PIDS DEVELOPMENT RESEARCH NEWS 11 MAY-JUNE 1985

NEDA-Makati. The study is a joint under-

lighted
taking ofrecently in a Montes,
Dr. Manuel seminar a held in
visiting iPUBLICATIONS 1
Research Fellow at the Philippine insti- WORKING
PAPERS
tute for Development Studies, a_qdDr. 1. w.P, # 8301 Studies on the Wood Based Furniture, Leather Products and Footwear
Rolando Danao and Dr. Dante Canlas, Manufacturing Industries in the Philippines, Niceto Poblador, Adtiano
both faculty members of the U.P. School Soti_, Roy Yba5ez, and Bi ..... ido Aragon,
2. W.P. # 8302 £conomic Policies and Philippine Agriculture, Cristina C, David.
of ECOROn3Jcs. 3. W.P. # 8303 Changing Comparative Advantage in Philippine Rice Production, Laurian
J. gnnevehr and Arsenio M, 8alisaean.
4. W.P. # 8304 The Impact of Government Policies on Philippine Sugar. Gerald Nelson
• i and Mercedita Agcaoili,
5, W,P. #8305 Comparative Advantage and Government Price Intervention Policies
in Forestry, John H. Power and Teresita Tumaneng,
6- W.P. # 8306 Government Expenditures of Agricultural Policies in the Philippines
SEMINAR ON "AN EVALUATION 1955-1980, Manuel $.J. de Leon.
7. W.P. # 8307 Economic Incentives and Comparative Advantage in the Livestock In.
OF THE GROSS INCOME dusrrv_ L.iborio S. Cabaniga.
TAXATION SCHEME" 8. w.p. # 830,9 An Analysis of the Economic Policies Affecting the Philippine Coconut
Industry, Ramon C]arete and J. Roumasset.
9. W.P. # 8309 Economic Incentives and Comparative Advantage in the Philippine Cotton
A presentation of the study on the Industry, Arsenio 8allsaean.

evaluation of thegross income taxation lO w_p. #8401 Intersactoral Capital Flows and Balanced Agro-fndustrial Development
in the Philippines. Manuel S.J. de Leon.
scheme was held in May at the NEDA 11, W.P. # 8402 Forest Land Management in the Context of National Land Use. Adolfo
Makati B ildin_ The presenters d i¢, v. Revilla, Jr.
_u____=. _ur.n_ 12. w.P. #8403 Policy Issues on Commercial Forest Management_ Cerenilla A. Cruz and
the seminar were Mr. Rodrigo Castelo, Marian Segura-delos Angeles.
Mr. Cesar Magnaye and Mr. PJfredo 13. W.P. #8404 The Impact of Government Policies on Forest Resources Utilization,
Gerald C. Nelson.
,_our,s
V , all from the "_"--:r, tmpp.ne National 14. W.P. #8405 Population Pressure, Migration and Markets: Implications for Upland
Bank. Several insights were also provided Development, Ma, Concepcion Cruz.
by the reactors from the Central Bank 15 w.p.#8406 Tenure, Technology and Productivity of Agro-forestry Schemes. Ana
Doris Capistrano and Sam Fujlsaka.
and the Mmist_ of Finance, the National 18 w,P. #8407 Environmental Effecrs of Watershed Modificationg Wilfredo P. David.

Tax Research Center, and the University 17 w.P. # 8408 Management and Cost of Watershed Reforestation:
and Megat Case_Jose A. Gaivez.
The Pantabangan
of the ]13)k_l;=_=-rlt]j_lp_Jlne
s at Los Bafios. 18. w,p. #8409 Workshop Papers on "The Consequences of Small Rice Farm Mecha,
nization in the Philippines':
19. W.P. # 8501 A Review of Welfare in the Coconot lndustry. SylviaN. Guerrero.
20. W.P, # 8502 Financing the Budget Deficit in the Philippineg Eli M. Remolona.

STAFF PAPERS

1. S.P. #8201 An Analysis of Fertilizer Policies in the Philip* 14. S.P. #8404 Development Finance and State Banking: A
pines Cristina C. David and Arsenio M, Balisacan. Survey of Experience. Edita A. Tan.
(Printed also in J.P.D, 1981) 15. S,P. #8405 Derived Protection for Nontraded Primary
2. S.P. #8202 Creditand Price Policies in PhilippineAgrieulture. Procluct. Erlinda M. Medalla.
Cristina C. David. 16, S.P. #8406 Modelling the Effects of Devaluation on Prices,
3. S.P. # 8203 Government Policies and Farm Mechanization in Output and the Trade Balance: The Philippine
the Philippine_ Cristina C. David, Experience Ma. Cecilia Goozales.
4. S.P. #8204 Shadow Prices of Goods and Resources in the 17. S.P. #8407 The Development Bank of the Philippines and
Philippines An Assessment Erlinda M. Medalla the Financial Crisis, A Descriptive Analysis.
5, S.P. # 8205 An Analysis of the Behavior of the Commercial Marie B. Lamberte,
Bank.¢ Marie 8. Lamberte. 18. S.P. #8501 The Protection Structure, Resource Flows and
6. S.P. #8301 Exchange Rate Flexibility and Intervention the Capital-Labor Ratio in Philippine Manufac-
Policy in the Philppines, 1973-1981. Filologo turing: A Short Empirical Note, Erlinda M.
Pante, Jr,, Medalla,

- 7. S.P. #8302 Qn the Use of the DRC Criterion in Selecting 19. S.P. #8502 A Decomposition Analysis of Philippine Export
Projectg Etlinda M. Medalla. and Import Performance, 1974-1982" Ponciano
8. S.P. #8303 Monetary Aggregate and Economic Activity. S. Intal Jr.

Marie B. Lamberte. 20. S.P. # 8503 Philippine Export and Terms of Trade instability,
9. S, P. # 8304 Effective Protection Rates and Internal Indirect 1965-1982. Ponciano S. I ntal, Jr.
Taxes in the Philippine Setting Rosario G. 21. S.P. # 8504 Methodology for Measuring Protection and Com-
Manasan. parative Advantage. Erlinda M. Medalla and
10. S.P. #8305 Response to Balance of Payments Crises in the John H. Power.

1970s Korea and the Philippine.¢ John H. Power. 22. S.P. # 8505 Food, Fuel and Urbanization in the Philippines.
11. S.P. # 8401 A Study of Philippine Real Property Taxation Alejandro N. Hattie, Manuel F. Montes, Rodolfo
Cayetano W. Paderanga, Jr. F. Florentine.
12. S.P. # 8402 Public Enterprise in the Philippines in 1982. A 23. S.P. #8506 Rural Development Experience; Economic Per_

Definitional and Taxonomical Exercise. Rosario pective.¢ Robert E. Evenson,

G. Manasan

13. S. P, # 8403 Estimating the Shadow Exchange Rate, the

Shadow Wage Rate and the Social Rate of
Discount for the Philippines. Erlinda M. Medalla.

I IIII 11111 I IIII IIII I IIIIIII!1

PIDS DEVELOPMENT RESEARCH NEWS 12 MAY-JUNE 1985
I il'lll I IIIII • II

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DEVELOPMENT RESEARCH NEWS is a bi-monthly publication of the PHILIPPINE INSTITUTE FOR DEVELOP-
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studies done by other institutions. PIDS seminars: publications, and ongoing and forthcoming projects which are of
interest to policy-makers, planners, administrators, and researchers are also announced.

PIDS is a nonstock and nonprofit government research institution engaged in long-term policy-oriented research. This
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