Agriculture

Agriculture
the science or practice of farming, including
cultivation of the soil for the growing of
crops and the rearing of animals to provide
food, wool, and other products
Agricultural Sector
Provide food and raw materials
Industrial sector uses materials from agricultural
sector to produce and manufactures products
Surplus labor
Market for industrial sector
Sources of foreign currency
Stages of Agricultural Development
Traditional or Subsistence Agriculture
Producing only what they consume
No surplus
Transition
Mixed or diversified farming
Specialized production
Called mixed or diversified
Multi cropping system
Important: harvesting more that once a year
Crops having different harvesting time
Small to medium enterprises

Stages of Agricultural Development
Stages of Agricultural Development
Large Scale or Commercial Farming
DOLE and Del Monte
The production is for the market
Specializing in one or two crops only
Take advantage of economies of scale
Major Problem in Agricultural Sector
Agricultural Stagnation
Very minimal to no growth in this sector
Labor productivity is relatively low
Whats responsible for stagnation?
Feudalism
Poor implementation of Agrarian Reform
Lack of irrigation rural electrification and
farm to market roads
Lack of education among most farmers
Inadequate research and development
Risk averse behavior of farmers
Protectionist Policy
Imperfect Markets
Governments ineffective use of funds
Lack of agricultural credit
Whats responsible for stagnation?
Policies to develop the agricultural
sector
Institutional and Pricing Policies
Agrarian Reform
Institutional change
A policy to change land ownership
Land distribution and support services
Policies to develop the agricultural
sector
Institutional and Pricing Policies
Cooperative
Weakening the power of middle - men
An institutional policy
Large discounts
One unified price
Putting their efforts together
Policies to develop the agricultural
sector
Institutional and Pricing Policies
Allow market prices to work
If market price is too low, to solve this
NFA purchases thus increasing demand
and price, solves oligopoly between
middle - men
Policies to develop the agricultural
sector
Supportive Policies
Agricultural Credits
Land Bank of the Philippines
Education and extension
Aids farmers in understanding new
technology
Crop Insurance

Policies to develop the agricultural
sector
Technology and Innovation
Integrated Development Objectives


Agrarian Reform
Can reduce poverty by allowing the farmers to
profit from their production
by allowing the farmers to own property (no
more rent, installment payments)
Profits derived from agricultural activities lead
to expansion, betterment of production which
will increase productivity and increase
consumption
History of Agrarian Reform in the
Philippines
Agrarian reform is not successful
because:
Initially placed in the provision that landlords
will be exempted, most of the congressman
are landlords
Politics vs. Economics
Interfering by protecting their personal interests


The system is keeping the poor, poor
Landlords know that the people have no work.
They know they are poor. They know they are
hungry. How to keep them quiet? Pay them a tip.
Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
Japan imposed a ceiling on land holdings of
one hectare. The landowners were
compensated in cash and
development bonds. In the course of
the reform the actual tillers were
given full ownership rights for the
holdings they had previously
cultivated and received a subsidized
mortgage

Labor productivity increased
annually by five per cent and land
productivity by four per cent
between 1954 and 1968
Key factors for the
success of the reform
were an existing well-
developed extension
service, land records and
an efficient bureaucracy.
Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
South Korea 65 percent of the agricultural land
was redistributed

A ceiling on individual holdings was
set at three hectares of good
cropland and land in excess of this
ceiling was distributed in units of
one hectare to former tenants

This low ceiling enabled nearly 76
percent of the total agricultural
households to own land for the first
time.
Korea has been the
equally thorough
development and support
to local village
government to assume
the land administration
function. Thus, the
country has been able to
maintain a local dynamic
for continuous
agricultural and rural
development.
Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
Taiwan Imposed by the Nationalist
Government, which had just been
exiled from the mainland.

Land ownership ceilings were fixed
at one hectare. The former
landowners were compensated in
industrial bonds, which they
invested in urban- industrial zone.
The new government
had no ties, nor any
obligation toward local
indigenous landowners.
Also important were
accurate land tenure data
and a non-indigenous
bureaucracy.

Between 1953 and 1960,
the annual production
and consumption of
inputs was of 23 percent
and 11 percent,
respectively,
Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
China In 1950, peoples commune
system was used

In 1978,
1.Introduction of the household
contract responsibility system which
gave the farming family usufruct
rights over the land it cultivated
2.Abolition of the organizational
system of Peoples commune
3.Development of new rural
economic organizations

led to overall equity in
land distribution

strong incentives the
reform gave to individual
farmers

the increased income led
to investments in
nonagricultural activities,
the establishment of
small rural enterprises
and the creation of
nonfarm employment


Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
Vietnam breaking up large collective farms
into tiny family units


Improving agricultural
productivity through
increased incentives of
individual farmers and
recognized land use rights
of individual households

there has been a
significant increase in the
areas under
industrial/commercial
crops including rubber,
coffee, tea, coconut,
fruits and vegetables
Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
Cambodia In 1975, the Khmer Rouge regime
abolished all private property, and all
land belonged to the State

After the Khmer Rouge regime
collapsed in 1979, the Vietnamese-
backed Peoples Republic of
Kampuchea upheld collective
property rights and created
collective work groups called krom
samaki consisting of 12 to 15
families with an allocation of 15 to
25 hectares

Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
Cambodia In 1989, the Constitution was
amended, providing for ownership
rights for residential land and
possession rights for agricultural
land

In 1992, The Basic Land Law was
promulgated, reflecting a further
shift in government policy from a
centrally planned, to a free market
economy

Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
India Land Reform in West Bengal
A total of 1.04 million acres,
constituting eight per cent of arable
land was redistributed to 2.54
million households, representing 34
per cent of all agricultural
households, while 1.1 million acres
were covered by the tenancy reform
benefiting 1.5 million households or
about 20 per cent of agricultural
households
Agrarian Reforms in Selected Asian
Countries
Country Land Reform Best Practice
Indonesia involved the imposition of land ceilings
and the redistribution of private and
State lands

However, with the political turmoil in
1965 and the rise of the Soeharto
dictatorship, agrarian reform was
stopped in 1966-67. As a result,
redistributed lands were recovered by
original landlords or fell into the hands
of third parties. Instead, the ensuing
Soeharto period (1967-1998)
emphasized large-scale exploitation of
natural resources, privatization and
deregulation to stimulate private sector
participation and growth