Not even a hundred days in office, President Duterte’s cabinet secretary for agrarian reform announced a major economic policy that imposes a two year moratorium on the conversion of agricultural land to non-agricultural uses.
The proposed ban is almost total. Agricultural land, no matter how unviable for planting, cannot be converted for better uses in industry, commerce and housing.
While the intentions are laudable: social justice for farmers, self sufficency in food, land to the landless and inequitable distribution of wealth, the proposed solution will create more social and economic disruptions than the benefits it intends to produce.
For starters, it is not an inclusive policy as it shuts out so many vital sectors of the economy and one of the sectors that will be hit is mass housing,
When we look at housing statistics: a 5.7 million housing backlog, growing at 5% per year versus an annual supply of only 250,000 housing units, you know right away that something is amiss.
Instead of creating more jobs, businesses and housing, the moratorium stops development in the countryside where it is needed most. Worse, it adds to congestion of cities already burgeoned with over concentration of population. The buzzword today is in fact “urban dispersal”.
It is a well-accept thesis in development that no country has ever become rich without massive urbanization. The moratorium negates this.
And yet, housing matters.
It matters to the economy. Housing has one of the highest multiplier effects to GNP. A seven times multiplier. It has the widest linkages to downstream and upstream industries, from cement, steel and paint, to furniture and household consumer products. At least 500 industries. It generates massive employment from construction workers, sales agents and security guards.
Housing creates entrepreneurship as it allows households to engage in micro enterprises from the ubiquitous sari-sari store to home-based services and even transport.
Best of all, housing creates a more stable and inclusive and Philippine society.
Let’s take a look at some more economic analysis.
Based on a recent study, using data for all regions from the past 5 years, it show that a skewed focus on agriculture can cause the region to lag behind in regional income.
This could mean that, either certain regions aren’t as conducive for agriculture, or that the sector has failed to modernize and increase its productivity. On the other hand, regions focused on services or industry contribute much more to economic activity.
DAR should understand that mass housing is actually the twin brother of Agrarian Reform.
While they seek to provide land to landless farmers, mass housing also provides the “homeless” middle and lower economic classes with their first real property asset: their own home. Both distribute land to the landless, In DAR’s case, farm lots; in our case, residential lots, thus both of us are able to create a more inclusive Philippine society in our own ways.
Urbanization is inevitable if we are to develop as a nation. But urban growth must be inclusive; that is why agrarian reform and mass housing must be put together in the same plate.
While food security is a good goal, DAR’s policies should not be done in isolation without an analysis of its effects on other sectors that are also as vital to a nation’s social and economic development. In helping our farmers with a moratorium, other citizens are locked out.
If food security is indeed the goal, then emphasis should not be on protecting agricultural land area. Only less that 2% of agriland has been converted since 1988.
Emphasis should increasing farm yield instead. And this is where agrarian reform ties up with other sectors like manufacturing, chemicals, construction, IT, that levels up the technology of agriculture while being less dependent on hectarage.
I really hope we can rethink the moratorium.
BY JJ Atencio