November 15, 2019

Smart policy responses and better coordination between and among government agencies will help curb employment losses in the agricultural sector, the National Economic and Development Authority said.

The results of the study Rural Labor Migration: An Analysis of the Loss of the Labor in the Agriculture Sector in the Philippines, which was conducted under the NEDA R&D Project, confirmed a prevalent out-migration in agriculture – the transfer or movement of agricultural workers into the industry and services sectors – especially among the young and educated workers.

According to the Philippine Statistics Authority, net employment in the Philippine agriculture, hunting and forestry (AHF) sector has been on a downtrend since 2010, as more workers had moved out of the sector than workers staying in or moving into agriculture.

The agricultural employment loss was observed in 15 out of the 17 regions in the country. Agricultural work was substituted for jobs that do not necessarily pay high wages but offer a relatively stable income stream, non-wage benefits, and better working conditions.

NEDA said a holistic and coherent policy design for agro-industrial development and more responsive institutional setup will be needed to address agricultural employment challenges.

According to the study, internal push factors that drive workers out of agriculture include rising production input costs (particularly labor), low farm gate prices, land conversion, limited access to credit and output markets, poor management of irrigation systems, and changing agro-climatic conditions.

The study noted that the increase in the availability of non-agricultural jobs figured as a major pull factor in the out-migration of farmworkers. The cost of job search has also been declining with the advances in communication technologies and government initiatives like the establishment of Public Employment Service Offices. In addition, public investments in education and training, together with cash transfers, have enabled younger family members to finish schooling and hence, acquire better-paying jobs outside of agriculture. Unfavorable on-farm working conditions also prod workers to seek non-farm employment.

The study said that an inter-agency committee for agro-industrial development should be convened to formulate region-specific and national strategies for effective design and implementation of cross-cutting programs that affect agricultural development.

 “One of the immediate measures is to address coordination failures between and among government agencies, particularly those that implement cash transfer schemes,” according to the policy note. .

Informants of the study claim that the government’s Conditional Cash Transfer (CCT) has inadvertently caused permanent and temporary migration out of agriculture. There were reports of CCT program beneficiaries opting not to work in the fields during the period of release of cash transfers. The study noted that the timing of the payout and the amount of cash transfers relative to the amount of income from agriculture mattered. Many farm operators cited labor shortage when the release of CCT payout coincided with the planting and harvesting seasons. The study noted that some beneficiaries invest cash transfers in non-farm activities to supplement or substitute for farm income.

“The challenge of boosting farm productivity requires smart policy responses. Without these, most farming systems will remain underdeveloped,” the policy note said.

The study notes the importance of schemes like land consolidation, cooperative farming, and machinery pooling systems that afford economies of scale and synergies to make the most out of agricultural resources while democratizing productivity gains.

Other short-term measures identified is to enhance agricultural market information systems to complement other marketing strategies and to build resiliency of the agriculture sector through better technologies.

Meanwhile, in the medium to long term, measures that may be explored include the development of high-value by-products of traditional crops, increased investment in storage and logistics, incorporation of agriculture into the elementary and high school curriculum to engage the youth in farming as well as the development of investment instruments.

A copy of the R&D Policy Note may be downloaded through the NEDA website:​  ​