Making agricultural reform work

Agricultural reform in the Philippines is necessary. Despite employing about one in five Filipino workers, the agriculture sector only accounts for roughly 8 to 9 percent of gross domestic product in recent years. In 2025, the agriculture sector grew by 3.1 percent, the highest since 2017. This also marks the first time that the growth in the agriculture sector hit the target growth range (1.8 percent to 3.3 percent) laid out in the Philippine Development Plan 2023-2028. Yet, these improvements have not translated into broad-based rural prosperity. Poverty incidence remains high among fisherfolk (27.4 percent) and farmers (27.0 percent) as of 2023.

Current situation. Department of Agriculture (DA) Secretary Francisco Tiu Laurel Jr. has underscored that rural poverty remains high, improvements in agricultural productivity are inconsistent, and food shortages and price increase persist despite continuous government spending. The core problem lies in weak targeting of programs and beneficiaries, fragmented implementation across agencies and local governments, limited coordination with key stakeholders, and an incentive system that prioritizes fund utilization. Agricultural reform will only succeed if progress is measured not by the amount of money spent, but by whether that spending leads to higher productivity, increased farmer incomes, and more stable food supplies that are affordable to Filipino households.

Current programs highlight the need for deeper reform. Programs remain input-driven, rice-centric, with limited focus on logistics and value chains. High postharvest losses erode farmers’ income. Losses range from 5 percent to 48 percent for fruits, 16 percent to 40 percent for vegetables, and around 15 percent for grains such as rice and corn, higher than the global average of about 14 percent for fruits and vegetables. Additionally, there is also an increase in prices on livestock, fisheries, and nonrice commodities, where disease risks, dependence on imports, and supply chain bottlenecks are severe. Simply boosting farm output without improved program management and complementary reforms in infrastructure and market system will not ensure lasting gains in incomes or food security.

Recommendations. 1. Adopt a sequenced legislative pacing framework. Agricultural reform should be treated as a policy investment portfolio with a clearly defined timeline, rather than a series of ad hoc initiatives. Around 12 priority reform measures have been identified, including the Agriculture and Fisheries Modernization Act, digital agriculture, warehouse receipts reform, livestock-poultry-dairy development, food systems resilience, land consolidation, land use and water governance, and supply chain modernization.

A disciplined approach through the Legislative-Executive Development Advisory Council would target one to two major reform measures per quarter during the 10 quarters remaining in the current administration.

2. Accelerate public-private collaboration to modernize supply chains. The private sector plays a vital role in modernizing logistics, transport, storage, and marketing systems. By fostering partnerships, they can build cold storage facilities and better farm-to-market roads.

Public support can include cofinancing and tax incentives. At the local level, cost-sharing arrangements can reward active LGU participation wherein for every peso, an LGU invests in food and agriculture, the national government can contribute P2 to P3, helping sustain social programs while expanding farm support. Digitizing regulatory permits and licensing processes can reduce delays and improve transparency, while enforcing rules against hoarding and smuggling and clarifying regulations can strengthen compliance and private investment. Together, these measures encourage business participation, strengthen market linkages, improve product quality, and reduce supply chain inefficiencies, benefiting both farmers and consumers.

3. Improve DA’s absorptive capacity. In 2024, the DA’s absorptive capacity was only 62.5 percent, compared with an average obligation/utilization rate of around 78 percent for all national government agencies, highlighting the need to improve planning and execution to close performance gaps.

Creating unified project management offices for major programs can improve coordination and accountability. Adhering to strict project timelines, reallocating idle funds, and prioritizing projects with the highest impact can increase efficiency. By rewarding results and fully utilizing available funds, the DA can get more value from public spending and build trust among farmers and investors.

Conclusion. Agricultural reform should be judged by its impact on farmers and consumers, especially in making food more affordable. Success depends not on whether institutions deliver results consistently and efficiently. Clear priorities, strong management, and accountability are essential at every stage. When implemented well, these reforms strengthen rural economies and ensure a food system that meets the needs of all.

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Gary B. Teves is a Filipino politician and public servant who served as secretary of the Department of Finance.