Philippines agricultural protection and insulation in international perspective

Abstract

For decades the Philippines has protected many of its farmers from import competition, taxed farm exports, and insulated domestic markets from fluctuations in international prices. Policy developments to the mid-1960s are summarized by Power (1971), and were updated to the mid-2000s by David, Intal and Balisacan (2009). This paper looks at what has changed in terms of agricultural assistance and food market insulation in the two decades since then, with emphasis on the extent to which those rates of assistance have fluctuated from year to year with international price movements as governments attempted to stabilize the nation’s domestic prices of farm products, most notably for rice. Philippine policies have been similar to those of other food-importing countries in adopting farm-support policies but have been unusual in being so protectionist so early in the country’s economic development. The paper explores the prospect of re-purposing support away from price-distorting measures – which are highly inequitable – toward more-direct forms of support for just the poorest rural households and boosting investment in rural public goods such as infrastructure and agricultural research. The latter would benefit a larger proportion of rural people as well as reduce food prices in urban areas.