economics and agriculture

[badkuk]

i read somewhere that for a country to prosper, it has to move away from an agriculture-based economy first. the only explanation i could think of is that, at least according to adam smith, division of labor is hard to do in agriculture -- which i also don't understand. siguro nung kapanahunan ni smith hindi nga pwede, pero don't we already have tractors, threshers, etc?



pwede po paki explain?

[Flagg]

Konti lang po kasi skills required sa agriculture. Kumbaga sa process of civilization, first industry ito - konti lang value-added. In the States I think mga farm na profitable e mga 10-15 employees lang per 1000 acres (I think). Ergo, konti lang kumikita utilising a very finite and expensive resource (land).

Kung sa factory, multiple required skills, the more skills (and higher expertise) the higher yung kita ng tao. Also, more tao in a much smaller space - much more productive than agriculture. Also, mga products are high value-added. Ergo, mas madami mga kumikita ng mas malaking income - so your entire community, yumayaman din.

Yung ok ngayon e yung mga technology-driven, like call centers. Small capital, large incomes, large requirement for expensive highly skilled labor. Very good! Kasama ng mga OFW, mga call centers ang saviors of the Philippines (as we all know, namamatay na manufacturing dito).

[uls]

Agricultural products are low value products.

Countries become wealthy when they export high value products. a country that exports mangos and coconuts will not make as much money as a country that exports motor vehicles, electronics, industrial machinery etc.

Wealth comes from creation of value. Iron is a raw material of low value. If u turn iron into engines and machinery, value is created.

Industrialization creates high value products from low value raw materials.

Silicon is very abundant in nature. its low value. Turn silicon into transistors and microprocessors and u create value.

[niky]

The problem is, agriculture doesn't produce as much profit for the amount of labor and capital.

That's why US farms are finding it hard to keep laborers, because farm labor doesn't and can't pay as much as industrial labor.

That's also why farms in third-world countries like ours can't compete, because world prices for agricultural products are kept artificially low because both the US and the EU provide such huge subsidies to keep their farms in operation that their prices are hard to compete with.

Of course, without a proper and modern agricultural system, we're more dependent on imports, which is bad for us. With both a developed agricultural and industrial sector, we can generate more jobs and lower our reliance on imports. The problem is to convince the government of that.

[4wrider]

Our country is still heavily reliant on the agricultural sector. The sector still provides significant employment which in turn provides the purchasing power which the other sectors like services, manufacturing etc need. Kung mababa ang income ng farmers natin, konti lang bibilihin nilang service and manufactured goods.

Also, with less opportunities to earn marami sa rural poor natin eh nagpipilit sa mga siyudad.

Pero ano na ba ginagawa ng gobyerno. Yung land reforms natin puro palpak. Pinababa lang ang productivity ng mga farms natin dahil nawalan economy of scales. Sino na ngayon sa maliliit na farms ang pwedeng bumili ng mga combines para maging more efficient ang farming.

[altec]

among those countries into agriculture, talagang 3rd world ang agricultural output ng pilipinas. From rice, sugar, corn, even cassava! Our yield per hectare is no where near those of other countries. These yields bring down their cost per hectare, plus bigger volumes, mean they can (or are forced to) sell it at a lower price, thus agriculture output in its raw form will never allow let a country heavily relying on it to progress like an industrial/commercial based country.

Pero teka nga, ang pilipinas ba ay agricultural based country or ofw/ocw based country na? Parang ofw remittances na parati ang nababasa ko that affects our forex more than our agricultural output, kasi halos lahat na ng tinatanim natin na agricultural product, ay net importer na tayo, meaning we are forced to import to satisfy our need for that product, plus its cheaper to import than to produce it domestically. At least sa pinoy, "net exporter" pa tayo ng ofw!!

[badkuk]

hmmm, didn't know us/canada/euro agri products were subsidized, parang china garments pala

pero mahirap din if you totally move out of agriculture; siguro naman develope it up to the point where you're at least self sufficient. mahirap din ung puro import lang

nabasa ko rin sa news column dati that some people are worried that china is converting agri lands for industrial use; baka time will come that they may not be able to export rice, or even feed itself. pag umabot kasi sa point na yan, di kaya maging profitable na ang mag agri?

[sirkosero]

actually, a country may prosper kahit na agriculturally dependent. thats what you call comparative advantage. kung pinaka efficient pa din na use of land is farming at pinilit maging industrial based, hindi din maganda ang effect. in some cases, lalo pa nagiging backward.

[van_wilder]

to simplify things... its all about allocation of resources/capital/asset... for examply luxembourg... if agriculture sila, do you think would they still have the highest gdp per capita?

[Flagg]

Re Luxembourg: Ehehe money launderer sila. The highest tech industry of all.

Re US/EU subsidies: Proof na talagang low earning ang agriculture. But a first step is still a first step, it has to be made to go forward (meaning self-sufficiency in agriculture first). Kaya nga protektado nila, while tayo di maka-bangon-bangon kc first step palang natin e palpak na. Sobra nga nakakahiya, IRRI is based here producing the high-yield strains benefiting other countries, but somehow, we can't seem to make use of them.

[empy]

basta pag naglaro ka ng Civ III talagang bumabanat yung civilization mo pag industrialized/high-tech na

not to mention you unlock all the cool military units

[Flagg]

basta pag naglaro ka ng Civ III talagang bumabanat yung civilization mo pag industrialized/high-tech na

not to mention you unlock all the cool military units

OT: Doon sa Civ (yung pre-Alpha Centauri) ang saya maglaro. May tanks me sa 1800's. Tanks vs musketeers. Wakekek! Late 1800s may aircraft carrier na, feel na feel mo god ka.

OT2: sir M54, di ko ma-gets sig nyo

[empy]

OT2: sir M54, di ko ma-gets sig nyo

mascot ko yan

he's my fast

[Mojo]

Badkuk

may Ages kasi ang evolution ng economies ng mundo

First, pre 19s century, Wealth is created sa agriculture, Agcriculture economy
During the 19s century, andyan na ang Industrial Revolution
Ngayon Information Age na.

Thats how wealth is created during those times, kaya pulubi ang agriculture based na country nowadays kasi nga ang Output ng agriculture are low value, or low input lang.

Unlike sa mga industrial goods, isang container van pwede million ang value. So pag nag trade ang agricultural country sa industrial country, usually nag kakaroon ng Deficit ang agricultural country.

PAg nag nangyari yan, in general currency adjustment para ma correct ang imbalance. Kaya pigil ang Government gumastos or "print money" or else inflation. Pag ang supply ng pera medyo mahirap, apektado ang consumer spending etc etc, babagsak negosyo blah blah

[oldblue]

agricultural products can be bartered d'ba? or at least here in the Phils., bec. of the absence of cash in some rural areas. is this a good thing or a bad thing?

[niky]

Agricultural prices are kept artificially low because of trade subsidies in the US and EU.

A US farmer, for example, can receive enough subsidy to buy their produce from a third world farmer, and still sell at a profit.

One other problem that most people don't realize we have... is that tropical countries have poorer soil and water resources than temperate zone countries... like the US. In other words, water and good topsoil is very scarce as compared to colder countries. Ibang klase, no?

I'm supposing as fossil oil supplies grow short, and the highly industrialized farming techniques of first world farmers become less cost effective, third world farmers will be able to start selling vegetable fuels for more than they could get from growing food. But that's probably many years in the future.

[badkuk]

nabasa ko rin sa Samuelson that while there are improved efficiencies on the supply side(harvesters, use of satellites), demand is more or less slow to catch up. it had something to do with price elasticity, pero basically elastic supply + inelastic demand = low prices. i think some countries actually give out money to farmers to not boost production


on the other hand, last week i read an article about some Chinese group wanting to develop an agri/industrial park in the philippines. kung hindi nga profitable ang agri, bakit me foreigners pang nag iinvest in it here? umaasa ba sila sa mga tax perks/incentives from the government? or is it more of a question of sustainability -- i.e. the venture would be profitable in the first 5 - 10 years, so pipilitin kong makaprofit during that time, then iabandon na ung venture after it becomes unprofitable?

[Flagg]

nabasa ko rin sa Samuelson that while there are improved efficiencies on the supply side(harvesters, use of satellites), demand is more or less slow to catch up. it had something to do with price elasticity, pero basically elastic supply + inelastic demand = low prices. i think some countries actually give out money to farmers to not boost production


on the other hand, last week i read an article about some Chinese group wanting to develop an agri/industrial park in the philippines. kung hindi nga profitable ang agri, bakit me foreigners pang nag iinvest in it here? umaasa ba sila sa mga tax perks/incentives from the government? or is it more of a question of sustainability -- i.e. the venture would be profitable in the first 5 - 10 years, so pipilitin kong makaprofit during that time, then iabandon na ung venture after it becomes unprofitable?

Wow pre, talagang economics terms na gamit mo ha? :dude:

Re the investors... usually mga super-specialized crops yan for which they have access to a market overseas. One example is that a large part of Basa Air Base is now planted to a special cassava na directly goes to Japan.

Re unprofitability, yes, abandon agad... parang what happened in the nata de coco phenomenon which fizzled when Japan's consumption went down.

I believe na we must have a strong, highly efficient agricultural sector = big, highly mechanized farms with low employment. This richer class of agriculturists (owners & employees) would then drive forward a job boom in other industries, absorbing the workers displaced by modernized farms. This wider state of employment could then be encouraged to consume, thus creating an economic boom. Yes, for me, it's that simple.

The first step is to get rid of that stupid CARP. Instead of distributing resources to those with limited knowledge in managing these resources (take note, I'm not saying farmers are stupid, I'm just saying they're technical specialization is the actual care of the land and not management strategy), why not instead just mandate a minimum wage in their regions? Treat agriculture just like any other industry sana. Just like any other business, mga tamad na landowners will fall and their holdings taken over by the most efficient ones who in turn will pay their employees (farmers) even more money to stay loyal cuz they need their skills even more...

[trotsky]

I believe na we must have a strong, highly efficient agricultural sector = big, highly mechanized farms with low employment. This richer class of agriculturists (owners & employees) would then drive forward a job boom in other industries, absorbing the workers displaced by modernized farms. This wider state of employment could then be encouraged to consume, thus creating an economic boom. Yes, for me, it's that simple.

The first step is to get rid of that stupid CARP. Instead of distributing resources to those with limited knowledge in managing these resources (take note, I'm not saying farmers are stupid, I'm just saying they're technical specialization is the actual care of the land and not management strategy), why not instead just mandate a minimum wage in their regions? Treat agriculture just like any other industry sana. Just like any other business, mga tamad na landowners will fall and their holdings taken over by the most efficient ones who in turn will pay their employees (farmers) even more money to stay loyal cuz they need their skills even more...

hi flagg,

i agree with the need for a modern highly-efficient agri sector. however i would like to ask how will these farms drive a job boom in other industries?
i doubt though if this will work, mainly because you can see from the us, australia and europe models where they have efficient farms on (very) big tracts of land but still need state subsidies to farmers.

as for land redistribution, i would like to propose a better solution. let us just reform carp, redistribute land but mandate creation of cooperatives. these cooperatives will be run by higly-trained managers (say via a up program) with tenured contracts, with profits to be shared by members, managers and employees. initial capital will be provided by a development corporation with cooperative assets as collateral. right there and then we do away with lazy interest-dependent landowners while having a motivated workforce. after a few years of maturity it will be just like any other industry.

[Flagg]

hi flagg,

i agree with the need for a modern highly-efficient agri sector. however i would like to ask how will these farms drive a job boom in other industries?
i doubt though if this will work, mainly because you can see from the us, australia and europe models where they have efficient farms on (very) big tracts of land but still need state subsidies to farmers.

hey trotsky, kasi IMHO, richer farmers parang middle class labas nyan, while those displaced will have jobs naman in the service industry which grows around all middle classes. For example: service crew ng mcdo which opens up in Province X kasi there is enough income to support a mcdo, which of course will be followed by jollibee (or vice versa) and so on. Or maybe work in the construction industry which will benefit from richer farmers looking for better housing, or even more gov't bureaucrats to tong the middle class (hey, in the RP, it's a job! ), etc.

Re the G-7 farms, IMHO lang po, they have too many farms due to their high-tech-ness so dapat open up the useless farmland for other uses. But their farmers, of course, want to go on farming kasi profitable. With the subsidy system nga e it's nicer to sit on your a$$ getting paid NOT to plant (ex: southern Italy) than learn how to be a caregiver (or 7-11 clerk, for that matter). It's like a hole their gov'ts dug themselves into, stupidly hand out cash and now you can't stop cuz it's a major voting bloc/public opinion issue.

as for land redistribution, i would like to propose a better solution. let us just reform carp, redistribute land but mandate creation of cooperatives. these cooperatives will be run by higly-trained managers (say via a up program) with tenured contracts, with profits to be shared by members, managers and employees. initial capital will be provided by a development corporation with cooperative assets as collateral. right there and then we do away with lazy interest-dependent landowners while having a motivated workforce. after a few years of maturity it will be just like any other industry.

Hey, I'm with you! Anything is better than our current lousy CARP. Admittedly, medyo mabagal my system cuz if you own thousands of hectares, medyo next century na you babagsak. My addition lang would be no limit on the amount of land a coop can own. Allow the coops to grow to achieve the proper economies of scale. Wag lang CARP ng CARP.