Is GDP more important than farmers?

The damage to crops, particularly rice from typhoon Frank’s fury “does not affect the country’s
gross domestic product (GDP).” NEDA Director Augusto Santos’ statement last week, brings me
more fear than the devastation brought by the latest typhoon to our country.

He is right. The value of damaged crops throughout the country is just P3.3 billion, a nip to the
total value of the country’s consumption, plus gross investment, plus government spending, plus
export minus import. Even if you add the infrastructure damages, its effect is miniscule, thus, our
country’s economic expansion would not be affected. That’s what the country’s economic
authority said - meaning “everything is all right”.

I know a little about economics, and I recognize, that he is damn right when asked about his
calculations of the effect of “Frank” to the Philippine economy. But, I am afraid, that he missed
the whole point of what the people needs to know about the effect of the typhoon. The most
important to know in any assessment, are the implications of these damages to the people in the
economy, rather than the mathematical calculation of the expected GDP minus the value of the
damages!

Let us go to my favorite staple and the most controversial these days, rice. The reported 3.3 billion
pesos in damage to crops, though miniscule in value, I suppose, is based only on the amount
invested by the farmers to plant their crops. The Department of Agriculture put the damage to rice
crops to 667 million pesos. The month of June is still within the planting season. A hectare would
cost the farmer an initial investment of not less than P25 thousand pesos. This means that the
damage to rice farms in terms of hectares, is at least 26 thousand. I may not be accurate in my
computations, but I believe this is the best approximation we can get.

With a little arithmetic, 26 thousand hectares could yield an average of 2.6 million cavans (an
average of 100 cavans per hectare every harvest), or 130 thousand metric tons of wet palay. If we
go further, this means that, at least P1.95 billion potential income to farmers is lost (at 15
pesos/kilo of wet palay). Still very insignificant compared to the GDP. But, this is a loss that
denies farmers of their meager incomes, and subsequently a reduction to the country’s diminishing
food supply!

Certainly, this will have demoralizing effect to the lives of the affected farmers. Their most
pressing concern at the moment is, what will they do next? What to do with the interests and
penalties from their borrowed capital for this cropping season? Worst, after calamities, fresh and
cheap capital is scarce. Without a doubt, the lack of capital would force many farmers to forego
planting for the rest of the year.

It is easy to tell the farmers that they still have time to re-plant and catch-up, as what the technical
guys of DA suggests. They call this as “turn-around.” But who would be daring enough to bring in
new capital? Even the best cooperatives, would think twice to provide crop re-financing. The
moneylenders as always, would beat them to the draw in terms of recovering their money from the
farmers when harvest time comes.

What I am saying, is that, the effect of this is not just about reduction of the country’s GDP, but on
the lives of the many small farmers who rely on this meager amount of our GDP in order to
survive! Many in the rural areas are landless. They rely on farm labor (hurnal in the visayan
dialect) for a living. Were they counted in the GDP? The hunger that lurks and the malnutrition
that it carry, was it factored in by NEDA in their statement, that this will not affect our whole
economy? Is our nation’s wealth do not include the more than 50% of our population that depend
on agriculture, the same people who feeds the nation so the economy could move?

It looks like that the primary policy concern of this government is just to secure the wealth of the
few. The statement whose main purpose is to appease the populace, instead illustrates the
government’s priorities. It tells us where their solutions would lead us to.

This is what meant, when I said that the problem of this country is the unequal distribution of
resources or wealth. Since majority of our population depend on the smaller share of this wealth, it
is easy to disregard their condition – as it will not affect the total wealth of the nation’s rich!

For comments, e-mail to roldanalex@yahoo.com