There shouldn’t be MORE farmers; there should be BETTER farmers. In a production function (in which agriculture is a good illustration), output can only go so high upon a certain increase in labor and capital (yes, even capital accumulation won’t cut it). After some point of increase in labor and/or capital, further increase would no longer generate output. As a matter of fact, output may even reduce.
There are two things the agricultural sector needs to improve on and nothing more, nothing less: the improvement of its technological tools as well as shifting the industry towards becoming capital-intensive. In an aggregate sense, technological progress in capital would mean the purchase of better equipment, as near as possible to the state of the art. I recommend further research on the agricultural methods in Australia as I’ve noticed that there exists a huge collection of agricultural journals there. Technological progress in labor (farmers) would mean that they become more educated, and this education should prove that it is not optimal for the farmers to do manual labor without the use of machines; this is very inefficient.
The problem is that many people view improvement in technology as well as shifting of the agricultural sector into a capital-intensive mode of production as regressive rather than progressive because it would cause unemployment of farmers, and they correlate the well-being of the farmers to the success of agriculture as whole. While that may be true UP TO SOME POINT, it can only go so far. Anyone equipped with elementary economics knows the concept of “diminishing marginal returns”. A farmer focused on the microeconomics of the business (farming management) will not be able to see the macroeconomic point of view of an economist, and this is why no one ever listens to the economists, because agriculturists are so focused on the what’s in front of them and not see anything else around them. I’m hoping this would change your mind (if you are like me who is interested in agriculture hoping to be a change maker someday).
The thing is, ceteris paribus, if the number of farmers increase above the equilibrium point in a steady state, their average wage decreases, and if the decrease in average wage is falsely viewed as the lack of output, then their current frame of mind would convince them to hire more farmers in the hopes that this would increase output, and this would cause even more harm. The need to decrease the number of farmers and focus on quality instead is a very harsh reality that agriculturists cannot accept, and thus would try to justify why the current number of farmers should remain in the form of a guilt trip. “Kapag tinanggal mo yung farmer na yan, paano na yung pamilya niya? Ano na magiging trabaho niya? Yan na nga lang kaya niya tatanggalin mo pa sa kanya?”. Though it might sound harsh, cruel, and cold, there is no escape from the economic truth that surrounds this issue. To focus merely on the feelings of the farmer is a common trait of a Filipino, which is being too sensitive and shortsighted (myopic), and that is why other countries will beat us…unless we change that.
However, let’s take a look at the bright side. Suppose we follow what economists suggest and indeed increase, instead, application of technologicaly and shift the industry towards capital-intensive operations. The decrease in the number of farmers alone (ceteris paribus) would immediately increase their wage given a certain output; add that to the fact that the proper use of equipment and the skills applied by the educated farmer would generate more output. In a myopic sense to try and satisfy the grieving hearts of agriculturists, the increase in wage of the farmer would allow him to feed his family, educate his kids, etc.
That leaves us with the problem on employment. Let’s talk about shifting to a more capital-intensive industry. A shift like this would cause huge unemployment in the agricultural sector. However, as cruel as this may sound, employment shouldn’t be the priority here. The agricultural sector of the Philippines is said to be labor-intensive. In macroeconomics, we learn that in countries which are capital-intensive, rent is cheap; in countries which are labor-intensive, wage is cheap. Ha! No wonder our farmers are so poor! (do you get it now?) However, is it really true that capital is more expensive than labor in this case? Has the output per unit been taken into consideration already?
Either way, if we want farmers to enjoy higher wages, then being capital-intensive is still the way to go, because at the end of the day, at the expense of higher unemployment (which in the first place these extra farmers should have never been hired), each farmer would receive a higher wage. So the struggle here really is this: would you rather have many farmers who earn poorly, or few farmers who earn a lot more? By the way, the article mentions how agriculture is a not-so-popular choice of career for young people such as I because of the heavy work and the low wages. Therefore, those who are capable of effecting actual change in agriculture are sucked away by the services and industrial sector due to higher wages for the same amount of effort if not lower (I can’t blame their self-serving actions, that is human nature). However, if someday the agricultural sector shifts into a more capital-intensive mode and focuses more on technological progress, and each farmer now has a higher wage, wouldn’t that encourage young people like us to pursue agriculture? Wouldn’t there be now EVEN MORE access to fresh ideas from the youth that can stir the agricultural sector to when it once was? (Google on the rich history of Philippine agriculture if you must)
No comments:
Post a Comment