Business, Economics and Consulting

Two weeks ago, farmers from Cagayan Valley started to notice their drying up farms and their dying corn and palay. The dry spell is now taking its toll on these less informed and unsuspecting hardworking farmers from the north. This early – when the wet season could just be ending and the onset of summer is supposedly be some weeks more to go - an estimated half of their expected harvest has been declared wasted. Come the months of March, April and May, the situation would be worse.

The financial prospects of our tenant-farmers who are mostly dependent on their small farms to sustain their basic household needs look so dim and unpromising. In order to cope with life in the coming months and, perhaps, the whole year, some rural households may have to sacrifice and forego some family affairs and community activities as well opportunities

The effect of the “El Nino” (or El Nino Southern Oscillation – ENSO) goes beyond the disruption to simple family affairs. It transcends the inability of communities to sustain and maintain a normal way of life; sacrifices have to be made especially at the household level. In the end, the level of economic growth – at all levels – will be impaired as agricultural production would definitely crash to the already-barren ground. In previous occurrences of the El Nino, damage to agriculture was magnanimous. In 1982-1983, for example, damage to rice and corn was recorded at P700 million with some 450,000 hectares of agricultural lands affected. In the 1992-1993 episode, set back to agriculture was P4.1 billion with about 478,000 metric tons of corn destroyed. In the 1997-1998 experience, El Nino struck when the country was enjoying a consistent 4-year steadily high economic growth, and brought damage to agriculture amounting to P8.46 billion and affected all regions of the country.

Aside from its economic effects, El Nino could also heavily impact on the environment. The dry spell could lead to drought. Degradation of soil is also expected; at worst, soil could become desert-like if degradation persists. Dry lands could affect water quality in the aquifers as salt water intrusion could possibly happen. Domestic water supply shortage could also result. In fact, the low level of water in our reservoirs has affected the operation of our hydro-powered generation plans. We should not also discount the high incidence of forest and bush fires.

As to its social effects, the dry spell disrupts normal human activities at the community level. Due to absence of economic opportunities at the rural agriculture sector, most farm workers would migrate to urban communities, and eventually, put pressure on the urban ecosystem, particularly in the delivery of basic services at the urban place. Health problems would certainly occur at both urban and non-urban areas putting burden to the more affordable albeit less effective public health sector.

In November last year, the PAGASA issued a warning of a “weak El Nino” or a moderate El Nino this year. The weather forecasting agency said last year that “For now, there is no need to panic. El Niño is not like a storm whose effect we can immediately feel. It could take months before we can feel the effects. We have time to plan mitigation measures.” The announcement was made only a few months back but the farmers from the north could already feel the severity of the El Nino. The worst, based on what I personally observed, is that despite such warning, mitigation measures are not fully planned out and put in place to cushion these vulnerable farmers, families and communities from the intensity of the El Nino.

Given this situation, we can foresee that the dismal economic performance last year would repeat itself this year, or at the very least, for the first and second quarters. The imminent and looming lackluster economic performance this year as a result of many factors now happening and about to happen, such as the May Election, disruption to power supply, plus now the El Nino, is expected but we could only wish that these factors would have been anticipated and carefully mitigated. Barely 9 months more to go for the year, but we still have to hear from our current leaders and, more importantly, the aspirants to key positions in the government bureaucracy clear and concrete actions to address our situation, particularly the effects of El Nino.

The good thing is that Filipinos have resilient hearts and a hardworking attitude! We will weather the El Nino with flying colors.

Fell free to send your comments to nic_agustin@yahoo.com.