Notwithstanding its high growth and poverty reduction potential, Philippine agriculture continues to under-perform. A weak policy environment and public expenditure support do not encourage growth and competitiveness in the sector. Farm incomes have kept lagging non-farm incomes mainly because of the low agricultural productivity and the slow out-migration from the sector. Philippine agriculture has the potential for higher growth through crop diversification, but traditional low-value commodities continue to dominate production (and land use). At the same time, dynamic high-value products with high export potential and income growth, such as tropical fruits, are not provided with sufficient level of government support to generate significant benefits for the sector and beyond. The choice of producing the traditional (mainly import-competing) agricultural products is determined by their continued support through high import tariffs, non-tariff barriers, and budget expenditures.
