One way to revitalize and modernize the country’s agriculture sector is through agripreneurship, which I believe is wider in scope than agribusiness.
Before I discuss further, let me first distinguish the difference between a farmer, farm manager and agripreneneur: A farmer is concerned with cultivating land; a farm manager oversees farm operations; and an agripreneur finds opportunities to make the most of agricultural output.
Making the most of agricultural output means thinking of how to convert raw agriculture produce into products that have higher value-added. And this requires tapping into innovation and markets.
When agripreneurs are able to utilize business processes and resources to convert agricultural commodities into higher-margin products, they can compete even in the export market.
A simple term for this is agro-processing, and if the export markets are successfully tapped, this can stimulate even greater farm production, thus bringing more income to agripreneurs and even farmers who work together with them.
Sad to say the Philippines has the lowest gross value added average (GVA) in Asean in 2010 to 2014 based on data from the Asian Development Bank: Philippines, 1.6; Thailand 2.0; Malaysia, 2.8; and Vietnam 3.2. While Thailand’s GVA average is 2.0, let us remember that it is the world’s top rice exporter.
The Philippines having the lowest GVA in Asean somehow explains why poverty is still prevalent in the countryside.
Research by InangLupa movement that I head show the country had a rural poverty incidence of 40 percent in 2014 that is hardly an improvement over the 46.9 percent recorded in 2000. Thailand’s rural poverty incidence was 13.9 percent in 2013, Indonesia 13.8 percent in 2014, Vietnam 17.4 percent in 2010, and Malaysia 8.4 percent in 2009.
So improving the purchasing power of agripreneurs and farmers to make them a viable consumer market base should also be carefully thought of when crafting programs for the farming sector. Increasing production is not enough; instilling the spirit of entrepreneurship can actually work wonders because it has the potential to contribute to a range of social and economic developments such as employment generation, income generation, poverty reduction and improvements in nutrition, health and overall food security in the national economy.
Food security should not be confused with food self-sufficiency, which is the domestic production of a staple and other foods to feed the population. But food self-sufficiency is useless if it denies farmers the chance to go into value-adding, which makes them remain poor to a point they do not have enough income to buy nutritious and safe food for themselves and their families.
While agripreneurship can start with businessmen investing in the agriculture sector, particularly in value-adding, the farmers themselves should be encouraged to become agripreneurs.
At present, most of the country’s farmers are engaged in producing traditional crops like rice and corn that are mostly sold to traders who end up making more money. Most of the country’s farmers are also fragmented or not organized, making them vulnerable to exploitation by traders.
So how do we encourage our farmers to become agripreneurs, especially in high-value agriculture?
If a farm can be considered a firm, and the farmer the owner, then certainly the farmer must be equipped with entrepreneurial skills to manage the farm profitably and to surmount the challenges faced by the agricultural sector.
Government and non-government organizations (NGOs) can also provide the training for farmers to become entrepreneurs, and that is no easy task because they need to be taught the basics of business management and accounting, among others. State colleges and universities (SCUs) and the regional offices of the Department of Agriculture (DA) can also cooperate in training farmers to become entrepreneurs.
Big companies that source semi-processed products from products (like dried cassava and dried/fermented cacao beans) can also train farmers to become agripreneurs.
In transforming farmers into agripreneurs, the Inclusive Market-Oriented Development (IMOD) framework with a value chain approach be adopted. As I have discussed in my previous columns in The Manila Times, IMOD builds on three powerful principles: resiliency; that markets motivate growth; that innovation accelerates growth; and that inclusiveness ensures that the poor benefit.
If farmers are assured of markets for raw and processed products, especially for export, they can be encouraged to organize and invest in agro-processing facilities, borrow from banks and cooperatives (not loan sharks), and try innovative approaches to production like block farming.
Once farmers realize that processed products have higher value-added, they can innovate or develop more products from raw farm produce, and even plant other crops that can be processed into more finished products. That is innovation!
The block farming approach can also make production more efficient because this will allow farmers to organize into smaller groups and pool their resources to adopt mechanization and other farming technologies. And through that they earn more. That is inclusiveness!
Organized farmers who get better incomes can also adopt measures to make their farms more resilient to the effects of climate change. This can range from planting cash crops that help check soil erosion and act as windbreakers for smaller and more vulnerable crops, to investing in facilities like small water impounding systems so water is still available during the dry season. That is resiliency!
The youth can also be encouraged to become agripreneurs and this is slowly coming to fruition with the recent Young Entrepreneur-Farmers Philippines (YEF Phils) that envisions “A food secure, resilient, and prosperous Philippines propelled by empowered young farmers-entrepreneurs,” and whose mission is “To mentor and empower young farmers to become successful entrepreneurs in high-value agriculture.” We partnered with Go Negosyo of Presidential Adviser on Entrepreneurship Joey Concepcion.
Since the youth are more receptive to adopting and even experimenting on various technologies, they can be more innovative than those who have been into farming for many years.
The youth are also very familiar in Information and Communication Technology (ICT) that they can easily apply in their quest to become agripreneurs.
The youth taking the lead in value-adding and farmers providing the raw materials using efficient farming practices is also an excellent strategy in jump starting agripreneurship in the countryside.
This type of partnership between farmers who still are hesitant to go into value-adding and the youth who are eager to start their own businesses in agro-processing can be facilitated by the DA, NGOs, SCUs and local government units.
The possibilities are actually endless under this type of partnership for various high-value crops like cassava, coffee, cacao, bananas, mangoes, among others.
Agripreneurship does open a lot of possibilities for subsistence farmers to earn more income and escape poverty. But it cannot be done merely with lip service.
So how can agripreneurship take root in the countryside where poverty is still widespread?
That is another interesting topic for my future columns next year. Till then, Happy New Year to all and may 2017 be a year where farmers will become prosperous.