Three years ago, in a forum held by the World Economic Forum on East Asia, it was mentioned that the average age of farmers in the Philippines was 57. Senator Francis Pangilinan observed that the new generation of Filipinos refuse to go farming and if that’s the case, who will feed the people? The forum adopted are solution to empower the farmers, to create sustainable agriculture in Asia, to make it more disaster resilient, to focus on how to reduce food waste and to improve cross-border collaboration. Stephen Groff of Asian Development Bank concluded that, “agriculture is one of the most effective ways in reducing poverty as a vast number of poverty-stricken families is in the rural areas. If we’re serious about inclusive growth, agriculture is going to be at the core of the solution.”
Agribusiness encompasses agriculture-related activities that put farmers, processors, distributors and consumers within a system that produces processes, transports, markets and distributes agricultural products. Agribusiness also includes farm business, fisheries, poultry, livestock, crops, etc.
To be able to empower agriculture today, the country needs to encourage the next generation on how agribusiness can be fulfilling and at the same time heroic in its own respect. However, it is very clear that the sector needs support to move forward. And one of the critical concerns is the problem of access to finance.
How many times have we read that local banks have failed to fulfil their required lending to the farming sector? In 2016, the BSP reported that loans extended by banks to the agriculture sector amounted to P452.19B for a 12.81 percent compliance ratio, or below the required 15 percent. This is despite the fact that total loanable funds generated by the banking industry surged by 24.3 percent, compared with 2015.
We definitely have to do much more than this. The Development Bank of the Philippines (DBP), for example, created its Sustainable Agribusiness Financing Program (SAFP) as a response. SAFP provides credit for agribusiness projects engaged in the production, processing and marketing of crops, poultry, livestock and fishing. It aims to respond to the food requirements of the country and provide sustainable incomes for farmers and fisher folks. It furthers the promotion of agribusiness for countryside development by providing agribusiness access to loan to enhance global competitiveness, environmental integrity, food security, self-sufficiency and new technologies. Finally, it aims to increase productivity for local and export markets in order to help eradicate extreme poverty and hunger. Modesty aside, the program has achieved for the bank substantial compliance with the required agriculture lending.
This column is entitled “Back to basics” as a signal call to adapt the old ways of doing things to the technological advances of this age. While white-collar jobs are viewed as the customary career track of many to achieve success, the profound needs of the human race go back to simple things – as simple as the living the good life in the barrios and engaging in food production through farming. Without the farmers, there will be no rice to eat and nothing to sustain humanity. In the end, whatever employment we have can be rewarding if driven with the right purpose. We cannot allow the agriculture riches of our country to wither away. It is one of the sources of pride of the Filipinos. Our country’s tourism hotspots have been known as somewhere between beaches and mountains, and it always included the “kapatagan.” The typical view in the rural areas – a mix of relaxation, of time passing by serenely, a place of solemnity and a breath of fresh air – is ehhanced by the farms that are made productive and attractive.
Unfortunately, even classical folk songs are discouraging. As the old ditty goes, “magtanim ay di biro, maghapong nakayuko, di man lang makatayo, di man lang maka-upo…” Perhaps a new song should be composed on the merits of farming. There is a career opportunity awaiting those who plan to till the land and harvest from the soil. By using technology to modernize agriculture and by motivating our youth, we can altogether survive and eradicate poverty through right skills matching, equal distribution of opportunities and support to our countrymen in areas where they most need it.
Benel D. Lagua is executive vice president at the Development Bank of the Philippines. He is an active FINEX member and a long time advocate of risk-based lending for SMEs. The views expressed herein are his own and do not necessarily reflect the opinions of his office, as well as FINEX.)