• How the country can export more farm products



    (First of two parts)
    For a country blessed with rainfall that is three times India’s, the Philippines should easily be one of the top exporters of farm and food products from the Asean region.

    The country has an annual rainfall of about 2,000 mm while India only has 700 mm. But India is one of the top rice exporters in the world, and rice is a crop that requires a lot of water to cultivate. On the other hand, the Philippines still imports rice.

    The country is not only a net rice importer but also a net food importer, as it exported $5.7 billion worth of farm and food products in 2016 and imported $11 billion. So the Philippines’ trade deficit when it comes to food and farm products amounted to $5.9 billion in 2016.

    The deficit can even be bigger because of smuggling, which I believe is still rampant.

    So how does the Philippines stack up against its Asean neighbors when it comes to farm and food exports?

    According to data from the United Nations Trademap, Thailand shipped abroad $42.2 billion in farm products in 2016 and imported $15.7 billion for a surplus of $26.5 billion; Indonesia $36.5 billion in farm exports and $17.9 billion in agricultural imports for a surplus of $18.6 billion; Malaysia $26.7 billion in farm exports and $17.4 billion in agricultural imports for a surplus of $9.3 billion; and Vietnam $23.1 billion in farm exports and $14.5 billion in agricultural imports for a surplus of $8.6 billion.

    The UN Trademap data also showed Thailand had 13 types of farm exports earning over $1 billion each a year, Indonesia five, Vietnam seven, and Malaysia and the Philippines only two.

    But while Malaysia only has two farm commodities earning $1 billion each annually in export receipts, it has five others earning $500 million each annually. Indonesia also has five other farm commodities earning $500 million each annually in export receipts, Thailand four, and Vietnam two.

    Latest figures from the Philippine Statistics Authority show pineapple products is now the No. 3 farm export of the Philippines, earning about $700 million in 2016.

    One of the reasons Thailand, Indonesia, and Vietnam are powerhouses when it comes to exporting farm and food products is they have diversified cropping systems, whereas the Philippines devotes about 80 percent of its agricultural lands to just three commodities: rice, corn, and coconut. Our coconut farms are also not productive and value-adding remains low, which explains why coconut farmers are among the poorest despite the country earning more than $1 billion annually from the export of coconut products, primarily in oil form.

    Thailand, on other hand, devotes 88 percent of its farmlands to five major crops, Vietnam 79 percent to three major crops, and Indonesia 67 percent to three major crops.

    While Vietnam almost has the same percentage of farmlands devoted to just three crops like the Philippines, it ranks at No. 3 worldwide in rice exports, No. 1 in shelled cashew nuts and pepper, No. 2 in coffee and cassava starch, and No. 3 in natural rubber, also according to the UN Trademap and research from UA&P.

    Looking at Vietnam’s other farm exports besides rice, I believe there is no need for the Philippines to reinvent or even invent new types of farm products so the country can increase its international shipment of food and farm commodities, both in raw and processed form. I am saying this because we can easily produce more shelled cashew nuts and pepper, coffee and cassava starch, and natural rubber, all of which Vietnam exports today.

    So let me ask my favorite question: what needs to be done?

    Adopt agri-industrialization

    For the Philippines to export more farm and food products, it must first adopt agri-industrialization as a strategy that will have the following as its major components: shifting and investing heavily on high-value crops, and value-adding with an eye for both the local and export markets.

    The adoption of agri-industrialization will also need a reorientation among stakeholders in the farming sector, especially smallholder farmers, for them to become agripreneurs.

    For starters, there is a need to shift from the largely mono-cropping system of Philippine agriculture to diversification and multiple cropping, which will need also a shift in program and policy priorities.

    As stated earlier, 80 percent of the country’s farmlands are devoted to only three crops: rice, corn, and coconut. And the irony is most rice and coconut farmers, and a large percentage of corn farmers are among the poorest of the poor in the country.

    While diversification will definitely need the conversion of large tracts of rice lands for the cultivation of other high-value crops, this does not mean the government abandon the country’s aspiration to become 100-percent self-sufficient for the staple.

    The most productive and potentially productive rice lands can further increase their production with interventions like mechanization, hybrid seeds, good agricultural practices, irrigation, among others. These can increase the average yield in rice farms from the current 4 to 5 metric tons per hectare to 6 to 7 MT per hectare.

    On the other hand, the less productive upland and rainfed lowland rice farms will be diverted to the growing of higher value vegetables, fruits, ornamentals and industrial tree crops like coffee, oil palm, rubber, cacao, and hybrid coconuts.

    Identifying crops that have export potential is a no-brainer, because all we have to do is look at which farm and food products have raked in billions of dollars for Thailand, Indonesia, Malaysia, and Vietnam.

    The issue of marketing should also be addressed if the country wants to export more farm products, and this should include the Philippines participating in international trade shows and exhibits, undertaking research on market trends, and linking smallholder farmers to companies that have access to export markets, among others.

    Smallholder farmers can participate in contract arrangements with private corporations. Also, smallholder farmers can be organized into cooperatives because organized farmers can consolidate their lands under the block farming approach, which will enable them to pool their resources to adopt mechanization and other farming technologies so they can increase their production.

    Once organized 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.

    More important, organized farmers can have better bargaining power when dealing with international clients or companies that have access to the world market.

    In the next part of this column-series, I will also discuss the other potential “export winners” of the Philippines from the agricultural sector.


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