Getting the youth into agribusiness



On October 23, 2017, I was invited to deliver a speech during an event of the Commission on Higher Education-Cordillera Region at the Benguet State University that was attended by both CHED officials, educators and 500 students. And I took the opportunity to inspire the youth to become agripreneurs.

For starters, let me reiterate what I believe is the best formula to create more wealth for the country and address poverty: “Modernizing and industrializing the agriculture sector anchored on an ecosystem on entrepreneurship.”

This is what I want to preach to as many people so we can elevate the country’s farming sector, create more wealth and put into place inclusive growth.

And when it comes to creating agripreneurs, the youth should be involved especially now that the average age of farmers in the Philippines is about 57.

I even believe that the youth can lead in creating social impact by becoming agripreneurs, especially if they undertake value adding and aspire for the global market. The youth are also very receptive to adopting new technologies that can increase farm production by more than two folds, and create more products from value adding. Eventually, the collective effort of the young agripreneurs can create social impact by addressing hunger and poverty. Let me explain.

The Philippines still has the highest poverty rate in Southeast Asia (or Asean) because of high rural poverty caused by the following: Low farm productivity; limited farmland diversification; low investment primarily by the government; and an undeveloped agri-food manufacturing and export industry.

Based on research by InangLupa movement, which I founded and head, Thailand’s rural poverty incidence is 13.9 percent and its national poverty incidence is 10.5 percent; Indonesia’s is 14.2 percent in the rural areas and 11.3 percent at the national level; and Vietnam’s is 18.6 percent at the rural level and 13.5 percent at the national level. The Philippines has a poverty incidence of 30 percent in the rural areas and 21.6 percent at the national level.

Total Factor Productivity (TFP) in Philippine agriculture is also low, according to the United States Department of Agriculture. TFP is the most informative measure of long-term agricultural productivity, and refers to cover land, labor, capital, and material resources used in production and compared to total crop and livestock output.

The end-result of those are low income and weak job creation specifically in the rural areas.
So what must be done?

Creating the environment

The key here is to provide an enabling policy environment for agriculture to be grown as an inclusive business and instilling the spirit of agripreneurship because of its potential to contribute to a range of social and economic developments.

The reality in the field (literally) is traditional farming (at least in the Philippines) emphasizes three main crops: rice, corn and coconut, which are not that profitable to grow and where value adding is limited or even non-existent. Honestly, does the Philippines have a chance to export rice and corn?

Furthermore, the typical smallholder Filipino farmer hardly thinks like businessman.

While there are many smallholder farmers today who have started to become agripreneurs by entering, usually through a collective effort, into production agreements with large agro-industrial companies, I believe the youth can provide the major impetus to modernize and industrialize the country’s agriculture sector, especially if an ecosystem for agripreneurship is created.

A modernized and industrialized agriculture sector should be treated like a business with expected gains and profitability resulting in the following: Employment generation; improvements in nutrition; income generation; overall food security; and poverty reduction.

The key to agripreneurship is of course, agribusiness, where an inclusive value chain approach should be put into place, and complemented with product development/value addition. Let me emphasize that it should be “inclusive” or involving the smallholder farmers as active partners and not just sources of raw materials at the lowest prices by big agro-industrial firms.

Although there are already efforts by a number of large agro-industrial firms to establish what I would call mutually beneficial or inclusive business relations with smallholder farmers, I believe the government, both from the executive and legislative sides, should enact policies providing incentives for agribusiness corporations to adopt an inclusive contract growing farming model.

The six Ms of agripreneurship

At the level of creating agripreneurs from the current ranks of smallholder farmers and the youth, let me enumerate the “Six Ms for Enhanced Agripreneurship,” which are Mindset, Mentoring, Money, Markets, Mastery and Machines. The six Ms are derived from the seven Ms of the Department of Trade and Industry.

Mindset refers to instilling a culture of entrepreneurship, where individuals with entrepreneurial mindsets are often drawn to opportunities, innovation and new value creation. And the only way to develop the agripreneurial mindset is through trainings and formal education from primary up to tertiary level. So there is definitely a need to strengthen the higher education curricula in agriculture.

The component of Mentoring is gradually being put into place with the launching of the Kapatid Agri Mentor Me Program (KAMMP) that aims to assist micro, small and medium scale enterprises to scale up and sustain their businesses, through weekly coaching and mentoring by business owners and practitioners on different functional areas of entrepreneurship. KAMMP is a joint program of the Department of Agriculture (DA) and Go Negosyo of Joey Concepcion, the Presidential Adviser on Agripreneurship.

Also under mentoring is Technology Business Incubation (TBI) that focuses on entrepreneurship and job creation in rural communities, especially among the youth, through technology transfer and entrepreneurship development programs. TBI also emphasizes the application of technology and innovation in an agribusiness undertaking.

Last but not least is the DA’s Young Farmers Program (YFP), which aims to promote agripreneurship among the youth by imparting upon them entrepreneurial skills for agriculture.

Money, mastery, machine

Money will always be an important component for agribusiness development, but also equally vital is financial literacy so agripreneurs will have set of skills and knowledge that will make them effective decision makers in managing their financial resources.

The problem of people wanting to go into agribusiness is usually lack of capital, so it is essential that government address the issue of affordability and accessibility of credit. This can be solved by providing innovative financing like soft loans for those who come up with innovative proposals in agriculture or micro-franchising.

The fourth M is Markets, or strengthening market linkages in the supply chains, both for local and export.

The fifth M is Mastery, where the agripreneur gains mastery on the know-how and how-to’s of entrepreneurship; what are needed to set up a business; basic rules of spotting market opportunities; product positioning and differentiation; product development; market development; basic business finance and plan preparation; and developing a system for continuous innovation.

The last M (but never the least) is Machine or Machineries, and this means agripreneurs not only gain knowledge on equipment and right tools to ensure quality production under the Shared Services Facility (SSF) program; they must also use the machines to level up their production and increase productivity.

Machines also means adopting innovation so agripreneurs can produce more products more efficiently.

So let me invite the youth to join the ranks of agripreneurs so the country can realize a truly modern and industrialized agriculture sector!


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