(Second of two parts)
Can the Philippines become one of the farm export powerhouses in Southeast Asia?
My answer would be “yes.” But a lot needs to be done.
Today, the Philippines can only boast of bananas and coconuts (primarily in oil form) as its two top farm exports earning more than $1 billion each annually.
While much has been said about Thailand being the top rice exporter in the world, it also earns billions of export dollars from natural rubber, prepared fish, sugar, prepared chicken, starch, prepared shrimp, animal feed, and various food preparation.
The United Nations Trademap data showed Thailand had 13 types of farm exports earning over $1 billion each a year, Indonesia five, and Vietnam seven.
So what must be done for the Philippines to ship more farm products that can generate at least $1 billion each annually?
Based on latest statistics from the Philippine Statistics Authority, pineapple products emerged as the third largest farm/food export behind coconut products and bananas, with export receipts of about $710 million in 2016.
Today, Dole Philippines, Del Monte, and Lapanday Diversified Products remain the largest producers of pineapple products in the country with their large plantations in Mindanao.
The good news is pineapple can be planted in many areas in the Philippines, including in Southern Luzon where there are many family-run farms particularly in Laguna and Cavite. Most of their harvests are sold along the road and markets, which shows none of the pineapple farms are consolidated and there is still no value-adding. That should make the government think of program or project to increase the production of pineapple farms in Southern Luzon and introduce value-adding.
Tuna was a far fourth with about $297.60 million in export receipts. And the good news is the Philippine Rise (Benham Rise) is reportedly teeming with lots of tuna.
More PH farm exports
The other farm products that the country exports and whose volume can be increased are seaweeds and carrageenan ($199.25 million), manufactured/processed tobacco ($161.18 million in 2016), centrifugal sugar ($99.04 million), milk and cream and related products ($91.68 million), mango and mango products ($83.73 million).
Unmanufactured/unprocessed tobacco ($74.85 million), shrimps and prawns ($52.86 million), copra oil cake ($52.06 million), rubber ($37.68 million), abaca ($20.24 million), cacao ($20.17 million), palm oil ($18.43 million), fertilizer ($12.90 million), wheat and meslin ($12.52 million), and frozen chicken meat ($10.12 million).
Maybe except for processed tuna products, the abovementioned farm/food commodities can all be produced by the private sector with the engagement of smallholder farmers and cooperatives. Cooperatives can also take their operations to a higher level by going into value adding or food processing.
While the government through the Department of Agriculture (DA) and Department of Trade and Industry can conceptualize a roadmap to increase the country’s farm/food exports (which I can discuss separately in another column), the solution is also to improve the entrepreneurial ecosystem for agriculture, or for agripreneurship to take root.
Why do I say this? My answer is simple – most smallholder farmers and fisher folk are still more oriented toward increasing on-field crop production without taking into account the larger markets and value adding.
Steps to instill agripreneurship
The end-result of agripreneurship are farmers, cooperatives, agribusiness companies, and even government agencies and research institutions having a vision to produce primarily value-added products that can compete in the international market.
Eventually, this should lead to an increase in the volume of the abovementioned farm/food exports, and more commodities like coffee and cassava, among others, getting shipped abroad.
So let me enumerate the “six Ms” for enhanced agripreneurship: Mindset, mentoring, money, market, mastery, and machine.
For mindset, individuals with entrepreneurial orientation are often drawn to opportunities, innovation, and new value creation. This can be developed through trainings and formal education from primary up to tertiary level. The higher education curricula in agriculture must also be strengthened.
For mentoring, the Kapatid Agri Mentor ME Program (KAMMP) aims to assist micro, small and medium scale enterprises (MSMEs) 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 joint program of the DA and Go Negosyo of Joey Concepcion 3rd, the presidential adviser on entrepreneurship.
Mentoring can also be done through technology business incubation that focuses on entrepreneurship and job creation in the rural community, especially among the youth, through technology transfer and entrepreneurship development programs.
Then there’s the Young Farmers Program (YFP), a program of DA-Agricultural Training Institute (ATI) that aims to promote agripreneurship among the youth, giving them access to entrepreneurial skills and development in agriculture.
Money encompasses credit provision and teaching financial literacy. On financial literacy, agripreneurs must be equipped with set of skills and knowledge that will make them effective decision makers with all of their financial resources.
On the other hand, government must innovate financing for agribusinesses. For example, soft loans can be provided to those who come up with innovative proposals in agriculture or micro-franchising.
For markets, there is a need to strengthen market linkages in the supply chains, not only in the local markets but also to the export markets. Also, production alone is not enough, so value addition must be pursued even from the farm level to stimulate greater farm production, which will generate more income for agripreneurs. Markets must be ascertained first before starting an agricultural enterprise. Let’s also prepare ourselves to do e-commerce or e-trade on top of the off-line trading that we do in most cases at present.
When it comes to mastery, agripreneurship centers can teach the following to both present and aspiring entrepreneurs in the agriculture sector: know-how how-tos of entrepreneurship, what you need 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.
Government agencies like DA-ATI and state colleges and universities can take the lead in establishing the agripreneurship centers.
For machines, agripreneurs must also know how to level up their production using the Shared Services Facility (SSF) program of government.
Farm mechanization to increase on-field crop production and the appropriate technologies to produce finished or semi-finished goods should also be pursued by agripreneurs.
Steps to increase farm production so the cost of raw materials for agri-processing should never be overlooked and I have discussed these in the first part of this column-series.
These include consolidating smallholder farms to form more efficient production blocks, farm mechanization, accessible and affordable credit, and using other technologies like hybrid seeds and improved cultivars.
Although I am concluding this two-part column-series, expect me to write more on how the country can increase its farm/food exports in the future. There is actually so much to be discussed from the topic.