On November 24, I presented a paper before a student’s forum held at the Ilocos Sur Polytechnic State College (ISPSC) led by its president Dr. Francisco Lopez in Santa Maria, Ilocos Sur, where I tackled the subject “Strengthening the Entrepreneurial Ecosystem in Agriculture.”
The message I wanted to send to more than 200 students in the forum was: There is a great future in farming, but much work needs to be done for agripreneurship to take permanent root.
While there are parts of Ilocos Sur that host very productive farmlands, the reality is not all regions in the Philippines have agriculture sectors that can anchor the growth of their rural economies.
Many regions in the Philippines still have low farm productivity, limited farmland diversification, low investment in agriculture, and an underdeveloped agri-food manufacturing and export industry, which all result in low income and weak job creation.
So it is no surprise that the Philippines has the highest poverty rate in Asean because of high rural poverty rate caused by those factors I just mentioned.
Based on data from the Philippine Statistics Authority (PSA), the country’s overall poverty rate in 2015 was 21.6 percent, and 30.0 percent for rural. According to my respected colleague Dr. Rolando Dy, the urban poverty rate for the Philippines is 11.3 percent.
On the other hand, for 2013 Thailand’s poverty rate is 10.5 percent, rural poverty rate 13.9 percent, and urban poverty rate 7.7 percent, according to World Bank statistics.
Another Asean neighbor Vietnam, has a poverty rate of 13.5 percent, rural poverty rate 18.6 percent, and urban poverty rate a very low 3.8 percent, all for the 2014.
Low agriculture employment rate
Figures from the Central Intelligence Agency also show that employment in agriculture was high in Vietnam, Thailand as well as Indonesia, or 48 percent (2012), 31.80 percent (2015) and 32 percent (2016), respectively.
The Philippines’ agriculture employment rate was 26.90 percent in 2016.
We can draw two conclusions from the poverty incidence and agriculture employment figures: No. 1—Asean countries that have a productive farming sector and a thriving agro-industrial complex have lower poverty incidences; and No. 2—Asean countries that are shifting from production-based farming to agribusiness, create more job opportunities both in farm and non-farm activities.
Proof that countries like Vietnam, Thailand and Indonesia have thriving agro-industrial complexes are the number of their top farm exports that earn from $500 million annually.
I have stated in many of my past columns that the Philippines only has two farm exports that earn $1 billion annually: bananas and coconuts (mostly in the form of oil).
Thailand, on the other hand, has 13 farm exports earning at least $1 billion a year and another four earning from $500 million to less than $1 billion a year; Vietnam has seven raking in at least $1 billion a year and another two earning from $500 million to less than $1 billion a year; and Indonesia has five farm exports earning at least $1 billion a year and another five earning from $500 million to less than $1 billion a year. Those statistics are based on the United Nations Trade Map and the University of Asia and the Pacific Analytics.
So how can the Philippines become a farm export powerhouse in Asean?
Agripreneurship is the answer
To develop more export winners in the agriculture sector, the farming sector must reorient itself toward agripreneurship. When I say the farming sector, I do not only refer to smallholder farmers but also to agencies concerned with the agriculture sector and entities in the agro-industrial complex.
The first step in making agripreneurship take root is to retool farmers and extension agents, so smallholder tillers of the land become agripreneurs who find opportunities to make the most of agricultural output.
Smallholder farmers are still very much oriented toward cultivating land, while a farm manager is more concerned in overseeing farm operations.
And while agripreneurship can start with businessmen investing in the agriculture sector, particularly in value adding, the farmers themselves should be encouraged to become agripreneurs.
Agripreneurship should eventually lead to the creation of more micro, small and medium enterprises (MSMEs) in the countryside that are involved primarily in agribusiness.
However, PSA statistics show less than 1 percent of the 896,839 MSMEs in the Philippines are involved in agriculture, fishery and forestry, which is very low. This can also explain why there is so much poverty in the countryside. So there is also a need to create more MSMEs in the agriculture sector through agripreneuship.
Mindset, mentoring, money
Since my audience at ISPSC were all students, I discussed anew the “Six Ms” for agripreneuship: Mindset, mentoring, money, market, mastery and machines.
Under mindset, there is a need to instill a culture of entrepreneurship to the smallholder farmers and youth.
Individuals with entrepreneurial mindsets are often drawn to opportunities, innovation and new value creation.
An agripreneurial mindset could be developed through trainings and formal education from primary up to tertiary level. This will require, among others, the strengthening of the higher education curricula in agriculture.
For mentoring, I am now one of the advisers of the Kapatid Agri Mentor Me Program (KAMMP), an initiative of Presidential Adviser for Entrepreneurship Joey Concepcion 3rd, which aims to assist MSMEs in scaling up and sustaining their businesses through weekly coaching and mentoring by business owners and practitioners on the different functional areas of entrepreneurship. This is a joint program of Go Negosyo and the Department of Agriculture (DA).
Technology business incubation should also be put into place, which focuses on entrepreneurship and job creation in the rural community, especially among the youth, through technology transfer and entrepreneurship development programs.
And there’s the Young Farmers Program (YFP) of the DA, which aims to promote agripreneurship among the youth, giving them access to entrepreneurial skills and development in agriculture.
Under money, agripreneurs must be equipped with set of skills and knowledge that will make them effective decision makers in all of their financial resources. This also refers to financial literacy.
Also, innovative financing for agribusinesses must be encouraged. For example, soft loans can be provided to those who come up with innovative proposals in agriculture or micro-franchising.
Under market, there is a need to strengthen market linkages in the supply chains, not only in the local markets but also with the export markets.
Under mastery, agripreneurship centers must teach the following: Know-how and how-tos 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.
And finally under machines, agripreneurs must have knowledge on the equipment and right tools to ensure quality production under the Shared Services Facility (SSF) program, so they can also use these to level up their production and venture into value adding. Also with innovation, agripreneurs can produce more products more efficiently. Farm mechanization should also be pursued to make on-field production more efficient.
I just hope that more of the youth will gain interest toward agripreneurship like those in ISPSC, because creating a “critical mass” of agripreneurs from both the youth and smallholder farmers is among the keys to creating more jobs and wealth for the country.