(First of 2 parts)
With the advent of the Asean Economic Community (AEC), there is also a need to put into place a “localized” program where the focus is on the advantages offered by a district, province or region, and where raw agricultural produce are processed in industrial centers and tourism can also be one of the supporting growth drivers. This can be realized through an approach called Institutionalization of District-wide Agro-industrialization, Innovation and Tourism (iDAIT) Platform initiated by Ilocos Sur Congressmen DV Savellano and Eric Singson. iDAIT is an Ilocano word which means “to sew.”
iDAIT is also viable convergence strategy where the efforts and programs of government agencies involved in agriculture, trade and industry, tourism and agrarian reform can be unified to bring about regional growth that should benefit, in a major way, small holders.
The iDAIT platform ensures food security, prosperity and environmental sustainability through the following: Strategic investments in agricultural modernization and agribusiness; developing the “Ecohistourism” and services sector; and attract investments in manufacturing (agro-processing) and allied industries.
iDAIT is also innovation-driven and market-oriented, and is thus anchored on participatory development approach by actively engaging stakeholders in value chain integration in any geographical location or area. And last but not least, iDAIT takes into account local assets, land, natural resources and opportunities as the source of competitive advantage of communities on which the program/project is located.
The end result should be the creation of jobs, income opportunities and reduction of rural poverty.
I must emphasize that when it comes to rural poverty, the Philippines has one of the highest in the region.
Research by InangLupa movement show the country had a rural poverty incidence of 40 percent in 2014 that is not much of an improvement over the 46.9 percent recorded in 2000. On the other hand, Thailand’s rural poverty incidence was 13.9 percent in 2013, Indonesia 13.8 percent in 2014, Vietnam 17.4 percent in 2010, and Malaysia 8.4 percent in 2009.
Also, the Philippines has the lowest gross value added average (GVA) in Asean in 2010 to 2014 based on data from the Asian Development Bank: Philippines, 1.6; Thailand 2.0; Malaysia, 2.8; and Vietnam 3.2. While Thailand’s GVA average is 2.0, let us remember that it is the world’s top rice exporter.
Perhaps the country’s high rural poverty incidence can be attributed to millions of farmers not getting covered by well-intended national programs for agriculture.
In reality, the presumption that national programs can reach all beneficiaries numbering the millions is actually an illusion. Based on the 2015 General Appropriations Act report, of the targeted 5.5 million beneficiaries of the government’s agricultural programs, only the first 1.5 million are adequately served.
There is also shortcoming when it comes to implementing some national programs: they do not take into account other growth drivers unique to a certain region, like tourism and the presence of ports and seaports vital for exporting products. Also, I have yet to see a national program to establish agro-processing centers for crops that are unique to a certain region or locality, which also requires the delivery of innovations (from research and development efforts) to support the manufacture of products from raw farm produce. If that were the case, then the country would now have lots of industrial parks devoted to agro-processing.
Indeed, agro-processing should be a vital component of poverty reduction efforts in the countryside.
When it comes to developing agribusiness and agro-processing, iDAIT advocates a public-private partnership initiative, with a mission to benefit the small holder farmers through an inclusive market-oriented approach comprising of agricultural innovation, entrepreneurship development and value addition technologies by integrating family-based enterprises and scale up to micro, small and medium scale enterprises (MSMEs).
One good strategy to integrating small family-based enterprises is the “common brand” approach, where farmers are taught good agricultural practices to produce quality raw materials that are consolidated, processed and packaged in a facility. The products churned out by the agro-processing plant carries only one brand even as many farmers contributed to its raw materials. The agro-processing facility can also be common shared facility established by the local or national government that can be rented out to MSMEs or farmer cooperatives and organizations.
Although businessmen can be counted on to establish agribusiness companies, the farmers and farmer cooperatives should also be trained by government to become agripreneurs, so they can adopt innovations and technologies to transform their raw produce into finished products that have a higher value added and longer shelf life.
While state colleges and universities can deliver innovations based on R&D to the countryside, it is still the responsibility of the national government to adequately fund research efforts and the country scores low in this.
The United Nations recommends Gross Expenditure for R&D at 1 percent of gross domestic product (GDP). However, the Philippines devotes only 0.5 percent.
So much has to be done in this area.
iDAIT also takes into account the role of tourism as a driver for growth in the countryside, especially in areas that host historical sites. Thus iDAIT also focuses on promoting travel for leisure, recreation, and holidays, which targets to package UNESCO historical sites, local practices and traditions that appeal to tourists, health and wellness, pilgrimage and religious pilgrims.
While attracting foreign and domestic tourists is a vital component of the iDAIT framework because they are also a market for food and processed agricultural products, they are not still the main market for processed farm products; it is still the export market.
Since the local government is actively involved in iDAIT and is actually one of its main implementors along with the departments of Agriculture, Agrarian Reform, Interior and Local Government, Trade and Industry, and Environment and Natural Resources, it must devote infrastructure programs that will propel the establishment of agro-processing or industrial parks, support tourism and provide safety nets for small holders.
In the next part of this column, I will discuss how Ilocos Sur intends to use the iDAIT platform to propel inclusive growth.