Philippine Agriculture: A Failing Industry

Philippine Agribusiness

Philippine agribusiness?

I occasionally spout the opinion that the Philippine penchant for small farms is hurting the nation by constraining its ag productivity.  This comes from  having seen California’s huge farms, knowing of the agricultural knowledge and skill that spouts from the ag universities there, and knowing that California supplies a huge part of the American food supply whilst exporting a lot of product (wines for example). It is not known to many, but a top California product in terms of tonnage is rice. Most of it originates from huge estates surrounding the Sacramento delta. The rice is seeded by airplane, not stuffed into the mud one plant at a time.

Well, having offered up the opinion on very cursory information, I thought maybe I should do some honest to gosh research to better understand “ag” in the Philippines. “Ag” is the American short form for agriculture. If you go to the University of California at Davis, or Colorado State University, you are going to an “ag” school. They specialize in farming and ranching and offer numerous degrees, including veterinary medicine and forestry.

Philippine Ag Schools

It surprised me how many colleges in the Philippines offer ag courses. The complete list can be found on what I suspect is an incredibly useful web site called finduniversity.ph by searching for “Agriculture”.

A total of 102 separate campuses throughout the nation offer bachelors degrees in ag. A total of 23 institutions offer doctorates. Interestingly, these are all public colleges or universities. No private schools offer PhD programs. A number of private schools offer bachelors degrees.

The two most comprehensive doctoral programs are offered at Visayas State University and Central Mindanao University. A doctorate in Forestry is offered at Isabela State. Schools are located in areas where agriculture is the dominant industry.

Negros13 sm 500

Doctoral Programs

  • University of the Philippines Los Banos, Los Banos, Laguna
  • Cavite State University – Indang Campus,

    Indang, Cavite

  • Mariano Marcos State University, Batac City, Ilocos Norte
  • Visayas State University, Baybay City, Leyte
  • Central Mindanao University, Maramag, Bukidnon
  • West Visayas State University, Iloilo City, Iloilo
  • Benguet State University, La Trinidad, Benguet
  • Mariano Marcos State University – College of Education, Laoag City, Ilocos Norte
  • Tarlac College of Agriculture, Camiling, Tarlac
  • Pampanga Agricultural College, Magalang, Pampangas
  • University of the Philippines Visayas, Iloilo City, Iloilo
  • Mindanao State University – Naawan, Naawan, Misamis Oriental
  • Misamis Oriental State College of Agriculture and Technology, Claveria, Misamis Oriental
  • University of Southern Mindanao, Kabacan, Cotabato
  • Laguna State Polytechnic University, Santa Cruz, Laguna
  • Capiz State University,
  • Roxas City, Capiz
  • Isabela State University in Cabagan, Cabagan, Isabela
  • Nueva Vizcaya State University, Bayombong, Nueva Vizcaya
  • Central Bicol State University of Agriculture, Pili, Camarines Sur
  • Isabela State University,
  • Echague, Isabela, Philippines
  • Don Mariano Marcos Memorial State University, Bacnotan, La Union

Fees for most bachelors programs are in the range of P3,000 to P10,000 per semester. Private schools such as Adventist University of the Philippines charge fees around P30,000 per semester.

Clearly, a lot of Filipinos are schooled in the fundamentals of agriculture.

Educational “results” for undergraduate programs are measured by percentage of graduates who pass the Agriculturist Licensure Exam. Percentages are all over the board, from a low of 7% to a high of 100%. The bases may be small, accounting for some of this varied result. Most programs score between 30% and 75% which I’d call a “reasonable shot” if I were considering a school.

For the 2012 examination, 1,334 out of 3,518 applicants passed the exam.

I ask the question, though. With all that investment in education, “why is the Philippines not an ag dynamo, the place that is feeding Asia?” The growing soils and weather are wonderful. Why is this not an agribusiness nation?

The answer has to do with big picture. With structure.

Cooperatives

The Philippines relies heavily on cooperatives to provide a farm to market economic road. The rules for cooperatives are intricate, making them “near corporations” with significant tax advantages for smaller groups. The particulars are outlined by the Cooperative Development Authority (CDA) in this document.

The CDA web site is typical of many government sites, partly working, partly not, and a lot “for show”. But thin on content. There is a link to on-line courses, but it requires registration to access. So I don’t know how meaningful those courses might be.

The CDA does set forth a clear statement of goals focused on two areas: (1) registration and regulation of cooperatives, and (2) development and promotion. The regulation goals include formulation of rules and enforcement of compliance to laws via inspections. Promotion includes developing support systems (training programs), recognition, and technical assistance. One gets the sense that cooperatives are an idea with promise yet to be realized.

In 2011, there were over 20,000 registered cooperatives in the Philippines. That’s a huge number. Presumably most are agriculturally based.

Type Number Pct
Credit 2,268 10.9%
Consumer 850 4.1%
Producer 949 4.6%
Marketing 753 3.6%
Service 1,160 5.6%
Multi-Purpose 14,406 69.3%
Other 406 2.0%
TOTAL 20,792 100.0%

What is fascinating is that the CDA in its historical review of cooperatives acknowledges that the cooperative method, deeply rooted in laws as “the Philippine way”, has failed again and again. And I’d suggest it is failing now. The cooperative approach is a Constitutional mandate so it is soundly seated as the way agribusiness in the Philippines is to be done. Yet, look at CDA’s itemization of the failings of prior cooperative efforts, and you can understand why they are failing today:

  • Incompetent management
  • Lack of proper understanding of the principles, practices true aims, and purposes of cooperative associations.
  • Improper use of credits by the borrowers who, instead of using money borrowed for production, spent it for fiestas or luxuries.
  • Defective securities.
  • Political interference particularly in the collection of overdue accounts.
  • Lack of compensation of officers.
  • Inadequate character and moral responsibility in handling the other fellow’s money.
  • Lack of adequate safeguard against unscrupulous officers who took advantage of their position to grant loans to themselves and their compadres which later proved disastrous to the system.
  • The dominance of the individualistic attitude instead of the spirit of cooperation among the people.
  • Inability of cooperatives to secure adequate capital.
  • Their dependence on alien suppliers and distributors.
  • Ineffectiveness of the government and promotion of cooperative organizations.
  • Inadequate marketing facilities.

These are all shortcomings that, in a corporate structure, are weaned out by the twin drives to both grow and be profitable. A cooperative takes the accountability that drives a corporation and turns it to mush. Cooperative members are not individually accountable for anything.

The Philippines manages its agribusiness via the laborers in the field. That’s essentially what a cooperative is. I’m afraid most cooperatives look like the camel, a horse designed by committee. Good of heart and ideal and intent, but ill-formed. The cooperative, with a name that sounds harmonious, is structurally born to fail.

The Philippine Agricultural Condition

The following discussion paper is on the “must read” list for those wishing to understand Philippine agriculture:

The paper was prepared in December 2011 by Marites M. Tiongco and Kris A. Francisco of Philippine Institute for Development Studies. It examines the practicality of the Aquino Administration’s goal of food self-sufficiency by 2016. It is a discussion paper, not a factual presentation, and so authors do not allow quotes. But there are clear views expressed that the weakness in Philippine agricultural production is due mainly to policy and institutional shortcomings.

JoeAm puts this in his own blunt terms: the framework for agriculture in the Philippines is structured to fail. It lacks the scale efficiencies needed to specialize and compete and profit. It is family farming that barely keeps food on Filipino plates. As an industry, it contributes little to eradication of poverty. Like mining, it is a wasted opportunity to prosper.

The chart on page 10 of the above document shows that agriculture simply is not on the government priority list for funding as a significant industry. Government engagements are generally directed at setting trade restrictions or tariffs on products and the farmer is pretty much on his own. We can also see that the cooperative framework, as a part of the “infrastructure” of Philippine agribusiness, is weak.

As a side-note, the CDA does live up to its transparency commitment by itemizing expenses in detail monthly. They simply pop in the working excel tabulations from their budget. So kudos on that. This is NOT the case for the Department of Agriculture where nothing is reported but top-line numbers that are of little help.

Department of Agriculture

The web site published by the Department of Agriculture is perplexing. Although it states a mission and vision, there is no plan to bridge between the broad goals (feeding people) and a huge number of activities. In other words, shortcomings of budget are not addressed, weakness of the cooperative program is not laid on the table, and one cannot get from the web site much confidence that agriculture is “on the move” the same way, for instance, we get confidence that tourism is a growth business. Or casinos. Or real estate.

Agriculture is dead in the water. Why?

Most of the “services” sponsored by the Department of Agriculture are those I would label “officious”, the permitting and regulations and registrations required. I’m not sure how to characterize this penchant to see regulation as control, rather than release. By release, I mean providing the support and imaginative ideas and incentives to encourage production rather than order it, channel it . . . control it. This is typical of government services in the Philippines, I think. Officious rather than break-out . . .

It is a government agency bogged down by a bazillion farms and farmers and licenses to manage. It is focused on control, not inspiring growth.

officious

JoeAm knows “officious” when he sees it . . .

Insurance and credit services are a part of the services provided by the department. And laboratory. So I know the Department does some important work.

If one goes to “product” and pulls up “rice”, an enormous list of activities is produced – overwhelming, actually – organized under six main headings:

A. Production support (producing breeder seeds, seed stocks, upland rice development, pest control, cloud seeding, fertilizer distribution, equipment distribution, laboratory work)

B. Irrigation Development Services 

C. Other Infrastructure and Postharvest Development Services (post-harvest goods and equipment, construction of warehouses, validation of farm-to market roads)

D. Market Development Services (seed training centers, clinics, market data, links with financial institutions)

E. Extension Support, Education and Training Services

F. Research and Development Services

Based on this, I’d say rice self-sufficiency is a top objective of the Department and some good programs are underway.

I tried to examine the budget to understand where the Department spends its roughly 44 billion pesos but the reporting is top line, so it’s difficult to parse. Of 2011 budget allocations, the distribution was as follows:

  • National Irrigation Administration: 17.3 billion
  • Regional  Field Units: 11.4 billion
  • Office of the Secretary: 5.9 billion
  • Bureaus: 3.9 Billion
  • Bureau of Fisheries and Aquatic Resources: 3.8 billion
  • National Agricultural & Fishery Council (NAFC) 0.8 billion
  • Philippine Carabao Center 0.8 billion

One cannot answer the question, “what really are the Department’s important initiatives?”, by looking at budget numbers.

It is impossible to get a feeling of confidence about matters. No plan. No budget breakout. No apparent efforts to address the shortcomings laid out in the discussion paper cited above.

Conclusion

I’m sure the Department of Agriculture would object to the notion that agriculture is a “failing” industry.

  • “Hey Joe, you overbearing Yankee cowboy, we feed the nation, eh? We employ millions. We are making progress on our number one goal, rice self-sufficiency. We are making inroads into international markets.”

And Joe would answer, “your seas are over-fished to deserts, your farmers are starving, your cooperatives are ineffective, the Philippines is a stinko international competitor, and you contribute nothing to reduction of massive national poverty.”

Others would argue:

  • But Joe, look at the fine work Tony Meloto is doing with Gawad Kalinga. You want to throw that out?

And Joe would answer, no, absolutely not. Both can subsist together, family subsistence farming and agribusiness. The balance will be found naturally if you take the constraints off agribusiness and let it thrive. Don’t put the nation into shock over it, but start to move with purpose, stepwise, toward building bigger farming enterprises.

Think about it. Who, around the world, holds the Philippine model up as the way to go? Who emulates THIS approach?

Here’s why agriculture in the Philippines is a failing industry:

  • Family farms are not agribusiness. There are no scale efficiencies and no expertise in areas of planning, financing, nutrition, growing, packing and marketing.
  • Cooperatives are a weak form of agribusiness. Cooperatives lack the individual drive and accountability to grow and profit, so they tend to fall apart and straggle in the dust. Or mud, as the case may be.
  • Regulation is hidebound by convention and control; by managing trees not forest. The Department of Agriculture is overwhelmed by numbers of farms and tedious management issues and cannot inspire a growth industry.

What can be done:

  • Promote agribusiness. Big, scale-driven, profit-making corporate agribusiness. Permit businesses to accumulate large plots of land. Not families, not haciendas. Corporations. I know it is hard to let go. Phase in “the building of Philippine agribusiness” by region and staggered dates. It is 2013 and the world is competitive. We need to get the rice straws out of our farmer’s mouths and computers into the barns.
  • End reliance upon cooperatives. Or privatize the management of cooperatives. Somehow there needs to be a winnowing process that cuts off cooperatives that are draining resources from farms and leverage those that are contributing to (1) growth and (2) profitability. This needs an aggregated profit-making oversight.

Hint: Socialism is a failed economic model. Capitalism is a proven wealth-builder.

Likelihood that these steps will be taken:

  • End small family farms as the Philippine “model”: 3%
  • End reliance upon cooperatives: 4%

Likelihood that JoeAm will remain cynical about Philippine agribusiness:

  • 93%

But here’s the deal. A first class Philippines does not occur on a second class industrial framework. A first class Philippines should be self-sustaining for its food PLUS be able to generate wealth above that to reduce poverty.

With population continuing to rise, settling for second class means settling for hunger.

Comments
37 Responses to “Philippine Agriculture: A Failing Industry”
  1. JM says:

    One of the things I like about your articles is that you research the topics well. You present comparisons against a successful country, and figures which are very informative. I am interested in what is going in my country and what should be done but I don’t have time to research (Im still in my 20s and spend most of my time working). I agree with the likelihood, I don’t think they would implement it. They’d perceive your suggestions as negative/detrimental to them. You mentioned mining as a failure as well, I am interested as to the reasons why, and what must be done. Although, it’s probably similar reasons mentioned above.

    Off topic: Adventist was mentioned. I dislike these people. They believe earth is less than 10,000 years old. They don’t believe in evolution. I know it’s none of my business but it annoys me a lot when they dismiss all the evidences presented to them. I try to change the topic when they bring up their religion and convince me to join.

  2. edgar lores says:

    1. This is what is exciting about blogging: we venture into areas where ordinary mortals, much less angels, fear to tread.

    2. I was trying to make sense of this piece by comparison to Australia. Some facts from the CIA Handbook and Wikipedia:

    2.1. Agriculture accounts for 4% of Australia’s GDP; in contrast it’s 12.4% for the Philippines.
    2.2. Agriculture in Australia, excluding fisheries, is comprised of crops 49.6%; livestock 45.4%; and poultry 5%. In contrast, Philippines has 64.6% in crops, 18.3% in livestock, and 17.1% in poultry.
    2.3 Livestock in Australia is primarily cattle and sheep and their products – beef, milk and wool. In the Philippines it would be, at a guess, primarily pork.
    2.4. Crops in Australia is primarily wheat, fruit and nuts, vegetables, sugar cane and oilseeds (canola). In the Philippines, it’s primarily rice and corn.

    3. Livestock in Australia is mostly family farming. There are huge cattle stations and sheep stations owned by families. But that segment of crops which involves broadacre cropping – wheat, barley, sugarcane, rice and oilseeds – is under corporate farming. This would support your main recommendation.

    3.1. I understand that San Miguel Corp has deep investments in agribusiness. And Dole Philippines has been there for ages although they may not have expanded beyond pineapples and bananas.

    3.2. Agribusiness in the Philippines would be subject to the vagaries of weather. This may be the reason why the Dole plantations are in Mindanao. The island is south of the typhoon belt but its northern edge has withstood some onslaught recently perhaps as a result of global warming.

    4. I remember in the 60’s and 70’s when the Philippines was a rice-exporting nation. At that time the International Rice Research Institute (IRRI) in Los Banos was the crown jewel of Filipino agriculture, and it developed or discovered those wonderful strains of ‘miracle rice’. The technology was exported to the benefit of other countries, and under Filipino hands it miraculously disappeared. Just like Judiciary and Senate funds.

    5. The CDA’s list of reasons for failure so accurately paints the dark playful side of the Filipino’s ESFP personality. “Using borrowed money to spend for fiestas and luxuries.” I was laughing as I read the list, laughing and hurting.

    • Joe America says:

      Interesting comparisons. That the uninspired agribusiness sector represents so much of the Philippine GDP suggests just how weak the other industries are. Mining, giving away rocks. Manufacturing, very limited.

      Perhaps the next phase of the inquiry will be to look at the big ag producers.I believe U.S. Del Monte sold out, leaving the name behind. That’s on the list for doing.

      Yes, I laughed through tears, too.

    • cha says:

      San Miguel Corp and First Pacific Firp. (of MV Pangilinan) are soon to compete in the area of corporate farming, with palm oil as their ag product of choice.

      http://manilastandardtoday.com/2013/05/23/mvp-ang-rivalry-shifts-to-farming/

      • cha says:

        That’s First Pacific Corp.

      • Joe America says:

        That is good to see, Cha. Thanks. I hope government agencies are generous and provide the necessary permitting. From the article:

        “Getting started, however, may not be easy. Commercial farms require the leasing of huge tracts and contiguous land that will involve permits and the go-signal from government agencies and local government units. Security is another concern—several parts of Mindanao remain a hotbed of insurgency.”

        • cha says:

          They should be (helpful and all), if this government is serious about jobs generation. Aside from the farming plantilla, I suppose manufacturing facilities would also be in the pipeline to process all that palm oil. Which local government wouldn’t want that in their town or province? San Miguel business was always welcomed by local officials, as I remember when I was still there. It has even more friends at the national level. I would think that Pangilinan also has some clout by this time?

          I wonder though if there would be environmental concerns raised along the way? There is a Say No To Palm Oil lobby decrying deforestation in countries like Malaysia and Indonesia. Will this be the case in the Philippines too?

          • Joe America says:

            That is the big promise of agribusiness, I think. The downstream marketing and packaging and selling. Jobs may migrate from the fields to industrial areas or cities.

            As I look around Biliran Island and Northern Leyte, the mountains are already covered in coconut trees. I have no idea if they are maintained to replant and keep the plantations fresh. I’m guessing there is a lot of under-utilized land that can be farmed before forests are removed, but I dunno. I think “say no to palm oil” is essentially saying “say no to jobs”.

            Are Philippine big businesses like San Miguel responsible citizens, or are they like Philex, running rather roughshod over the lands? I don’t know. I’m guessing they will be properly checked by public awareness.

          • cha says:

            San Miguel was frontrunner when it came to corporate social responsibility during our time. Each brewery had a wastewater treatment plant back when everybody else was just dumping their wastes on the river system. But this was during the time of the Sorianos. I left just when Cojuangco took over.

            But I had a look at their website and it does seem they are still into environment protection and stewardship. Thank goodness.

            http://www.sanmiguel.com.ph/corporate/page/15/Environment.html

    • Mariano Renato Pacifico says:

      “This is what is exciting about blogging: we venture into areas where ordinary mortals, much less angels, fear to tread.” – EDGAR

      True. U.P. la Salle and Ateneo journalists are ordinary mortals. Bloggers are extra-ordinary mortals even without journalism credentials.

      Journalists in the Philippines becomes “extraordinary mortals” when “gossips” has reached critical mass for politicians afraid to exterminate.

  3. Mariano Renato Pacifico says:

    1. Degree in Agriculture is for poor children from poor farming families. After graduation they go back home plant kang-kong and camote. Others go to these schools because it is the only school they can afford to go to and it is closer to their nipa huts.
    2. Urban Filipinos do not go into agriculture because they do not want their skin browned and crinkled, body smelly, fingernails filled with dirt. No way! Parents prefer OFWing as houseboys and housegirls abroad. No hassle.
    3. Agriculture and farming got no class.
    4. It is cheaper to import than grow rice. No hassle!
    5. My parents raised pigs for fiesta celebration, birthdays, special occasions. They found out too late it is easier to buy lechon than raise our own. No hassle! No smell! No oink! oink! oink! in the middle of the night.
    6. “vagaries of weather” is an Act-of-God or Fortuitious event that no insurance companies nor government would insure. Who can stop acts of God? No one!
    7. Parcel of land is a prized posession to Filipinos. My great grandfather had 10 hectares. He divvied it up among his 10 children for 1 hectare each. My grandfather had another 10 children. My father inherited 1,000 square meters. We are 10 in the family, I inherited 100 sq meters. I have two children, of course, they will inherit 50 sq meters each. How in the world our family can plant in economy of scale when all of us are not in goot terms? How can we be in goot terms when my fathers pig strayed into my cousins piece of lot and shotted it because it was trespassing nibbling on his weed plantation.
    8. It was not Acts-of-God my parents were worried about raising goats, cows, pigs and coconut. It is the Act-of-Filipinos and acts-of-neighbor and acts-of-cousins my parents were worried about. Nothing can stop them. They want it easy. Stealing is easy than planting. My parents went to police. Police came back to advise my parents to take it easy else the thieves will join NPA. Papa afraid. Went to America. He was a WWII veteran, according to my mother.

    • Mariano Renato Pacifico says:

      My parents had 15 hectares planted to coconut. They were levied by the government called “coco levy” to give to Cojuangco who bought UCPB that bought San Miguel. benign0 Aquino is silent. It his cousin. They own UCPB and San Mig and PLDT by extension.

    • Mariano Renato Pacifico says:

      Typhoon, eartquake, floods, landslide is an Act of God. God is not merciful. Vatican has been lobbying Lloyds of London to take out “Act of God” from any insurance language and replace it with Fortuitous Events.

    • Joe America says:

      I think you can get four coconut trees on your lot if you plant one in each corner. Hut in the middle.

      I finally came to understand why so many families in the Philippines fight over their inherited land. Superstition. No one does a will to define for sure who gets what because a will is “bad luck”. So papa and mama die and the kids do the animosity trip of “he said/she said” and so much for close family ties.

      The lawyer told me when I said I needed a will. “You are a practical man” from which I deduced I am heebie jeebie stupid.

      • Mariano Renato Pacifico says:

        Culturally Filipinos do not execute wills because, like what you said, it is bad luck. It is true. When my mother was 65 years old and healthy she did not want the will because she’s still healthy. Unbeknownst to us she wrote in her own words who gets what from her share of my father’s inheritance.

        In the provinces inheritance is settled by knife-fight, bolos and spears.

  4. JosephIvo says:

    What a coincidence, I will moderate a workshop for DTI and DA and private sector people tomorrow and Friday on Value Chain Analysis in one agricultural sector. Will only be able to react to your article in the weekend.

    Strange, Siliman University is not in your list, it belongs to the Philippine “Ivy league” and offers masters and doctorates by my knowledge, I worked with them on an agricultural project some years ago (how to share best practices).

  5. “Hint: Socialism is a failed economic model. Capitalism is a proven wealth-builder.”

    as far as my undergrad studies are concerned, US agri is protected from competition from south america, remember NAFTA obliged south american agri market to open up while US found some loopholes to PROTECT– w/c was not so capitalist–their own farmers.

    Read on us farm subsidies
    http://www.usnews.com/opinion/blogs/economic-intelligence/2013/06/17/congress-appears-unlikely-to-cut-subsidies-for-wealthiest-farmers

    anyway i think letting companies takeover is a good idea because CARPER is a failure due to politics and poor implementation. one thing this companies can do is provide high-tech machineries which will improve productivity. i didn’t read the whole article thoroughly though because i’m in a hurry, sorry Joe. but how can companies takeover– through PPP or selling it to them? I believe that vast tracts of agriculture-suitable land in the country are owned by landed elites or real estate magnates.

    • Joe America says:

      You ask some very good questions, Angelo. And that is Phase II of my “ag exploration project”, as it is developing. The major players and landowners. Who are they? What do they own? I just started digging today and I can tall it will take a bit of work to unwind it. I’ve to this point mainly just agreed with your notation that “CARPER is a failure”, and ag is a bit of a pickled mess. It could be that the major players like San Miguel, as they focus on the opportunity for products like palm oil, will sort it out. The thing I can’t figure out is how we (we the laborers) can eat palm oil. I’ve no doubt the corporate barons will make money on it.

    • Mariano Renato Pacifico says:

      True. Agriculture is protected industry in America. Farmers get gazillions of doleout from the U.S. Government. France also protect their farm industry. Philippines should also have price support. Price support only supports the corrupt as usual like coco levy.

  6. The Mouse says:

    How do we then solve the problem of export oriented corporations? The biggest agri corps in the PH like Dole and Del Monte producefor export.Del Monte opted to have Cavendish for others than supplying more lacatan for domestic consumption and then exporting it as well, etc. Dole exports their pineapples.

    Meanwhile, most of domestic consumption are supplied by local cooperatives and small farms.

    Nothing wrong with exporting, but when companies export products due to bigger market and the Philippines will be forced to import food it can grow to supplement shortage in supply is very ironic.

    • Joe America says:

      Yes, you have just cited a point that struck me this morning. That the Philippines DOES have large farming corporations, but they aren’t doing much to feed the Philippines. They are providing jobs. Plus, some have considerable foreign ownership. So profits go out of the country. Two strikes against the Philippines. I’ve got to work on that matter, after some research.

      • The Mouse says:

        The remedy I could think of is some government intervention. Some kind of law that kind of like disallows export until local demand is satisfied. It is ironic that the Philippines is one of the biggest exporter of Cavendish to the world but the high demand for Lakatan (which is always in shortage, hence its more expensive price than Cavendish) is never satisfied.

        If I were Del Monte Phils, I would dare on the Lacatan and have an R&D to extend its shelf life and dare export it. Hahaha. They could have a monopoly of Bananas one day due to the superiority of the Lacatan species over the Cavendish. Hahahaha

    • Mariano Renato Pacifico says:

      Prawns are raised here and exported, too! So are lobsters. So are coffee. Nothing left for us.

      Gootness, Bo’s chain of coffee shops offer Davao and Baguio beans roasted to your liking.
      Prawns are exported and imported back. Sick. So are lobsters. So are tunas.

      Why are they not selling locally?

      • Joe America says:

        “Prawns are exported and imported back.” Same with citronella products. The oils are exported out and the candles imported in. Seems to me like we’re missing a few jobs here, and maybe marbles.

  7. Thanks for writing this Joe. I am 23 years old and a lurker here. My day is not complete if I don’t visit your blog.

    We have a 10-hectare rice farm back home in Mindanao. Oh, how my mom cries every harvest season because most of the time, the venture is a failure — we borrow money to finance the farm and end up not having enough “revenue” to pay those debts.

    I used to think that it only needs a simple management improvement from my parents part. I used to be a fan of cooperatives too. Reading your articles, I understand way better now why it has not worked.

    • Joe America says:

      Good of you to visit, Von. Your mother’s case is common, I think.The endless dilemma of how to get cash out of land.10 hectares is a big chunk of property. I would think it should pay, but that depends on the particulars of soil and water. When I looked at buying a small rice farm, I scratched my head because I couldn’t figure out how I’d ever get the price of the property back because the margins are so thin. The only reason for buying it would be to sell it for houses. So the money went into US stocks.

      I’m doing another piece for next week dealing with the “big dogs” of agribusiness. It’s rather interesting seeing who owns what.

  8. JosephIvo says:

    I went in the workshop very optimistically “harmonization” between the private sector, DA (Department of Agriculture) and DTI (Department of Trade and Industry) to boost the agro-industry, a structured approach via “Value Chain Analysis”, after reading Joe’s blog, what can you expect more?

    But I was reminded immediately about the Philippine reality. The workshop did not start at 2:30 as planned, because the lunch took a little longer and the introductions never ended, it started at 4:15 and day one ended at 5pm as planned (some participants left home at 3am so an evening session was not an option). The next day was planned from 8:00am to 5:00pm and it started ok at 8:15 but had to end at noon because more pressing things were on the agenda for the afternoon, like visiting the city and buying pasalubong.

    Too few private sector participants, I guess they know why. The civil servants were from regional offices, from the impervious clay layer in between the top with a clear vision and good initiatives on one side and the “front liners” confronted with reality. The administration departments are still “self-supporting” systems, engines where the fuel pump consumes more energy than the engine produces. Customer orientation? “Pull” systems? “We know what is good for them!” (we got money from our foreign sponsors to tell you what to do, we have doctor or master degrees, we can make life difficult for you if you don’t fill out the forms correctly…) So please read the remainder taking my foul mood in mind.

    Some issues in the Philippine agribusiness:
    1- All micro-business, 93% is backyard livestock. A few large businesses, few small businesses nothing in the middle. The San Miguel’s live on a different planet, run their own shop, know much better than the administration does.
    2- I didn’t know livestock was so important, more than 1/3 (even without aquaculture) of the total agriculture production and thus consumption. Swine as number one, than poultry and cattle as a far number three, diary, ducks, goat… negligible.
    3- Little import and export, less than 10%, even with swine prices much less on the global market. Nobody was talking about the 2015 lifting of trade barriers in ASEAN. (but I’m sure San Miguel does)
    4- Existing livestock organization, private or government are not functioning.
    5- After the devolution the LGU’s are supposed to take initiative. But there are too few Robredo’s. Most often you get POLITICS instead. Pacquiao (or his lawyers) deciding on what, where to plant and how, all in function of who gets government aid.
    6- Pasture land reduced to 15% of what it was in 1970 in this province.

    The vision and motivation (and disillusion due to the few private sector participants) of the ASec (assistant secretary) were heartening though. But it will take time to replace the clay layer of civil servants, all in their late 50’s, all having pasalubong for children and apo’s on top of their mind.

    • Joe America says:

      What a wonderful, if somewhat depressing, exclamation point to the article and discussion. Your point one is so very very true. I am researching the “big dogs” of Philippine agribusiness right now, and there are some very first-class companies. They buy on a contract basis, and so have some measure of control on cost and quality. Then there is the rest of the Philippines, the “free agents”, mired in muck and poverty. But there is also a little uplift. Some businesses are starting to focus on ways to make money by organizing the unorganized.

      I’ll complete the story on the big corporations. Then I want to spend an article brainstorming on how to better bridge the gap between the bigs and the poor.

  9. Joe America,
    I would like to concentrate on what is given, that is, small farm, high school grad farmer, with children who graduated either as a teacher, engineer, nurse who will not enter into planting crops or raising livestock. This you seen in eery corner of the street, in every barangay in every municipality. If i am able to put food on their plates by effeciently growing crops, i am pretty sure i might uplift their chances of thinking that putting food in their stomach will be as close to solving poverty.
    We have to identify the steps and take it a step at a time.

    • Joe America says:

      Welcome to the blog, Ephraim. I think that is true from the perspective of people who live in the provinces and have the land to farm. But putting food on the plates of all the residents in the cities is a different matter. The Philippines wastes a lot of money buying rice from overseas because it can’t quite get to self-sufficiency, much less get to exporting so that money is flowing IN to the Philippines. There is a place for small scale farms, but it is hard to declare a nation full of them as an agribusiness nation. It is a farming nation. And it is not feeding the Philippines. I agree with “one step at a time”, but we need to agree on the goal we are stepping toward. For me, it is self sufficiency, plus exports to make the nation wealthier.

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  1. […] a prior article on agribusiness, I wrote that Philippine agribusiness as an industry is “dead in the water” because […]

  2. […] is the third and final article in a series about Philippine agriculture. The first article provided an overview of agriculture and government institutions and practices. It characterized […]



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