Saturday, August 27, 2005

Understanding Nation Building (Part 3)

this is part three of our series on understanding nation building--- an analysis and discussion based on the Blueprint for a Viable Philippines.

On Agriculture


Increase rural folk’s access to productive resources. Complete the implementation of the agrarian reform program, and strengthen land and asset reform by bringing back reformed lands into the circuit of commerce. Pump-prime agricultural modernization by increased investments in irrigation, post-harvest facilities, and other support infrastructure. Insure optimal access to rural credit by making available a P300 to P400 billion fund to at least 5 million of the poorest rural families. These funds will be sourced from the full and focused compliance with the existing Agri-Agra Law (PD717), as well as from official long-term softloans. Integrate agro-based industries into a network of corporate and cooperative business clusters that will create a synergy of initiatives from farmer and fisherfolk communities, micro, small and medium enterprises. Reorganize and strengthen all the agencies and institutions central to agricultural and rural development with a view to making them effective instruments of rural transformation and agricultural modernization. Improve the complementation between the Department of Agriculture and the local government units.

Strengthen Philippine representation in the World Trade Organization through regular consultations and joint initiatives with similarly situated and disadvantaged nations. Expand bilateral trade and technology exchange with other countries.”

Big Mango:

When we look at agriculture, the flaw is that no big business is making it happen. There are small farmers who are still trapped in techniques they learned from their grandfathers who learned it from their great grandfathers.

This is the primary reason why government needs to funnel funds into irrigation facilities, into post-harvest facilities and support infrastructure. We've been doing it for twenty years, and it has not shown any improvement in our agricultural standing.

Why? Farmers can't afford the facilities and government can't afford to maintain them--- the former because they've never been trained to be businessmen and the latter because governments all over the world just sucks at business.

Providing funds to small farmers who can't manage their farms properly will never get us anywhere. We've tried it for twenty years. It hasn't worked. The idea of a cooperative running a farm together is a good one but individual people and communities would have to find a way to work together, what a tall order!

Farmers are good at farming. Sadly, we need to bring in business men into the picture or teach them how to properly be entrepreneurs and innovate. We need to create a logistics train--- from the time the first seed is planted to the point of harvesting, to the point of drying the grain to the point of distribution to markets, this chain must not be broken and more importantly it must be in the hands of farmlands or farm land communities, the latter running in concert with other farm owners (i.e. a cooperative).

This way, the price of rice for example should be determined by the market place and never regulated by the government or by middlemen.

A farm is a business and must be treated as such. One family can not simply manage a farm properly, they get killed by the middleman. There are no nationally known rice brands and even if there weren't, direct selling to markets and those in the food business by farmers themselves hasn't happened. These farm lands, the agricultural industry needs to be shaped into economically viable businesses.

On another point, the case of Mango Production for example, most plantation owners are small businesses. Now out of the twenty four million or so metric tons of mangoes the world produces, we account for about 1 million, thats about an increase of 50 thousand to a 100 thousand metric tons per year for the past three years.

Now the age old problem is that mangoes are highly in demand in the western world. Especially our brand of sweet, yellow mangoes, but unfortunately, we need industrial irradiation facilities to penetrate those markets. Now such a facility will need more money to put up--- the project is not so feasibly viable on a financial level because current projections can not be quantified enough. It becomes a case of build 'em and they will come. Unfortunately, no one with enough resources is prepared to risk millions of dollars on such a venture. It is my belief however that such a facility will be an economically viable one when working in concert with producing more mangoes, with the right packaging and production.

So it is not just simply land reform, it is also a case of transforming the outlook of farmers who will be running the land and giving them the proper tools to develop.

There is however a thriving Tuna industry in the Mindanao composed of small businesses that are highly successful. This can be a model for success.

The strengthening of ties with the World Trade Organization is an excellent idea. It is the only way for us to compete in the world stage and even learn a thing or two from our friends and competitors and the right way to go.