FARM clustering will play an important role to level up Philippine farm productivity and boost agriculture’s role in the economy, especially amid the pandemic, according to an expert and educator.
At the recent third edition of the Experts’ Forum organized by the ALC Media Group with partners—this time on the themes of agriculture, agrarian reform and food security—former chancellor of the University of the Philippines-Los Baños (UPLB) Dr. Luis Rey I. Velasco highlighted the main problems of the farmers in the country which leads to their poverty, and lack of competitiveness in terms of production.
He said farm clustering is needed to attain economies of scale.
The ALC Media Group and Bigkis Pinoy Movement partnered with the Alliance of People’s Organization in organizing the experts’ forum series.
With farm clustering, Velasco said, the government can provide production mechanism, market access, better bargaining position, easier access to seeds, fertilizer and technical support, while providing social protection for farmers.
“If they [farmers] will organize into clusters it would be easy for them to trade in the futures markets,” he said. A futures market is a market in which people purchase and sell future contracts. It protects producers from the vagaries of the market, as the traders bear the brunt of the risks. If the price of goods drop by the time the harvests arrive, they will take a loss but if it rises, they will also benefit from the gain.
In 2020, the Department of Agriculture (DA) issued Administrative Order 27 that sets into motion the Duterte administration’s farm consolidation and clustering program to attain economies of scale and enable more farmers, fishers, and agripreneurs produce and earn more from their toil.
The DA has said farm clustering and consolidation will enable farmers to greatly reduce their cost of operation, attain bountiful harvests, and earn bigger incomes.
Supply chain woes; ABCs vital
Velasco cited challenges to the supply chain among factors behind the disconnect between the demands of the market and products being delivered by the farmers. Velasco said the supply chain covers the aspects of production, understanding the market requirements, converting the products into finished products, and moving them to meet the consumers.
Velasco drew attention to the inefficient supply chain, an absence of assured markets for the farm produce, inadequate transport infrastructure which adds greatly to the cost of the products, as well as inadequate support families and services. While he admitted that the government already tried to organize farmers before, the problem is that they do not have a set market for their products.
Velasco underscored the need for more Agri Industrial Business Corridors (ABCs) to connect farmers to the market.
According to Velasco, the common problem of farmers is access to a reliable and credible market.
“ABCs will connect clusters of farmers to market even before planting a crop, in other words, the crops they will plant will have already a ready market. With a ready market, the risk of loss and loan default is reduced so farmers have easier access to bank loans,” he said.
“The ABC aims to put streamlining, integrating products and services and supply chain for efficiency and effectiveness, but more importantly to connect small farmers to the demand that is centered in the urban areas,” Velasco said.
Rañola: Combination of strategies
Dr. Robert Rañola Jr., who co-presented the discussion with Dr. Velasco, pointed out that the ABC is not an isolated matter but is, rather, a whole combination of strategies.
“Ang importante diyan [What’s important here] will be clustering of the farmers, the organizing. The whole theme of our presentation is more on organizing. The production going to the market is not organized, so the concept is they would be able to produce in a volume if you link them to the market,” he said, partly in Filipino.
Currently, the DA is pursuing the establishment of ABCs with Fisheries Management Areas and trading posts to provide smallholder farmers and fisherfolk access to resources, including state-of-the-art production technology, hatcheries and nurseries, capital, and value-adding facilities.
The establishment of ABCs in strategic areas will help address employment challenges in the “new normal” or post-Covid-19 environment, said the DA.
The DA has announced the establishment of the first Agri-industrial Business Corridor (ABC) for freshwater aquaculture and urban farming in Taguig. A National Seed Technology Park will also rise in partnership with the Bases Conversion and Development Authority (BCDA).
“The benefits from the establishment of ABCs will include a ready market for farmers and fisherfolk, access to technologies, strengthening the value chain, facilitating increased trade and investments,” Velasco added.
Through ABCs, Velasco said the agriculture sector can assure an organized cluster of farm producers, investment in infrastructure and facilities—such as ports, roads storage, ICT, public private partnerships and an efficient supply chain.
The ABC also assured markets for strategic commodities, appropriate rural financing through innovative financing instruments at different stages of the value chain, and the critical involvement and inclusion of smallholder sector,
he added.
However, Velasco admitted that the operation of ABCs should also consider some challenges, including political interference and misallocation of funds, institutional coordination, inadequate provision of main and last mile infrastructure, including feeder roads and access to water, electricity and communications, not ensuring continued market access and neglecting the mobilization of private investors. (Jovee Marie De la Cruz)
SOURCE: https://businessmirror.com.ph/
