Agriculture sector still a ‘laggard’

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Sunday, March 24, 2013


CITING the agriculture sector as an economic “laggard,” Cabinet Secretary Jose Rene Almendras hopes their plans to push for more investments in rural areas will catch on and bring about inclusive growth beyond urban cities.

Almendras, who made a presentation on the Philippine Government’s agenda on inclusive growth at the Forum on Inclusive Business hosted by the Philippine Business For Social Progress, said their plan from the start was to make sure growth was brought down to the “geographical and demographical bases of the pyramid.”

He admitted that programs like the conditional cash transfers have been criticized for being dole outs, he explained that the money some beneficiaries get allows them to worry less about their daily needs and work on earning a living. As an example, he said that when the government urged farmers to grow coffee and coconut, they are able to provide for the farmer’s daily needs while waiting for the yields of their crops.

Almendras said the CCT is a transition strategy that is targeted at rural employment.

He also believes it is a successful program, as sales of stores in rural areas with CCT components “go through the roof.” He said CCT purchasing has brought in economic growth in these rural areas.

Some 300,000 households are expected to complete the CCT program after five years and some 70 percent of them are from rural areas.

“Government has started the investment. It is time for private business to join us at the base of the pyramid,” he said.

Aside from undiscovered tourist spots in the country, Almendras said there are also a lot more areas that are ripe for investment.

He admitted that business owners end up setting up shop in areas like Cebu because they like the comfort and are used to the idea of it being a good business location.

The Philippines’ Investment Priorities Plan provides income tax holidays for investments in the agriculture, agribusiness and fishery sectors.

These include commercial production, commercial processing and services in support of the sector such as irrigation, harvesting and post-harvesting facilities.

To help farmers earn better, food service company Jollibee Foods Corp. has been cited as an example of what private business can do to help.

Chief finance officer Ysmael Baysa said 20 percent of the onions used in their outlets come from small farmers.

Baysa said this was a sourcing strategy they adopted to diversify their supply so they would not have to rely on the big suppliers.

“We work directly with the farmers. These are farmers with land less than a hectare,” he explained.

They develop the farmers by teaching them to be entrepreneurs–training them in basic accounting and technology concepts so they can do business on their own.

Baysa added that because they have contracts with Jollibee, financing services are granted to them. This allows them to increase their incomes, send their children to school, pay debts and buy trucks to transport their goods.

He said this arrangement not only benefits farmers, but their company as well, because they are assured of the volume of crops they need for their stores.

Baysa encouraged others in the food industry to do the same, saying such programs should be replicated in as many places as possible.

For his part, Department of Agrarian Reform (DAR) Undersecretary Jerry Pacturan noted that what others fail to know is that their agency does more than give out farmlands.

He said their agency is also tasked with making sure farmer beneficiaries get support services so they can start production.

These include credit and risk mitigation and strategic rural infrastructure.

He cited that for 2013, DAR has P2 billion in special financing for its beneficiaries while it has done away with tough requirements for applications made to the Land Bank of the Philippines’ special fund.

Published in the Sun.Star Cebu newspaper on March 25, 2013.

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