Inclusive growth through agriculture

THE National Economic and Development Authority (Neda)-Davao is pushing for the advancement and the development of agriculture in a bid to foster inclusive development in the rural areas.

“Agriculture is still the most important sector in rural areas of almost all developing countries. Developing the rural economy, therefore, is key to achieving inclusive growth,” Maria Lourdes Lim, Neda 11 regional director, said to some 300 participants during the Philippine Financial Summit 2018 in Davao City on February 24, 2018.

According to the Davao Regional Development Plan (DRDP) 2017-2022, which is anchored on the Philippine Development Plan (PDP) 2017-2022, while the region's economy is largely agriculture, its growth remained to be the slowest among the sectors and its farmers and fishermen remained to be the poorest among the basic sectors.

Based on the assessment of Neda, from 2011 to 2015 the sector had been performing below targets. The sector hit a -8 percent (%) growth rate in 2013 as compared to its target of 1.2%. This was due to the effects of Typhoon Pablo, which hit the region in 2012. In 2011 the growth rate of the sector was only 1%; 0.4% in 2012; 2.6% in 2014; and 1.4% in 2015. All are below their targets -- 1.5% in 2011; 2% in 2012; 3% in 2014; and 3.5% in 2015.

The slow growth in the sector is also evident in the volume of production of some of the region's major crops. For example, banana production in 2011 was at 3.85 million metric tons (MT) MT but in 2015 it was at 3.45 million MT. However, it must be taken into account that the banana industry has experienced various challenges in the past years like the impact of Typhoon Pablo and El Niño.

The DRDP further states that there is a need to intensify efforts to uplift the agriculture sector as this would pave way to "greater opportunities for Davao Region’s populace and would lead to a more vibrant manufacturing and services sector."

Lim said one of the strategies of the government to boost the agriculture sector on the country as a whole is through the implementation of the Comprehensive National Industrial Strategy (CNIS), which includes agribusiness as priority area.

According to the Department of Trade and Industry (DTI), the CNIS will link and integrate manufacturing, agriculture and services; address supply chain gaps; and deepen industry participation in global value chains.

"The vision is to transform the agriculture sector from traditional farming to a globally-competitive agribusiness sector," Neda said in a statement.

"This will be carried out by phases, first by improving the productivity of high value crops with regional comparative advantage and the strengthening of the emerging crops," Lim said.

She added that the medium-term phase shall be on strengthening linkages among agro-processing and supply chains and commodity clusters, while the long-term phase shall be the deepening of participation in global value chains or regional production networks.

"To attract more investments, generate better jobs and produce more exports, Davao Region has adopted the Industry Clustering strategy since 2004 to help small and medium enterprises (SMEs) increase their productivity through linkages with regional production networks and global value chain," Lim said.

Davao Region has 18 priority industry clusters -- abaca, banana, bangus, cacao, coconut, durian, ICT, livestock and poultry, mango, mining, renewable energy, rice, seaweeds, tourism, wood, oil palm, rubber, and coffee.

“Indeed, the prospects for agribusiness are very bright with growing demand for value-added products in the domestic and global market,” Lim said.

She said in order to tap into the agriculture sector's potentials as a means to achieve inclusive growth, there is a need to improve the competitiveness of sector's physical infrastructure, trade facilitation, industry clusters, science and technology infrastructure, human resource development, compliance to safety and quality standards, as well as address the various supply and value chain gaps.

Under the DRDP, one of the startegies to improve the region's agriculture sector is by strengthening research and development.

"Investing in research and development shall significantly lower production costs and increase the competitiveness of commodities. It shall also allow the development of climate-smart technologies that will make farms resiliet to severe and extreme climate conditions," the DRDP states.

In terms of infrastructure, the DRDP states that the region will pursue massive public investments on farm-to-market roads, irrigation facilities, and post-harvest facilities.

The DRDP states that by improving the productivity and quality of the agricultural and fisheries produce are expected to spur the development of the agribusiness industries and shall open up wide opportunities for the industry clusters to engage in the global value-chains.
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