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Agriwatch

Agri anchors, roadmaps, governors

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Just as there should be national agricultural commodity  roadmaps, there should also be provincial agricultural  roadmaps that reflect the commodity plans. Critical to these are the identified existing and potential anchor projects that will make possible the economies of scale to ensure competitiveness.

Agriculture clusters

In a previous article, we wrote about the need for effective support services to make farms productive and competitive. We said these services could best be provided by “anchors.” These anchors would be processing plants, agri-business integrators and even progressive cooperatives that provide small farmers with technology, training, purchasing, marketing and financial assistance. The cluster approach spearheaded by the anchors enable the small farmers to achieve the economies of scale necessary for competitiveness.

On April 3, this cluster approach was emphasized in a presentation given at a meeting of the agricultural working group of the National Competitiveness Council. Doris Ho, president of Magsaysay Shipping and chair of the National Corn Competitiveness Board, stated that effective transportation support—such as ports, roads, ships and railway systems—would be economically viable only if there are enough goods to transport. Ships follow goods; goods do not follow ships.

Thus, it is necessary to produce first the goods in sufficient quantity. These goods can be produced only with a cluster approach using economies of scale. In the case of corn, if there are small farmers who work individually without coordination and support, production will be low, and quality will be inconsistent and poor. Consequently, the desired volume of production will not be achieved to make transportation logistics viable.

Ho talked about the processing plant as a possible anchor to catalyze this cluster approach. Once sugar farmers see a smokestack as part of sugar post-harvest facilities, or corn farmers see a silo as part of corn post-harvest facilities, they are immediately motivated to cooperate as a cluster.

Putting creative business sense into the anchor approach further increases competitiveness. Hogs and chickens can be considered “four-legged walking corn” because corn is a large cost component in their production. Corn can then be transformed into hogs and chickens. Instead of corn, it will be hogs and chickens that will be transported to the large business centers. Doing this will result in the inclusive growth that P-Noy is advocating. This is because the value added and high profits will remain in the provincial corn centers where the small farmers are. Consumers will get better prices because of lower transportation costs. Instead of transporting corn, what can now be shipped is frozen meat and “chicken in yakitori sticks.”

Governors

We commend Agriculture Secretary Proceso Alcala for having directed the creation of agricultural commodity  roadmaps that are now being pursued vigorously. These can only be useful if a spatial dimension is included in the  roadmaps.

Since it is now the local government units (LGUs), and no longer the Department of Agriculture (DA), that are responsible for agriculture development because of the Local Autonomy Code, the governors must now have well-crafted agricultural  roadmaps. These should include the insights provided by the national agricultural commodity  roadmaps from the DA. They should identify actual and potential “anchors” using the cluster approach and strategic business sense to make their agriculture competitive.

The DA can even have a national contest where the governors with the most strategic agricultural  roadmaps will be recognized. The DA can give their provinces additional budget allocations to achieve their  roadmap objectives.

Many things will then happen, such as “the ships following the goods” and the all-important “inclusive growth” our country badly needs.

(The author is chair of Agriwatch,  former head of the Presidential Flagship Programs and Projects and former undersecretary of agriculture and trade. For inquiries, e-mail agriwatch_phil@yahoo.com or telefax 8522112.)


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Tags: Agriculture , Business , column , commodity roadmaps , Ernesto ordoñez , support services



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