It is not only large multinational firms like Del Monte and Dole that can be agriculture anchors. So can small and medium size agriculture processing firms, cooperatives and even individuals. As we approach 2015 and the effectivity of the Asean Free Trade Agreement (Afta) with its almost zero percent tariff regime, it is imperative that we harness individuals as anchors of the agriculture sector.
Anchor. We identify an anchor here as an entity that catalyzes and promotes economies of scale by providing agriculture support services to small farmers. By themselves, these farmers will not be able to survive the severe global competition coming in 2015, when Afta takes full effect. Small is beautiful. But in the face of severe competition, small may die. An anchor provides the necessary support services such as technology transfer, training, market access, and even financial support for the small farmer to compete effectively.
A frequently cited anchor model is Dole. It provides the farmers with the technology to successfully produce a pineapple, and buys it back at a good price. We cannot exactly replicate this model for many other products. But we can duplicate this anchor approach in another form, even with individuals, for many other products throughout the country.
Example. Dr. Pete Destura (0917-3538613) is an individual who is such an anchor. From 1987 to 2007, he served as president of Eastern Samar State University and subsequently president of the University of Eastern Philippines (UEP).
At the end of his term in 2007, Destura continued to serve the rural poor. He went back to his roots in Northern Samar and established Villa Destura Farms and Gardens, a registered Philippine Coconut Authority (PCA) nursery. Destura not only provides coconut farmers with certified coconut seedlings. To alleviate the extensive poverty among coconut farmers, he also provides certified coffee and cacao seedlings for intercropping to raise their incomes. Destura does not stop there. He goes on to help the small farmers with the support services an anchor usually gives.
Networking with mayors (who are now primarily responsible for agricultural development in their communities), government agencies, and non-government organizations (NGOs), Destura provides technology transfer and training for the farmers to nurture these seedlings properly. He also helps the farmers with market access and market contracts so that the products from these seedlings are sold at a good price.
While doing this, Destura encourages farmers to unite into farmer organizations so that they can achieve economies of scale in production, marketing, and technology transfer. Here we see how an individual can provide the same anchor services as a large multinational firm.
Recommendation. To achieve global competitiveness, we need technology. For many farmers, technology starts with the correct certified seedlings. If the seedlings are not good, both the quality and productivity necessary for global competitiveness are not achieved. We need nurseries to produce good seedlings. But these nurseries are few and far between.
In addition to being so few, many nurseries stop at selling seedlings. They miss the opportunity of serving as anchors to small farmers by providing agricultural support services in technology transfer, training, purchasing and marketing.
They can also catalyze the organizing of farmers into groups that will have the economies of scale necessary to become competitive.
It is because of this severe lack that we recommend an extensive government program to support individuals with such nurseries. These individuals should also be encouraged to act as agricultural anchors, with Destura as an example. This program should include soft loans with technical assistance so that the anchor functions can be carried out effectively. This way, we can have a direct impact on the small farmers’ poverty level. More strategically, we can have them survive and succeed in preparation for the Afta free trade regime in 2015.
(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, e-mail agriwatch_phil@yahoo.com or telefax 8522112.)