Better DA, DTI coordination needed

Farmers and fisherfolk are significantly helped by the Department of Agriculture (DA). But the Alyansa Agrikultura, a farmer-fisherfolk coalition of 42 federations and organizations covering all major agriculture sectors, believes that the Department of Trade and Industry (DTI) can help them almost as much as the DA. This can be done with a closer DA-DTI tie-up.

President Noynoy Aquino has submitted to Congress a proposed 2014 DTI budget of  P3.7 billion and a DA budget of P69.5 billion (with DA-attached corporations, P79.2 billion).

For inclusive growth, the needs of the farmers and fisherfolk should be addressed. DTI has two important roles. The first involves the food processing industry, which is under DTI. This is what will give added-value to the raw agriculture produce. In addition, it will process the food that would otherwise be wasted.

The second is DTI’s expertise in trade, both domestically and internationally. Agriculture produce, whether raw or processed, should be traded well. Without this marketing, the farmers will be deprived of much needed income.

Despite the large DA budget, annual growth has been below the Neda target of 4.2-5.2 percent. Secretary Proceso Alcala successfully turned this around. It was 2.4 percent in 2011 and 2.6 percent in 2012. However, the first semester growth this year is only 1.4 percent.  Can a closer link with DTI improve this?

For the 2014 budget, the Department of Budget and Management (DBM) has asked DA to produce agriculture commodity sub-sector roadmaps to justify their request for a budget increase. Thus, in November 2012, Secretary Alcala directed DA officials to produce these requested sub-sector roadmaps.

Roadmaps are essential so that government’s limited resources are used in the most cost-effective way. The highest return on investment (ROI) should be targeted. “Return” here is defined, not as financial short term profits, but as long-term equitable financial and social gains to achieve inclusive growth.

Last Aug. 13, an Industry Roadmap Conference was held sponsored by the National Competitiveness Council (NCC) and the DTI Board of Investments (BOI). The chair of both the NCC and BOI is Secretary Gregory Domingo. Therefore, it was expected that the conference would feature traditional industry roadmaps, such as the chemical and the copper roadmaps.

Though both are important, agriculture-based industries such as coconut more directly address inclusive growth. Unfortunately, only two of the 20 identified were agriculture-based: rubber and bio-diesel. But for inclusive growth, there should be more emphasis on the food processing industry.

For a coconut industry roadmap, it is important that the land used for growing coconut should have intercrop products such as cacao. But coconut and cacao need to be processed by industry for maximum value. For example, coconut should be processed into byproducts such as virgin coconut oil and coconut water, while cacao should be processed into chocolate for maximum return. This is why the succeeding conferences on roadmaps should include agriculture-based roadmaps that are ideal for increasing jobs, decreasing poverty, and reaching the low-income sectors in our society.

The NEDA-affiliated Philippine Institute for Development Studies (PIDS) has been tasked to collect the roadmaps to enable it to prepare a national industry policy and plan. The food processing industry is at least as important as the chemical or copper industries. But PIDS has not been able to get any of the many roadmaps that have been completed by DA.

Thankfully, during the Aug. 13 conference, both DTI Undersecretary Adrian Cristobal Jr. and NCC Co-Chair Bill Luz authorized PIDS Vice President Rafaelita Aldaba to help secure the DA roadmaps. These will now be used for the final formulation of the industry policy and plan, which should give the needed attention to the food processing industry if we want inclusive growth.

Agriculture development cannot take place if we focus on production alone. Emphasis should be given to the processing of the raw agricultural produce and trading these domestically and internationally. These are both within the expertise of DTI.

Because of this, the farmers need a closer DTI-DA tie-up.

(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, email [email protected] or telefax (02) 8522112).