Amid high food prices, decreasing farm gate prices affecting farmers and fisherfolk, and the possible danger and food insecurity amid the ongoing crisis between Russia and Ukraine, we need to expand Kadiwa.
The Kadiwa program is a farm-to-consumer market chain that offers lower retail prices to consumers. It allows producers to generate higher income by selling their produce directly to consumers.
Last March 8, President Marcos said there were around 500 Kadiwa outlets across the country currently. He added, “We are thinking of evolving it—not this type of pop-ups, but to have permanent Kadiwa centers in different local government units.”
Agro-industrial centers
Last Wednesday, at the monthly Usapang Pagkain and press conference organized by the Philippine Chamber of Agriculture and Food, Inc., its president Danilo Fausto pushed for an expansion of Kadiwa centers to 4,000 to cover 10 percent of all barangays.
He suggested that the Kadiwas be reorganized into Kadiwa Mini Agro-Industrial Centers (MAICs). This would be linked to larger centers using a systems approach. For example, for rice, the system would include palay driers, warehouse facilities, a mobile rice mill and delivery trucks. For fish, there would be blast freezers, cold storage facilities and small ice plants.
Each MAIC will be directly linked to retailers and could enter into forward production contracts with agribusiness corporations and food processors. It will be owned, managed and operated primarily by the association or cooperative, which could enter into a joint venture with the local government unit or agribusiness corporation with guidance from the Department of Agriculture (DA). Locally manufactured agriculture machinery, consistent with the unique needs of their communities, will be encouraged.
A MAIC will have a budget of P3 million to P5 million. To cover 4,000 barangays, this would mean a budget of P16 billion, which is less than 10 percent of the 40-percent increased agriculture budget of P164 billion this year. This is a small price to pay for the enormous benefits it offers.
In June 27 last year, in a letter submitted to the President, the AgriFisheries Alliance (representing the three sectors of farmers and fisherfolk, agribusiness, and science and academe) submitted a set of recommendations to jump-start agriculture as Mr. Marcos began his term. The President commended the recommendations in a subsequent meeting. The group then included the need for decentralized agriculture focus, as exemplified in the MAIC strategy.
In a subsequent July 16 letter, the DA requested the key leaders from the private sector to recommend a new agriculture direction that will be submitted to the President. The heads of six agriculture-related coalitions came together to submit on August 15 a 69-page document entitled “Towards an Effective Agri-Fisheries Plan.”
Budget constraints
It cited, among others, the need for a decentralized agriculture development at the local level. However, since the 2022 budget had been largely used up because of massive COVID-related spending, not much could be done to support those recommendations.
With the increased agriculture budget this year supported by the President, we can now support a significant Kadiwa expansion.
We should finally forsake the ill-advised government tendency of relying too much on lowering tariffs and importation. Some economists believe that the private sector should stop “being spoiled” and become competitive without any support.
Our strategy should be a developmental one, with necessary private sector participation. The Kadiwa-MAIC expansion is one such strategy.