Cacao, inclusive growth and the private sector
TO ALLEVIATE poverty, inclusive growth is needed. Because of its unique characteristics, cacao is a primary candidate to address this. However, unlike in the past, it is the private sector that is playing a key role in making the national cacao initiative possible. It is originating in Davao, and will soon spread throughout the country.
To contextualize this problem, here are a few statistics. Our rural poverty level is 40 percent, more than double the 19 percent of Viet nam and much higher than the 14 percent of Indonesia and Thailand, and 2 percent of Malaysia.
You cannot have inclusive growth without agriculture. This is where the great majority of the poor are. From 2011-2015, the average industry growth was 6.4 percent, while agriculture grew by only 1.5 percent. During the first quarter of this year, industry grew by 8.7 percent, while agriculture declined by 4.4 percent. The latter was attributed to extreme weather conditions.
What agriculture crop can give a needed boost to our agriculture? Because resources are limited, this crop should have a relatively low investment to create one job. In addition, it should have a good return.
Cacao meets these two requirements. Firstly, for only P71,000 in investment, a job can be created. This is very small, compared to the more than P1.5 million needed to create one job in most industries.
Secondly, this small investment will result in a net income of P130,000 during the fifth year. Since cacao lasts for more than 60 years, net income will be generated from this investment for a very long time.
The market for cacao is assured. Locally, we import more than two- thirds of our cacao. Internationally, global demand is not fulfilled, and is growing rapidly. The world supply shortage will be about one million tons in 2017. In contrast, our current production is only 14,000 tons. In addition, cacao can grow in land that is otherwise not suitable for many other crops.
We must also address the plight of the coconut farmers, who constitute the largest and poorest agriculture sector. Two million of our three million coconut hectares are practically idle, with no intercropping done at all. If cacao is planted in between the trees, the P25,000 average net income of a coconut hectare will increase by P130,000.
Davao initiative
This is where the private sector comes in. Valente Turtur (09173778756) is the executive director of Davao-based Cacao Industry Development Association of Mindanao Inc. (CIDAMI). He is the private sector key mover of the Cacao Industry Council, where he now serves as co-chair. The council is national in orientation. But its decentralization strategy, consistent with President-elect Rodrigo Duterte’s orientation, is to empower the regions with their own regional cacao councils.
To help ensure government support, the council chair is currently the ex-officio DA undersecretary for operations, who is now Emerson Palad. The secretariat head is DTI Director Edwin Banquerigo, who is also the National Cacao Industry cluster coordinator.
With the private sector taking the lead, an on-going campaign is being conducted to organize regional cacao industry councils that will make up the national cacao council.
On June 23, 2016, a significant event happened. Taking directions from Turtur, the Kapampangan Development Foundation (KDF) and the Alyansa Agrikultura (AA) gave a presentation to the Regional Development Council (RDC) of Region 3. Though the cacao presentation was scheduled for only 10 minutes, the RDC interest from both the public and private officials stretched the discussion to 2 hours and 15 minutes.
At the end of it, the RDC gave its full support for a scheduled Regional Kakao-Konek Congress on Aug. 1, 2016. This will be at the Heroes Hall in San Fernando, Pampanga.
All the governors present made helpful and innovative suggestions. They were Governor Wilhelmino Sy-Alvarado of Bulacan (RDC Chair), Governor Lilia Pineda of Pampanga, and Governor Hermogenes Ebdane of Zambales. They said they would bring their constituents to this Congress, which is expected to have at least 1,000 participants.
In organizing this Regional Kacao-Konek Congress in Pampanga, the major partners of KDF and AA are the provincial and city governments of Pampanga, the Floridablanca National Agricultural School (FNAS), the PCCI Pampanga Chamber of Commerce, and the Pampanga Rotary Clubs.
Private sector perspective
Unlike some government Manila-centered initiatives that do not consider a region’s unique requirements, this initiative shows the way for others to follow. It is initiated by the private sector, with decentralized implementation consistent with a local area’s needs and desires. Government support is nevertheless necessary for these programs to achieve their full potential. But instead of the government mandating the direction and the private sector complying, it will be the private sector proposing and the government supporting.
This way, cacao will become a strategic crop to alleviate poverty and contribute to inclusive growth. All these can be accomplished only if the private sector takes a more proactive governance role in the new administration.
(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).
