It takes money to make money in agri

10 October 2017 Philippines

Any businessman understands that he is required to shell out money before profiting

from his ideas. If he intends to expand, he would have to spend more money to earn more. There is a Filipino expression which goes, “Laway lang ang puhunan”. But rare is a business venture that succeeds just by investing only laway, or all talk.

Just like businessmen, governments know that they need to spend so they can stimulate the growth of their economies. Washington did this in 2008 when then-President Barack Obama unveiled a $832-billion plan to jump-start the economy of the United States and create more jobs. In the Philippines, the Duterte administration has rolled out an ambitious infrastructure plan, which entails spending more than P8 trillion on various public projects to sustain economic growth.

The country’s economic managers have presented a list of big-ticket flagship projects included in the “Build, Build, Build” (BBB) program. Of the 75 flagship projects, only 11 are for the agriculture sector and are mostly focused on irrigation. Flagship projects are considered “high impact” or “game-changing” because of their potential to create more jobs and cut poverty. These projects will be financed by overseas development assistance (ODA).

The government had also unveiled a list of projects that seek to expand economic opportunities in agriculture, forestry, and fisheries (AFF). These projects were identified under the Public Investment Program (PIP) 2017-2022, a six-year programming document that accompanied the economic blueprint of the Duterte administration, dubbed as the Philippine Development Plan (PDP). According to the National Economic and Development Authority, the PIP contains the “rolling list” of priority programs and projects to be implemented by the government within the medium term that contributes to the achievement of the targets in the PDP.

The AFF projects are geared toward improving the productivity of farmers and fishermen and to help them cope with climate change. Some of the AFF projects include a crops research and development (R&D) program and revitalizing R&D to boost inland aquatic resources as frontiers for food security. The PIP list indicated that the government is targeting to spend P682.4 billion until 2022 for these projects. As of July 25, the PIP list showed that most of the projects will be locally funded, although the government had said it also intends to tap the private sector and ODA.

It is hoped that the government would attain the targets of the PDP and fund AFF projects included in the PIP list. While the projects look good on paper, these would count for nothing if they are not be implemented for lack of funds. The Duterte administration would do well to heed the advice of the Food and Agriculture Organization (FAO) of the United Nations to increase investments in agriculture. During the opening ceremonies of the World Food Week on October 9, FAO Representative in the Philippines Jose Luis Fernandez noted that “much needs to be done” to encourage rural families to stay in their communities.

Filipino farmers are aging and many of their sons and daughters do not want to take the place of their parents because of the perception that farming would not allow them to earn a decent income. The problems confronting the farm and fisheries sector will not be solved overnight, but at the very least, the Duterte administration should start laying the groundwork to make farming a profitable venture. And this will not happen if the government will not take the lead in spending for R&D, which will allow more farmers to go into value-adding, and to put in place the right policies to help them cope with climate change, such as the amendment of the Philippine Crop Insurance Corp.’s charter.