Strong agribiz industry to spur inclusive growth

CEBU, Philippines – The Philippine Institute for Development Studies (PIDS) calls for stronger ties between the farmers and the business sector as strengthening the agriculture industry will help generate inclusive growth for the country.

PIDS senior research fellow Roehlano Briones said that the agriculture industry in the country should start attracting investments from the business community at the same time farmers should take advantage of the huge potential of the farming business.

“Every farmer should be an entrepreneur. However, in our case, the agriculture here is separated from being a business," Briones said adding that local entrepreneurs don’t see the sector as a thriving industry, the reason why there is not much investments in the sector.

Briones said that one of the reasons why the agriculture sector is not doing well is because it hasn’t been linked to business and has been far from the radar of local investors.

Agriculture therefore should be well integrated with business, this way, inclusive growth can be easily achieved while modernization in the agriculture sector is expected if investments will come in.

At present, Briones bared that the country's agriculture sector is swamped with several challenges, amid its great potential.

Lack of investments in research and development, insufficient allocation to major and high-value added commodities like rice, coconut and sugarcane, inadequate transport infrastructure, lack of access in technologies, exclusion of farmers from formal financial system, absence of a comprehensive competition law, and infirmities in securing titles and transfers which deter investments especially for long-term projects, are just few of the concerns faced by the sector.

Thus, reforms of the Philippine agriculture will not only depend on government programs and policies but also largely require stakeholder consultation. A comprehensive agri-business roadmap therefore is important.

On a medium-term, they are looking at the creation of agri-based economic zones and industrial centers, provision of tax incentives, and increase investments in research and development, irrigation facilities, regulatory systems and transport facilities.

The long term goals, on the other hand, include the secure property and efficient land administration system, comprehensive competition policy that prohibits anti-competitive practices and creation of regulatory systems facilitating business registration and licensing, among others.

According to Briones, it is high time for the Philippines to transform the sector from merely agriculture to becoming agribusiness for it to become a top revenue-generating sector similar to tourism, manufacturing and Business Process Outsourcing.

“Agri-development in the Philippine context involves the transition from farming to agribusiness. Rural transformation can only be attained through upgrading and restructuring of supply chain to gain competitive advantage in high-value agro-industrial products," he said.

Briones said that by encouraging farmers to become agri entrepreneurs, they will no longer be limited to supplying raw materials but become producers and sellers of value-added products.

Meanwhile,   Philippine Economic Zone Authority  director general Lilia De Lima announced earlier that her office and the Cebu Provincial Government, through Governor Hilario Davide III, are discussing a possibility of setting up an Agro-Industrial Zone in Argao.