Agri-food makers urged to drive for sophistication

CEBU, Philippines —  Agri-based product makers are encouraged to diversify in producing goods with higher sophistication in order to tap emerging markets where potential is good.

According to a paper released by state think tank Philippine Institute for Development Studies (PIDS), the country’s agricultural sector can diversify into the production of goods with higher sophistication content as well.

In the short run, the country can focus on improving the production structure of agricultural goods, which the country has revealed comparative advantage (RCA).

These include processed fish and seafood, industrial oil, cereals/pasta/bread, animal/vegetable fats/oil, and extracts/dye.

The paper further said another short-run diversification strategy looks at products that are relatively close to the country’s current production structure but the country has no RCA in.

Potential products include part/accessories of instruments/devices/equipment, equipment/devices/parts of electrical nature, minerals, parts/accessories of motor vehicles, products related to plastics, among others.

Potential markets for these goods include Organization for Economic Co-operation and Development (OECD) economies and Association of Southeast Asian Nations (ASEAN) members, it added.

It added potential markets for these goods include OECD economies, ASEAN countries, Brazil, and Morocco.

Some OECD and ASEAN economies are markets for goods in the country’s current export basket such as integrated circuits, static converters, and photosensitive/photovoltaic/LED semiconductor devices, color television receivers/monitors/projectors, and crude/ refined copra oil.

Further, the paper said it is imperative to promote an environment that encourages innovations as a way of doing business, noting that innovations are correlated with the firm’s productivity and employment growth.

“To facilitate product innovations, there is a need to ensure that process innovations are integrated into the various stages of good production. This will require increased servicification,” it added.