PH needs to cluster its farms
Clustering for agriculture development is the way to go. In this endeavor, however, corporations play an important role in making sure it will be successful.
Last March 3, Department of Agriculture (DA) director Ricardo Oñate Jr. presented the agency’s clustering strategy in a budget review conducted by the Philippine Council of Agriculture and Fisheries. Oñate heads the Farm and Fisheries Clustering and Consolidation (F2C2) program.
Clustering means grouping interconnected producers to promote efficiency. One must note that our 3-hectare average farm size in the 1980s has shrunk to only 0.9 ha today.
Unless we cluster our small farms, we will never be able to achieve meaningful agriculture development.
A clustering approach is “a sustainable farming practice to transform subsistence crop production into a market-based production system” (Ali et al.). We must go way beyond this limited concept, however.
This is crucial especially in a challenging global trade environment, where imports are replacing our products and poverty incidence is further increasing.
DA response
The DA’s response to this is the F2C2 program, which aims to “increase efficiency in farming and fisheries by consolidating farms and fisheries with clusters.”
Its three program goals are (1) cost-efficiency: achieve this by promoting consolidated value-chain systems; (2) market-linkage: create this with institutional buyers; and (3) capacity-building: provide training for farmers, such as business plan preparation and financial management.
From May 28 to 29 last year, Oñate presided over an F2C2 National Cluster Summit. There, the role of corporations was highlighted in achieving successful clustering. Among the participants were San Miguel Foods, Universal Robina Corp., Dizon Group of Companies, KLT Fruits, Mayani and Magnolia.
San Miguel said it has developed a sustainable sourcing program for its domestic raw material requirements. Its target is to mobilize at least 500,000 ha of farmlands in the Philippines.
It will provide rural livelihood opportunities by introducing alternative crops and improving farm technologies and incomes.
The program involves partnerships with clusters for stable production of cassava, sorghum, sweet potatoes and other crops for the company’s feed mills all over the country.
For its flagship cassava program, San Miguel provides a market agreement with a specific volume, delivery schedule and product quality standards; a guaranteed floor price; and startup technical assistance in production, postharvest and logistics operations.
They are looking for consolidators to partner with them (contact 0917-888-2474).
Private sector partnership
Consolidation, however, will work only if there is an identified market.
San Miguel provides this important element. It can help identify and organize these consolidators.
The consolidators can then be guided by the company in using the most effective technologies while getting other business support.
Note that the DA is limited to its regional offices. Because of the 1991 Local Government Code, all agriculture extension workers are now with local government units.
Fortunately, the DA has recently developed, alongside the governors, a Province-led Agriculture and Fisheries Extension System. This is where the devolved provincial and municipal extension workers are now coordinating closely with the DA and the F2C2 program.
Aside from corporations, other groups like foundations and entrepreneurs can also identify markets for the clusters.
Tycoon Manuel V. Pangilinan is also the current chair of Kapampangan Development Foundation (KDF), which has established the only two hospitals in the world that provide completely free services to persons with disabilities. It is now venturing into agriculture.
Last Dec. 18, Pangilinan asked the KDF board to help form clusters to grow napier grass, used in cattle diet, for one of his agriculture involvements and also to identify other markets. Pangilinan’s Metro Pacific Investments Corp. has dairy farms.
Entrepreneur Danilo Fausto, who is also president of the Philippine Chamber of Agriculture and Food Inc., likewise identified an unserved market for carabao milk. He had organized clusters of farmers with carabaos and provided technical help to ensure their milk’s consistent high quality.
Clusters cannot succeed without identified markets. Corporations play a significant role here because of their larger markets, latest technologies and business knowledge. Together with local governments and F2C2, corporations must increase their critical participation in this area to optimize the clustering success our agriculture needs today.
