Clustering and consolidation for agriculture success
Clustering and consolidation are key if we are to succeed in agriculture. This year, the Department of Agriculture’s (DA) budget increased significantly from P176 billion last year to P297 billion. For this to be optimally used, we must strengthen our clustering and consolidation approach.
Other countries have used this as a key strategy for agricultural success. For Thailand, it is clear from the naming of its Ministry of Agriculture and Cooperatives.
For us, this has become imperative. Our average 3 hectares per family holding in the 1980s is now only 0.9 hectare. Our fisherfolk work in separate small boats with few united activities.
Clustering and consolidation were therefore a key conditionality successfully advocated by the AgriFishers Alliance (AFA) for the Feb. 21, 2023, ratification of the Regional Comprehensive Economic Partnership. How could we compete in a larger free trade agreement if we did not have economies of scale?
AFA is composed of coalitions from three major agriculture sectors. They are Alyansa Agrikultura for farmers and fisherfolk, Philippine Chamber of Agriculture and Food Inc. for agribusiness and Coalition forAgriculture Modernization in the Philippines for science and academe.
Last Jan. 8, leaders from AFA, the Federation of Free Farmers, Pakisama, Bayanihan Sa Agrikultura and AgriCOOPh met with director Ricardo Onate Jr. He heads the DA Farm and Fisheries Clustering and Consolidation Program (F2C2). A review was made and recommendations offered.
Status
F2C2 has six objectives: (1) achieve economies of scale; (2) create stronger linkages between producers and markets; (3) improve bargaining and market power; (4) establish better access to credit and financing; (5) encourage big brother-small brother partnerships; and (6)raise the overall productivity of the agriculture sector.
F2C2 partners with an Agro-Enterprise Clustering Approach program that includes capacity building interventions through specialized courses as well as the development of Cluster Development Plans. These plans include objectives, strategies, key result areas and action initiatives in areas, such as production, processing, packaging, marketing and distribution along the value chain.
As of September 2025, F2C2 has identified and supported 1816 clusters. They involve 705,955 individuals engaged in farming and fishing, covering a total area of 937,366 hectares. The breakdown is: rice—659 hectares; corn and cassava—458; high value crops—411; livestock—148; fisheries—61; and others—79.
While the F2C2 budget is P131 million for 2026, the total clustering and consolidation budgets found in the DA banner programs (such as rice, corn and high-value crops) are approximately P5 billion. Unfortunately, the F2C2 personnel complement to guide the entire budget use is very limited: a director, an assistant director; and 12 low-level temporary hires.
Recommendations
First, there must be a much stronger F2C2 management team. Full-time senior consultants must be harnessed to complement the extremely small staff for effective clustering and consolidation formulation and implementation.
Second, there must be a well-formulated Cluster Development Plan. Today, only 50 percent of the 1,067 clusters have this completed. How can the clusters proceed effectively without this plan?
Third, each cluster must have a full-time professional manager. The lack of such a manager has been found to be the main cause of the failures of most cooperatives.
Fourth, while much has been done and several successes seen, there is now an urgent need to assess the F2 C2 program. This should be carried out with the help of outside practitioners and experts. High-level consultations should be conducted and country benchmarking done, such as with Thailand’s Ministry of Agriculture and Cooperatives.
An example of this kind of assessment is the Philippine Cacao Industry Association’s open conference: “Clustering Production, Processing, and Marketing.” This will be on July 13 to July 17 at the SMX Davao City. If interested, call Jona Simbulan at 09-503764569.
We need effective clustering and consolidation to make optimal use of the increased DA budget of P297.1 billion this year. This will help turn the promise of agriculture success into reality.
