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S.M.N.I. Truth That Matters

Welcome back to Business and Politics. We're talking to Mr. Danny Fausto of the Philippine Chamber of Agriculture.

Sir, the Second State of the Nation address of the President is coming up.

I know we've talked before and you said that the President is well informed about the agriculture issues, but still.

What would you like to hear from Mr. Second State of the Nation? Is there anything in particular that the agriculture sector needs?

Maybe not just from the President, but also from Congress.

We have forwarded all the recommendations from our chamber to the President.

We are hopeful that these recommendations and issues will be addressed by the President and be mentioned in the SONA.

In the first SONA, he already mentioned the Philippine Guarantee Corporation, the land bank of the Philippines, but still is there.

There's got to be an overhaul of how the system works in terms to make sure that access to credit be given to the farmer.

Because without capital, no matter how much you want the farmer to expand and produce, if he has no money for the inputs, there will be a problem.

They are dependent on traders, especially if talking about onions, 75% of the onion growers are dependent on traders.

Now I have read that the DTI is coming up with a system that can help, but the government is not a lender.

If you go through a system, the financial system, going to the farmer, that's where the problem will come up.

Because the subject or the borrower, the target borrower has no competency to come up with documentations, lengthy documentations and compliance to ensure the stability of the financial market.

There's got to be a system that can accelerate and make it easier for the farmers to access credit.

Because if they have credit, these farmers are good.

If you go, want to go, and then we are now doing the Rice Competitiveness Enhancement Fund, there's this money.

We would like also all the commodities that is importing has to be channeled through that particular commodity.

If you import chicken, the poultry farmers and support not only on the chicken, but the backward linkages like corn and feed milling and everything, which is the necessity to grow up a chicken.

And also all the other commodities that we import.

We are importing a lot of other commodities.

We are not sufficient.

We have rice, corn, mungo, potato, coffee, garlic, onions.

If we get tariff from them, it has to flow back to that particular commodity, just like what they're doing in rice.

If that is done, then they are assured of more or less some support in terms of value chain, warehousing, processing, and so on.

You mentioned that value chain is very important.

And correct me if I'm wrong, you were talking about onions at one time, where there is a surplus in one part of the country.

And so that leads the farmers to destroy the crop.

And there's a shortage in the other part of the country where they need the same commodity.

What's the problem there?

What can be done to get – is it infrastructure?

Is it simply policy?

Is it information?

What can we do?

That's not onions.

That's not the problem.

What we're talking here of tomato.

Sometimes tomato, you throw it out in Nueva Vizcaya, in Benguet, while our friends in Zamboanga, our canning factory are importing tomato.

The other one is throwing up tomato.

Yesterday, people in Zaragoza, Nueva Vizcaya, is throwing away the calabasa.

If we can process it and have it ready for pumpkin soup or something, in tomato, you can produce ketchup or tomato paste or something.

I think what is needed in Zamboanga, the canning factories, is the variety of the tomato you're planting.

So that's got to be a market-driven process, what you plant.

If you plant, you make sure that there is a demand for what you plant.

And that can be done through proper dissemination of information.

We do not have a data network information system.

It's just being set up now, real-time information, so that farmers can plan what to do, and they can prepare.

But if they do not have information, for example, you plant onions, and at the end of the day, there's no trader to buy it from you,

because there is no cold storage facilities available anymore.

It's filled up, because the cold storage facilities might be lacking.

We don't have the necessary cold storage facility to put them all in.

So if you expand to be sufficient in terms of onions, we are now doing last year, we have done 340,000 metric tons.

That's a good one. It's the highest so far.

But the thing is, when you harvest this, you need to put it somewhere.

You can't consume it all at once.

But the cold storage sometimes is filled with chicken or meat.

And there's a lack of the post-harvest facilities.

That's why the mini-agro-industrial facilities should be present in every barangay.

Just to protect and be able to support the farmers.

When there's a bumper harvest, make sure that it can be processed, and then you need the packaging, the labeling.

That is where I think the youth can come in.

You've been talking earlier about the youth.

You have digital technology for too much.

The tech-savvy.

Yes, the tech-savvy youth.

Too much the production to the market.

And also the processing, labeling, graphics, packaging.

They're very innovative on that.

I think they would like that.

And there's a lot of business in processing and in the value-adding.

And then distribution and marketing.

And that is where the youth can come in if they do not like to till the land.

But there are also some techniques, because it's part of the strategy of a farmer on what to do with his crops.

And also if you have aquaculture, you have fruits, vegetables.

These are all with strategy.

And they know what to do.

The thing, number one, is where will they sell it?

How much capital is needed to do that?

What if the climate change, if rain comes in, or the drought comes in?

So that's things that are in control.

But if you have forward information, just like what we're having now,

we know that at the last quarter, we will have less water.

Now we have plenty of water.

We need to conserve it, because the last quarter is when we plant our high-value crops.

Our onions and all other vegetables are planted in the last quarter.

If we do not have the water, how can you grow crops when you do not have water?

We were talking earlier, and besides the intervention of young Filipinos and the techies,

we were talking about the role of the cooperatives.

But you were mentioning that that also needs help, because they're mostly metal farmers,

and they should be the ones thinking about planning, strategy, marketing,

not to mention all the financing, the OPEX.

What kind of help do they need, these cooperatives?

How do we make them stronger so that they are more helpful to farmers in all of these issues?

I'm proposing that we put up a Bureau of Agricultural Cooperatives inside the DA.

Because the CDA has a quantum task of there is a tricycle cooperative,

there is a teacher's cooperative, there is an employee's cooperative.

Now for the agriculture sector, because it is just not a matter of putting people together as a group.

You need to train them on governance, entrepreneurship, business, and financial literacy.

We were talking earlier, you're a very active member of the Rotary.

Yes.

Past just a governor, your classmate was my member at the Makati.

But you're saying that, as an analogy, Rotary has these training centers.

Could you talk about that and how that may be the solution for preparing the cooperatives?

Yes.

The problem before was that you let the farmers go to the training center.

Before, it's difficult.

From the far Plang Barangay, you go to the urban center.

In Central Luzon, you go to Region 3.

They cannot even pay for the tricycle going to the town.

Much less going to Pampanga.

Now, we need to reach out to them.

During the time of, as I said, the former president, the old Marcos,

we have an agricultural technician for every ten barangays.

That helps them prepare the farm plan and budget, train them.

There's a cell of five farmers together.

The only thing that is, I think, the failure of Masagan 99 is that it made a lot of rural banks bankrupt.

Because there's no guarantee system.

When the rural bank lent to the farmers and they discounted to the central bank,

they were not able to collect.

So, they're now obligated to the central bank.

That's made them bankrupt.

But if we have the guarantee system protecting them, then we can help the farmers.

So, that's what the trouble.

It's not only putting them together as a cooperative.

You have to walk them through.

They need the capacity.

Yes.

You have to capacitate them as an organization.

And not because they just want a free machine.

They put themselves together so that they can have a free machine from the PILMEC.

Or free seedlings or hybrid seeds from PILRISE.

You need to put them together, bring them to the end,

and make sure that their income is increasing.

Because we need consolidation.

Because without consolidated land, we cannot have economies of scale.

About 80% of our land has three hectares and below.

And 60% of that 80% is one hectare.

Oh, wow.

Because of the transfer to the offspring, pass it on to the next generation.

They parcel the land.

Subdivided.

That's right.

The difference with other countries like Taiwan, Thailand, Vietnam, is that they were supported.

When we have given them the land during the agrarian reform, practically we abandoned them.

There was no proper support or resources given to them.

They end up selling the land.

But in other countries, they are showered with resources to help them.

But in our country, we left them alone.

So now the president has to, what's it called,

you do not have to pay the interest anymore.

You have to forgive everything.

We cannot have to do that if we have supported them in the first place.

Now that the agrarian reform has a split program, they split the land.

While the Department of Agriculture is consolidating the land.

So what the right hand is doing is different from what the left hand is doing.

We need to work together.

Perhaps they're splitting it, but they have to keep them together as a group or a cluster

to make sure that we have economies of scale.

If not, if you title them a small parcel and they cannot make money,

you just sell the land.

That's too bad.

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