Gloria Macapagal-Arroyo

President of the Republic of the Philippines 2001 - 2010

The Agribusiness Enterprise: Towards Increased Agricultural Productivity

For decades, the Government has been concerned with raising the productivity of the agricultural sector in order to satisfy national requirements as well as, in particular, ensure national food security.

In the last nine years, this concern has focused on the active promotion of business in agriculture. Promoting agribusiness has another merit to it—attaining another major goal of the Government—the creation of employment opportunities. Achieving these two objectives was facilitated by the Government's emphasis on the development of micro-, small-, and medium-scale enterprises (MSMEs) in agriculture.

I. Progress: A Bird's Eye View

The soundness of the approach can be seen in the Table below which compares accomplishments with targets over the period encompassed by the Medium-Term Philippine Development Plan, 2005-2010:

Source: Philippine Agriculture Development and Commercial Corp.

As the Table shows, the land actually turned to agribusiness, 1.8 million hectares, even exceeded the land targeted to be so converted, 1.6 million hectares. Further, the jobs actually generated, 2.6 million, exceeded those targeted to be so generated, 2.4 million.

II. Supporting Programs

The development program for the agricultural sector was underpinned by a number of specific programs, most notable of which were the Bagsakan Project, and the O! May Gulay and Pork-in-a-Box Project.

Eastern Visayas Mariculture park

A. The Bagsakan Project

The Bagsakan Project is a breakthrough concept designed to forge direct market linkages between the farmers and the consumers. The Project envisioned that such direct linking between the farmers and their markets would enormously benefit both the farmers/fisherfolk and the consumers. The main thrust of the Bagsakans is to do away with the multi-layered marketing scheme that had always put farmers at the losing end. The new system would be comprised of the Bagsakan Centers (BC) and the Barangay Bagsakans (BB).

La Trinidad Bagsakan Center in Benguet

Under the scheme, the bulk of agricultural or fishery products are directly sold wholesale by the BB to the BC to minimize, if not totally eliminate, the trading layers that just ate up the profits of the farmers/fisherfolk. The system results in a more affordable price for the buyer and a more reasonable income for the producer.

While the bulk of the agricultural produce is brought to the BCs, a considerable portion thereof goes to the BBs. Here, the producers could directly transact with the consumers within their own barangays. This system results to savings in transportation expense for the benefit of both the producers and the consumers, as there would be no need for either of them to go to the market to sell or buy the products.

The Bagsakan is an innovation that brings immeasurable advantage to farmers/fisherfolk. The overly-commercialized market can no longer rein in the small farmers and fisherfolk, who can now directly trade their produce on a level playing field.

B. O! May Gulay and Pork-in-a-Box

Corollary to the Bagsakan Project, the DA, in partnership with the private sector, started the "O! May Gulay" Project in 2005. More than the usual market linkages, this promotes value-adding activities on vegetables to ensure freshness and appeal to the senses of customers. Under the program, preparations of "pinakbet," "chopsuey" and "sinigang" in 500 gram packs (enough for an entire family) are retailed at P25 each.

The O! May Gulay recipe book was published to give more exciting ideas to the program's patrons

This continuous supply of affordable vegetables in the supermarkets minimizes price fluctuations, especially during rainy months. Aside from the affordable and nutritious food made available by the program, the innovative processing and packaging techniques involved generate employment opportunity in line with the Government's comprehensive job-generation program.

The Vegetable Production Enhancement Project in Roxas, Isabela

O! May Gulay gives new meaning to market linkage by concerning itself not just with the delivery of food products, but by highlighting the potentials of the processing and packaging stages of food production as value-added incentives to our farmer-entrepreneurs.

Commercial Production of Tomato in Rice-based areas at Cabatuan, Isabela

The DA has also forged a partnership with the private sector to include pork in the coverage of the Bagsakan Project. Under the Pork-in-a-Box Program, hogs from the Visayas, Mindanao and some parts of Luzon are slaughtered at the point of origin to be processed into different cuts, frozen, stored in chillers, and transported to BCs and BBs to ensure regular deliveries. The outcome would be the stable and predictable price of pork.

One of the DA-supported private hog-raising facilities

Together with elements of the strategic infrastructure plan, these projects under the umbrella of the Bagsakan Program effectively create an atmosphere wherein farmers and fisherfolk would no longer see geographical distance as a hindrance to the trade of agricultural commodities, but instead, a medium by which agriculture would once again become the backbone of a revitalized Philippine economy.

III. Mindanao: Reclaiming its Role as the Premier Food Basket

A big chunk of the success described in earlier sections came from the Agribusiness Mindanao Super Region, in line with the Government's policy of bolstering the image of Mindanao as the country's premier food basket.

The breakdown shows that, among the super regions, Agribusiness Mindanao generated 1.15 Million jobs, or 52.7 percent of the agribusiness group target, and developed 776,647 hectares or 52.5 percent of the targeted lands. This is a clear manifestation of Mindanao's potential as a major contributor not just to its own development but to the development of the whole nation as well.

IV. Optimism in the Filipino Agri-Entrepreneur

The impressive performance of agribusiness, especially between 2004 and 2008, is a departure from the boom-and-bust cycle that had hounded it in the past. Despite setbacks to food security arising from the series of crises that struck the world in 2008, the agricultural sector retained its resiliency during those tough times. The agri-entrepreneurs led the way. The Government gave them full support by way of investments and policy interventions.

Jatropha Nursery in Northern Samar, Farmers look on as the tractor prepares this parcel of land for agribusiness.

With our new breed of entrepreneurs providing the leadership in the development of agri-business, and the Government continuing its support through a combination of investments and policy interventions, the agricultural sector's prospect for rapid growth in the next few years can only be described as bright and realistic.