Wednesday, November 27, 2019

BWorld 387, Agribusiness and corporate farming

* My article in BusinessWorld on November 19, 2019

The good news about Philippines agriculture is that the average yield per hectare of many crops keeps rising, thanks to technological modernization. The bad news is that there is continuing land conversion from forest to agriculture — and residential, industrial, commercial — uses.

I checked data from the UN Food and Agriculture Organization (UN FAO) over the past five decades, I picked the Philippine crops with millions of tons of output in a year, meaning major crops. Sugarcane and pineapples have the highest productivity and crop intensity per hectare, although sugar yields were generally flat for five decades while pineapples showed consistent rise. Bananas reached 20+ tons/hectare/year in 2010-2012 but there were bad harvests in recent years. The biggest crops in terms of huge land use, with millions of hectares planted, are rice, coconuts, and corn, and it is here where average productivity is among the lowest in the country (see Table 1).

Then I checked the productivity of three crops for selected Asian countries. Surprisingly, despite the modern corporate farming of the Philippines’ pineapple and banana industry (although there are also huge backyard, small-scale pineapple and banana plantations), Indonesia has much bigger output per hectare in these crops than the Philippines (see Table 2).

Our rice industry needs to take the path taken by the banana and pineapple industries which have some big corporate farming growers in the Philippines. Wide areas — hundreds or thousands of hectares — are managed by few entities that employ the most modern crop sciences (agronomy, insectology, biotechnology, and molecular biology, etc.) and machines (tractors, irrigation, harvesters, drones, etc.).

Lands need not be owned by these corporate farms — they can be leased for five years or so, although a long-term lease of 15 years or more and wide corporate land ownership are preferable. Farm owners will just wait for their annual land rents plus the opportunity to work in these corporate farms and earn extra, more stable incomes.

The government’s endless, no timetable agrarian reform or forced redistribution of private farm lands — from Marcos’ 1972 agrarian reform to Cory Aquino’s 1998 CARP and extensions — is among the big hindrances to dynamic agribusiness (and mass housing) development in the country. Government should end this continuing rural business uncertainty.

Meanwhile, The Arangkada Philippines Project (TAPP) conference on Nov. 21 at the Marriot Hotel Manila will tackle the TAP (Tourism, Agribusiness and Power) as focused sectors. Local and foreign businesses and researchers in these and related sectors will learn new data and perspectives at this big event.

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