AGRICULTURE Aiming for rice self-sufficiency, the creation of new jobs and more modern methods
Crop diversity is fruitful for farmers

The agricultural sector continues to play a major role in the Philippines economy, accounting for nearly a quarter of total economic output. In 2000, the industry grossed P574 billion ($11.274 billion), a 2.19 per cent increase on the previous year, from a variety of crops including pineapples, bananas, coconuts, mangos, cotton, rice, sugar cane, tobacco, coffee and corn.
Crop diversity enables farmers to offset the effects of downward price pressures to some extent. Despite a significant drop in production and prices for onion, coconuts and coffee last year, cotton and rice posted healthy gains.

During the last six months, the farming sector has grown by three per cent on the previous year, according to agriculture secretary Leonardo Montemayor, yet it is important to stabilise the industry as much as possible for the sake of the overall economy.
The Philippines is looking to achieve self-sufficiency in rice production by 2004, according to Mr Montemayor. This would mean a jump from last year’s record high of 12.48 million tons to 15 million tons within three years.
The Department of Agriculture is looking to create one million jobs through the creation of Strategic Agriculture and Fisheries Development Zones – areas with potential for agricultural and agro-industrial development. It has already identified 10 million hectares of farmland.

“Roughly half of the labour force is involved in agriculture and about a quarter of our gross national product is contributed by agriculture, yet the poverty incidence is greatest in the rural areas,” says Mr Montemayor. “If we can do a good job in accelerating development in this sector then we will be able to hit several birds with one stone.”
One of the key constraints in achieving goals such as rice self-sufficiency is the lack of available finance, although efforts are being made to attract funds from the private sector to develop infrastructure. Investment in post-harvest technology could help to reduce production losses enough to achieve self-sufficiency. “If we could cut our losses by 10 per cent we would not need to import,” says Mr Montemayor.
One of the country’s largest agricultural investors is Dole Asia, whose fully-integrated operation includes growing, sourcing, manufacturing and packaging facilities, as well as sales and marketing of fresh fruit, vegetables and packaged foods.

Paul Cuyegkeng, president of Dole Asia, says improved distribution methods and land reform are needed in the sector

Dole Asia president Paul Cuyegkeng says there is still considerable potential in the agricultural sector, though several issues need to be resolved such as the thorny topic of land reform, improved distribution methods and changes to the cooperative structure.
“The Philippines is an area where you are blessed with sunshine, rain and all kinds of positive environmental factors that would make a product grow.” This enables the company to grow typically temperate crops such as asparagus in tropical areas,” adds.
“We produce asparagus all year round. You do not see that anywhere else in the world because it only comes out during certain seasons. We are exporting it to Japan and New York. I guess the Philippines is the largest exporter of asparagus to Japan.”

Dole Asia is currently in the middle of a major $111 million expansion programme in the Philippines, which involves raising vegetable production, building new facilities for mangoes and papayas, and extending credit to small farmers so they can plant fresh crops. The firm is also looking to increase its market share in the canned products market and is investing more in new equipment.
“We are going into technology,” says Mr Cuyegkeng. “We don’t want to be known as a produce company but a technological company that uses produce as a base.”
Del Monte Philippines dominates the local market for canned products such as juice and fruit, but it is also investing in new facilities and looking into other areas. The company gained independence from parent firm Del Monte Pacific during the last six years and is now reporting dynamic growth.

Alejandro Castillo, president of Del Monte, says the firm is pioneering an agri-tourism project in Bukidnon

From tomato sauces it has branched out into spaghetti sauces, and now even markets its own pasta brand, sourced from Indonesia, which has a 10 per cent market share in the Philippines.
Del Monte Philippines president Alejandro Castillo says it is always looking to develop best practice for the benefit of the industry, consum-ers and the local farming community. “Look at pasta. To us, this is no capital investment. If we failed, we’d stop, but we have succeeded. It’s unbelievable. We now have a 24 per cent share in metro Manila supermarkets. Nationwide we have a 10 per cent share. And that’s from zero two years ago.”
The firm is also pioneering an agri-tourism project with the departments of agriculture and tourism at the Del Monte pineapple plantation in Bukidnon. Aside from being a self-contained working farm, Del Monte is highly regarded for its readiness to accommodate tour activities due to its accessibility via Cagayon de Oro city and nearby accommodation and support facilities.

Mr Castillo says the new corporate structure has speeded up the investment decision-making process within the company and added a new dynamic, replacing old bureaucratic methods. “Now it takes two minutes – you come in here, you show me the write-up, and if it makes sense we will do it. The velocity of these decisions energises the whole company.”
Jaime Ong, vice president of corporate human resources and affairs at Del Monte Philippines, says the new government’s plan to put business and the agricultural sector at the top of the agenda will be welcomed in the farming heartlands such as Mindanao, where the company has been operating for 75 years.
“Mindanao is basically an agricultural economy,” he says. “Long considered the back door of the Philippines, Mindanao is where Del Monte operates. The government’s strong support of the agricultural sector is good news. Its plan to build the necessary infrastructure to support farmers, including farm-to-market roads, will certainly help to boost the island’s economy.”

Mr Ong believes the company will continue to diversify its product range and explore new markets, at the same time as investing in facilities and training its workers. “I see our company becoming more and more diverse – becoming not only a low-cost producer of pineapples but of other tropical products too.”
Luis Lorenzo Jr, chairman of Lapanday Holdings, agrees that the new administration in Manila offers hope for the farming community in Mindanao and elsewhere. “Given the level of expertise and the potential resources in Mindanao, particularly in the agricultural sector, companies like Lapanday, Dole and Del Monte have a role to play in channelling resources towards economic development.”
Mr Lorenzo says a lasting peace in the Mindanao region is a key part of this process, but other factors such as the application of new technology and the opening up of new markets remain critical. “I would like to see the products that we can competitively grow and export from the Philippines to be openly accepted in countries around the world in the next five years. That will entail the government focusing on making sure we do gain market access,” he says.