DA explores farm 'service outsourcing' to spur agri prod'n

MANILA, Philippines - The Department of Agriculture (DA) is looking to spur more agricultural production through the promotion of farm “service outsourcing.”

Similar to outsourcing in most other industries, the DA is also encouraging and promoting farm service outsourcing – especially to landholders with small plots of one to two hectares.

In a talk with reporters, Agriculture Secretary Proceso J. Alcala revealed that there are already several entities engaging in farm service outsourcing.

A farm service provider, for a straight contract fee with the landholder, takes on the task of farming the land. However, the service provider does not have any share in the profit from the production harvest which all goes to the landholder.

According to Alcala, the service provider can also be contracted to engage only in various stages such as land preparation for planting or for the harvesting stage.

Alcala pointed out that farm service outsourcing may be the wave of the future and an answer to the declining number of farmers.

The DA official noted that there are a lot of landholders with small plots of just one to two hectares which they are not able to utilize for agriculture. Thus, to achieve economies of scale for the service provider, the small landholders could band together and form cooperatives.

Alcala said the DA, through its regional offices, have been able to bring together landholders and farm service providers.

By encouraging such farm service outsourcing arrangements, Alcala said he is optimistic that overall agricultural production would increase and dovetail with the government’s food self-sufficiency program.

At the same time, Alcala said farm service outsourcing is a better alternative to corporate farming which would only make farmers mere employes, with the financial benefits accruing to corporations rather than to the farmers.

Alcala said he wants to ensure that any arrangement on agricultural plantations should ensure that the farmers directly benefit.

While Alcala said he is not against corporate farming.He however, prefers a more equitable arrangement for local farmers whereby farmers with two to three hectares of land could be integrated into cooperatives to achieve economies of scale and then enter into contract growing with interested companies and foreign investors to produce specified commodities.

With a contract to grow, Alcala said farmers could more easily access credit facilities.

The investors could also help provide farming equipment and post-harvest facilities and negotiate a price for the commodity.

In such a way, Alcala said, the farmers would directly benefit.

He cited the “sad truth” that multinational corporate farms sell their produce abroad for as much as $6 per box, while only buying the commodity from farmers for as low as $3 per box.