Low agri exports traced to declining productivity

MANILA, Philippines - Local businessmen are worried that the declining agricultural productivity is contributing to low agriculture exports.

Philippine Food Processors and Exporters Organization Inc. (Philfoodex) president Roberto C. Amores said that amid the 2012 gross domestic product growth target of 5.5 to 6.5 percent set by the Philippines economic managers, the food manufacturing/processing and exports sector are seriously concerned with four major issues namely: inadequate raw material supply, high cost of sugar and other material inputs, high cost of power and poor infrastructure and logistics which are lingering problems impeding the growth of the sector.

According to Amores, the continued scarcity of supply of essential raw materials which are vital inputs for the food manufacturing/processing industries is one of the main factors cited as directly hampering the export performance of the sector.

He said the Philippines performance in agro-food exports lags behind its ASEAN peers and far from global averages. The country’s productivity of many agricultural crops registered yields below global average.

Moreover, there is a need to address the immediate problem of the increasing costs of sugar and the spiraling cost of power which are critical components affecting the costs of processed food products including drinks and beverages.

The power cost in the Philippines is among the highest in Asia. These impacts on the cost of primary processing like drying, storage and of course processing.

In a related initiative, the Philfoodex and the Sugar Regulatory Administration are discussing ways to provide access to low-priced sugar by MSME’s engaged in food manufacturing/processing.

Amores said that under the proposed development advocacy program for MSME’s, Philfoodex can act as a “big brother” wherein it can consolidate the sugar requirements of these MSME’s. Philfoodex is comprised of micro, small and medium food processors and exporters who need all the assistance to become competitive amid spiraling production costs.