Pigs

No, this is not a column about politicians. It will be an insult to pigs to compare them to some of our congressmen, senators, mayors, governors or candidates in this election. This is a column about pigs… about pork, and not pork barrel.

A Taiwanese businessman is investing big in raising pigs in our country. He has seen a big potential in breeding pigs here. It is an investment we need after the African swine fever (ASF) almost decimated our pig farms.

A story in Taiwannews.com reports that last Feb. 10, nearly a thousand pigs arrived in the Philippines from Denmark. The Taiwanese investor has lived here for 50 years and is in the animal feed industry. He knows there is a big potential in the country’s hog farming. But he also knows it must be done the right way.

That means using Danish techniques and pigs. He has invested P900 million ($17.5 million) into his swine breeding venture. He plans to build five farms in Bataan. He expects to produce 120,000 heads a year by 2025, which will help curb local pork prices and improve pig breeds.

Doing it right means hygiene and disinfection are of utmost importance at the farms. Even meals for the workers at the farms will not include pork or beef to prevent swine viruses.

This investment is a good one for the country. Our local industry is now struggling to restock since the ASF caused our pig population to significantly drop. From 13 million pigs in October 2019, it is down to 9.87 million in the same month of 2021.

The Department of Agriculture has resorted to importing pork to manage retail prices in public markets. But this has been protested by pig farmers who are asking for government assistance to recover their business.

This Taiwanese investment isn’t the first foreign interest in our pig industry. The Thais were here earlier.

In 2017, then agriculture secretary Manny Pinol accompanied officials of Thailand’s largest agricultural corporation, the Charoen Pokphand Group (CP Group), to a meeting with President Duterte. The Thais wanted to invest an estimated $2 billion in the Philippines over the next five years to produce pork and chicken, both for the local and export market.

The CP Group is already operating in the Philippines, mainly in the Luzon area, but it would like to expand its operations to the Visayas and Mindanao.The hog and chicken production project of the CP Group will be divided into 10 modules utilizing about 6,000 hectares per module for the production of corn and soybeans to be used in its feed production.

I asked Agriculture Secretary William Dar what happened to the Thais. He said they are here and he is working with them. But when I asked for details, Dar stopped responding.

The local industry is essentially a lot of backyard operations. It is like most agricultural sectors… no economies of scale. Modernization has not happened and that also explains why a swine flu epidemic can spread quickly.

The fairly big investment this Taiwanese entrepreneur is making is exactly what our agricultural sector badly needs to improve production, lower prices for the consumers, and enhance our food security.

Our agriculture sector can use some good news like this. It has not been performing well.

Agriculture Secretary Dar was confident the sector would recover in 2021, which in turn would help with the overall economy’s recovery. It didn’t happen.

The Philippines’ 2021 overall economic growth target range was 6.5 to 7.5 percent, and the agricultural sector’s growth target was 2.5%. Instead, our agricultural production last year declined by -3.3 percent in the first quarter; dropped by -1.5 percent in the second quarter; dipped by -2.6 percent in the third quarter, and minimally increased by 0.6 percent in the fourth quarter.

There are a lot of excuses from the ASF epidemic to the typhoons. But even without those natural calamities, our agricultural sector had not been a good contributor to GNP growth through the years.

Many explanations have been offered for our lack of productivity, including inadequate government assistance to farmers. Technical assistance to farmers is now a responsibility of LGUs and they are not very good at doing this.

Low productivity has made the agricultural sector very protectionist through the years. Importations of rice and vegetables have been opposed, even if it means consumers must pay higher than normal prices. High food prices result in labor unrest as industrial workers demand higher wages that also affect competitiveness of manufactured products.

But politicians are hesitant to do anything beyond the same old policies that keep the agricultural sector an economic laggard. The basic problem of fragmented land ownership that prevents modernization and mechanization is too controversial to reform.

Secretary Dar loves to say that “Our vision is a food-secure and resilient Philippines with prosperous farmers and fisherfolk.” But we haven’t moved much in that direction so far.

A recent World Bank report says it is essential to transform Philippine agriculture into a dynamic, high-growth sector. It is how the country can speed up pandemic recovery, poverty reduction, and inclusive growth, a World Bank report says.

The World Bank noted that “in the past, spending has gone mostly toward price support for selected crops and goods, as well as subsidies on inputs such as fertilizer, planting materials, and machines.”

The World Bank report says that interventions like farm consolidation (including cooperative farming schemes for instance), better extension services, e-commerce, and investments in agribusiness start-ups can further advance modernization of Philippine agriculture.

Of course we know all those prescriptions of the World Bank. Our experts always know the theory. We just can’t get things going on the ground. The cartels have made the sector resistant to reforms.

That’s why this one big investment by someone from the private sector, a foreigner at that, is so refreshingly important. Maybe our food manufacturing sector can do better than contract farming and operate like the Thais and this Taiwanese. Bolder thrusts from the private sector is the only hope.

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco