Greater farm productivity means more jobs — Lorenzo
Lorenzo said the job creation program "must have a strong rural component if it is to be truly meaningful". He warned that "the over-concentration of job opportunities in the urban areas would only aggravate the present imbalance in local economic development". This, in turn, would only result in the continuing exodus of productive labor from the countryside eventually resulting in the perpetual underdevelopment of the Philippines’ vast agricultural resources, the 43-year old agri-business expert pointed out.
Lorenzo said improving farm productivity "is a much better alternative in the creation of countryside-based jobs". The other alternative is to surrender rich agricultural lands to the establishment of industrial and manufacturing concerns.
"While the industrialization route could jumpstart rural job creation, it will be very costly to the country," he said.
Environmental costs
Lorenzo said the biggest disadvantage of the industrialization route is to the environment: once rich farmlands are converted into industrial use, the arability and fertility of this resource could no longer be recovered after such use. He also cited the threat that extensive industrial activity could pose to other natural resources such as forests and waterways.
"On the other hand, enhanced farm productivity is consistent with environmental preservation even as more jobs are generated," the 1982 Wharton MBA graduate said. This is because the most modern farm productivity enhancement techniques are anchored on soil and environment protection through decreased chemical application and the creative and innovative use of available farm space.
Among these technologies is modern biotechnology which has developed various seeds that are naturally resistant to specific crop-damaging insects. Several Asian countries are currently testing the commercial use of biotechnology-processed plants. Indonesia has recently planted some 10,000 hectares to a popular biotechnology-processed cotton variety. Both Indonesia and Thailand are in the process of testing and eventually, commercialize biotech corn.
The natural resistance to specific insects results in radically decreased application of chemical insecticides which are often harmful both to environment and farmers.
Lorenzo said the use of such technologies also augur well for increased harvests. US agricultural experts noted significant improvements of up to 40 percent in the harvest of farms that use biotechnology-processed seeds.
"At the end of the day, this is the meaning of greater farm productivity: greater harvest using the same — if not decreasing — amount of land," Lorenzo pointed out.
Job creation strategy
Lorenzo said increased farm productivity "will definitely lead to increased requirements for laborers who will perform harvest and post-harvest work".
"But this is just the icing," he said. The real job creators will be the downstream expansion of enterprises as a result of higher farm productivity. These include food storage, food processing, distribution and retailing, as well as unrelated enterprises that will be created from capital derived from increased farm revenues.
"Step One in our job creation framework is identifying markets," Lorenzo said. We can say that as of now the market for food produced from productive farms is so large that a big portion of it is unserved.
"The market potentials are therefore very high," he explained.
Step Two is identifying the enterprise movers. Farmers are, perhaps, among ours most important enterprise movers, Lorenzo said. This is because "they man and manage the most crucial enterprise fortress of the nation."
Step Three is locating suitable production areas. Lorenzo said as far as agriculture is concerned, it is not so much locating these areas, but "what is left of our agricultural lands into productive farms".
Step Four is determining competitive attributes. Lorenzo said "there is much to be desired as far as the competitiveness of our agricultural products is concerned". However, biotechnology and other similar means are available to enhance the quality and quantity of our produce, he explained.
Lorenzo said he is confident the government can meet its job creation targets, particularly in the agricultural sector.
The elements of determination and political will are there, he said.
He cited President Arroyo’s recent directive to have the guidelines on the importation of biotechnology-processed plants and products, as an example of this will and determination.
President Arroyo brought our farmers closer to the reality of modern agricultural technologies through her recent bold move, Lorenzo said.
The former chairman and CEO of Lapanday Holdings, Lapanday Foods and Del Monte added that Arroyo’s determination to infuse modern technology into the farming sector "will ensure that we are not to be left behind by our Asian rivals in the agricultural arena".
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