Local farmers are always able to fill the supply side, and can supply more if needed. Affordability of buyers is apparently lacking in the equation of supply and demand.
Despite this, there seems to be an endless push for farmers to produce more without identifying who are to buy the additional volume. And at what price this produce will be when purchased, either by ultimate consumers or by commercial buyers for further processing.
Filipino farmers are as efficient and effective is their counterpart in the ASEAN regions. However, the domestic environment is not competitively attuned.
Farmers in the Cordilleras are able to produce the volume of cabbage or carrots that the country needs but not at the cost equivalent to that of China or Thailand.
While vegetable farmers in China are able to make use of efficient irrigation systems, farmers in La Trinidad, Benguet, and in other places in Cordilleras, water their small vegetable plot manually with riguederas (fabricated kerosene can sprinklers). Other make use of improvised irrigation system made of individual plastic hoses that are kilometers long, getting their water from some mountain streams. There is no organized process of effectively managing water utilization and application in this place known as the salad bowl of the country.
Fruits are in the same state. A kilo of lanzones here costs twice that in Thailand. Name any products and chances are, cost of production in the Philippines is higher than in any other ASEAN country.
For many years, the National Food Authority had been earning profits by importing rice and selling this to the local market. The agency would incur losses when they sell their locally procured palay, milled into rice. Farmers in exporting countries are able to produce a kilo of rice at half our cost.
And we have been wracking our brains, asking what brought us at this point when we are no longer cost competitive with our neighbors in the international market, and (worst) even in our very own backyard.
Primary to the survival of Philippine agriculture is its competitiveness. Our competitiveness has been eroded over the years. And now, we do not have any other choice but to focus our energies and scarce resources in once again, defining our competitive niche in the international market.
There is a need to review the competitiveness of Philippine agriculture.
The Philippines once looked up to as a good model for agri-development. Now the country is buying rice from its ASEAN neighbors.
The Philippines had pioneered in penetrating and developing markets for agricultural products abroad, but these have been taken over by other countries. A nearby country has even branded its rice export as Milagrosa – which is a known Filipino high-end quality rice. And we kept quiet about it. Where we started to export our indigenous patis and bagoong, the market has been taken over by others.
And the saddest part of it is when our local farmers are not able to compete with imports right in our markets. Carabeef from India is readily available in Metro Manila public markets underpricing beef and pork. And in many occasions, chicken cut-ups are also being sold much lower than domestic chickens.
This is true with vegetables. The top fast-food chains buy their lettuce from Australian suppliers who can assure continuous supply at a contracted one-price over a certain period of time. (Often, price is not the only or major underlying reason when buying but assurance of supply.)At what cost is lettuce produced in Australia? What is their harvest (tons per hectare) compared to our "best farming practices that they can under price our farmers?"
Filipino farmers should strive to be competitive. Investment for such can only come from higher income. And private sector cannot, on its own, create the environment to pursue international exposure and competitiveness. An environment where the competitive spirit in the Filipino culture should be developed, basically by government through policy directions and infrastructure setting. Creation of a market linkage that provide a remunerative compensation for efforts exerted would definitely motivate farmers to increase their volume of production and elevate their productivity to higher levels.
Producing bigger or greater volume in agriculture does not automatically translate higher income for farmers or producers. Nor does higher productivity. Access to market or to consumers at competitive cost is the defining linkage that spells income for farmers.
Farmers have to know where the Philippines can be competitive and spend their energies and resources in creating the environment where the private sector can flourish. A redefinition by government of its agricultural end-objective of producing more to a market oriented approach, will greatly help the private sector in allocating their scare resources where they can be most competitive.
Reduction in the cost of farming (through policy setting and infrastructure investment) and of doing business will go a long way in defining our competitiveness. Our farmers should be given the same working environment as that of other countries similarly situated as ours. Then we can truly measure our own competitiveness.
While we have plenty of agri-products in the domestic market, we have to benchmark against the world and know our specific competitive edge as this will translate into more affordability (higher demand or consumption) of buyers or consumers.
And if only we can translate the political competitiveness of our leaders in government into agricultural competitiveness, then we can readily face competition from all comers.