Observing the boxes on the conveyor belt, I could not help but notice that balikbayan boxes come in different sizes. Which made me wonder why. Is this done to create a distinct competitive advantage? Are these companies intent on making it impossible to hide the boxes inside the great black vinyl bags that Ada Mabilangan told me are sold in Christmas bazaars? Or, is this another example of how Filipinos just cannot agree to agree?
The balikbayan box story reminds me of the corn story. Corn is grown in Mindanao and is shipped to Luzon for the feed mills that serve the chicken and hog industries. Corn is also grown in food grade for the corn chips we eat. To help develop a more competitive Mindanao, the Maritime Industry Council (MIC) has been studying why corn freight is expensive in relation to the unit price of corn.
Unlike corn or grains that are imported in 60,000 metric ton lots on huge vessels from the US or countries like Argentina, local corn is shipped in bags inside a container which can carry as much as 20 metric tons. There are reasons why we cannot ship in larger bulk quantities. Farmers do not plant the same type of seed nor have the same standard of drying facilities, which range from excellent ones to the side of the road. Because of this, traders do not intermix their cargoes, making it difficult to create an economy of scale to economically justify investmenting in silos. As a result, domestic corn cannot be shipped in large bulk vessels which would mean cheaper freight.
In a recent meeting organized by Secretary Cito Lorenzo, the maritime industry sector with the various stakeholders of the corn industry agreed that each sector would have to reinvent itself. In addition, there is an urgent need to re-engineer how we do things in order to make corn growing and processing, corn trading, corn storing and shipping financially viable for the farmer, trader, processor, and logistics and shipping operator, and especially the customer.
In order to do this, we will need to find ways to make hybrid seeds, which are more expensive and need to be purchased for every planting, affordable for the farmer. We will need machinery to enable farmers to plant evenly and to spread fertilizer efficiently to maximize yields. We will need to find ways to empower the farmer with market information and financing. We need to once and for all eradicate the eight to 10 percent a month interest that some farmers are paying. We will need the political will of a governor, or a group of mayors, or a department, and the private sector to rally everyone towards a common self-interest to be a desirable source of corn, better in all ways than imported substitutes.
Mindanao Inc., has a tremendous opportunity to market Mindanao as a place to invest. Once a clear plan for corn is in place, the sheer volume will form the impetus for investments in equipment, post-harvest facilities, silos and bulk ships. MIC chairman Bitay Lacson further argues that Mindanao can offer incentives to feed mills, as well as to chicken and hog growers and processors, to locate in corn rich areas, making transport of corn unnecessary. Mindanao could then aim to add value to its poultry in the way Thailand prepares, packages and exports yakitori in sticks to Japan.
Many ask the Maritime Industry Cluster why it is advocating the move of chickens to Mindanao. Doesn’t this mean that the shipping industry will lose freight? Not totally true. Shipping companies will exchange low paying corn cargo in containers for higher paying dressed chicken destined for local and export markets. It will also gain from a new trade – corn in bulk.
How is this similar to the balikbayan box story? Imagine the synergy that can be developed if all balikbayan box companies had standard sizes of boxes, trusted each other enough to intermix their cargoes, jointly negotiated for a shipping contract with a shipping line? Working together brings about opportunities and ideas that we fail to see when we work alone.