Agri-development: more than irrigation, post-harvest facilities, and farm-to-market roads

Many politicians propose solving rural poverty via three areas: irrigation, post-harvest facilities and farm-to-market roads. I beg to differ. It is much more than that. Indeed, needs are area and crop-specific. High productivity and diversification require these investments, but there are more to spur investments.

IRRIGATION
Water is plant life. Unfortunately, irrigation in this country is focused on rice irrigation. There are about 1.7 million hectares (ha) of land with irrigation, says the National Irrigation Administration (NIA). Public irrigation is designed to flood rice plants. Palay needs about three cubic meters per kilo produced, or 12,000 cubic meters per hectare per harvest. Since it is an aquatic plant, it requires far more water than other crops.
The huge irrigation investments in this country mainly benefit rice and little for corn, coconut, sugarcane, fruits, among other crops. These systems are mainly river diversions and reservoir dams, such as the large Magat river irrigation system in Isabela and Upper Pampanga river irrigation system in Nueva Ecija.
The common irrigated farm system is rice in the wet season and rice in the dry season. In some places, the dry season crop can be tobacco, tomato (Ilocos region) and corn (Cagayan Valley).
But modern irrigation technologies have evolved. And they economize on water. Cavendish banana for export uses drip irrigation or sprinkler irrigation to achieve quality and high yields. Durian farms in Thailand use micro-sprinklers. Coffee and cacao need supplementary irrigation. Greenhouse veggies use soil-less drip systems but can produce several harvests a year.
New systems, such as the proposed Chico river irrigation system in Kalinga and Cagayan that will irrigate 8,700 hectares, are not cheap at P500,000 per ha even it irrigates 4,400 farmers.
Small farm reservoirs that trap water in the wet season and release water in the dry season for crops need to expand their coverage. This is in the context of the country’s topography and climate change.
In the Philippines, lowlands are mostly narrow coastal strips except for larger plains in Luzon (Cagayan Valley and Central Plains), Mindanao (Cotabato and Davao-Agusan valleys), and others in Negros and Panay. Rivers are short and generally seasonal in flow.
What is the message? Irrigation is more than just rice irrigation. Many crops need it to achieve quality and yield. Consider irrigation design as part of the overall irrigation and poverty reduction strategy.
POST-HARVEST FACILITIES
Post-harvest losses are high in developing countries. They can reach 15% for palay (IRRI, 2015), and 20-40% for vegetables (PSA 2012, as quoted by Mopera, 2016). Mopera claims that “food loss is mostly caused by the inability of the small farmers to provide proper post-harvest handling, which includes storage facilities, infrastructure, cooling chains, packaging and marketing systems.”
One challenge for an efficient post-harvest facility is scale and organization. Small and fragmented holdings do not augur well for a viable facility.
The use of combined harvesters for rice can minimize harvest losses. Modern rice mills can yield high mill recovery.
Private-run facilities observe scale economics. A banana packing house for 25 ha can deliver two containers of export banana a week. I also saw a coop-run kiwi packing house in New Zealand for 150 ha.
FARM-TO-MARKET ROADS (FMRS)
FMRs invariably have many social benefits. They make roads passable all-year-round and reduce transport costs of both farm inputs and outputs. They open up new areas for development. They also open villages to extension and health services of government as well as promote competition by traders.
A standard concrete FMR is not cheap at P10 million per kilometer. Hopefully, it is built to standard and no leakages occur. And it is maintained well.
FMR and tree-crop investments need to be compared given scarce resources. Coffee can be planted/intercropped with a budget of P150,000 per ha, and modern banana farm at P1M per ha. Each can benefit one farmer.
When building FMRs, therefore, economic trade-offs need to be considered.
Are there equally important rural investments aside from the three areas? Yes. Investments can also be made on the following:

• Cost-sharing by local government with entrepreneurs for planting marketable crops like cacao, coffee, rubber and oil palm

• Establishing modern nurseries

• Stringing electric posts to aquaculture ponds or mariculture parks. It is costly for investors to pay for electric posts and lines to their farms. I understand in Vietnam and China, the government spends for these.

• Small port rehabilitation or RORO port

• Access roads to farm tourism sites

• Flood control

• More weather stations

The primordial criterion is how public investments can contribute to value chain competitiveness. It is about economic justification and poverty alleviation impact. When a third of farmers and fishers are poor, trade-off and prudence are keys to project selection.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
 
Rolando T. Dy is the Co-Vice Chair of the MAP AgriBusiness Committee and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.
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