Why not a Department of Agribusiness?

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Teresa S. Abesamis

Grassroots & Governance

It seems that as often happens, Rodrigo Roa Duterte’s announced “transfer” of Agriculture Secretary Emmanuel Piñol to the Mindanao Development Authority is on hold following the announcement by Senator Bong “Rasputin” Go that Piñol is still staying in his Cabinet post because “he has performed well.” I wonder what the basis for this assessment is since all the statistics (contribution to GDP, growth rate, etc.) indicate the dismal state of Philippine agriculture, on which 30% of our families basically depend, and to which most of our poverty incidence belongs.

Agriculture has never really been a significant contributor to our economy; and it is hard to believe that in all this time, government leaders cannot seem to wake up to the need to radically rethink the direction for our crucial food production sector. Today, rice importation has been liberalized which has benefited rice consumers, but domestic rice producers are howling. Other piecemeal initiatives are being announced, such as the provision of free irrigation and, incredibly, free farm equipment. If agriculture officials take a look at history, they should realize that when government provides irrigation for free, it helps for a while — until the system breaks down from weather disturbances and lack of maintenance. That is why Irrigators’ Service Associations (ISAs) were organized, to ensure maintenance of the systems. The organized ISAs also required farmer beneficiaries to pay regular fees to fund the maintenance of the systems. The Provision of free farm equipment, I fear, will be a management nightmare. Who is responsible for allocation of time for equipment use? For maintenance? For storage? If management is to be run by government functionaries, I can foresee too many opportunities for graft and corruption.

The experience with the wasteful and disastrous National Food Authority should give us lessons on why government should not mess with the allocation of goods and services except for the provision of hard infrastructure and social services such as health and education.

We need to look strategically at food production as basically a business or negosyo sector, rather than food production sector. We have to rethink agriculture and call it what it should be: Agribusiness. While some small farmers may want to remain independent, the fact is that the average age of farmers is 60 years, and their descendants and they themselves do not wish their unprofitable backbreaking work on their children who prefer to work on computers. The need to rethink and act is urgent and crucial for the sake of our rural people, and for our food security.

To raise productivity we need to have efficiencies of scale. This means integration of modernized production systems, access to technology and finance and marketing competitiveness. This calls for organized, larger-scale systems of cooperatives or entrepreneurial ventures working with small farmers as contract growers. Land reform has brought about small-holder farms, which are decreasing in number as unproductive small farms are converted into housing subdivisions or malls.


What we need in a Department of Agribusiness is someone, for instance, like Trade and Industry Secretary Ramon Lopez, who has worked with the private sector on “Go Negosyo.” The role of government here emphasizes a promotive and supportive rather than regulatory function. Incentives for private investment and initiatives that make it worthwhile for entrepreneurial risk-taking is what we need to create and install, rather than give away free farm equipment and irrigation. There are possibilities in free or reduced taxation policies for start-ups, to make the risk-taking attractive enough. Access to foreign markets can be facilitated and eased. Crop insurance to ensure protection in the context of our weather disturbances can be provided by government to reduce investment risks. We might also learn some lessons from the incentives provided to rice farmers in Japan.

Perhaps the Department of Agribusiness (DA) can have a technical support division: The new DA can provide technical information based on soil analysis, access to domestic and export markets, guidance on the appropriate crops to grow per town, province, and region. This is what can be provided free by the government. The objective is to facilitate investments and help ensure successful agribusiness ventures. Since the agriculture bureaucracy has been devolved onto the LGUs, perhaps their focus can be reoriented into agricultural research and information dissemination.

Agribusiness ventures can hire agriculture technicians who can be retrained to become “farmers’ friends” and technical advisors, as they have successfully done in Vietnam. The frequent change in LGU leadership and the unclear — or the lack of — agriculture policies have weakened the ability of “agriculture technicians” to support local farmers.

Perhaps a new leadership, and a reorientation to a Department of Agribusiness can begin with consultations with the business community and farmers cooperatives (including the agrarian reform beneficiaries) toward the restructuring of the food production sector to a private business-oriented sector. The legislative leaders should also get involved in order that they can come up with supportive policies and incentives to get agribusiness moving.


Teresa S. Abesamis was professor at the Asian Institute of Management and a Fellow at the Development Academy of the Philippines.