Tel: (632)3734446 Fax: (632) 3734443 Email:

Sunday, June 1, 2008

Revisiting the Highways of the Sea

Chairman's Corner
Angelito M. Sarmiento
MARID Editorial Board
Vol. 19 No. 2, June 2008

As early as 1985, we have been pushing for a project like RO-RO. We're glad it's coming to reality.

Finally, the RO-RO network, which I referred to as "highways of the sea" is coming into a reality -- linking islands, creating access to an efficient mode of transporting commodities or products to market or buyers.

It is a project long nurtured in the back burners, all through numerous government administrators.

The RO-RO, which I started to push way back in 1985, (during my Philippine Chamber of Commerce, Inc. (PCCI) days as Chairman of the Food, Agriculture and Forestry Committee) together with numerous co-dreamers of an efficient transport system like Vicente "Ting" Lim, Jr., Menardo Carlos, Gus de Leon, Carlos Ortoll, Soledad Agbayani, Dulce Gozon, Raul Hernandez, Roberto Ansaldo, Joseph Siahetong, Rosalino Perez, Ike Unson III, Ernesto Sanvictores, Franklin Panahon, Jose Manglicmot, among others, was first brought as a viable agenda for government with then President Ferdinand Marcos.

This was again taken up with then Secretary of Agriculture Ramon J. Mitra and with the succeeding administrations.

The support of regional and local chamber of commerce were solicited, to include the participation of shipping associations like the Philippine Inter-Island Shipping Association which was then headed by Mr. Agustin Bengzon) and buyers of agricultural products, specially the wholesalers and retailers (which was then represented by Mr. Joey Albert of the Philippine Association of Supermarkets) and many other stake holders.

And it is only now, under President Gloria M. Arroyo that the project has taken momentum to take off.

The development of the highway of the sea or RO-RO is a continuing process and should not end. Its presence can very well contribute to the improvement of the quality of life of our people.

Read also: Solon Envisions Highways of the Seas

Thursday, May 1, 2008

Scrounging Amidst Plenty

Chairman's Corner
Angelito M . Sarmiento
MARID Agribusiness Digest
Vol. 19, No. 1, May 2008

In the news lately is the long queue of people buying NFA rice -- taking more than an hour of waiting for a buyer to buy three kilos of low-priced rice. The long lines are reminiscent of years of the past, when a similar situation came to force.The increase of price of rice (and other food commodities) in the world market -- over 100% over three years -- is a nightmare for rice importing countries like us and Indonesia and Bangladesh where the food cost is about 80% of income earned by their poorest constituents.

And despite the continuing assurances of government that there is no rice shortage, people are reacting more to a shortage scenario, coupled with pronouncement from military and police authorities of raiding rice warehouses, looking for hoarded rice.

Over the years, we have always looked at nearby rice-producing countries to supply the domestic gap between what we produce and the demand of households, and that it was profitable for NFA to import rice and sell at the domestic market. There was a margin or profit to be made whenever rice is imported and sold in the domestic market.

And that import volumes that were 600,000 metric tons before soared to more than a million and we were importing 1,500,000 tons by 2003. This continued to increase, and for 2008, we are looking at going beyond 2,000,000 tons, a record of sort.

This contiunuing importation is a puzzle to many as we claim to be an agricultural country, having a topnotch school, and home of the International Rice Research Institute (IRRI), which is focused on increasing rice supply. This is aside from the fact that we were never in short supply of agri-technocrats.

The importation and perceived rice shortage is a recurring bad dream that refuses to go away, that haunts the bureaucracy, and puts uncertainty over a period of time.

Many reasons have been brought forward why we continue to import rice, each pundit putting his ten-cents worth of analysis, and yet failing to see the whole scenario as a problem of political will. This is not the first time we have this problem.

The problem seems to be of national magnitude, but solutions can be found by breaking down the problem into manageable parts.

While an environment of cheap fuel cost is gone, and fertilizer price has gone out of the window, there are still options to negate the spiral-up effects of these inputs. All is not lost simply because we are in a regime of rising cost of production.

As I have always espoused, there are pockets of production areas that can still be brought into higher productive levels by working on the existing system. Identification of rice deficit areas and finding out why so can bring in solutions based on what exists at ground level.

A basic computation of rice produced in an area divided by its hectarage can bring out under-productive areas. Further study of why such a situation exists can bring reasons that are manageable even at the lower level of the bureaucracy.

It is in this scenario that DA should look at LGUs as an effective partner in working out solutions to this seemingly never ending food production short fall in the countryside.

There are about 78 provincial governors, more than 90 city mayors and about 1,600 municipal mayors, and each would definitely like to establish production benchmarks that can provide food security for their constituents (who will cast their votes come election time).

Critical in this working hand-in-hand with local executives is a common understanding and agreement on expectations and this can be done through continuing dialogue as each individual area would require a tailor-fit arrangement, a far cry from the usual national approach of one program-fits-all.

The role and participation of local executives are imperative to any food production program coming from the national agency as agri-production takes in gestation or growing time. Agri-projects cannot be left alone unlike construction of infrastructures. Any neglect along the way comes out in the computation of productivity levels, and as such, participation (or monitoring) at grass root level is a must.

Local government units are able to tap resources which are at arm's length from them. Each would have the needed manpower to work on identified projects, and that they have their own funding sources, no matter how meager these are (brought about by the devolution). DA can tap on the strength of local units to further its objective of setting up production areas nearest the market, if not consumed within.

The regime of low fuel cost to transport agri-products to far-away consumption areas is gone. And if we continue to work on this model, transport cost incremental is added on to the price, making it unaffordable to consumers. This is one of the reasons why the price of Thailand and Vietnam rice had increased more than 100% over a period of less than a year.

Let us work on local areas of productivity to make food affordable, and we no longer need to scrounge for food amidst plenty.

Saturday, December 1, 2007

Why a Million Hectares

Chairman's Corner
Angelito M. Sarmiento
MARID Agribusiness Digest
Vol.18, No.8, December 2007

In a recent talk with agri-practitioners from the University of the Philippines, Los BaƱos (UPLB), I was told of their disappointment over the seemingly wholesale invasion of agricultural products in the local market from China. This was coupled with the government plan to open a million hectares of agri-land for Chinese businessmen, despite or the existence or availability of local agri-talents recognized and hired by foreign governments and organizations.

To a large extent, I share their concern. UPLB enjoyed high international recognition as an educational institution producing top caliber agri-people. But the inability of the Philippines to elevate its agricultural productivity equal if not better than nearby countries somehow puts a dent in its image. Somewhere, somehow, the agriculture scenario seems not equal to the recognition anymore.

In restrospect, there are many things that could have been done but that is water under the bridge. A litany of "what could have been" is an input to the equation, but knowing where we are and where we want to go is a basic fundamental in planning. Not knowing where we are will not bring us anywhere.

Questions why agri-products from China and far-away lands are able to penetrate local markets at competitive levels must be answered outside of the off-the-cuff reasons of government subsidies and price dumping. Real answers must be given to guide local producers in their investment ventures and activities.

Determination of competitive areas, now and in the future, must be known so that government interventions and programs can be consistently pursued (and funded), and not be dependent on who heads the agri-bureaucracy and other interim officials.

Unlike in other government initiatives, agricultural programs require long term nurturing commitment and sustained attention to bring in projected economic results. There is no other way.

And this brings to fore the attendant political reality in Philippine agriculture. The structure and process had evolved into a quagmire that somehow negatively affects or stifles real development thrusts needed to create the momentum of growth in the countryside.

A case in point is the definition of high value crops as needed in a piece of legislation aimed at jump-starting and supporting commodities that are competitive and to generate additional income for farmers. As the legislative mill worked on it, high value crops were finally defined as all other crops outside of the mainstream crops of palay, corn, coconut, sugar and tobacco as each lawmaker involved would like to have crops in their respective legislative district be included in the definition. And that is but the natural way for the lawmakers to do to promote and protect the interest of their constituents.

This penchant of "covering all fronts" must be reviewed and that a priority order must be restored. A true recognition and appreciation of agri-truths must be in place as in the devolution of certain DA functions to local government.

There is no use in looking back at and wishing that agri-extension work be brought back to DA. The effectiveness and efficiency of the present devolved set-up must now be the end objective and no energy must be spent on wishing otherwise. While it is true that the present set-up did not work well in some areas, this is more of the exception rather than the rule.

And this is where the crux of the matter lies. The strength of the agricultural linkage is determined at its weakest link, and this is where our energies should be devoted.

A working partnership between the environment provider (government) and the participants (the private sector) must be established to bring about a fighting stance ( competitive level) to meet threats coming to the local markets and make export inroads. It is in the process that technologies are generated to challenge and head-off emerging threats.

And government must play its role in resolving technology generation. Its intervention should hasten the creation and adoption of technologies suitable to local conditions meet market demands. Success of technology adoption is ultimately measured in terms of its acceptability to consumers and does not stop at producer's application.

Use of imported technology whenever it meets local markets should be encouraged. We do not have to reinvent the wheel. We have to be willing to invest and pay for the cost of buying technologies that our constituents can benefit from. Market demand is so dynamic that we do not have the luxury of research time. Market competition dictates that we work on where we have comparative edge, and we let go of where we are least able to compete.

And this we have to benchmark and define our competitiveness.

It is only then that we can head-off competition and be able to work on our own million hectares. We have the distinct home (court) advantage which foreign investors cannot take away from us.

It is only then we can truly claim it our own. And they need not come anymore.