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No Free Lunch

Copy our neighbors

One little piece of advice I have for our government, particularly in steering our agriculture sector toward greater dynamism, is simply to copy our neighbors. Once upon a time, these neighbors were the ones copying us, and sent many students to learn agricultural science at the University of the Philippines in Los Baños, acknowledged then as the best place in the region to learn agriculture. That era is long gone, and the tables have turned. Now, we must humbly accept that our neighbors made much better use of what they learned here than we did, and have since left us lagging far behind. It’s time to copy what they did in return.

What they (especially Thailand, Vietnam, and Indonesia) learned from us back then was the science. They went on and harnessed the scientific knowledge with the right governance and institutional environment, management, and attitudes, and achieved far greater mileage from it than we did. Even so, there was also some management and institutional knowledge we shared, including to the South Koreans, who came to Los Baños in the 1960s to learn about our farmers cooperative marketing associations (Facomas), a model to emulate then. They went on to develop a strong agricultural cooperative system that now owns one of the country’s top banks. In contrast, our own experience with farm cooperatives since the glory days of the Facoma has been a checkered one, marred by all-too-common stories of corruption and mismanagement.

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With our own agricultural performance now trailing that of Indonesia, Thailand, Malaysia, and Vietnam, it’s our turn to find out what they are doing better, and try to copy and adapt them to our own situation. There should be no shame in this, as there is, indeed, so much to learn that could potentially catapult our farm sector to the levels where they are now. Indeed, many of the agricultural imperatives I’ve written on in the past are the subject of such lessons we could learn from our neighbors today. Let’s cite a few.

First, look beyond the farm gate. Our Department of Agriculture had traditionally taken the position that anything that happens beyond the farm gate is no longer its concern, but that of the Department of Trade and Industry. Yet, Malaysia calls its agriculture ministry the Ministry of Agriculture and Food Industries; Vietnam calls it the Ministry of Agriculture and Rural Development. They have clearly long understood that agriculture authorities need to look at the farm system holistically with a full value chain perspective—that is, “from field to fork” (I like to add “finance” before “field” as well.)

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Second, finance small farmers amply. The Asia-Pacific Rural and Agricultural Credit Association reported in 2016 that Thailand’s Bank for Agriculture and Agricultural Cooperatives “now reaches nearly all farmers and villages and, unlike most developing countries, smallholder farmers in Thailand have adequate access to credit.” And as mentioned earlier, Korea’s National Agricultural Cooperative Federation (NACF) owns what has become the country’s third-largest bank (NongHyup Bank). Our own Landbank could probably learn a thing or two on what makes the Thais and Koreans more successful in bringing ample financing to their small farmers through their similar banks.

Third, cluster and consolidate farm management. Small average farm size is not unique to us; it is a challenge our neighbors face too. Thailand’s Ministry of Agriculture and Cooperatives indicates how they see farm cooperatives to be central to agricultural development. Korea’s NACF has asserted this for decades, and through coops, their farmers achieve scale economies and participate in higher value-adding all the way to retail. Socialist Vietnam has had long experience with farm collectives, and even with an average farm size of only half a hectare, it is now a strong exporter of a wide variety of farm products. They must have secrets we can copy.

Finally, copy how our neighbors devote much more funds to agriculture. The sector only takes up 1.7 percent of our total government budget, while it’s 3.4 percent in Indonesia, 3.6 percent in Thailand, and 6.5 percent in Vietnam. That alone already speaks for itself.

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TAGS: agricultural development, Cielito F. Habito, copying neighboring countries, No Free Lunch
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