By Rolando Dy
Executive Director
Center for Food and Agri Business
University of Asia and the Pacific
[Part2]
As a result of a poor export record, the Philippines is the only country among the five that posted a negative trade balance. According to a NEDA report, this started to occur in 1995.
Based on the data from the UN International Trade Centre in Geneva, the Philippines dismally trailed its ASEAN peers in 2008.
In fresh food exports:
• The Philippines ranked No. 60 in world market share as compared to Indonesia 16, Malaysia 30, Thailand 11, and Vietnam 14
• On market diversification, the Philippines ranked 77th compared to Indonesia 58, Malaysia 27, Thailand 20, and Vietnam five.
In processed food exports:
• The Philippines is ranked No. 58 in world market share compared to Indonesia 12, Malaysia four, Thailand 16, and Vietnam 61
• On market diversification, the Philippines was No. 65 compared to Indonesia 39, Malaysia 10, Thailand 24 , and Vietnam 48.
Why do we trail?
There are at least five factors.
1. The lack of focus on product diversification, particularly tree crops, fishery and aquaculture. Political leaders look at rice self-sufficiency as the success factor.
2. Most of the budget (some 60 percent) went into the rice program, mostly for rice irrigation.
3. Lack of long term funds for planting long-gestating crops such as rubber, oil palm, cacao, coffee, coconut, etc.
4. Limited funds for export market intelligence and development.
5. Lack of solid program for rural poverty reduction anchored on agribusiness development.
Where do we go from here?
An agriculture blueprint is urgently needed that is inclusive (all farmers, landless and fishers) and market-driven. It must increase farmer incomes that will lead to rural poverty reduction (at nearly 50 percent of all families today). Second, is penetrating new markets.
This must be under the ambit of three key result areas: productivity increase of all crops; market-led diversification; and non-farm and off-farm creation through private investments and public-private partnerships.
The opportunities are staring right at our faces. These are:
1. Coconut and rubber have expanding export markets but production is severely limited. The capacity utilization of coconut mills is 50 percent to 60 percent. Little replanting has been done for the senile coconuts. And fertilization has been inadequate.
The country imports 30 percent to 50 percent of its palm oil. Mindanao and Palawan have potential of 500,000 hectares but today only about 40,000 hectares are planted. Moreover, the country also imports half of its coffee beans.
2. The country imports seaweeds from Indonesia as the country is short of supply for processing. The Seaweed Industry Association of the Philippines indicated that the total capacity is about 130,000 tons a year versus domestic supply of 85,000 to 90,000 a year.
3. A leading fruit processor in Cebu revealed that there is competitive supply of banana, pineapple, papaya and mango. But, the others are either scarce or costly such as passion fruit, jackfruit, guyabano, etc.
4. ASEAN countries are very strong in seafood exports. Where are we today? We need more resources, mariculture research and production.
Exporting is an important tool for market expansion. Given that half of the rural folks are poor, and there are external market potentials for many products, it is a sound strategy to exploit these opportunities.
Are we depriving the Filipino nation of food if we export?
Obviously not. In fact, we are improving the lives of the rural poor by increasing their incomes. Given more money into their pockets makes a vibrant domestic consumer market. That is the evidence in the ASEAN. We need not re-invent the wheel.
