Business

The government needs to catalyze the private sector

If the government does not catalyze the private sector with the necessary steps, our agriculture will remain stagnant. This is especially important today. Due to the Mandanas-Garcia ruling, local government entities (LGUs) get a 55 percent increase in their share of the tax breakdown. They can now use part of this to multiply their help by mobilizing contributions from the private sector.

When the LGUs took over responsibility for agricultural development from the Ministry of Agriculture (DA), they did not get the corresponding resources. They also did not get the necessary capacity building for local agricultural planning and implementation. When they took over the agricultural extension function from DA, this service was therefore degraded. Hopefully the DA management does not let this happen again. Instead, it can identify good models for replication of LGUs with private sector mobilization. Innovative trading system

Last August 10, at the weekly Tuesday forum of the Management Association of the Philippines – Agribusiness and Countryside Development (MAP-ABCD) Foundation, an example of this contribution from the private sector, with state support in the beginning, was discussed by general manager Gilbert Rumila from Nueva Vizcaya Agricultural Terminal Inc. The project started in 2015 with the government having a 28 percent stake in the investment. In June this year, it was already down to 16 percent. During these six years, the government added only P6 million, while the private sector added P91.5 million. The government increased its share by 6 percent, but individuals and cooperatives increased their shares by 210 percent and 160 percent, respectively.

Nueva Vizcaya Agricultural Terminal Inc. is a 6.7-hectare facility that provides marketing channels for agricultural products and services in Nueva Vizcaya and adjacent provinces. Because in the past there was no formal trading system, problems included, the same problems many provinces face today. Examples are limited stalls for trade, high losses after agriculture, farmers and traders and lack of reliable price information system.

The private sector needed government action to begin solving this perennial problem. Then Governor Rodolfo Agbayani set aside P20 million for this initiative, mainly used for a feasibility study. When the study showed promise, the partnership with the private sector began. The private sector quickly took over the major role in implementing the solution. This is very different from many shopping malls where the government takes responsibility and mistakes occur. If you want to know more about this project, please call GM Rumila (0917-3092445)

The MAP-ABCD forum, where 12,000 interested parties email weekly about effective technologies and good practice, continues the vision catalyzed by its late chair, Ramon Ilusorio. Supported by CEO Bernadette Yap, this vision is to be “a functioning source of information with a management perspective to contribute to agriculture and rural development against poverty reduction.” Among the members are former Prime Minister Cesar Virata and former Secretary of Agriculture Senen Bacani.

Already now there is a follow-up to look at replication of this trading system model in other parts of the country. New forum participants Jim Cano, agritech director of 8Layer Technologies and Jade Tulio, market information officer at Aramco, meet Rumilo and a governor to pursue the MAP-ABCD vision.

This follow-up action reflects the change in leadership from the older to the younger generation. While the former MAP-ABCD board was composed of managers over the age of 60, the current board has 40 percent of its members under the age of 36. It is this emphasis that young people now take responsibility for helping to copy little used effective technologies and practices with their more creative and innovative strategies.

The government’s efforts to catalyze the private sector’s agricultural contribution are what we desperately need today. DA may also consider setting up a special group of young professionals whose sole responsibility is to look for technologies and good practices that can be replicated. This may be an important direction to take into account the recent verdict of Mandanas-Garcia.

The author is chairman of Agriwatch, former secretary of presidential programs and projects and former deputy secretary of DA and DTI. Contact is [email protected]
Note: DA contributed P7.5M in each of the intervening years.

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