The government should encourage agribusiness venture arrangements (AVAs) and sugarcane block farming (SBF) to boost agrarian reform beneficiaries’ (ARBs) productivity and income, a recent Philippine Institute for Development Studies (PIDS) study said.
According to the study, AVAs and SBF can be successful and profitable if the government supports these beneficiaries in their operations, from production to marketing.
The government must provide a policy environment for export crops to be competitive, it said, adding that ARBs’ problems need to be resolved to strengthen AVAs and SBF.
“Initially, there should be capital to ensure that appropriate production inputs are applied at the right amount and time. Land., which is a factor [in]production, is also necessary, [as is]security of tenure,” the study’s authors said.
“No investor will enter into an agreement if the farmer or cooperative does not have a firm hold over the rights to the land,” they added.
Labor, farm machinery, irrigation, and post-production and processing facilities should also be available, the authors said.
They emphasized credit provision, saying that, unless capital is provided, farmers would always be tempted to sign a lease agreement without thinking of the consequences.
“Financial assistance is needed by the farmer to ensure that recommended inputs are applied. If the government cannot provide the needed capital, it should look into the possibility of providing subsidized inputs to farmers or cooperatives,” the study said.
Although cooperatives are generating income, the study said some still need strengthening in order to manage them properly.
The Department of Agrarian Reform (DAR), it added, needs to ask assistance from the Cooperative Development Authority and other service providers to strengthen the managerial, financial and marketing abilities of cooperative officers and staff.
Trainings on crafting project proposals, as well as feasibility and market studies, can be held for them, the authors suggested.
Since banana, pineapple, and sugarcane are export crops, the government does not have control over their prices, but it can offer policy support, like pushing for lower tariffs for banana and pineapple, to benefit farmers.
For SBF to prosper, the authors said DAR must sustain the support services extended to ARBs. They recommended a quota on corn syrup after 2018 to ensure that local demand for sugar would increase.
It is necessary to create a new government entity to address the needs of the banana and pineapple industries, the study said.
“It may be more practical and feasible for the Department of Agriculture (DA) or the Department of Trade and Industry (DTI) to create a section within its organization that will look into the concerns of the two industries,” it added.
