International Fund for Agricultural Development (IFAD), together with Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), will put in millions of funds in order to assist small Filipino farmers raise their exports as well as deal with the huge trade imbalance between the Philippines and other rich countries.
A statement showed that a $2.5-million IFAD-funded project is now looking at ways for small farmers to help raise exports so as to cut Philippines' and ASEAN's heavy import dependence that just benefits rich countries like Australia and Japan.
Called Agricultural Transformation & Market Integration (ATMI), this project is being implemented by SEARCA and IFAD to effectively integrate small farmers into the larger ASEAN market.
In an ATMI inception program hosted by SEARCA, the Philippines Statistics Authority (PSA) showed that the Philippines imports agricultural goods substantially from Australia, United States, Europe, and ASEAN more than it exports.
This creates more favor for farmers abroad as Philippines imported $555 million worth of goods from Australia but exported only $69 million in 2016, creating a negative balance of trade of $486 million.
From the US, it imported in 2016 $2.54 billion worth of goods as against export of only $1.334 billion with negative Balance of Trade (BOT) of $1.208 billion.
Even from ASEAN, it imported $3.837 billion and exported only $525 million in 2016. From the rest of the world, Philippines imported $4.036 million worth of farm goods, exporting only $1.684 billion.
Despite this grim situation, there appears to be an opportunity for Philippines' farm export growth.
Coconut oil export grew from $1.129 billion in 2015 to $1.152 million in 2016, while export of pineapple and its products expanded from $574 million in 2015 to $711 million in 2016. Export of fresh bananas also rose from $658 million in 2015 to $730 million in 2016.
"The aim of ATMI is to encourage ASEAN nations to commonly address problems that hinder development," SEARCA said.
A. Kishore of International Food Policy Research Institute (IFPRI), an ATMI implementor, said this will be done through improved policies, such as attractive investment policies.
"(ATMI will enhance) cooperation among ASEAN states for food security and agricultural development through preparation of strategic programs in the areas of R&D, food safety and investment in food and agri-based industries," said Kishore.
Kevin Chen, IFPRI senior research fellow, said the simultaneous development of industries sector (processing), services (logistics, marketing) are also needed in transforming agriculture.
"Value chain development of the ‘post farmgate' segment has been a dual revolution," Chen said.
It means there is great progress in farming when small farmers are able to upgrade into processing, transporting and marketing their raw, fresh farm produce.
Moving forward, ATMI will identify value chains of agricultural goods and identify how farmers' competitiveness can be raises.
For instance, small farmers should be helped in credit in order to invest in trucks that will enable him to transport his own goods and raise his margin.
Very important, transformation needs government's policy reforms in order to improve small farmers' plight.
Land distribution for instance enables farmers to have the incentive to maximize farm production and buy or lease additional land areas.
