Leveling up the country's agricultural value chain

It is common knowledge that the agricultural value chain in the Philippines needs to be leveled up given the high post-harvest losses across a big number of crops grown locally.

Such was affirmed in an Asian Development Bank (ADB) report released in June 2022 titled "Analysis of Fruit and Vegetable Value Chains in the Philippines." The partner for the ADB report was the Southeast Asian Regional Center for Graduate Study and Research in Agriculture, an institution with in-depth knowledge on various issues affecting Philippine agriculture.

Although the report covered tomato, onions and mango, it can give us an overview of the various value chain issues in the agriculture sector.

For this column, I will go straight to the recommended course of action as these also give an overview of the challenges the country's agricultural value chain and the sector as a whole faces.

For the short-term recommendations, or for six to 12 months, the ADB report recommended the following, and let me quote most of them: address input supply issues; provide training of producers in good agricultural practices (GAP), better harvesting technique and improved post-harvest and processing technologies/practices; promote mechanization and irrigation to reduce labor costs and product handling; make plastic crates available to producers; promote community-based post-harvest and processing facilities; and increase access to credit and crop insurance.

Good inputs and practices

For addressing input supply issues, the recommendation is to get more involvement from the private sector in the distribution of certified disease-free seeds and seedlings. Hence, the Department of Agriculture (DA) and local government units (LGUs) explore private-public partnerships for producing and distributing quality seeds to organized farmers and clustered production areas.

I also recommend that research institutions, especially those from government, and state colleges and universities, accelerate and contribute to the development of quality seeds for Filipino farmers.

The ADB report also recommended providing technical and financial assistance for the production of organic solutions for controlling pests and growing crops.

For training of producers in GAP, post-harvest and processing, the report recommended that farmers also be trained in use of inputs, proper cultural management practices, and improved post-harvest and processing technologies/practices.

GAP can also help lower post-harvest losses, with the ADB report citing that GAP lowered such losses of mangoes shipped from Guimaras to Manila to only 11 percent. On the other hand, mangoes shipped from Iloilo to Manila recorded three times more post-harvest losses to 33.89 percent.

For promoting mechanization and irrigation, this is a no-brainer and does not need rocket scientists to comprehend. Mechanization has been actively promoted from the Duterte administration and has been sustained during the watch of President Ferdinand Marcos Jr. as Agriculture secretary.

Mechanization can reduce labor costs, which makes up more than half of the production costs of most farms, according to the ADB report.

"Efforts could reduce these costs by increasing access to mechanization for land preparation, irrigation for watering (SWIP or drip irrigation), and streamlined harvesting and sorting procedures to minimize rough handling of harvested product which increases the incidence of post-harvest losses," the report said. SWIP are small water impounding systems.

Making plastic crates available to producers was described by the ADB report as "one of the simplest and quickest ways to reduce post-harvest losses," and I wholeheartedly agree. From what I have observed, the use of plastic bags and baskets made from Indigenous materials makes fruits and vegetables prone to high post-harvest losses.

The ADB report particularly cited post-harvest losses as high as 24 percent particularly for tomatoes shipped to Manila from Northern Mindanao, 45 percent for red onions shipped to Divisoria from Bongabon, Nueva Ecija, and, again, mangoes shipped from Iloilo to Manila logged post-harvest losses of 33.89 percent.

Community-level engagement and crop insurance

For promoting community-based post-harvest and processing facilities, the report said that this should include drying facilities for onion, hot water treatment for mango and semi-processing machines for tomato.

As for increasing access to credit and crop insurance, it was recommended that Agricultural Credit and Policy Council set the strategies to enable and encourage more farmers to avail of crop insurance from the Philippine Crop Insurance Corp. (PCIC). The ADB report also recommended that PCIC work with LGUs to forge partnerships with cooperative banks, rural banks and partner cooperatives. Furthermore, PCIC sustains its orientation of farmers on crop insurance programs and how they can benefit from it.

For the second part of this column-series, I will discuss the medium- to long-term recommendations, or for one year and beyond, of the ADB report. These recommendations, and let me quote some of them, are: strengthening extension services through the Province-led Agriculture and Fisheries Extension Systems, a program that was kicked off during my watch at the DA; and strengthening market development services that should be a multi-agency effort.

Also recommended is supporting investments for climate-smart infrastructure development including post-harvest, processing and marketing facilities.