THAILAND has been held up as a model for the government’s new domestic-demand focus for agriculture, with its competitive tourist industry helping boost local consumption and lessening dependence on exports, where prices are volatile and delivery requirements are demanding, the head of a university agriculture department said.
University of Asia and the Pacific Center for Food and Agribusiness Executive Director Rolando T. Dy told BusinessWorld in a text message on Friday that the Philippines has to tackle a number of other issues to develop the agriculture sector, among them a mismatch between export policy and the needs of a domestic market.
“The basic problem is [the] supply of competitive raw materials and cost of doing business. Our agriculture is not only less productive, it is also less diversified compared to Thailand, Indonesia and Vietnam,” he added.
While the departments of Trade and Industry and Agriculture have targeted the development of high-value crops, data from the Philippine Statistics Authority showed that the top agricultural export is still coconut oil, which is derived from a low-value crop.
The road map for agribusiness covers the development of bananas, cacao, carrageenan, coconut, coffee, mangoes, palm oil, rubber, and other processed goods such as fruits, meat and shrimp.
The second phase of the road map, which covers 2018 to 2021, is seeking to strengthen the supply chain, commodity clusters and the link between production and manufacturing.
By 2025, the government is expecting to deepen the country’s participation in the global value chain.
Despite enjoying tariff perks for selected fruit exports bound for the European Union and other countries expressing interest in sourcing agricultural products, the Philippines itself needs to import items like palm oil and large garlic bulbs to satisfy domestic demand.
Mr. Dy said that the strategy the government must ensure that “domestic production should be cost, quality and scale competitive” in order to succeed in substitution for imports.
“Coffee and cacao have import-substitution and export markets. The country imports coffee and cacao paste. But we export quality artisan chocolates from Davao. We can export barako coffee but the country is short [on] supply,” he added.
On Feb. 14, Agriculture Undersecretary for policy and planning Segfredo R. Serrano said that the department has been given a directive to focus more on local demand instead of exports as the country continues to achieve food security.
Mr. Serrano also pointed to Thailand as an example to follow, because tourists consume much of its agricultural output.
“The Thais have been doing that for a long time. They’re set on that because they know that the export market is very volatile,” he added.
“If the product that you export is fresh produce, then it’s [more] volatile.” — Anna Gabriela A. Mogato