MARKET DEVELOPMENT
Brighter Prospects for Agriculture
Brighter Prospects for Agriculture
(Second of two parts - 19/06/2014 & 25/06/2014)
25/06/2014 (Tempo) - Senator Manny B. VillarWe continue to court foreign investors to do business in the Philippines. To date, we are still trying to catch up with our neighbors when it comes to the amount of foreign direct investments coming our way.
Based on information I have been gathering from media reports as well as government publications, I believe agriculture is one area with a great potential to attract foreign capital. It is also the kind of investment that is beyond the capacity of local investors.
The good news is that investors, both foreign and domestic, including governments, are interested in undertaking agricultural projects. These are big-ticket projects that will generate high-quality jobs with decent salaries. These are what Filipinos in the rural areas need to climb out of the poverty pit.
Developing and making the agriculture sector competitive has also become an urgent necessity for us. First, with the lowering or elimination of import tariffs under the ASEAN (Association of Southeast Asian Nations) free trade regime beginning next year, we will be flooded with products from our neighbors unless we are able to produce them at prices and quantities at par with other ASEAN members. Second, the scale insect infestation that has destroyed thousands of coconut trees has made it necessary to develop new areas to plant coconut so as not to affect production.
This is the time for the Philippines to undertake an agricultural renaissance, with help from the private sector. We are an agricultural country, so it is proper that we develop agriculture as a major industry.
The World Bank estimates (as of 2000) agricultural lands in the Philippines at 111,840 square kilometers, or 37.5 percent of the country’s total land area of 298,170 square kilometers. Other estimates place agricultural land at as high as 47 percent of total land area.
In 2011, this paper published a report about the South Korean government’s interest in funding the development of idle lands in the Philippines. The Department of Trade and Industry said the project, which would initially cover 3,000 hectares of idle lands (out of the estimated 100,000 hectares of idle government agricultural lands) in the provinces of Isabela, Quirino, Aurora, and Misamis Oriental for corn and other crops, would be coursed through Korea International Cooperation Agency.
The South Korean government wanted to use the project as a showcase to encourage Korean companies to tie up with Filipinos in agricultural projects.
I have not heard any update on the proposal, but I hope the government is aggressively pursuing it. If the 3,000 hectares were developed as a sugar plantation, the estimated capital requirement would be P270 million.
Another investor that has been pursuing agricultural projects in the Philippines is the First Pacific Group, headquartered in Hong Kong but owned by Indonesians. PT Indofood Sukses Makmur Tbk, the food business of First Pacific, owns about 268,725 hectares of oil palm, rubber, sugar cane, cocoa, and tea plantations in Indonesia.
In the Philippines, First Pacific has acquired a 34 percent stake in publicly listed Roxas Holdings, Inc., which is engaged in sugar production.
In 2012, First Pacific and hybrid rice seed grower SL Agritech Corp. engaged in talks for a partnership on large-scale rice farming in which First Pacific would provide the tracts of land while SL Agritech would provide the rice seeds.
First Pacific is also looking at developing 30,000 hectares of land in Davao Oriental for oil palm production. This coincides with Environment and Natural Resources Secretary Ramon Paje’s proposal to utilize eight million hectares of idle or denuded lands for agricultural projects.
Even the Ayala conglomerate, for a long time known for its banking, real estate, and telecom businesses, has expressed interest in going into agriculture.
The agriculture department said in news reports that the Makati-based conglomerate was interested in investing in agriculture in the areas that were affected by super-typhoon Yolanda.
In sum, there is no dearth of investor interest in leading the renaissance of agriculture. There is also no limit to making agriculture a growth driver for the economy.
More importantly, we now have an opportunity to eliminate poverty, which has for so long impoverished more than a quarter of our population.
Let us all act now, or we risk losing the opportunity forever.
(For comments/feedback email to: mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph)
25/06/2014 (Tempo) - Senator Manny B. VillarWe continue to court foreign investors to do business in the Philippines. To date, we are still trying to catch up with our neighbors when it comes to the amount of foreign direct investments coming our way.
Based on information I have been gathering from media reports as well as government publications, I believe agriculture is one area with a great potential to attract foreign capital. It is also the kind of investment that is beyond the capacity of local investors.
The good news is that investors, both foreign and domestic, including governments, are interested in undertaking agricultural projects. These are big-ticket projects that will generate high-quality jobs with decent salaries. These are what Filipinos in the rural areas need to climb out of the poverty pit.
Developing and making the agriculture sector competitive has also become an urgent necessity for us. First, with the lowering or elimination of import tariffs under the ASEAN (Association of Southeast Asian Nations) free trade regime beginning next year, we will be flooded with products from our neighbors unless we are able to produce them at prices and quantities at par with other ASEAN members. Second, the scale insect infestation that has destroyed thousands of coconut trees has made it necessary to develop new areas to plant coconut so as not to affect production.
This is the time for the Philippines to undertake an agricultural renaissance, with help from the private sector. We are an agricultural country, so it is proper that we develop agriculture as a major industry.
The World Bank estimates (as of 2000) agricultural lands in the Philippines at 111,840 square kilometers, or 37.5 percent of the country’s total land area of 298,170 square kilometers. Other estimates place agricultural land at as high as 47 percent of total land area.
In 2011, this paper published a report about the South Korean government’s interest in funding the development of idle lands in the Philippines. The Department of Trade and Industry said the project, which would initially cover 3,000 hectares of idle lands (out of the estimated 100,000 hectares of idle government agricultural lands) in the provinces of Isabela, Quirino, Aurora, and Misamis Oriental for corn and other crops, would be coursed through Korea International Cooperation Agency.
The South Korean government wanted to use the project as a showcase to encourage Korean companies to tie up with Filipinos in agricultural projects.
I have not heard any update on the proposal, but I hope the government is aggressively pursuing it. If the 3,000 hectares were developed as a sugar plantation, the estimated capital requirement would be P270 million.
Another investor that has been pursuing agricultural projects in the Philippines is the First Pacific Group, headquartered in Hong Kong but owned by Indonesians. PT Indofood Sukses Makmur Tbk, the food business of First Pacific, owns about 268,725 hectares of oil palm, rubber, sugar cane, cocoa, and tea plantations in Indonesia.
In the Philippines, First Pacific has acquired a 34 percent stake in publicly listed Roxas Holdings, Inc., which is engaged in sugar production.
In 2012, First Pacific and hybrid rice seed grower SL Agritech Corp. engaged in talks for a partnership on large-scale rice farming in which First Pacific would provide the tracts of land while SL Agritech would provide the rice seeds.
First Pacific is also looking at developing 30,000 hectares of land in Davao Oriental for oil palm production. This coincides with Environment and Natural Resources Secretary Ramon Paje’s proposal to utilize eight million hectares of idle or denuded lands for agricultural projects.
Even the Ayala conglomerate, for a long time known for its banking, real estate, and telecom businesses, has expressed interest in going into agriculture.
The agriculture department said in news reports that the Makati-based conglomerate was interested in investing in agriculture in the areas that were affected by super-typhoon Yolanda.
In sum, there is no dearth of investor interest in leading the renaissance of agriculture. There is also no limit to making agriculture a growth driver for the economy.
More importantly, we now have an opportunity to eliminate poverty, which has for so long impoverished more than a quarter of our population.
Let us all act now, or we risk losing the opportunity forever.
(For comments/feedback email to: mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph)