Agriculture, big business and inclusive growth

By Ernesto M. Ordoñez


Last July 3, the Alyansa Agriculture received an invitation to meet the Secretaries of the Economic Development Cluster. The objective was to discuss issues and proposed measures for the next three years of the Aquino administration. This was a followup to the June 19 letter to the President signed by 13 organizations, mostly representing big businesses. Alyansa Agriculture, which represented small agribusiness, farmers and fisherfolk was included. This was a breakthrough.

Big business uniting with small agriculture stakeholders is certainly a welcome development. If we are to achieve inclusive growth, big business and agriculture must be united with a common vision. Among the business groups that signed with the Alyansa Agrikultura were the Philippine Chamber of Commerce and Industry, the Management Association of the Philippines, the Makati Business Club, Philexport, Financial Executives of the Philippines (FINEX), and Foreign Chambers of Commerce and Industry.

In this joint effort, the Alyansa championed the creation of a public-private sector oversight body that would monitor and help the Bureau of Customs in its fight against smuggling. It submitted data on the underreporting of imports that had gone from $3.69 billion (or 8 percent of the exports to the Philippines reported by the top 25 exporting countries) in 2004 to $23.5 billion (or 30 percent of the exports reported) in 2011.

The Alyansa argued that both the quantity and percentage increases of underreporting were alarming. If inclusive growth is to be achieved, jobs should be increased. However, smuggling not only causes job losses; it also discourages the investments needed to create new jobs.

Another Alyansa recommendation that was unanimously approved by the big business groups was the automatic transmittal of the Inward Foreign Manifest (IFM) by the Bureau of Customs to the Department of Agriculture (DA) and the Department of Trade and Industry (DTI). This was successfully done in 2009, but was discontinued the same year. Guess why?

The IFM is the single most important document to combat smuggling. It lists the importer, the product, and the country source two days before the ship arrives. The DTI and DA officials can compare the IFM information with their own watchlists and import permits. Questionable goods can then be investigated even prior to leaving the ports of entry.

The underlying theme of the June 19 letter to the President was to focus on issues that contribute to inclusive growth. From the listing of the 13 signatory-organizations, Alyansa Agrikultura which represents small agri-business, farmers, and fisherfolk was cited as a good source of inclusive growth recommendations.

Each organization presented its Top 10 issues which were submitted as appendices in the June 19 letter to the President. The Alyansa list, in order of priority, is quoted below:

1) Anti-smuggling: Public-Private Oversight Anti-smuggling Body; Inward Forward Manifest automatically transmitted to DA and DTI

2) Access to Credit: Loans with accessible terms; Special Fund for small farmers and fisherfolk

3) Agriculture Sub-sector Roadmaps: Done comprehensively with the private sector

4) Municipal Fisherfolk Registry: Implemented on a nation-wide basis with presidential support

5) Incentives for Agriculture: State domestic support for agriculture, similar to that given in Asean countries like Thailand

6) Coco levy: Private-Public Body to oversee levy acquisition, management and distribution; used for income increases such as cacao inter-cropping

7) Agriculture Potential and Infrastructure: Agriculture Investment Promotion; Public-Private Investment in Processing Facilities

8) Women Empowerment: Safeguard women rights such as ownership and titles; equal access to support services

9) Land Use: Implement strategic and agricultural fishery development zones (SAFDC); Preserve land for agricultural uses

10) Logistics: State support for logistics, such as transportation mechanisms

It is understandable that the Alyansa list is not the same as that of big business. This is because the other organizations listed the advocacies most relevant to them. At the same time, none objected to the Alyansa list.

This is a sign that big business and small agricultural stakeholders are now uniting to pursue inclusive growth. The fact that the Secretaries of the Economic Development Cluster wish to discuss the issues identified jointly by these groups last June 19 further indicates government support for this private sector initiative.

We recommend that this kind of public-private partnership (PPP) be fully harnessed so we can achieve the elusive goal of inclusive growth.

(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, e-mail or telefax 8522112.) Business Inquirer


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