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It is quite rare for a powerful man to seek the counsel of others. After all, he didn’t get to his position by sheer chance. He was deemed worthy of the post, by mandate of those who appointed him with the task, or those who trust that he can do the job.
These are the thoughts that come to mind whenever I do work for the Private Sector Advisory Council, the counseling body formed by President Ferdinand Marcos Jr. to advise on matters of priority, namely jobs, healthcare, basic infrastructure, agriculture, tourism and digitalization. It comprises men and women who head the country’s largest corporations, and embodies the principles of public-private sector cooperation.
The recruitment of the private sector to advise on matters of government is not a new concept. It is done elsewhere in the world. Working with the private sector is, in my opinion, one of the best ways to make governance more inclusive. By looping in the private sector, policies are given some real-world grounding and make them practicable and sustainable. It is a humble acknowledgment that the government, alone, cannot solve the country’s problems.
Recruiting some of the busiest people in the country to set aside time and resources to come and work with you is not easy. Yet the President and PSAC convenor Sabin Aboitiz were able to do it. I must say, this is one of those extraordinary times I’ve seen these busy men and women – all of them with companies to run, board meetings to attend, families to look after – come together to work hand-in-hand for the government.
Jobs creation is one of the priority areas of the President, and he is correct in making it one of the clusters of the PSAC. But you can only create jobs if there is economic growth. The companies that employ people must themselves do well so they can hire more people. The biggest base we have of “companies” are the MSMEs, which constitute almost all – 99 percent, per DTI data – of enterprises.
Agriculture is one of the biggest sectors where you can find these MSMEs, and their smallest unit are the small farmers – the nanopreneurs – one-man businesses. The moment we scale them up, they will be able to hire more people to help in this labor-intensive industry and reduce poverty in the rural areas. More than that, if our small farmers do well and become agripreneurs, our country can finally realize its potential to become an agricultural powerhouse and raise the sector’s less-than-10 percent contribution to GDP.
The House has already passed House Bill 6336, a measure condoning the existing loans that farmers incurred in owning lands under the CARP. I see this as a positive development. Condoning these loans means the farmers can take the money they would have otherwise used to pay the loans and direct it toward inputs to make their asset (the land) more productive.
That the House recognizes this, is a big deal; but we can still take it a step further so that our agriculture industry can adapt to the times and make these lands even more productive. Productivity can be achieved through scale. We know this as fact in business. And here we have a chance to make these lands productive by consolidating those previously inaccessible to investors and passionate farmers: the lands that were awarded through CLOAs (Certificates of Land Ownership Award).
The private sector is willing to help, but some policies currently in place are limiting. CLOA lands cannot be sold by the farmers, and the banks cannot accept these as collateral. This practically limits farmers’ access to capital, and keeps these lands from being productive by preventing those people with the capital and technology from farming them.
There are so many ways to free up these potentially productive lands. One way is through leasing, with the important provision that the lands remain dedicated to food production. And before this is tagged as a precursor to a land-grab scheme, let me just make it clear that companies are not interested in owning land. Their main goal is profit, and to make profit, you have to be productive. Ask any businessman and they will tell you that the last thing they want is to wade through decades of bureaucratic red tape and manage hundreds of land owners.
Another way to make these lands productive through economies of scale is by allowing farmers, after condonation of the loans, to increase the amount of land they are allowed to own. For a rice farmer to scale up, for example, the opinion among experts is that the farm should be at least 24 hectares: manageable for a cash-rich returning OFW to farm productively as an agripreneur.
Another way is through technology. There already exists technology that will allow farmers to manage their farms even through unpredictable variables like weather disruptions. There is technology that will allow them to compute optimal planting times and application of inputs.
However, these technologies will only make sense if we have contiguous lands and, again, economies of scale. Some solutions may be radical, some simple and obvious, while some have proven successes or fails in other agricultural economies but this is the process by which we arrive at workable, sustainable solutions.
We need to keep our eye on the goal, and that is to alleviate poverty and create jobs by helping our farms achieve productivity through economies of scale. Land consolidation can be through cooperatives or through small farmers being incorporated into the value chain of the larger agri companies. Either way, these lands – long unproductive because of a system that pits farmers against inaccessible capital, lack of mentoring and a roundabout way to market – must be made productive so they can generate jobs and assure our country of food security.