Wednesday, August 19, 2015

Editorial by Ernesto T. Solidum

Issues And Concern  In Agriculture
There are two economic terms applicable to the deep rooted problem of land ownership namely: Family Size Farm and Economies of Scale. More or less they are related to each other in terms of production efficiency and effectivity.

Family size farm is defined as a minimum cultivated area by which a family of five members can apply scientific farming practices to increase productivity and income on a sustainable basis. During the early 1970’s the economic managers of the Department of Agrarian Reform determined this to be three hectares. Thus this concept was incorporated into the CARP law that landowners’ retention is five hectares while the heirs of legal age are given three hectares each.

Economies of scale is a management technique whereby the cost of production becomes less as more land is cultivated or the number of farm animals is raised. Under this system, machine and other gadgets are used to improve efficiency and increase productivity.

It should be the primordial responsibility of the State to strengthen the welfare and advancement of small farmers as well as plantation and aquaculture projects in order to achieve economies of scale and competitiveness not only in the local but foreign markets. Our sugar, banana and aquaculture industries are best managed by technical and business experts who can plan, operate and maintain high productivity and quality products.

Industrialized countries like Japan, South Korea and Taiwan with their managerial expertise cultivate farms more than 1.5 hectares since the products are insufficient no needs of small farms. Instead, small farms are consolidated to increase area and lease to other active farmers. Those farmers who leased their lands either engage in industries or manufacturing. For instance, Japan with 127.1 million people had only 5.8 million farmers or 4 percent of its population. The US has 320.1 million population but only 2.0 per cent are farmers or 6.4 million. No one can dispute that those countries are able to adequately feed their population and export food surplus.

On the pressing problem of fragmented and stagnating farms in Aklan, the best alternative is land consolidation. Uneconomic size farms of less than three hectares landowners or CLOA title holders must be consolidated to become productive and viable enterprises.

Agribusiness investors need medium size farms to start with like five hectares expanding to 1,500 with interested parties. A case in point is Al-Mujadin Agro Resources and Development (AMARDI), a Malaysian-Filipino consortium engaged in 1,500 hectare banana plantation in Ampatuan, Maguindanao. It employs 1,500 workers who plant and take care of “Halal” or Cavendish bananas for export to the Middle East and Japan.

The computation shows how poverty is routed in the area:

Land rental is P8, 000 per year per hectare.  For three hectares. The annual rental is P24, 000 or  P2,000 per month.

Family members may have option to be employed in the Company equivalent to one member per hectare. Hence, three laborers per family at P300 a day for day 226 days per year, will earn P203, 400 per year or P16, 911.80 per month.

Other fringe benefits are free education for children and hospitalization.      
It should be noted that P7, 890 per month is the minimum income to be earned by a family of five members to adequately feed, clothe and educate its children. Well, the monthly income of P16, 911.80 is more than the family requirement stipulated by National Statistics Coordination Board. This is significant deterrent to insurgency and rising criminality.

Similar arrangements are found in other agribusiness corporations like La Frutera, a banana firm operating 5,000 hectares in Datu Paglas, Maguindanao and Del Monte investing in a $60 million pineapple plantation in Datu Abdullah Sangki in Maguindanao. Del Monte will develop 1,500 hectares and create 8,000 jobs.

Aklans’ geographic location is in the Visayas where typhoons are prevalent and destructive. Hence, strategies are needed to minimize the impact of climate change. Plantation crops suitable are: coffee, cacao, cassava, rubber, palm oil, mango, and coconuts.

Although banana and abaca are indigenous species to Aklan, they are not recommended in view of their susceptibility even to wind velocities of 50 kph.

Dr. Gervase B. Radislao, Veterinarian, Animal Stockfarm and Breeding Center at Tina Makato said that profitable poultry production starts with keeping 1,000 layers since the return on investment could reach up to 25 per cent. Less than this number is a losing proposition or break even. Undoubtedly, this is the working principle of economies of scale.

Our elected officials and leaders of Aklan, must spearhead to promote investments in agriculture. It is welcomed news that DENR is in the process of cadastral survey and titling of agricultural and residential lands. Having said this, suitable farm lands must be consolidated into viable “production blocks” in preparation for agribusiness investments. It should be noted that our agricultural lands constitute 58,905 hectares while fishpond is 9,200 hectares out of the total aggregate area of 181,794.6 hectares. Only 17,120 hectares are planted to rice in which 6, 712 hectares or 39.2 per cent are irrigated.

There is agriculture potential to be modernized in Aklan as farms are reconsolidated and stakeholders given the right incentives. This is a challenge that could only be overcame by political will and commitment. /MP

1 comment:

Blogger said...

eToro is the most recommended forex broker for beginning and full-time traders.