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A Reaction to Boo Chanco’s “Left Behind in ASEAN”

In Boo Chanco’s “Left Behind in ASEAN”, he argues that the Philippines lags behind its ASEAN neighbors in growth and development, urging a shift in priorities and policies to achieve greater economic competitiveness. His points resonate within Philippine agriculture, a sector in need of both modernization and a redefined focus. While Chanco’s article doesn’t target agriculture specifically, his observations on inefficiency and underutilization of resources apply readily to the challenges faced by Philippine farming today. Agriculture should be seen not only as a tradition or a cultural legacy but also as a dynamic economic enterprise, capable of driving profitability and attracting investment. This shift in perspective is essential for the sector’s long-term viability and alignment with the competitive pace of other ASEAN economies.

One of the primary challenges in Philippine agriculture is the absence of entrepreneurial focus. Agricultural management is traditionally dominated by agriculturists, who emphasize cultivation and yield over economic sustainability and financial growth. While cultivating crops effectively is fundamental, it’s equally crucial to consider agriculture through a business lens, focusing on profitability, risk management, and scalability. To ensure that agriculture remains viable across generations, it must attract ongoing interest from new entrants who see it as both a meaningful pursuit and a profitable venture. Currently, the reliance on a love of farming alone limits the sector, as it fails to attract the entrepreneurial mindset needed to bring about industry-wide innovation.

In addition to a lack of entrepreneurial orientation, Philippine agriculture suffers from underdeveloped financial risk management tools, particularly crop insurance. Without adequate insurance, farmers are left vulnerable to crop failure from pests, diseases, and extreme weather, which are becoming more frequent with climate change. A robust crop insurance program could provide farmers with a safety net, ensuring that losses are not catastrophic and encouraging them to take calculated risks that could lead to greater profitability. Currently, crop insurance is still in its infancy, leaving a significant gap in the agricultural safety net that many other ASEAN countries have already addressed.

Moreover, there is a general lack of knowledge and training in finance within the agricultural sector. Farmers, while adept at managing the technical aspects of cultivation, often lack access to training in financial management, such as budgeting, investment, and credit use. Improved financial literacy would empower farmers to manage their resources more effectively, scale their operations responsibly, and invest in tools and technologies that can increase productivity. This knowledge is crucial for transforming smallholder farmers into entrepreneurs who can make sound business decisions, sustain operations, and even expand their markets.

Another barrier to economic stability in Philippine agriculture is the absence of a pricing system akin to futures markets or indices for crops, similar to those used in global fuel and commodity markets. Such systems provide a pricing basis that helps stabilize costs, manage risks, and offer a measure of predictability. In countries where agricultural futures markets are well-developed, farmers and traders alike can make informed decisions, hedging against price fluctuations and ensuring a fair market price. Introducing a similar framework in the Philippines would give farmers a more reliable income and reduce the risk of price crashes. It would also provide traders with greater confidence, which in turn would support a more dynamic agricultural economy.

Corruption also presents a formidable obstacle to growth in agriculture, affecting the efficient allocation of resources and the implementation of policies that could benefit farmers. From allocation of subsidies to distribution of resources, corruption diverts funds and support away from those who need it most. For agriculture to thrive, resources must be allocated transparently and based on real needs. Efforts to curtail corruption can ensure that investments in agriculture truly reach the farmers and contribute to sector-wide improvements.

Efficient land use is another critical factor that affects the competitiveness of Philippine agriculture. With land increasingly in demand for urban development, the agricultural sector must prioritize optimizing the use of available farmland. This might include implementing high-yield, space-efficient techniques, such as hydroponics and vertical farming, which allow for greater productivity on smaller plots of land. In densely populated areas or those with limited arable land, efficient land use can mean the difference between stagnation and thriving agricultural productivity. Land management practices that prioritize high output per square meter could help address some of the food security concerns and drive economic viability within farming communities.

Finally, there is a persistent misconception about the role of traders in the agricultural value chain. Often seen as taking profits away from farmers, traders actually play an essential role by assuming risk and connecting farmers to markets. Traders invest in the transport, storage, and distribution of goods, bearing the financial risk in volatile markets. Rather than viewing traders as adversaries, the agricultural sector could benefit from recognizing them as partners who facilitate market access and ensure that farmers can reach a broader consumer base without bearing the full burden of market risk. Embracing traders as part of the solution rather than the problem could lead to a more cooperative approach, one where both farmers and traders work together to achieve mutual profitability and stability.

In the broader economic context, modernizing agriculture is an imperative if the Philippines is to keep pace with its ASEAN counterparts. Implementing changes in agricultural policy to address these issues—fostering entrepreneurship, expanding crop insurance, providing financial education, introducing futures pricing, fighting corruption, optimizing land use, and fostering positive relationships with traders—could catalyze the growth and profitability that are essential for long-term resilience. By addressing these areas, Philippine agriculture could align itself with the efficient, sustainable practices that Chanco argues are necessary for the country to thrive within the ASEAN region. This modern approach would not only attract new generations of farmers but would also build a competitive, resilient agricultural sector capable of contributing substantially to the national economy.

Boo Chanco’s insights into the need for broader economic reform underscore the importance of viewing agriculture as a dynamic sector that requires innovative solutions and structural reform. Moving forward, the Philippines has a unique opportunity to leverage agricultural modernization as a cornerstone of economic development, building a sector that aligns with the resilience and efficiency seen in its ASEAN neighbors.

For further insights into Boo Chanco’s views on national development, his full article “Left Behind in ASEAN” can be accessed here.

Author

Picture of Christopher Tuason

Christopher Tuason

Christopher Tuason is the Chief Operating Officer of NutriHydro, bringing extensive experience from his previous roles as a trader in fuel supply companies across Singapore and the Middle East. With a robust business background, Christopher now channels his expertise into advancing NutriHydro’s mission of empowering the next generation of Filipino growers. He actively supports NutriHydro's commitment to innovation and sustainability, ensuring that the company remains at the forefront of hydroponics and sustainable farming solutions in the Philippines. NutriHydro provides new and seasoned growers with high-quality resources, technical assistance, and crop protection, driving a new wave of resilient, profitable, and environmentally responsible agriculture across the nation.
Picture of Christopher Tuason

Christopher Tuason

Christopher Tuason is the Chief Operating Officer of NutriHydro, bringing extensive experience from his previous roles as a trader in fuel supply companies across Singapore and the Middle East. With a robust business background, Christopher now channels his expertise into advancing NutriHydro’s mission of empowering the next generation of Filipino growers. He actively supports NutriHydro's commitment to innovation and sustainability, ensuring that the company remains at the forefront of hydroponics and sustainable farming solutions in the Philippines. NutriHydro provides new and seasoned growers with high-quality resources, technical assistance, and crop protection, driving a new wave of resilient, profitable, and environmentally responsible agriculture across the nation.

NutriHydro is a manufacturer of plant nutrients based in the Philippines. They are known to grow the healthiest, heaviest, and largest lettuce in the country. NutriHydro products are available to purchase from the following e-commerce platforms.

Lazada: bit.ly/3asMYXN
Shopee: bit.ly/3nRJX6Z
Basilyard: bit.ly/346Kklw
NutriHdyro Website: bit.ly/434MoY6

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