Farm clustering deemed crucial in overhaul of high-value crops

By Vonn Andrei E. Villamiel

FARM CLUSTERING and consolidation will be needed to achieve economies of scale in high-value crops, which are being reorganized by the Department of Agriculture (DA), former officials said.

Former Agriculture Secretary William D. Dar said the  fragmentation of farms continues to limit productivity and competitiveness.

“We have a problem of small land holdings, hence there are no economies of scale. We need to enhance farmer clustering and boost productivity to have sufficient volume and quality products,” he told BusinessWorld via Viber.

“Those crops or value-added products for export must be scaled up in areas where we can optimize production. We can have mango districts, cacao districts, and others,” he added.

Former Agriculture Undersecretary Fermin D. Adriano said farm consolidation is also key to strengthening supply chains and supporting rural enterprises.

“The major obstacles to the development of micro, small and medium enterprises (MSMEs) are the inadequate supply and poor quality of raw materials. For these to be addressed, farm consolidation is needed to attain scale economies,” he told BusinessWorld via Viber.

The DA is currently promoting consolidation through its Farm and Fisheries Clustering and Consolidation (F2C2) Program, which organizes small-scale farmers and fisherfolk into clusters to help them improve bargaining power and expand market access.

Mr. Adriano added that greater investment in research and development is needed to improve crop varieties. He said the sector will benefit from upgraded processing and packaging, and stronger product marketing to boost competitiveness.

The DA has announced that it is reorganizing its high-value crops program by establishing three offices specializing in exportable items, coffee, and commodities for domestic consumption.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. said the reorganization will help boost farm exports, while helping address consumer prices for high-value crops sold domestically.

He added that the reorganization will allow the DA to adopt a more targeted and commodity-specific approach.

“We concentrate heavily on rice, sugar, corn, and coconut. But high-value crops were too broad and all under one roof. What we did was create more focus on individual sets of commodities,” he said.