"I can think of at least three good reasons."
"I can think of at least three good reasons."
One of the most important changes that have taken place in the Philippine economic landscape during the last three decades has been the expansion of the nation’s largest business establishments into sectors of the economy with which they historically had not been associated. To wit, these sectors are real estate development, banking and retailing. Today the business establishments owned by the Sys, the Zobels, the Gokongweis, the Tans and other top-tier families manage schools and hospitals, build highways, generate energy and operate facilities that provide high-technology products and services.
But there is one sector of the economy that has yet to feel the beneficent touch of Big Business.
Through all the crises of Philippine agriculture, and despite its chronic underperformance, the big bosses of Philippine business have shown no inclination to finance farms, crops and plants. Agriculture has had no attraction for them.
This situation is very unfortunate. It has to change because agriculture is the sector of the Philippine economy that provides the people of this country with food and fiber. A state of affairs in which the businessmen of an agriculture country invest their resources in all sectors except agriculture makes no sense.
There are three reasons why this country’s largest business establishments should move into agriculture. The first has to do with financial capability. The second is managerial capability. The third—and arguably the most important—reason is operational discipline.
The business establishments belonging to the groups bearing the names Ayala, Gokongwei, Aboitiz and Metro Pacific can, as a result of their size and successful operation, mobilize large magnitudes of financial resources. With their own capital and funds raised from the investing public, they are able to raise the large amounts of capital needed to launch new enterprises. They do not need legislation to provide the funds that farms require to be able to operate consistently. A good case in point is the entry of Big Business into the once-notoriously-inefficient urban water business. With the infusion of large amounts of money, the Ayala Group’s Manila Water Co. and DMCI group’s Maynilad Co. were able to infuse efficiency—and hence profitability—into Metro Manila’s water industry.
The second reason why this country’s Big Business should get itself involved in agriculture is its managerial capability. With its access to the latest technology and, no less important, its deployment of sound managerial concepts and practices, this country’s conglomerates can raise the level of efficiency of Filipino farms. They can show that farming is just another business operation—albeit one that is more vulnerable to the vagaries of weather—and that with the use of sound managerial practices, farming can be a consistently profitable activity in this country.
The third reason why Big Business—the Tans and the Gotianuns and the Angs—should move into agriculture is their reputation for operational discipline. It can probably be said that the average Filipino farmer is wanting in operational discipline, which leads to inefficiency, which in turn leads to unprofitability. By operating farms—large farms, to be sure—this country’s conglomerates can show Filipino farms what it means to run a farm efficiently. Optimization of resource use and reduction of wastage can be infused into the operations of Philippine farms, no matter how small.
The Rice Tariffication Act that was recently approved embodies a provision for the establishment of a tariffs-derived P10-billion fund for the financial support of this country’s farmers. There is a palpable expectation that with the support that they will be receiving from the fund, Philippine farms will henceforth operate in a financially and technically stable manner. The expectation is weakly founded; the P10-billion fund will of itself not be the game-changer for Philippine agriculture.
I strongly believe that the broad-scale entry of Big Business can be the game-changer. Which is why I urge this country’s conglomerates to consider doing for agriculture what they have done for other sectors of the Philippine economy. Get into farming. Show the Filipino farmer how farming should be.