Hubs helping the agri sector thrive

By Bjorn Biel M. Beltran, Special Features Writer

For years, the Philippines’ story was about growth and development. Dubbed as Asia’s next rising tiger, the country’s economic narrative had been breaking expectations with its rapid and continued expansion. Then the pandemic struck. Moving forward, the question on everyone’s minds is how to return to such a state of growth and restart the journey to recovery. According to the World Bank, agriculture could be the key.

“Modernizing the country’s agricultural sector is a very important agenda for the Philippines,” Ndiame Diop, World Bank country director for Brunei, Malaysia, Thailand, and the Philippines, said in a September 2020 report titled “Transforming Philippine Agriculture During COVID-19 and Beyond.”

“With the exception of a few small natural resource-rich countries, no country has successfully transitioned from middle to high-income status without having achieved an effective transformation of their agri-food systems. Transforming agriculture and food systems is always challenging. But the country’s new vision for agriculture, it’s current thrust for diversification and use of modern technologies, and its effective management of food supply during this pandemic clearly indicate that the country is well-equipped to overcome the challenge,” he added.

The report, which was prepared as part of World Bank’s support to the Department of Agriculture’s “new thinking” in agricultural development, goes on to explain how transforming Philippine agriculture into a dynamic, high-growth sector is essential for the country to speed up recovery, poverty reduction and inclusive growth. Modernizing the industry could further lead towards improving the overall resilience, competitiveness, and sustainability of the rural sector.

Agro-industrial zones already exist around the country to take advantage of this opportunity. These zones are accredited by the Philippine Economic Zone Authority (PEZA), and are created to support the agricultural sector and continuously create ways to develop communities through different programs for farmers and crop growers. PEZA awards accreditation to developers of agro-industrial parks and through this, provides several incentives to its locators, such as tax holidays and other exemptions.

Agro-industrial parks are industrial estates that process, warehouse, and manufacture agricultural products for both food and non-food output, with the main function of an enterprise hub for the agricultural industry in a specific location. It stimulates the development of the agricultural industry through the manufacturing of agronomic production to food processing.

Moreover, an agro-industrial park is an excellent opportunity for investors to implement projects on its site using its infrastructure and services.

“Agro-industrial hubs provide several opportunities for the country’s economic and inclusive growth from farmers to businesses. They leverage on the country’s abundance of natural resources, rich land, and raw materials which can differ in several parts of the Philippines. These are primary sources of livelihood for Filipinos,” Ricardo F. Lagdameo, president of Damosa Land, Inc. and Anflo Industrial Estate, said in an e-mail.

“Agro-industrial parks that can provide complete facilities including even a cold storage facility and direct access to a world-class container terminal have the potential to fill in supply chain gaps in the industry. We aim to spur rapid development and economic growth in the countryside through developments such as this,” he added.

Mr. Lagdameo said that modern industrial parks are excellent catalysts for economic development and attract businesses to meet the requirements and demands of several industries, a boon for rural communities that rely on agriculture as their economic output.

For instance, Anflo Industrial Estate provides opportunities for businesses and investors to locate in the heart of the Davao region with ample tools, support facilities and services required for processing and agro-based manufacturing.

Mindanao, it bears noting, is dubbed as the “Food Basket of the Philippines,” largely producing 40% of the country’s food needs and 30% of the national food trade. Agricultural produce from Davao are exported to countries like China, Japan, the Netherlands, and the United States. Locators at the park export products such as banana, coconut, cacao, and rubber and have given vast opportunities for farmers to market their produce.

“The agro-industry is considered one of the top 10 priorities of the Davao Region. Its vast cropland is conducive for various investments in agribusiness and addresses matters on food security in the country while safeguarding sustainable development by providing employment and income generation for its community. Its integration with industrial real estate means opportunities for the local farmer to companies of different industries,” Mr. Lagdameo said.

Agro-industrial hubs’ potential for rural development will further support the government’s push to decentralize Metro Manila and direct investors to the provinces, contributing to the financial inclusion.