Time to adopt One-Town-OneProduct (OTOP) approach for farms

There are many causes to our underperforming rural economy. The key structural limitation is our small, fragmented farms and their consequent lack of economies of scale in all stages of the supply chain, from land preparation to culture, postharvest, assembly and transport of produce, processing and marketing.

Sadly the situation is bound to get worse with each passing generation as the farms are equally divided among siblings. And as long as we retain the fivehectare ceiling under agrarian reform.

Apart from declaring victory in agrarian reform and relaxing the fivehectare limit, the obvious solutions are two-fold. First, we must somehow operate our tiny farms into larger management units as cooperatives, irrigators associations, sugar block farms and link them with corporate integrators, exporters, processors, and supermarkets into contract growing schemes.

Second, we must consolidate production in key production areas with the best growing conditions and in order to facilitate delivery of extension services; farmers’ access to technology, inputs and credit, and to moderate logistics costs (assembly, storage, and transport). OTOP Very Successful for SMEs One very successful model for promoting development of small and medium scale enterprises (SMEs) is the One-Village-One-Product movement started by Morihiko Hiramatsu, Ph.D., governor of Oita prefecture in Japan in1979. The self-help movement encouraged communities to selectively produce goods with high-value-added under the very simple but practical slogan of “let’s work together on what we can do in the present situation.” Dr. Hiramatsu received The Ramon Magsaysay award for this novel and inclusive development approach in 1995.

The model has since been adopted by many countries. They came to be known as One Tambon One Product (Thailand), One Village One Treasure (Wuhan, China), and Satu Kampong Satu Produk (Malaysia).

Our Department of Trade and Industry (DTI) under President Gloria M. Arroyo launched over own One-Town-OneProduct program (OTOP) in 2004. It was temporarily dropped by the Department of Budget and Management (DBM) in 2011 but later authorized to be continued by President B.S. Aquino.

The OTOP offers a comprehensive assistance package through a convergence of services from the national government, the local government units, (LGUs) non-government organizations (NGOs) and the private sector.

The assistance package includes business counselling, appropriate technologies, skills and entrepreneurial training, markets, and product design and development. Credit is provided through the SME Unified Lending Opportunities for National for Growth, or SULONG program.

The OTOP approach which is working well for SMEs should work as well for crops, poultry, livestock, agroforestry and fisheries.

It is about time we shift gears and graduate from growing a little of each crop and livestock in the overly romanticized bahay kubo ideal. Better that our small farmers specialize and intensify production for the market in key production areas to attain economies of scale, and facilitate access to technology, inputs and credit, and improve their leverage in the marketplace.

117 OTOP Coffee Towns

This is how it could be done. My favorite example is coffee:

In 2016, our total coffee consumption was equivalent to 208,500 tons of dried coffee berries, of which we produced only 68,800 tons (balance of 67 percent we imported).

The area planted to coffee was only 114,800 hectares. In order to substitute for the imported coffee berries, we need to plant an additional 117,000 hectares, provided we raise the dried coffee berry yield from 600 kilograms per hectare per year to 1,200 kilograms per hectare per year (Vietnam’s yield is 2,000 kilograms per hectare per year).

Although coffee grows practically everywhere except in flooded areas, we should not dissipate our efforts in all 1,489 municipalities and 38 cities to produce our domestic requirements. It will be much more efficient and much more manageable if we focus our coffee development efforts on towns where the local governments have agreed to adopt coffee production as their preferred OTOP enterprise. At 1,000 additional hectares for each town, we need only 117 of such coffee towns.

Ideally the new coffee plantings are integrated with the coconut hybrid replanting program of the Philippine Coconut Authority (PCA), figuratively to shoot two birds with one stone.

Corollarily, we should designate a few of the state universities and colleges (SUCs) to specialize in coffee research and extension. The following regional SUCs come to mind: 1) Benguet State University (BSU) for highland Arabica coffee, 2) Cavite State University (CvSU) for Robusta and Liberica coffee (kapeng barako) in CALABARZON, 3) Visayas State University (VSU) for Robusta coffee in the Visayas, 4) Caraga State University (CSU) for Robusta coffee in CARAGA region, 5) Central Mindanao University (CMU) for Arabica and Robusta in the Bukidnon midlands, and 6) University of Southern Mindanao (USM) for Robusta coffee for the rest of Mindanao.

The regional SUCs will be funded to provide applied research, farmers training and extension support to the designated coffee towns in their respective areas.

Actually, Nestle Philippines on its own had been doing a commendable job of promoting coffee production. Nestle supplies selected high-yielding coffee clones to its farmer cooperators at cost, conducts training for farmers and assures the coffee growers market for the coffee berries based on the prevailing world market price.

Nestle, Robina, Figaro and other coffee processors will be invited to set up buying stations in the designated coffee towns. The private companies on their own initiative will be encouraged to deal directly with the coffee towns to assure themselves of raw materials supply.

***** Dr. Emil Q. Javier is a member of the National Academy of Science and Technology (NAST) and also Chair of the Coalition for Agriculture Modernization in the Philippines (CAMP). For any feedback, email eqjavier@yahoo.com.