Agri & connectivity, a lingering challenge
WHILE Mindanao is a major source of agricultural products in the country it continues to face lots of challenges.
One of the obvious issues the sector continues to face is connectivity, which is a long standing issue that, despite the government's efforts, is still a challenge up until today.
In the recently released Philippines Mindanao Jobs Report: A Strategy of Mindanao Regional Development, a World Bank Study, it reported that the limited connectivity in Mindanao has constrained its agriculture sector.
"Farmers are disconnected or misconnected with technical service providers, agro-enterprsises, markets, and consumers, a problem that has multiple consequences," the reported said.
The report stated that In 2010, 26 percent of rural barangays in Mindanao, 45 percent in the Autonomous Region of Muslim Mindanao (Armm), were not connected to a national road. Meanwhile, some 22,491 meters of bridges in Mindanao need to be rehabilitated.
"Poor village roads in Mindanao lead to higher transportation costs and losses of up to 2.5 times more than if the roads were in good condition," the report said.
Farmers with bad connectivity will experience reduced terms of trade (higher input costs and lower produce prices); reduced marketing options and less bargaining power; reduced incentives to invest in higher on-farm productivity; minimal scope to diversify into higher-value perishable products; and dilled incentives for producing higher quality products and frequent rejection.
Agribusinesses, meanwhile, will experience higher aggregate cost for produce; higher physical and product quality losses; difficulties in realizing scale benefits and utilizing processing capacity; inability to service national markets; and reduced export competitiveness and profitability.
Lastly, the impact of limited connectivity to consumers are higher food prices for both staples and non-staples; reduced scope for dietary diversity and improved nutrition; and increased exposure to food secure safety risks.
"Many roads are in bad condition or congested, with the result that agricultural produce is often rejected, especially perishable commodities like bananas and other fruits and vegetables," the report said.
The report noted that there is a continued demand for more and better farm to market roads (FMR).
"This has been confirmed by preliminary impact assessments from the Philippine Rural Development Program (PRDP), which show robust direct benefits to farmers," the report said.
Among these benefits include reduced travel time and costs, greater trader competition, higher farm gate prices and farm incomes, expanded agricultural services, and easier access for farmers to health and educational services.
"Spending more to close the FMR gap, together with adequate operations and maintenance funding, could help increase farmer incentives and profitability, which in turn could increase crop yields, diversification of crops and livestock, and farm incomes," the report said.
At present, through the PRDP, FMRs are being constucted throughout Mindanao, allowing better and improved access for farmers.
Currently, there are 62 FMR projects in Mindanao, some of which includes a bridge, amounting to P21.78 billion.
However, according to the study, improving the connectivity of the farmers goes beyond the construction of FMRs.
Improving the connectivity of the farmers also means improving port services, domestic shipping, and cabotage. To put it simply, the study shows that improving the connectivity of the farmers also means improving the logistics system of the country.
"An efficient logistics system is essential if Mindanao’s potential to become a global supplier of basic and value-added produce is to be unleashed," the report said.
The report said ensuring a seamless logistics network from farm to markets will entail connecting farms to towns by investing in village roads; connecting towns to ports by investing in major roads; promoting competition in the domestic shipping industry; liberalizing cabotage; modernizing the major ports; and streamlining export and import procedures.
"Because the logistics chain is only as good as its weakest link, partial reforms will not lead to lower prices and better service. For instance, reforming domestic shipping and cabotage without modernizing ports and improving the roads will not lower shipping cost; shipping lines will not upgrade to larger ships to increase scale if cargos movement will still be delayed on the road and at the port," the report said.