Supply chain management missing
If we do not have comprehensive supply chain management to address our COVID19 crisis, we will experience serious setbacks. This missing element was obvious in the early stages.
Consider what happened. Agriculture Secretary William Dar had gained national approval for allowing farming and fishing activities to continue, as well as the provision of agricultural inputs, packaging, processing, transportation and personnel movement. But the wrong implementation of these measures caused by an inadequate understanding of supply chain management resulted in significant mistakes. For example, a night curfew prevented fishermen from their necessary night fishing, barangay checkpoints stopped food processing personnel from crossing barangays to get to their company pickup points, extremely limited market hours minimized the buying and selling of agriculture produce. This not only decreased the already low incomes, but also ironically caused the crowding that is the opposite of the necessary social distancing. Supply chain spans production ( supply) to use (demand). If there is little demand because of market constraints, then the production is useless because it is not sold and used.
The rules of the lockdown should be interpreted and applied within the context of a clearly understood supply chain. At the municipal level, this is done by the mayors and barangay captains. But for them to do this well, they should be guided by the publicprivate legislated municipal agriculture and fisheries councils, who have largely been ignored in the past.
This past week, an Alyansa Agrikultura leader said in a Zoom meeting: “We have a new normal. When the lockdown is lifted, we should not go back to the old normal, because that kind of normal has never worked for agriculture.”
This is validated by statistics over the last six years. While annual industry growth averaged 6.8 percent agriculture grew by only 1.6 percent. With the new normal in this lockdown, the rice farmers are getting what other countries give their farmers: Subsidized hybrid seeds and fertilizers. These two components that are not included in the old normal of the P10billion Rice Competitiveness Enhancement Fund (RCEF). The fund was to help up the 62percent decrease in per hectare income from P25,960 to only P12,040 because of the rice tariffication law, where the applicable allowed safeguard was unfortunately not given. With the new fertilizer and seed subsidies provided because of COVID19, farmers can now increase their incomes.
The supply chain extends to international trade. Recently, many of our agriculture goods have not been able to move because of port congestion. Ships bound for the Philippines have bypassed us or returned to their source because there was no space to load or unload their cargo. Thanks to government action and private sector involvement, port usage is now at a manageable 70 percent. But with the announcement that we can now accept cargo, he predicts that we may have port congestion again. He stated that there were about 5,000 abandoned containers which were occupying needed space, but less than 400 containers have been disposed of. He suggested that private sector teamwork with the Bureau of Customs would significantly hasten the removal of the abandoned containers. Meanwhile, the private sector is facing higher port and demurrage charges due to factors beyond their control. This affects container movement, and therefore should be addressed as part of a comprehensive supply chain.
All supply chain components should therefore be identified, measured, monitored and addressed. This should be done in a holistic manner, not in current piece meal way we see too often.
In view of this, a focused comprehensive supply chain unit with an experienced leader using a war room orientation should be created. Just as there is daily monitoring of the virus, there should similarly be daily monitoring and action taken for supply chain difficulties. Only if we provide this missing element can we effectively address both the lives and livelihoods of our people. This is important not only during the crisis, but also for the challenging period immediately after.
The author is Agriwatch chair, former Secretary of Presidential Programs and Projects and former undersecretary of Agriculture and Trade and Industry. Contact him via agriwatch_phil@yahoo.com