Minimize the role of middlemen

I didn’t realize that many of our readers are into agri-business, so every time an issue on this topic is addressed in this column, we get reactions and feedbacks from readers. Yes, agri-business is still a viable one here because we do have the land for it especially in the rural areas where otherwise idle lands are still aplenty. Feeds are also readily available and can be locally sourced, as in corn for the chicken farmers. Backyard chicken growers rely on this, but as I wrote in my previous column, local corn supply can no longer meet our broilers and growers needs in this industry. To supplement this, they import wheat, a more expensive commodity which entails duties, freight, hauling and other charges. If you factor in these other charges, shouldn’t our local corn farmers be able to compete, price-wise?

This continues to baffle me. Why aren’t there enough corn farms in the country to support the feed sector? Corn is used not only by our chicken growers, it is also used by our hog farmers and including perhaps by the country’s rather big population of fighting cock aficionados. In many provinces in the Visayas and Mindanao, families subsist on corn grits as an alternative to rice. It is a lot cheaper and perhaps even pack more nutrients than rice. Being harder to digest, cooked corn grits keeps hunger at bay for these impoverished rural dwellers. Many areas in the country are also suitable for corn planting which I understand needs less irrigation and generally less growing costs. Too, corn is known to be more resilient than rice, and in a typhoon-prone country like ours, this spells a big difference to farmers.

The price of good quality corn now is at P14.50; the lesser quality sells at about P13. These prices of course are a lot less than rice, but other factors come into play here. If your land is less arable for rice, then corn is a good substitute because the demand is stable and constant, and processing, warehousing conditions, etc. are not as stringent and demanding.

The Department of Agriculture, together with the Philippine Coconut Authority, is launching a program for the coconut industry. Since many of our coconut trees in the country are over-mature, they have a re-planting program, hoping to encourage more coconut farms to go back to serious planting. With the growing health concerns of many developed nations which could provide the markets for these coconut products, many of our coconut farmers are now looking at reviving and rehabilitating their idle coconut farms.

A simple and very inexpensive way of fertilizing the coconut trees involve the common coarse salt that is in abundance everywhere. A simple application of salt around the trees apparently does the trick very efficiently and cheaply, but there are certain prescriptive conditions to be observed like the diameter of the area where the salt is to be applied, how much salt is needed per tree, etc. I’m certainly not an expert here, nor do I even pretend to be an agri-business enthusiast. But this morsel of information struck me as simple and cheap enough to be employed by the simple coconut farmers in far-flung areas.

As a non-agricultural businessman, I appreciate the merits of agri-business and share the concerns of many on how to make the country more self-reliant in the food sector. The claims of UMBRA (United Broilers and Raisers Association) on how their industry is so impacted by massive smuggling and unregulated importation of chicken and chicken parts and how other factors such as very expensive feeds have forced their member-farmers to resort once again to early culling of their broilers are rather disturbing. This is a big enough industry, as it is, but I understand that the smaller chicken farms have folded up and only the medium to large businesses are surviving. For how long—your guess is as good as mine.

One of the reactions I recently got was an e-mail from an old associate in the motoring industry. Rico Anonas, who used to head marketing of a major tire company in the Philippines and who also dabbled in the poultry business before, sent me this e-mail.

“I’ve been in the poultry business so I understand where Mr. San Diego’s group is coming from.  But I wonder if UMBRA has plans to empower their association further by trying to take out the middlemen.  They could start with auction centers where farmers meet end users (I remember reading an article on Thai agriculture attributing its success to auction centers).

Once direct links are established with end users, then go into feed mills and dressing plants - every step cutting out middlemen.

It seems every sector of our society keeps on harping on government support or non-existence of support.  As Dr. Bernie Villegas once told me, “We should make government irrelevant in our lives.” Only then can there truly be a market driven economy, we survive on our wits and creativity.

Establishing an association is only the first step.  They must seek forward and backward integration to survive.”

I couldn’t agree with Rico more.

Mabuhay!!! Be proud to be a Filipino.

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