#MINDANAO
As we savor the Christmas food and take a rest during the holidays, we reflect on the importance of two new agreements that will help our agriculture and Micro Small, and Medium Enterprises (MSMEs).
We reflect on the NEDA’s announcement of the implementation of the Philippines- South Korea Free Trade Agreement (FTA) which is welcome news for many Mindanao exporters of fresh fruit. The FTA was first signed in September 2023. This agreement, among other things, ensures greater market access for many products, especially our agricultural exports.
Another is the signing of the joint memorandum between the Department of Agriculture and the Department of Trade and Industry to boost exports. In a statement on the DA website, the agreement aims to achieve this through initiatives such as “trade promotion, strategic investments, empowering small and medium enterprises, and resolving issues like market access and tariffs. “Since both the DA and DTI have jointly put together the various commodity roadmaps in the previous administration, I hope that this agreement can harness the spadework of cooperation that the roadmaps developed.
Both new institutions are relevant to Mindanao because the island is our food basket and export hub for agricultural products such as coconut, banana and pineapple. Increasingly, new products such as avocado and durian are emerging as new exports that may interest local and foreign buyers. The hope lies in getting higher volumes of exports to more markets. After all, our agri exports constitute between eight and nine percent of Philippine GDP. Strong export performance brings foreign exchange and can create more stable rural jobs.
There are, however, challenges. The first is increasing export volumes. One of the oft-repeated concerns is the lack of supply of a given commodity when demand peaks especially abroad. This can be helped by using innovation and technology to produce more per tree or hectare planted. New products for a wider range of markets can be developed. This can help sustain market demand, and opportunity for producers.
Other measures include promoting affordable and efficient logistics to bring the products from farm to table or factory. Yet another is removing all bottlenecks that hamper exports. These are enablers that can encourage more exports and bring more export income.
A good opportunity, in particular to the DA-DTI memorandum, is to leverage on DTI’s capability to help exporters innovate using technology and the creative industry. In the case of Mindanao, a lot of its creativity is inspired by the crops being grown and other natural endowments that play a large part in local culture. This special capability will enable the creation of new and exotic products to meet changing market preferences.
The key for these agreements to achieve their hoped-for outcomes is vigilance by the private sector in ensuring that the advantages and benefits of these institutions for the industry are maximized. Having strong partnerships between the DTI, DA and the private sector can help producers plan production over time to continuously meet demand and help capture opportunity.
Industry associations will therefore need to continuously engage in constructive dialogue with government counterparts to promote the benefits of such agreements, particularly in export promotion abroad and the scaling up of local agroprocessing. This ensures that these benefit the broadest range of producers, processors, and exporters. This creates more job opportunities and sustains incomes that help the local economy thrive. As the new year comes, we hope to further examine how these agreements can be harnessed for our economic growth.