Agriculture remains PH’s biggest challenge, says Concepcion | Business and Politics - video Dailymotion

The Manila Times

Agriculture remains PH’s biggest challenge, says Concepcion | Business and Politics   Asean Business Advisory Council Chairman, Jose Maria 'Joey' Concepcion 3rd says that agriculture remains to be the biggest challenge of the Philippines today. He says that farmers need access to capital, as well as markets. Collaboration with bigger farming corporations, upscaling and block farming is the way to go.   Subscribe to The Manila Times Channel - https://tmt.ph/YTSubscribe   Visit our website at https://www.manilatimes.net   Follow us:  Facebook - https://tmt.ph/facebook  Instagram - https://tmt.ph/instagram  Twitter - https://tmt.ph/twitter  DailyMotion - https://tmt.ph/dailymotion   Subscribe to our Digital Edition - https://tmt.ph/digital   Check out our Podcasts:  Spotify - https://tmt.ph/spotify  Apple Podcasts - https://tmt.ph/applepodcasts  Amazon Music - https://tmt.ph/amazonmusic  Deezer: https://tmt.ph/deezer  Stitcher: https://tmt.ph/stitcher Tune In: https://tmt.ph/tunein  #TheManilaTimes

Transcript

00:00 Sir, can we talk a little bit about how we grow our MSMEs in the Philippines?

00:06 There is a law that supposedly helped in the way of the Magna Carta,

00:09 but it seems that there are still persistent issues that still crop up.

00:14 I mean, access to capital is one thing.

00:16 How do you assess the situation now, and then maybe what are you working on to make the environment more conducive?

00:25 Well, through the MSME Council, which Secretary Pasqual chairs and I'm the Vice Chair,

00:30 both DTI and the private sector are working together in this council.

00:34 And, I mean, we are doing everything we can for MSMEs, especially those non-agri.

00:44 I mean, you can see all of them here.

00:46 For everyone, yeah.

00:47 And including the non-entrepreneurs.

00:49 The non-entrepreneurs are these guys, who are people signing up in a platform,

00:57 but they are the owner and they are the employee as well.

01:01 Right, right.

01:02 That is growing phenomenally because of all of these platforms.

01:05 So, the biggest challenge really still is agriculture and how we can really get them to consolidate.

01:16 Secretary of Australia, Department of Agrarian Reform, has done a great job.

01:23 They've cleaned all those problematic titles.

01:26 In the past, technically, if you received land from land reform, you're not allowed to sell.

01:33 But everybody knows these people have started to sell.

01:37 Unfortunately, you can't, even with the land, the banks will not accept it as collateral

01:42 because you're not allowed to borrow money on it.

01:46 So, by itself, that has to be corrected.

01:49 And I believe it will be corrected because the farmer needs capital for him to till the soil and all of that.

01:58 And he needs access to market.

02:00 So, the other way around it, aside from having cooperatives, is to bring the big brothers,

02:05 which we have done through CALAB, Kapititan At Lahat Agri Program.

02:08 We have about 35 big brothers, I mean really big ones, in agriculture, in the north, you've got Winston Oil,

02:18 largest in tobacco, one of the largest in Asia.

02:22 And you've got Fission Molar, you've got many others.

02:27 Two options that the farmer has.

02:29 A, he either leases his land to whoever, to a cooperative or to a big brother.

02:36 Or two, he can work with the big brother or join the cooperative.

02:42 So, those are two options he has.

02:45 If he stays on his own with one hectare, he's not going to make it.

02:48 He has to scale up.

02:50 And the experts say the minimum hectare age is 24 hectares.

02:55 So, clustered farming, block farming is the way forward.

03:02 And the President knows that and they're moving towards that.

03:04 So, hopefully, these lands that have been cleaned up and the lands owned by the indigenous people,

03:09 which are, a lot of them, part of the forestry, can be put to more productive use.

03:18 It's interesting that you went into that direction.

03:22 We're talking about CALAB.

03:24 Is that somehow connected to your aspiration to maybe reduce poverty?

03:29 Is there a connection there?

03:32 Well, bulk of our MSMEs are from the agri-sector.

03:36 So, unless we correct that problem, then, I mean, access to big brothers within the Metro Manila area is easier.

03:46 I mean, you look at Pure Gold and many other big supermarkets, they're catering now to the sari-sari stores.

03:51 Everybody is giving so much attention to the sari-sari store.

03:55 So, the chances of success is there.

03:57 But to the farmers, it's more challenging.

04:00 Not only that you have weather and disease, but access to capital.

04:04 Because banks will not lend these farmers because the risk is too high.

04:09 I've called the meeting with all the banks and they said the risk is too high.

04:13 Now, how do we bring down that level of risk?

04:15 The moment they are attached to a big brother, the bank will lend.

04:19 Because they know that the big brother will provide the mentorship, will provide the access to technology,

04:25 and then access to the market because they can buy the products from the farmers at a fair price.

04:32 So, then the banks will now lend because it becomes a viable business model.

04:36 It's similar to franchising.

04:38 Jollibee franchises out their stores.

04:41 They train them.

04:42 The entrepreneur owns the stores.

04:44 So, Jollibee or McDonald's acts as the mentor and provides the market because they advertise the brand.

04:52 So, that's how it can be viable.

04:56 That's how we should do agriculture.

04:58 Talking about that, some people have been saying that maybe the government's role could be to secure a certain amount of the loans

05:05 so that the banks will feel more comfortable because they're dealing with MSMEs who probably don't have the collateral,

05:11 the traditional requirements that the banks would require to give out the loans.

05:16 And the other part of that, some say, is maybe the social preparation

05:19 because obviously the farmers and other MSMEs, they have the cash,

05:25 but they don't have, I guess, the confidence or the patience to fill out the forms or to go to the bank.

05:32 But they can go to 5-6 and pay usury rates and get their capital that way.

05:38 And, well, that's their last desperate thing to do.

05:43 But I feel that the banks are fearful in lending because they don't see the farmer as a viable model if he has a small hectare agent.

05:56 That's what you were saying, that clustered.

05:59 The moment they cluster together, the moment it's like, would I lend money to a franchisee of McDonald's, Jollibee, or whatever?

06:10 I will lend if Jollibee is the brand and he is being mentored.

06:15 So that's how I would do it.

06:17 So imagine if Winston Oil, one of the largest in tobacco in the north, would say,

06:21 "Okay, these are my farmers. I'm training them. They have access to market."

06:29 Guaranteed, the bank will lend them.

06:32 It's interesting. When people talk about the Magna Carta for MSMEs,

06:36 they always cite that problem with access to capital, but what's not mentioned as much is that

06:41 there's a provision there that requires government from national to local to set aside 10% of their procurement budget for MSMEs,

06:48 but that's not complied with either.

06:50 What can be done there, do you think?

06:53 Maybe just compel local government, "Hey, buy from a small business."

06:57 I think they should be able to do it, especially if the business is into agriculture like rice.

07:03 I think some of them are doing it already. They're buying rice from the farmers.

07:07 So that helps. The access to market helps.

07:10 It can be LGU. That's why a cooperative can also be just as good,

07:15 provided that there is good leadership in the cooperatives.

07:18 Because as we know, a cooperative is just too much democracy. Leadership changes.

07:23 In a Big Brother approach, there's only one boss, the real owner.

07:27 So it's more, I would say, secure for a bank to some extent.

07:37 But cooperatives and Big Brothers to me is the way forward.

07:41 You've been advising presidents for many years now.

07:44 You started with Mrs. Arroyo, then Rodrigo Duterte, and now President Marcos.

07:50 Are there other policies that you would like to see that would be helpful to MSMEs,

07:58 maybe not just in agriculture, but generally that should be considered by this government?

08:04 I think digitalization is really important.

08:09 Because access to market used to be controlled by us.

08:13 I hold the money to advertise my product, can get my product out there.

08:19 But today, social media has disrupted that whole thing.

08:23 We don't advertise anymore in television and radio.

08:29 We only post on social media.

08:32 And many other companies are moving in that same direction.

08:36 Is it good? It's good for our small people.

08:39 Because we're now teaching them how to become micro-influencers.

08:42 So when you go to a Go Negotiation mentoring event,

08:45 you will see a number of influencers teaching the MSMEs on how to sell their product.

08:50 And they can do it.

08:52 If my youngest kid can be now a social... I'm telling her to be careful, but they're hiring her.

08:58 But you can see that it's working.

09:03 So that wave is huge.

09:07 So there's going to be a real disruption, even in television.

09:12 You can see that in a way in print as well.

09:14 But you're evolving. You're using other formats.

09:16 You're using social media.

09:18 So everybody will evolve.

09:20 So as we all evolve towards social media,

09:23 then social media to me is a very inclusive platform.

09:26 I don't know if you caught that in Jakarta during the summit.

09:31 Some statements made that there will be now some collaboration or attempts to collaborate

09:36 with regard to funding for MSMEs.

09:39 I'm not sure if that came up in some of the meetings that you attended.

09:42 But there was some talk about possibly...

09:45 I'm not sure if it's setting up a fund for MSMEs across the region,

09:49 or if it's just simply Indonesia looking for a small brother or another brother in the Philippines or elsewhere

09:56 to help them grow.

09:59 What are the developments there that you're following in terms of funding across the region?

10:05 What I see more is on the digital platforms.

10:09 Access to credit will be...

10:12 There are already platforms lending money.

10:15 But they have their own way of gauging if you're creditworthy or not.

10:19 Now on the brick and mortar businesses,

10:22 I still believe it's going to be the traditional way of lending.

10:26 What they're maybe trying to say is that

10:30 as we really come together,

10:34 if this company in the Philippines has a joint venture with another company in Malaysia or whatever,

10:40 then they can be a major conglomerate.

10:45 Not only present in the Philippines, but present in all other countries.

10:48 That's why I've been telling the big brothers in the Philippines,

10:51 this is the opportunity of what we have done.

10:54 You expose yourself and your business to these guys,

10:57 they see the opportunity, and that's the start of you expanding beyond.

11:01 Many of them are doing that.

11:03 Christian Moeller, who's in coconut.

11:05 Yes, and Palawan.

11:06 Yes, and he doesn't do coconut water. It's beyond that.

11:10 Simon Baker is expanding, so there's this opportunity.

11:14 We have a lot of really super agri-entrepreneurs who are doing well,

11:19 who I believe are ripe to expand here and abroad.

11:23 That's what I was asking earlier.

11:25 I guess maybe not in a clear way,

11:28 but maybe do you see, for example,

11:30 your mentoring program going region-wide,

11:34 where maybe that can be how our entrepreneurs get to know

11:38 their potential customers or suppliers in Malaysia, Thailand,

11:42 maybe through that kind of activity.

11:46 Maybe not even just a social get-to-know-you,

11:50 but maybe like what you do, a formal mentoring activity.

11:54 Right now, it's done online, basically.

11:56 In the Philippines, it's blended online and physical.

11:59 Hopefully, these MOAs that we sign will now push us to go to countries.

12:04 So, Malaysia has come here with their former minister and ambassador.

12:10 We will do the same.

12:11 We will go to Thailand. We will go back to Indonesia.

12:14 We will bring our big brothers who we believe has the potential.

12:18 So, that will start, hopefully.

12:21 I think everybody is looking for wanting to grow.

12:27 The opportunity is getting to meet people.

12:30 So, the business chambers, and in the case here of the CNBAC Philippines,

12:35 George is the chairman of the PCCI.

12:38 So, he has that network.

12:41 We also know these guys.

12:43 So, in other words, we need to expose our talented entrepreneurs

12:48 who are successful, already successful.

12:50 Not the beginners, the ones that are successful,

12:53 to meet other people out there.

12:55 And that's how relationships are created.

13:01 Yeah.

13:02 [Silence]

13:08 [Mouse click]

13:09 [Bell ring]

13:10 [Silence]

Agriculture remains PH’s biggest challenge, says Concepcion | Business and Politics

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