GRAIN: FG WILL NOT BUY FROM HOARDERS – LOKPOBIRI

In view of media reports that grains are being hoarded, the federal government, has said that it would not purchase the commodity from hoarders.

In a statement to Leadership Weekend, the Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri, revealed that he has “reports of the hoarding of large tons of harvested grains by some individuals who hope to sale at exorbitant price to the Federal Government”

He said, “The Federal Government has however affirmed and warned that it has no plans to buy grains from any unscrupulous third part and that anybody hoarding grains is doing that at his own risk” he said

Senator Lokpobiri appealed to such individuals to put out these grains and make them available for consumers than hoarding them in conditions that will affect their quality and eventual loss, both of the grains and their much desired profit in monetary terms in the spirit of enhancing our agricultural sector’s self-sufficiency policy.

Senator Lokpobiri reiterated the determination of the FG to ensure the country enjoys food security and self-sufficiency, stating that “To achieve this desire, the present Administration through the Ministry of agriculture and rural development has put several measures in place that has today enhanced increased food production, especially grains”

He added that in addition “high breed seeds, soil test and relevant fertilizers are also within the reach of farmers, maintaining that “the Ministry is hugely engaged and committed to all-year-round agriculture including dry season farming and also through increased investment in irrigation”.

“The Federal Government’s Policy is to greatly ensure the drive towards achieving self-sufficiency in grains, to meet local demands from North to South and East to West, nevertheless, to encourage farmers in a situation where there are huge grains due to increase production, Government last resort is to buy off excess grains from farmers to be stored and released when the need arises,” he said.

HOW TO INCREASE YOUR FARM PROFIT IN 2017

The major concern of every farmer who sees farming as a business is how to increase the revenue or turnover of his/ her farm.

However, the practice with many farmers is to sink money into farming without developing good farm accounting procedures and processes, which are very important to sustainable profit margin in any farming business.

Many of these farms don’t even have strict accounting discipline, the result is that huge losses will be incurred and the farm eventually shuts down operations.

The experience of many farmers is that it takes 3-5 years to be able to make significant profit from farm investment. However, some farmers can start making profit sooner if they have low overhead cost and have good production skills.

The Australian Department of Agriculture and Food advises farmers to take into considerations the following: Assess the flexibility of their business in different production scenarios; know the profit implications of pricing decisions; evaluate expenditure on inputs, and plan more effectively for the future.

The following tips will help you to increase your farm’s revenue and keep you in business for decades:

Control the expenses on your farm by strictly adhering to a budget. Every good farmer must have a budget – how much he/ she intends to spend on the farm vis-a-vis how much he or she expects as revenue – and adhere strictly to the financial plan. Failure to do so might result in spending money on areas that may not have direct bearing on the farm and/ or things not planned, which will eat deep into the farm’s revenue.

Secondly some farmers don’t even try to understand the true cost of what they produce, including indirect costs. As a farmer, try as much as possible to understand the unit cost of each item you produce in the farm and also look at how much is spent indirectly in producing it. This will also help you to knock-off wastages or leakages.

Thirdly, put in place sustainable mechanisms or processes, that will enable you to understand which of your products or produce brings more money to you and which one does less. This sort of analysis enables the farmer to consider investment in more profitable ventures.

Lastly, before you spend money in buying new assets for the farm, take an analysis of how much you are likely to make on those equipment, otherwise you could spend huge resources on buying things that will not bring any significant income to you. This is among reasons many farmers hardly make any good income from their investment.

AGRIC BUDGET: STRATEGIC FOOD RESERVES TO GULP N4.1BN

The Federal Government has appropriated the sum of N4.1 billion to buy grains for the strategic food reserves. There are 33 silos scattered across the country.

The measure is also expected to shoreup the prices of food commodities.

The amount represents 5.4% of the total budget (N76.16 billion) appropriated to the main ministry of which N69.2 billion is for capital expenditure in the 2017 fiscal year.

According to the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, the silos sites have a total capacity of about four million metric tonnes of grains.

This money is expected to fill the 33 silos across the country with rice, maize, beans, sorghum, millet and other grains, which will be released back to the market to cushion the effect of soaring food prices later in the year.

Also in the 2017 agric sector budget is the provision of N4.1 billion to get agricultural mechanisation equipment to farmers through service provider operators (SPOS).

This might be grossly inadequate considering the size of the country and the huge demand for agricultural equipment, which is a major factor that can attract young people to the farm.

Also the ministry has penciled down N5.1 billion to be spent on maintaining ‘land and climate management’.

The ministry would also spend the sum of N3.38 billion for livelihood intensive family enterprise (LIFE) programmes; a programme that the ministry said will take life back to the villages in order to reduce the number of urban poor.

Similarly, extension services support to farmers, value chain actors, youth and women in agribusiness is expected to gulp N3.01 billion.

On grazing reserves, which have been the subject of heated debate, the key question is: Would N1.86 billion budgeted for National Grazing Reserves development grass up 50,000 hectares of land, with infrastructure such as water (for both animals and people) and schools across the northern belt and even develop new ones?

However, considering the lack of federal government preparedness to tackle pest and disease in the country, it intends to spend N2.1 billion on veterinary and pest control services.

The budget may evoke row over constituency allocation

Special budgetary allocation to some constituencies for the 2017 fiscal year may generate controversy among stakeholders in the sector.

N150 million is earmarked for Kebbi South Senatorial District only for “supply of fertiliser to rice farmers for productivity boosting measures”, which is different from N1.8 billion for input delivery platform for GES roll-out and management.

This raises concern over why only “Kebbi South Senatorial District” was chosen to get fertiliser worth such amount while other potential rice growing areas in the geo-political zone were left out.

Also in the budget is a special appropriation of N500 million for construction of Wukari-Ibi rural road.

This is separate from the N6.46 billion allocated by the ministry to “rural roads and water sanitation.”

Crops with giant allocations

Wheat tops the list of crops that have received the ‘billion naira’ allocation for the 2017 fiscal year, with N2.61 billion assigned for the promotion and development of its value chain, which is closely followed by N2.01 billion allocated for the promotion and development of rice value chain.

Cocoa was assigned N1.88 billion for the promotion and development of its value chain; N1.81 billion for the promotion and development of cassava value chain and N1.62 billion for the promotion and development of cotton value chain.

Other crops that have made the list include cashew with N1.26 billion earmarked for promotion and development of its value chain and N1.1 billion for the promotion and development of sorghum/millet value chain.

Likewise, the Federal Ministry of Agriculture and Food Security (FMARD) assigned N1.55 billion for the promotion and development of fisheries and aquaculture value chain, while promotion and development of nutrition value chain got N1.87 billion.

Similarly, N1.1 billion was set aside for the National Agribusiness Incubation Programme (NAIP) and N1 billion for the procurement of agricultural equipment and inputs for 36 states.

SOKOTO FARMERS BEGIN HARVEST OF ‘SHAMBO’ PEPPER

It’s the time of the year for the harvest of a pepper variety popularly known among farmers and consumers in Sokoto as ‘shambo’ pepper.

Although the pepper is noted to be popular among farmers in Fadama areas of Sokoto because of its viable economic potentials, the pepper variety is consumed more in South-western Nigeria.

“Our people take the pepper to the South where the market is more favourable,” stated a dealer, Hussaini Abdullahi, 38, of Dundaye Bakin Gulbi who has spent 10 years in the business.

Farmers in Goronyo, Rabah and Wurno local government areas of Sokoto State are noted to be the major producers of this pepper variety.

‘shambo’ is longer than the popular ‘atarodo’ and it has a unique aroma and taste. Consumers use it to spice stews and soups, indigenous foods such as ‘akara’, ‘moi-moi’ as well as the popular ‘fura da nono’  and ‘awara’.

At the Ramin Kura vegetable depot in the Sokoto State capital, a ‘shambo’ pepper dealer, 60-year-old Altine Faru told Daily Trust that they get supply of the pepper from the farming communities in the state twice in a week, Monday and Friday.

On each of these two days, they bring in 320 to 480 sacks, totaling over 600 to almost 1,000 sacks on weekly basis.

He, however, said the variety that used to cost N2,000 per sack, now goes for N1,200 per sack due to glut as a result of the economic downturn.

“It used to sell at N2,000 when consumers had more money and the highest price for a sack is N3,000 when the rainy season approaches and the supply dwindles. Now it is harvest season as you can see a lot of it packed and waiting for buyers,” he said.

However, half of the weekly supply is transported from the market to the southern part of the country at the rate of N2,500 per sack.

Altine said the major challenge they face is lack of adequate funds to run the business whose success, he said, depends on capital.

“Most of us don’t have enough money to buy a trailer load of ‘shambo’ pepper to sell to larger consumers in the southern part of the country,” he lamented.

Another dealer, Hussaini Abdullahi, revealed that this year, some  farmers faced the problem of pests which destroyed their crops.

“There is lower production of the pepper this year. With a good harvest, you hardly find a place to stand here, it would have been full of ‘shambo’ pepper sacks waiting for transportation to southern Nigeria,” he said.

Hussaini decried that the prevailing economic situation had slowed down their business, hence the glut in the market which would affect farmers.

Another farmer, 55-year-old Bello Abdurra’uf of Lahodu village in Wurno Local Government Area who is also into ‘shambo’ pepper farming, said they plant the seed alongside millet when early rainfall is recorded.

“The seeds require a lot of watering, fertilizer and application of pesticide at required intervals to prevent insects from hampering its growth,” he said.

Abdurra’uf added: “When properly nurtured, it can be harvested six to seven times, unlike onions which we harvest only once.”

In this harvest season, Abdurra’uf declared that he expects to realize  N40,000 from his N5,000 investments in its farming.

Similarly, Garba Buhari, 57, noted that the pepper is more economically viable than onion and tomato put together.

“It can bear more than six harvests which guarantees reasonable income for a farmer,” he stated.

He appealed to the state government to provide farmers with soft loans, adequate fertilizer and subsidized pesticides to produce enough to enhance the economic growth of the state.

Aminu Muhammad, 30, has also been into the production of the pepper for over 10 years now. He said good and well-raised farm that can undergo 10 rounds of harvest on weekly basis.

“I invested N15,000 in the production of five beds of ‘shambo’ and I am expecting a profit of N50,000,” he revealed.

The farmer urged the state government to come up with a programme for the variety’s production similar to the newly introduced wheat programme.

NEWS WHY YOU NEED TO KEEP FARM RECORDS

Farm records form an integral part of running a successful farm enterprise. The more records a farmer keeps, the easier it is to manage and run the affairs of the farm
An agricultural economist, Dr. Yusuf Oseni, of the Department of Agricultural Economics and Rural Sociology, Institute for Agricultural Research, Ahmadu Bello University Zaria, said farm records provide farm history and allows for comparisons with other similar ventures.

Sighting the bigger picture, he said, farm records may be required by certain government agencies for establishment of development schemes like ADPs and irrigation schemes and form the basis for government policies geared towards helping farmers.

Dr. Yusuf noted that location and size of farm, soil types, form of labour employed and its costs, number and cost of input supplies and number and cost of each farm produce sold are among the basic records to be kept by farmers.

He explained further that farmers also need to keep farm inventory, including records of all assets owned, tools and equipment inventory and crop and livestock expense records among several others.

On the importance of keeping farm records, Aliyu Samaila, Director, Agricultural Productivity, MARKETS II programme of USAID stated that keeping records provides a guide to show you whether you are making profit or not.

He disclosed that agriculture needed to be taken as any other business as such records provided a reference point to know when an incident occurred and how, so as to prevent future occurrence, especially in poultry business.

Aliyu stated that records also serves as a reference point to extension agents to be able to make necessary corrections on how farmers are carrying out farming activities, adding that they guide farmers against making or repeating mistakes.

Similarly, a renowned livestock breeder/farmer, Malam Musa Rabo Dan-Hassan, who is the Managing Director, Dan-Hassan Livestock and Poultry Services, Madugu House in Katsina, disclosed that keeping farm records helped him in taking managerial decisions for the smooth operations of his farm.

Malam Musa stated that he kept records of where his poultry stocks were bought, their production during different seasons and vaccination records of the birds.

He noted that from the records, he was able to identify quality stock and avoid problematic or poor quality suppliers of the poultry stock, adding that it allowed him to know the best time to sell output or when to buy input.

In terms of sheep and goats, Dan-Hassan outlined that keeping records enabled them to easily identify problems in growth rate of the livestock, and also prevent inbreeding of the livestock.

Keeping records allow farmers to quantify the profit they have made from the total input they put into the venture and the output they were able to get at the end of each production cycle.

USDA SWITCHES DESTINATIONS FOR U.S SOY TO CHINA, OTHER BUYERS.

CHICAGO, Jan 6 (Reuters) - U.S. soybean export sales hit a marketing-year low last week, the U.S. Department of Agriculture said on Friday in a report that revealed China and other importers will take crops previously listed as sold to undisclosed buyers.


The relabeling of destinations for shipments previously earmarked "unknown" surprised traders who had expected China, the world's top soybean buyer, to make bigger new purchases in the latest week. The switching also pressured futures prices.


Exporters in the week ended Dec. 29 struck deals to sell just 87,500 tonnes of U.S. soybeans for delivery in the 2016/2017 marketing year, which ends on Sept. 1, according to the USDA. That was down 91 percent from the previous week and 94 percent from the prior four-week average.
Traders had expected sales in the week at 800,000 to 1.2 million tonnes.


China bought 641,500 tonnes, according to the USDA. However, the total included 626,000 tonnes that had previously been labeled as sold to "unknown destinations," meaning the purchases were not new business.


Other buyers, including Indonesia, Vietnam and Spain, also each said they would take delivery of U.S. soybeans that had previously been earmarked for unknown destinations.

ANALYST: HOG PRODUCERS BE READY FOR ACTION.

Summer month hog prices have rallied from the mid-$60s to the upper $70s and appear, as of late, to have run out of gas. After the hog prices suffered significant losses through early October, futures have since rebounded and are entrenched in an uptrend. However, so is the U.S. dollar. Exports comprise roughly 20% of pork demand, and with daily slaughter averaging over a hefty 435,000 per day, it becomes more challenging to have a long-term, friendly price outlook.

 
We encourage hog producers to treat summer futures months defensively. They are priced roughly $12 to $14 premium to the cash index as well as front month futures. In this environment, a sell-off could quickly ensue, should prices begin to break support levels. So far, so good, as price setbacks since October have proven an opportunity for buyers. However, we don’t see the fundamental catalyst for an upturn in the meat complex with the rising dollar, ample inventories, and good demand as indicated on last month's Cold Storage Report, which indicated a larger disappearance year over year. Yet, we question how long that can last, especially now that the holidays are behind us.

 
Producers should consider hedging with futures, buying puts, or using a fence strategy, which consists of buying a put and selling a call. Discuss these strategies with your adviser. Be prepared. Often when markets make a move, it occurs so quickly that it is hard to implement a strategy.

 
If you have questions or comments, or if you would like help in creating a balanced strategy for your operation, contact Bryan Doherty at Top Farmer Intelligence (800/TOP-FARM, Ext. 129).

 
Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results. BY BRYAN DOHERTY.

DEMAND FOR SOYABEANS CAPTURES ALL MARKET EYES.

Weekly exports were pushed back a day to this morning, and that report came in disappointing.
Trade was looking for sales of 650K to 1,000K and instead only saw a number of 429K. This was a sizable setback from previous sales reports, and it set a negative tone through the day.
We should keep in mind that this sales report reflects last week's sales between Christmas and New Year’s, which should be expected to be slow.

Bears will look at this as two slowdowns in a row on the export report, giving reason to pick up selling expecting a third and convincing report next week. With March starting the day off in the 360 resistance area, it didn't take much of a push to convince this market to move lower.

Trade also spent most of the day likely expecting that the analysts’ estimates for next week’s report will show a bearish number. Those expectations also likely weighed on corn today.

Downside was limited, however, from anticipation of more index fund buying on the close again today. Index buying will occur on either positive or negative trading days so no matter what, that light support will be found on the close until the buying is done.

Bulls

• Index fund buying is not over yet, so bulls can continue to expect support at the end of each day until the buying is done.
• Buyers will likely choose to hold off until another setback is seen back down to chart support just under 350.

Bears

• Weekly exports came in at 429K, which was well below the range of expectations (650K to 1,000K).
• Most traders will start with a bearish bias going into next week’s reports, which should lead to more pressure the closer we get to those reports.
• Bears can now make the case that corn has seen three weeks in a row of slowed corn sales on this weekly report.

Cattle Commentary

The closely watched measure of the U.S. stock market, the Dow Jones Industrial Average, touched up to 19,999.63 today. Not quite enough to hit the trade’s 20,000 psychological goal but still close enough. The jobs report was a little disappointing with gains of 156,000 last month. That was under the trade’s 178,000 expectation.

On a positive note, the market found good news in the wage portion of the report. Wages showed a gain from the 2.5% year-over-year increase in November to now a 2.9% gain in December. This is the largest annual growth since June of 2009.

The Atlanta Federal Reserve’s GDP model, called GDPNow, left its estimate of Q4 GDP unchanged at a 2.9% growth rate. This would be a good finish to a year that saw only +0.8% and +1.4% year-over-year gains in the first two quarters. Q3 was also a good one at +3.5%. We will point out that the New York Fed’s own model, Nowcast, sees Q4 at only 1.89% and Q1 of next year at 1.94%.

Though the NY Fed is the main bank in the system, the Atlanta branch’s model gets a little more credibility. Allendale’s meat demand model looks at economic growth, employment, and wages. Demand will, of course, be a big issue discussed at the January 24 - 26 Allendale AgLeaders Conference.

Live and feeder cattle futures ended the week on a down note. Today’s low was the lowest price since December 16 on the February fats. March feeders, the dominant contract, fell to its lowest point since December 12. Wholesale beef prices were mixed to lower yesterday and again today. Though we do have higher retail demand expectations for 2017 compared with 2016, it is not unusual to get a little retail weakness into mid-January as consumers pay off holiday bills. BY RICH NELSON.

BRAZILS SOYABEAN CROP SEEN AT 103.5 MILLION TONNES AS HARVEST BEGINS.

SAO PAULO, Jan 6 (Reuters) - As Brazil's 2016/17 soybean harvest begins, analysts expect a record crop of 103.5 million tonnes thanks largely to good weather conditions, a Reuters poll showed on Friday.

The estimate, based on the average of 18 predictions by consultants and official bodies, was slightly higher than a forecast of 103.1 million tonnes from a Reuters poll in early December.
Brazil is the world's largest exporter of soybeans, so an abundant harvest would keep international prices under pressure while replenishing domestic inventories.

A record harvest this year would represent a strong recovery after a drought triggered by the El Nino weather phenomenon slashed yields in 2015/16, when output dipped to 95.4 million tonnes.
Now, with Brazil experiencing the milder La Nina, weather-related problems are scarce and fields are generally in good shape. An early harvest has already begun in scattered areas in top producing states, like Mato Grosso.

"Crop conditions, in general, are good," said independent analyst Flavio França Junior, who predicted a 104.7-million-tonne harvest. "There are only pockets of problems, so I don't see any major reason to lower my forecast."

On Thursday, INTL FCStone raised its outlook by almost 700,000 tonnes due to expectations of higher yields in a couple of states. It left its projection of planted area unchanged.
Government agency CONAB will publish an updated version of its 2016-2017 crop forecast on Tuesday.

Although many areas are nearly ready for harvest, there are regions where planting took place later and weather can still be decisive for productivity, such as the Matopiba region, formed by Maranhão, Tocantins, Piauí and Bahia states.

In Matopiba, rains were below average in December and in the first days of January.
"Weather forecasts indicate that rains will normalize only in February. We will have to keep one eye on that region," França Junior said.

A Reuters poll of 18 consultants and official bodies also showed Brazil's corn crop should reach 88.1 million tonnes, up nearly 33 percent from last season, which was plagued by below-average rains.
Unlike the soy poll, estimates for corn vary widely, from 81.3 million tonnes to 99 million tonnes. The differences were due to divergent views over the winter corn crop, which will be sowed after the soybean crop is harvested. BY DANIEL FLYNN.

FINANCING AGRICULTURE, RECOVERY.

In the aftermath of Typhoon “Nina,” the Department of Agriculture (DA) has preliminarily reported that close to P400-million worth of damage to agriculture covering more than 300,000 hectares of farmlands has been sustained.

The report dated Dec. 27, 2016 states that in the Bicol area alone, 87,800 hectares of rice areas and 6,000 hectares of corn areas have been affected with crop damage in excess of P300 million. In the Calabarzon, more than 200,000 hectares of farm areas have been affected while damage to fisheries have yet to be declared.

Perfunctorily, the DA has prepared its usual aid package of assorted vegetable, rice and corn seeds for distribution to farmers to perform a “quick turn around” program of plantings in the hope the farmers can recover from their crop losses: crop losses on inputs which were secured through debt from informal lenders charging at rates beyond 5/6.

 

 

Some farmers do indeed plant, while most others just sell the seeds because they need the money more to restore their homes and prioritize expenses related to their survival. Some farmers hope to recover while most others know, there is no recovery from the cycle of debt and devastation.

In the last five years, figures from the Philippine Crop Insurance Corp. (PCIC) have estimated crop damage at more than P200 billion, yet to date, the virtual absence of a strong and credible nationwide crop insurance program has settled no more than 2.5 percent of these losses.

It is the absence of this insurance coverage, among a few more other key measures, which has choked Philippine agriculture and stifled its growth and development. It is the absence of an innovative transfer mechanism for risks which has kept cash releases to victims at a limited sum from the national budget when that amount can be leveraged ten times over, if there is an effective crop insurance system in place.

Anyone in the rural countryside knows that after a calamity, seeds are not what people need. It will take weeks to clear the debris and devastation before farms are workable again. In between that time is the business of tending to the sick, the wounded, the dead, and to the severe damages to farm equipment, infrastructure, livestock and animals.

Cash needs to be distributed but the nationally appropriated budget for such calamities is never enough. But whatever that amount is, no matter how paltry, can still be leveraged over and over again if an insurance and re-insurance system is in place. After a calamity, cash pay-outs are what moves people to act and recover.

A case in point was our experience after the devastation of Typhoon “Haiyan.” Despite efforts of the government to get the recovery efforts going, nothing was moving until the Buddhist charity organization called the Tzu Chi Foundation started doling out a cash for clean-up program.

In Africa, countries affected severely by weather related incidents have banded together (African Risk Capacity) to pool funds for agriculture insurance and to issue payments not only when a full scale calamity ensues, but at any time in the planting cycle when weather changes affecting crops. That is the beauty of “Index Based Agriculture Insurance.”

Water, the wind, precipitation, dry and wet spells, temperature… are all indexed as they affect a crop’s output. For example, rice needs to be subjected to a certain amount of sunlight, water and temperature to grow at its optimum rate. At any time the weather changes throughout that planting cycle breaching the “indexes” set, pay-outs are triggered to allow the farmer to adjust and save his crop or engage in another farm activity to save his investment.

Needless to say, if a full scale calamity ensues, a pay-out is triggered as well. With this system in place, adjusters will not be needed to settle pay-outs as agronomic science and weather tracking stations will do so.

The national government and local government units can pool funds to leverage that pooled amount to tens of billions of funds ready for pay-outs immediately after a calamity. But the greater impact of an Index Based insurance system is the confidence it will give mainstream financing institutions to fund Philippine agriculture.

In a climate-changed world, in a country as weather vulnerable as the Philippines with an average of 30 tropical cyclones in a year, can we blame banks if they choose not to lend to farmers without any insurance system in place? Do banks have no duty to their depositors and shareholders to stay profitable? Is it no wonder that despite the mandatory provisions of the Agri-Agra Law on lending to the farm sector, banks would rather pay penalties?

An agri insurance system through a strengthened PCIC, that will be mandated to do direct and indirect (re-insurance) index based insurance system will not be enough. An Agriculture Guarantee Fund, must also be institutionalize and expanded.

The case has been proven that such a fund can and will motivate rural banks and mainstream finance to flush more capital to the farm sector. The fund set up by the DA with the Landbank in 2008 which started at less than P4 billion has not only remained intact but has actually grown to more than P6 billion today. Along the way, it has been responsible for convincing rural banks to lend to thousands of farmers.

In time, with the possible reform of the National Food Authority, the day will also be possible for its network of nationwide warehouses to be operated as post-harvest and refrigeration storage facilities for our farm produce.

Creating a system, where farmers can store and have their produce properly valued, is the day we provide farmers a pricing mechanism for their crops resulting in more financing against crops held in these warehouses. A robust warehouse receipts program, operated even by the trust departments of banks can even take charge of this system of trading warehouse receipts. Can commodity trading on the Philippine Stock Exchange be far away?

Finally, in a country of micro, small and medium-scale enterprises, we will need to enact into law a “secured transactions law,” or a modernized “Movable Collateral Law,” that will allow MSMEs to be financed based on what they have (equipment, improvements, vehicles, raw materials, crops, jewelries, receivables, and other movables) rather than what they do not have (land and cash).
Done through an electronic registry which is transparent, as is being done in China and Vietnam today, millions of would-be entrepreneurs will get a shot at financing their agri and other related business ventures.

Today, all the bills regarding Index Based Agriculture Insurance, the Agriculture Guarantee Fund, the creation of a national post harvest and storage network, the creation of a “Secured Transactions” system for movable property, have been filed in the House of Representatives. Together, these measures provide a nucleus to convince the private sector to help finance the agriculture sector.

Combined, these are also meant to help government distribute relevant aid soonest when it is nee
ded in the form it is most usable to the victims. They are by no means the only silver bullets to cure Philippine agriculture since telecommunication connectivity and investments in infrastructure must continue to generate growth and development in the farm sector.

But these measures will definitely go a long way in starting an irreversible process to establish a financing ecosystem for our farmers that will include the private sector in a substantive way, beyond government dole-outs and palliatives. —CONTRIBUTED

Arthur Yap was Agriculture Secretary from 2004-2010, a member of the 15th, 16th and 17th Congress of the Philippines, and current chair of the Economic Affairs Committee.

BYARTHUR C YAP.