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How better infrastructure investment can help the Philippines’ agricultural sector

Blogs & Features

July 3, 2023

Farmer planting rices in the field

While the Philippine economy is now largely based on services and manufacturing, agriculture remains a vital sector. Combined with forestry and fishing, agriculture accounts for about 9.1% of the country’s GDP as well as approximately 24.5% of the workforce. Notably, even with services and manufacturing accounting for most of the national GDP, the agricultural sector remains the key industry in most of the country’s regional economies. Additionally, as agriculture had been the Philippines’ main industry for centuries, the sector continues to be a key component of the country’s national identity.

Unfortunately, the Philippine agricultural sector is now struggling to maintain relevance in a fast-changing global market. The sector is facing several challenges that hinder its growth and profitability, much of it related to inadequate infrastructure. In this article, we will explore how targeted investments in modern infrastructure may help boost the country’s struggling agricultural sector.

Developing water resources through better irrigation

Irrigation is a critical factor in agricultural productivity, especially in countries with erratic water security like the Philippines. The Philippines’ geography and the distribution of freshwater resources effectively limit the regions where certain high-value crops could be grown. Growing water-hungry staples like rice outside of some regions can also be highly unprofitable, particularly when vital water infrastructure like irrigation canals and pumps are lacking.

As a rice-growing nation, irrigation is especially important for Philippine agriculture, particularly outside of its few major floodplains. However, as climate change alters the predictability of rainfall, formerly productive areas are now struggling to keep up with the country’s growing demand for produce.

Fortunately, existing water resources should be able to keep up with demand provided that modern irrigation is made available in areas that lack a year-round supply of freshwater. Notably, according to the Philippine Statistic Authority, the land area serviced by irrigation facilities in 2020 accounted for 63% of all irrigable land, estimated at 3.13 million hectares. Further expanding irrigation infrastructure should create better opportunities for farmers, empowering local economies. The government and its private sector partners should also harness lessons learned from developing water infrastructure and water treatment facilities for urban environments to determine which methodologies and technologies can be applied to agriculture in order to improve farming communities’ access to water for irrigation.

With improved irrigation systems, farmers in disadvantaged areas can reliably increase crop yields and improve the quality of their produce without having to rely on increasingly erratic rainfall. Better irrigation can also help farmers to diversify their crops, preventing an over-dependence on monoculture. This can lead to better, more predictable incomes for farmers and contribute to the global competitiveness of the domestic agricultural sector.

Better irrigation can also help mitigate the worrying effects of climate change on local agriculture. Each year, typhoons and droughts cause billions of pesos in damage to local crops, causing massive problems for local farming communities. Irrigation, particularly modern closed systems that prevent evaporation and contamination, can also make it easier for farmers in water-poor areas to bounce back from typhoons and other natural calamities.

Electrification is critical for modern agriculture

As of 2020, about 96% of communities in the Philippines have access to electricity. While this is impressive, it still leaves millions of Filipinos without access to power. A large proportion of those without access to electricity are farming communities due to the cost and complexity of electrifying sparsely populated areas. In addition, millions more rural Filipinos only have partial access to electricity, with rolling power outages still a fact of life in the countryside.

This is problematic, as a lack of electricity in the countryside limits the use of modern technologies. Modern productivity tools such as irrigation pumps, tractors, and produce processing equipment all require stable electricity. Without proper electrification, millions of farmers have to rely on inefficient production methods and technologies, limiting their competitiveness. Electrification is, therefore, not just a matter of material comfort but a prerequisite to modernized Philippine agriculture.

With access to electricity, farmers can use modern technologies to reduce drudgery, improve efficiency, and increase yields. For example, electric pumps can be used to access underground water for irrigation, freeing up time to do other critical labor and reducing water wastage compared to manual pumps. Similarly, new technologies like drones can be used to assess fields in minutes rather than days, reducing the physical labor involved in farming.

Moreover, electrification can also help Filipino farmers to diversify their income sources, particularly during fallow periods and off-season. With better access to electricity, Filipino farmers can engage in other potentially lucrative activities such as food processing and handicraft production, creating additional income streams and contributing to the overall growth of their community.

Connecting farmers to supply chains with farm-to-market roads and airports

An aerial view of a bridge with cars on the road

A lack of good roads and airports has long hindered Philippine agriculture. Many farm-to-market roads remain unpaved or otherwise disconnected from major highways, greatly slowing down the transportation of produce and compromising the quality of fruits and vegetables. Similarly, the ability of Philippine farms to sell high-quality produce to premium markets in Metro Manila and overseas is hampered by the lack of airports in the countryside.

These facilities are also essential for improving education and healthcare outcomes. Better roads, in particular, improve rural communities access to vital services such as healthcare and education. Rural airports can also make it easier for emergency response teams to access faraway communities in case of emergencies. Improving roads and developing airports in rural areas should not only boost Philippine agriculture but also lead to a sea change in the quality of life available in the countryside.

Modernizing Philippine agriculture through better digital connectivity

Stakeholders in Philippine agriculture should not overlook the importance of better digital connectivity. Digital inclusion is especially important for agricultural businesses and farmers as it provides them with an abundance of valuable resources as well as access to global markets.

With better connectivity, farmers can access valuable market information, weather forecasts, and highly qualified advice to make better farming and business decisions. They can also use digital technologies to quickly identify various pests and crop diseases as well as optimal planting and harvest times. They can even access satellite imagery to track storms or give a quick overview of crop conditions. 

Furthermore, digital connectivity can also help Filipino farmers engage in e-commerce, allowing them to reduce their dependence on middlemen while also giving them access to a broader market. This direct market access may even help shield beleaguered farmers from exploitation and allow them to earn better incomes.

Fortunately, the Philippines is currently well on its way to providing important digital infrastructure throughout the Philippine countryside. Companies like Aboitiz InfraCapital are now helping with the development of effective low-cost digital communications solutions in previously unconnected parts of the country. Low-cost, high-impact technologies like common towers and small cell sites are now connecting a growing number of local farmers and agricultural businesses throughout the Philippine countryside.

Less waste and more profits through improved local post-harvest facilities

Investment in local post-harvest facilities can help farmers deliver value-added products and stave off post-harvest losses, effectively increasing their useful yields and their income. Even simple solar dryers and storage facilities can make a massive impact on many less-developed farms. More advanced facilities located within major farms may even create positive changes that affect entire generations of farm workers.

With better storage facilities, farmers can store their products for longer periods, reducing the need to sell their produce immediately after harvest when prices are at their lowest. Improved processing facilities can also help farmers add value to their products, enabling them to sell them at higher market prices. Moreover, better facilities closer to the farms can help farmers reduce their transportation costs, reducing spoilage as well as the overall cost of marketing their produce. Together, these benefits can help increase their competitiveness and contribute to the overall development of the Philippine agricultural sector.

Better infrastructure prevents unsustainable agricultural practices

Worker with tablet in hand that controls the quality

With the country’s population continuing to rise, infrastructure investments in Philippine agriculture are as much a matter of long-term food security as they are of global competitiveness. The Philippine agriculture sector has had many recent successes in driving sustainability, but it remains to be seen if present initiatives are enough to offset the challenges of climate change, overpopulation, and market inequity.

Better infrastructure may not solve all the sustainability problems faced by Filipino farmers but improving it will be an important step. Fortunately, most of the modern infrastructure investments mentioned thus far not only will help increase profit margins for local farmers but will also help conserve dwindling agricultural resources. Better infrastructure promises to not only help farmers make more efficient short-term use of land but it should also help them become better stewards of the soil and water for generations to come.

Building a food-secure future with Aboitiz InfraCapital

Thanks to decades of consistent effort by multiple successive government administrations and private sector entities like Aboitiz InfraCapital, Filipino farmers are now more capable and more productive today than they have ever been. However, there is still much that needs to be done to help our farmers’ competitiveness and productivity.

Investing in better infrastructure, particularly in the areas mentioned above, will be critical for not only boosting the Philippine agricultural sector’s productivity but also improving the lives and incomes of Filipinos in the countryside. Expanding current rural infrastructure initiatives should, therefore, not only contribute to national food security but also help bridge a longstanding rural-urban divide. Working together, Filipinos in both the cities and the countryside can yet achieve a more food-secure and prosperous future.

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