February 9, 2025
The Department of Agriculture (DA) is shifting its focus toward projects that offer strong and sustainable returns as part of its multiyear budget strategy.
During a recent two-day budget planning session, Agriculture Secretary Francisco Tiu Laurel Jr. emphasized the importance of strategically allocating limited resources. He stressed that priority would be given to projects with an internal rate of return of 12 to 14 percent annually or a payback period of no more than seven years to ensure both profitability and bankability.
Since joining the Marcos administration in November 2023, Tiu Laurel has introduced a corporate mindset to the DA’s operations and budgeting. He underscored that every peso spent must contribute to both project sustainability and national agricultural growth. Projects that fail to meet investment-grade criteria, despite being agriculturally viable, will not be prioritized.
“Our resources are finite, and we cannot afford to squander them,” he stated in a press release on Sunday.
As an example, he cited a proposed mushroom farming project that projected a return of just 8 percent, requiring 12 years to recover the investment.
“That is not sound business,” he remarked, emphasizing the need for efficiency in resource allocation to maximize impact and boost farmer profitability.
“We must think like entrepreneurs, not just farmers,” he added.
In addition to prioritizing high-return ventures, Tiu Laurel also advocated for diversifying agricultural activities to enhance the sector’s resilience.
Rejecting the conventional “one-town, one-product” model, he suggested that each town cultivate multiple key commodities to reduce dependence on a single crop.
Drawing from his personal experience, he recalled how his family’s fishing enterprise faced difficulties during the Asian financial crisis of the early 1990s, leading them to expand into food processing, cold chain logistics, and shipbuilding.
“Having multiple businesses allowed us to weather tough times by balancing losses in one sector with gains in another,” he shared.
He believes Filipino farmers should adopt a similar strategy by focusing on a “trinity of products” to mitigate risk. However, he warned against excessive diversification, cautioning that spreading resources too thinly across too many crops could lead to inefficiencies.
Instead, he advocated for a balanced approach, allowing towns to absorb downturns in one crop while capitalizing on others with stronger market demand.
“We must invest wisely to safeguard the future of our farmers and the long-term stability of the agriculture sector,” he concluded.
Source: PNA