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BIG
businesses San Miguel Corp. (SMC) and Kuok Group of
Companies are pooling together $1 billion to develop
agricultural lands that will help address the country’s
food-security concerns.
The
partnership was sealed in a memorandum of understanding
signed on Thursday and witnessed by President Arroyo.
SMC
chairman Eduardo Cojuangco Jr., in an interview, said
the search for at least 1 million hectares of
agricultural lands has started and is being handled by
the government.
“The
government has already identified 3 million hectares all
over the country. Whichever is the most suited, iyon
ang uumpisahan namin [we will start with them],” he
said. The areas are mostly concentrated in Visayas and
Mindanao.
Dubbed
“Feeding Our Future,” the project will allow for a
sustainable and adequate supply of grains, sugar and
other basic food staples.
Cojuangco said the government, through agencies like the
Department of Environment and Natural Resources (DENR),
the Armed Forces of the Philippines, National Commission
on Indigenous Peoples and the National Power Corp., will
identify, evaluate and review government land suitable
for food production.
He
explained that SMC and the Kuok Group would take care of
the financial and technical expertise for the
development and cultivation of the government land. They
will also buy all food products under the terms and
conditions of the agreements executed by all the
parties.
Ramon
Ang, president and chief executive of SMC, said the $1
billion would be shared equally by the two companies.
“That’s
only the initial investment. If there’s a need to put in
more, we can easily raise funds by going to the market,
possibly sell bonds,” he said.
The
investment will be funded 30 percent by equity and 70
percent through borrowings.
Meanwhile, the Department of Agriculture (DA) said it
would provide technical assistance to SMC and Kuok in
their agricultural tie-up.
The DA
will study prospective arable lands in the Philippines
to determine what suitable crops to be planted on them.
It will also seek the two companies’ food or grain
priority to grant proper agricultural extension
services.
“We will
be looking at soil suitability, tenure arrangements,
compliance with the constitution and part of the DENR
untenured lands that can be released, except our
protected forest lands,” Agriculture Secretary Arthur
Yap told reporters at Shangri-La Hotel’s
foundation-laying ceremony held Thursday at The Fort
Bonifacio Global City, Taguig.
Yap
said, “The lands to be developed will primarily be in
Mindanao, to include our indigenous people, and to
balance the volume of food production in the country.”
Yap said Cojuangco has assured that the agricultural products
will be produced at the most efficient cost possible.
Asked
how many land tillers will benefit from the
public-private initiative, Yap said, “We haven’t taken
that into account. Maybe at least 100,000 families of
farmers.”
To
further support the land tillers, Yap said the
government has asked the Land Bank of the Philippines
for a guarantee fund of P400 million, or 5-percent
income of government-owned and -controlled corporations
under Administrative Order 2-55A.
“As the
largest food company that already has ongoing
agricultural and raw-material-sourcing programs in
several provinces throughout the Philippines, we are
stepping up our efforts to assist the government in
developing solutions for the short-term problem of
insufficient food production and the long-haul issue of
food security,” said Ang.
In
recent years, food security has emerged as a serious
issue globally as a direct result of several problems
plaguing the world’s economies.
Kuok
Group chairman Robert Kuok said factors like
urbanization, changing diets in emerging economies, the
use of crops to produce alternative fuels, global rise
in population and climate change, have put tremendous
pressure on farm lands and are changing the face of
farming.
“The
skyrocketing prices of fossil fuels, which affect not
only farming but also the transportation of goods, as
well as the rise in prices of fertilizers, have also had
a major impact on food supply and food prices,” added
Kuok.
SMC and
Kuok said they are committed to support the project for
the long term.
SMC is
among the most profitable companies and is known as the
biggest food-and-beverage firm in Southeast Asia. From
January to May this year, its net profit stood at P17
billion.
Kuok, on
the other hand, is one of the country’s largest property
developers, especially known for its investments in
Shangri-La Hotels. (With L. Francisco) |
