Government must help farm equipment makers

The Philippine Center for Postharvest Development and Mechanization (PhilMech) recently released the results of a policy study on the local agricultural equipment-manufacturing industry. Titled, “The Role of the Machinery Manufacturers and Distributors in the Grains Postharvest Mechanization,” the study revealed that despite the fact that there are 400 local manufacturers of agricultural equipment, the Philippines remains a net importer of farm machines.

The importance of agricultural equipment in increasing the productivity of farmers, particularly those planting corn and rice, cannot be overstated. Sans the assistance of farm machines, PhilMech said it would take at least 20 men one whole day to plant rice seedlings over a hectare of land. With the use of mechanical transplanters, only five workers can get the job done.

The use of mechanical transplanters in rice fields would increase harvest by as much as 2 metric tons (MT) per hectare. Expanding the level of mechanization in the rice sector alone would allow the Philippines to significantly reduce its reliance on imports. If harvest is raised by 2 MT in just 1 million hectares, unmilled rice production would expand by 2 million metric tons (MMT). This volume translates into 1.3 MMT of milled rice, enough to wipe out the country’s imports.

Currently, data from the PhilMech showed that the average farm- mechanization rate of the Philippines is at 1.23 horsepower/hectare (hp/ha), with the rice and corn sectors registering the highest level of farm mechanization at 2.31 hp/ha. The country’s level of farm power, however, lags behind Japan (7 hp/ha), South Korea (4.11 hp/ha), China (4.10 hp/ha) and Vietnam (1.56 hp/ha), according to data from the attached agency of the Department of Agriculture (DA). The DA wants to increase this to as much as 4 hp/ha before President Duterte steps down from office.

Under a business-as-usual scenario, local agricultural equipment manufacturers cannot take advantage of this opportunity. The DA has its own farm mechanization program, but the PhilMech study noted small- and medium-scale manufacturers could not participate because of “financial constraints”. It also does not help that many of their workers lack formal educational background on machine fabrication.

As Congress is now in the middle of scrutinizing the budget of government agencies, lawmakers should consider urging the DA to put in place a financial and credit assistance package for small- and medium-scale farm-equipment manufacturers. The DA had proposed to set aside P50 billion for a credit assistance program for farmers and fishermen. Loans under this program, according to Agriculture Secretary Emmanuel F. Piñol, may be availed at low-interest rates.

The DA could include small- and medium-scale manufacturers in its credit assistance program. Reviving this industry makes sense, as local farmers would no longer be reliant on equipment we import and made by foreign manufacturers. A vibrant agricultural equipment-manufacturing industry would also help the Philippines retain its skilled professionals, such as engineers.