In a strategic move to enhance the sustainability and profitability of the agricultural sector, the Department of Agriculture (DA) in Manila has announced a shift towards prioritizing projects that promise high returns. Agriculture Secretary Francisco Tiu Laurel Jr. emphasized this new direction during a recent budget planning session, highlighting the necessity of focusing on initiatives that offer an internal rate of return between 12 to 14 percent annually or a payback period not exceeding seven years.
Secretary Tiu Laurel, who joined the Marcos administration in November 2023, has introduced a corporate mindset to the DA’s operations and budgeting. He insists that every peso invested must yield returns that not only sustain the project but also contribute to the broader development of the national agriculture sector. Projects that do not meet these stringent investment-grade criteria will be deprioritized, regardless of their agricultural viability.
Tiu Laurel illustrated his point with a recent proposal for mushroom farming, which he critiqued for its projected 12-year recovery period at an eight percent return rate, deeming it an unprofitable venture. He stressed the importance of efficient resource allocation, advocating for investments in high-return projects to maximize impact and profitability for farmers.
Beyond focusing on high-return projects, Tiu Laurel also pushed for diversification within the agricultural sector to bolster its resilience. He rejected the traditional ‘one-town, one-product’ approach, suggesting instead that towns should concentrate on multiple key commodities to mitigate risks associated with relying on a single crop.
Drawing from personal experience, Tiu Laurel shared how his family’s fishing business diversified into food processing, cold chain, and shipyard operations during the Asian crisis of the early 1990s. He believes Filipino farmers should adopt a similar strategy, focusing on a ‘trinity of products’ to safeguard against market fluctuations. However, he cautioned against over-diversification, which could lead to inefficiencies, and instead recommended a balanced approach that allows towns to weather downturns in one crop while capitalizing on others with stronger market potential.
Tiu Laurel concluded by emphasizing the importance of wise investments to secure the future of Filipino farmers and the agriculture sector for future generations.