The Department of Agriculture (DA) will focus on projects with an internal rate of return of 12 percent to 14 percent per year and a payback period of not more than seven years to make sure they are bankable and profitable.
Agriculture Secretary Francisco Tiu Laurel Jr. said in a statement Sunday that utilizing a corporate approach to DA’s operations and budgeting is crucial, emphasizing that projects that fail to meet the investment-grade criteria will not get priority even if they are viable.
Laurel cited a mushroom farming proposal the DA recently had to reconsider as it would take more than a decade to recoup the investment.
“We don’t have infinite resources, and we can’t afford to waste them,” Laurel said.
“At 8 percent (per year), it would take 12 years to profit from the investment. That is not good business,” he explained.
Resources must be allocated for high-return projects with maximum impact and farm profitability, the DA head said.
Laurel also called on the government to veer away from the traditional one town, one product model and focus on multiple key commodities to reduce reliance on a single crop.
He said that having multiple businesses will ensure that “if one has a difficult period, the other businesses could take up the slack,” so towns could withstand downturns in one crop while maintaining focus on others with stronger market potential.
However, Laurel cautioned against excessive diversification, warning that growing too many crops could lead to inefficiencies.
The DA reiterated the importance of effective resource management and the need for continuous review and adaptation to challenges posed by climate change and evolving technology.
