Agriculture Secretary Francisco Tiu Laurel Jr. stressed the need to prioritize projects with strong, sustainable returns as the Department of Agriculture (DA) develops its multiyear budget plan.
Speaking at a recent two-day budget planning session, Tiu Laurel urged DA officials to allocate limited resources strategically, focusing on projects with an internal rate of return of 12%-14% per year or a payback period of no more than seven years to ensure bankability and profitability.
A successful businessman before joining the Marcos administration in November 2023, the agriculture chief introduced a corporate approach to DA’s operations and budgeting.
The agriculture head stressed the importance of fiscal discipline, explaining that every peso spent must generate returns that support both project sustainability and national agricultural development.
“We don’t have infinite resources, and we can’t afford to waste them.”
“We don’t have infinite resources, and we can’t afford to waste them,” he stressed.
Tiu Laurel made it clear that projects failing to meet investment-grade criteria would not be prioritized, even if they were agriculturally viable. He cited a recent mushroom farming proposal that would take over a decade to recover the investment.
“At 8 percent, it would take 12 years to recover the investment. That is not good business,” Tiu Laurel explained.
He underscored the need for efficiency in resource allocation, ensuring that high-return projects take precedence to maximize impact and farmer profitability.
“We need to think like businesspeople, not just farmers.”
“We need to think like businesspeople, not just farmers,” Tiu Laurel said, advocating for a results-driven mindset that balances agricultural viability with financial practicality.
Beyond prioritizing high-return projects, he also called for diversifying agricultural activities to strengthen the sector’s resilience.
Rejecting the traditional “one town, one product” model, Tiu Laurel instead proposed that each town focus on multiple key commodities to reduce reliance on a single crop.
Drawing from his own experience, Tiu Laurel recounted how his family’s fishing business had a challenging stretch around the time of the Asian crisis in the early 1990s, prompting them to diversify into food processing, cold chain, and the shipyard business.
“By having multiple businesses, we ensured that if one has a difficult period, the other businesses could take up the slack,” he shared.
Tiu Laurel believes Filipino farmers must adopt a similar approach, focusing on a “trinity of products” (TOP) to mitigate risks.
However, he cautioned against excessive diversification, warning that growing too many crops could lead to inefficiencies. Instead, he advocated for a balanced approach that enables towns to withstand downturns in one crop while maintaining focus on others with stronger market potential.
Tiu Laurel’s vision for the DA is a more profitable, resilient, and sustainable agricultural sector, where strategic investments and local-level diversification secure a prosperous future for Filipino farmers.
“We need to invest wisely,” he stressed, “so that we can secure the future of our farmers and our agriculture sector for generations to come.”
