Monday, February 15, 2016

The business of agriculture and Edison

Will Edison buy into this? “In its report titled, ‘Enabling the Business of Agriculture 2016,’ the World Bank outlined key issues that must be addressed. These are: seed; fertilizer; machinery; finance; transport; markets; information and communication technology (ICT); land; water; and livestock.” [Agri development plan needs review – Balisacan, Ted Torres, The Philippine Star, 9th Feb 2016]

Consider what Edison said in 1877: “I want to see a Phonograph in every American home.” In this day and age of innovation, Edison has been resurrected given that he was a practitioner of “begin with the end in mind.” And it took over a century before Stephen R. Covey captured that in his 7 Habits of Highly Effective People.

Edison is considered the father of modern-day R&D with the shift (from individual) to team-based research and development. And the d-school in Stanford would push the envelope into “design thinking.”

“To get started, design thinkers focus on five steps, but the first two are the most important. Step 1 is to ‘empathize’ — learn what the real issues are that need to be solved. Next, ‘define the problem’ — a surprisingly tough task. The third step is to ‘ideate’ — brainstorm, make lists, write down ideas and generate possible solutions. Step 4 is to build a prototype or create a plan. The final step is to test the idea and seek feedback from others.” [‘Design Thinking’ for a Better You, Tara Parker-Pope, The New York Times, 4th Jan 2016]

“Design thinking is normally applied by people who are trying to create a new product or solve a social problem or meet a consumer need.”

Where are we with agriculture?

“Intercropping either cacao or coffee . . . will give the coconut farmer an extra P80,000 per year to supplement the P20,000 he now gets primarily from copra . . . More significant is multi-level intercropping with additional products like pineapple, papaya and banana. This yields a total profit of P200,000, which can be found in places such as General Santos, Davao and Cavite. Substituting the high value rambutan for one of these products yields P300,000. This can be seen in Batangas, Laguna and other provinces.

“Why has the strategy of intercropping not succeeding? The potential synergy between the Department of Agriculture (DA), where PCA is attached, and the Department of Trade and Industry (DTI) is sorely lacking. The DA covers production, while the DTI covers the industrial part of agriculture, which is processing. Food manufacturing is the largest manufacturing subsector today.

“While we have the correct strategy for agriculture, we do not have the appropriate structure to effectively implement these strategies. We need the DA and the DTI to unite in a structure that will synergistically use their expertise. In addition, we need the funding.” [Structure following strategy in agriculture, Ernesto M. OrdoñezPhilippine Daily Inquirer, 29th Jan 2016]

Clearly the public sector is not the private sector. Yet we would always raise the MNC example, if not use it as a yardstick, whenever we want to challenge public-sector efficiency and effectiveness. But let’s dissect that. Why does the private sector start with the product? “I want to see a Phonograph in every American home.”

In fact the old notion of “strategic planning” was discredited because industry saw it as overpromising but underdelivering. In what way? Begin with the end in mind! Simply put, the measure of sustainability of an enterprise or economic activity is the extent its output or product is accepted by the consumer.

And the competition to win her heart and mind comes down to how engaged she is with the product – that she would even influence her community of friends (e.g., Facebook and Instagram) to embrace her choice.

What has that got to do with the business of agriculture? If agriculture is to be a sustainable economic activity, it is imperative that we recognize market reality? And if we are a democracy and a free market in a highly globalized and competitive 21st century world, do we really have a choice?

Japan Inc., Singapore Inc., and China Inc. – or the Asian tigers – pursued industrial development by climbing up the value-chain: from light- to medium- to heavy-industry to high-technology. And that has translated to today’s popular brands like Samsung or Sony or LG or Canon. “China’s Haier to Buy GE Appliance Business for $5.4 Billion,” reports the Wall Street Journal. Should we still be surprised?

What is the end in view in the case of agriculture? We can relate to canned or packaged food products, for instance. And if we are to visualize the business of agriculture, it must respond with the kind of products that consumers would pick in the supermarket.

And if we are to push the envelope, we must go beyond, for example, “intercropping either cacao or coffee . . . will give the coconut farmer extra [income] and [more significantly with multi-level intercropping] with additional products like pineapple, papaya and banana” . . . and imagine PH products becoming popular brands similar to those referenced above.

What else must Philippine agriculture hurdle? “A structure such as a Task Force is necessary to unite DA-PCA, DTI, and LBP to implement the intercropping strategy . . . On Jan. 8, the Federation of Philippine Industries (FPI) met with newly appointed Trade Secretary Adrian Cristobal. This was to recommend areas that the DTI could identify as priorities in the last six months of the current administration.” [Ordoñez, op. cit.]

Those are all the right words: strategy, structure, synergy, expertise, funding, task force, priorities, etc. Yet we have ways to go if we are to in fact “connect the dots” – which was how Steve Jobs defined creativity.

And as important, so that we don’t see the business of agriculture collapsing under its own weight given the many pieces that must be pulled together, we better remember Edison – i.e., begin with the end in mind. And likewise to toss “crab mentality” and keep Pareto’s 80-20 rule in mind.

In other words, what if we stop making “pa-pogi” – pleasing the 100% – and shoot for the 20 that will deliver the 80. For instance, do we have an initiative that is better than Arangkada? Is our 32 industry roadmaps a better industrialization policy and program for PH than their 7 industry winners? 

And back to Steve Jobs. Developing a product that will win the heart and mind of the consumer is not a cakewalk. But Jobs figured that out, that is, that music is the way to the soul, for example. And so Apple developed the iPod, and moved beyond the Macintosh and the Apple computer.

To empathize and understand human needs is easier said than done. It’s a universal challenge. And why in the age of the millennials, for instance, Hillary Clinton appears to be struggling to win over not only the young men but the young women too. They have a different worldview that goes beyond feminism, the advocacy long associated with Hillary.

What more in a culture that is hierarchical and paternalistic – subservient to political patronage and oligarchy – like we have in PH? The rhetoric we are hearing consistent with a Philippine presidential election is just that – a rhetoric – given our oligarchic, non-inclusive economy?

And the loudest noise comes in populist tones against poverty as though they’re a panacea! When they are in fact a rehash of same-old, same-old – and we know what Einstein would call that? They reinforce and perpetuate the vicious cycle of poverty-paternalism-hierarchy-political patronage-oligarchy-non-inclusion-poverty?

Consider: “Aquino a failure if gauged vs JFC’s Arangkada targets,” Catherine Pillas, Business Mirror, 9th Feb 2016. “IF the Arangkada Philippines blue-print of the Joint Foreign Chambers (JFC)—which set medium-term targets for investments and job generation when it was launched back in 2010—is to be made as basis, the Aquino administration was a resounding failure.

“Consider these: Arangkada’s foreign direct investment (FDI) target was an average of $7.5 billion a year from 2011 to 2015, while President Aquino was only able to deliver an average FDI haul of $3.9 billion.

“John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines (AmCham), knows the reason behind the failure.

“‘We targeted an average of $7.5 billion a year for a decade [to 2020] and have a total of about $20 billion for 2011-2015. But everything the JFC recommended to reach the target was not done,’ Forbes said in a text message.”

But back to agriculture.

“[T]he World Bank outlined key issues that must be addressed [in the business of agriculture.] These are: seed; fertilizer; machinery; finance; transport; markets; information and communication technology (ICT); land; water; and livestock.”

Indeed they are imperative, but what products must we develop to make Philippine agriculture respond to the needs of the consumers if not the world – and make it a sustainable economic activity?

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

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