“Heed the lessons of failure.”

“It’s OK to celebrate success, but it is more important to heed the lessons of failure.

“That’s a powerful lesson, but it’s one that many of us have a hard time learning. There are very few – if any – overnight successes. Also, it turns out, very few overnight failures too. Understanding that is just as important.” [“Bill Gates Learned at an Early Age This Lesson That Takes Most People a Lifetime. Some People Never Do,” by Jason Aten, inc.com, 11th Oct 2020.]

Very few overnight failures? Recall Einstein’s definition of insanity. Haven’t we been doing the same thing over and over again? And we still wonder why we’re the regional laggard, if not the laughingstock of the world?

Consider: “Past administrations had poured money into the rice industry to demonstrate they had used the resources for their intended use. Their investments boiled away into thin air, leaving white elephant infrastructure facilities proof of budget utilization, but farmers remained poor.

“Repeating the way his predecessors spent public resources for the rice industry would likely create the same legacy for his administration, and, down the road, raise the likelihood of a failed experiment in liberalizing rice import policies.

“Secretary Dar has the Rice Competitiveness Enhancement Fund (RCEF) to use in his effort to deliver a new rice industry of the country. The fund is rigid by law, but he is sitting on at least a P10-billion fund yearly.

“Akin to that momentous decision he had to take of supporting the RTL, he is now called upon to effectively convert the RCEF into higher rice productivity even as the industry faces import competition.” [Is it time for an agriculture rebound under Secretary William DAR's leadership (?), Ramon L. Clarete, Introspective, BusinessWorld, 11th Oct 2020]

Let’s hold it right there. But let’s not be frozen and assume that the tools we call RTL and RCEF are the be-all and end-all.

Recall this spiel, “Often, a secret unlocks itself only when one looks at a problem from multiple perspectives, including some that initially seem orthogonal.

“To gain a dragonfly-eye view, ‘anchor outside’ rather than inside when faced with problems of uncertainty and opportunity.

“Take the broader ecosystem as a starting point. That will encourage you to talk with customers, suppliers, or, better yet, players in a different but related industry or space.

“Going through the customer journey with ‘design-thinking’ in mind is another powerful way to get a 360-degree view of a problem.

[“Design thinking is a process for creative problem-solving. It has a human-centered core. It encourages organizations to focus on the people they’re addressing, which leads to better products, services, and internal processes. When you sit down to create a business need solution, the first question should always be, what’s the human need behind it? [https://www.ideou.com/blogs/inspiration/what-is-design-thinking”]

“Dragonfly-eye perception is common to great problem solvers. Dragonflies have large, compound eyes, with thousands of lenses and photoreceptors sensitive to different wavelengths of light.

“Think of this as widening the aperture on a problem or viewing it through multiple lenses. The object is to see beyond the familiar tropes into which our pattern-recognizing brains want to assemble perceptions. By widening the aperture, we can identify threats or opportunities beyond the periphery of vision.” [Six problem-solving mindsets for very uncertain times, Charles Conn and Robert McLean, McKinsey Quarterly, 15th Sep 2020]

Let’s pause once more. Those familiar with the blog will appreciate that while the postings quote bodies of knowledge, they are different from classroom work. That is because the writer is a practitioner, not an academic. In other words, beyond the logic, the quotes confirm his real-world experiences.

For example, when a Ph.D. candidate requested his assistance in developing her dissertation, he set the caveat for the resulting work to be put to real-world use. The confirmation came: “I am asking your assistance because I want the dissertation to help me progress in my career. I am doing this for the brand that I manage. But we are a small market (in Eastern Europe) for this global brand. My wish is to go beyond the local market, into the region and then the world.”

Fast-forward to the present; she is the global marketing director of a billion-dollar-plus brand sitting at London’s corporate headquarters.

His practitioner’s mind likewise drives the writer’s presence in Eastern Europe. At the instance of USAID, he volunteered to assist two local young MSMEs.

Consider: How can people born and raised as socialists under Communist or Soviet rule turn on a dime, embrace the free enterprise system, and become entrepreneurs themselves? Yet, despite being novices, they had to compete against Western pillars of the industry.

Let’s digress a bit. Recall that after we Filipinos gained independence from the Americans, we did not have to turn on a dime. For good or ill, “Uncle Sam remained a significant influence despite the national elections of 1946. People assumed Manuel Roxas, who was elected president, had the staunch support of General MacArthur.

“American aid (e.g., rehabilitation fund) came with strings attached (e.g., military bases). At the same time, graft and corruption came hand in glove with the public sector, as did military police abuses in the provinces. Enter the Hukbalahap (Huk) movement.” [Wikipedia]

In the meantime, the Asian Tigers made a name for themselves. They first begged for Western money and technology and then embarked on rapid economic development.

That was how the Asian Tigers separated themselves – as men – from the boys. If the men were the Asian Tigers, the boys were the Philippines and Latin America.

In the case of Eastern Europe, former Soviet satellite states had their transition nightmares. Former commissars became the first oligarchs. Unsurprisingly, the EU stepped in and initiated accession protocols into the Union; and the US lined up FDIs and technology.

That was when USAID tapped the writer. Bulgaria and Romania had just begun the accession process into the EU, and their new enterprises needed help – so that they don’t go extinct in the face of competition from Western global behemoths.

Long story short, the writer’s friends introduced him to their country’s president, who thanked him for his work. Today that he is an ex-president, they can share worldviews. They have much in common because the former president also comes from the private sector, a German MNC.

Do we wish we were under Soviet rule instead? Have we heard of Ukraine or why the Baltic states embraced the West instead? Or why did Gorbachev pursue Glasnost? The USSR was economically incapable of keeping the satellite states under their wings, i.e., even the morning supplies of bread disappeared across Central and Eastern Europe.

There is no free lunch.

But let’s get back to the rice industry. How do we in the Philippines look at this challenge from multiple perspectives?

Benchmark. Benchmark. Benchmark.

Look outward – not just inward – so that we aren’t frozen to embrace preconceived solutions.

Consider: “Vietnam is one of the world’s richest agricultural regions and is the second-largest (after Thailand) rice exporter worldwide.

“The Mekong Delta is the heart of the rice-producing region where water, boats, houses, and markets coexist to produce a generous harvest of rice. Vietnam’s land area of 33 million ha. has three ecosystems that dictate rice culture. These are the southern delta (with its Mekong Delta dominating rice coverage), the northern delta (the tropical monsoon area with cold winters), and the highlands of the north (with upland rice varieties). 

“The Mekong Delta is the most prominent irrigated rice system. The Mekong River and its tributaries are crucial to rice production in Vietnam. A total of 12 provinces constitute the Mekong Delta, popularly known as the ‘Rice Bowl’ of Vietnam, with some 17 million people and 80% engaged in rice cultivation.

“The delta produced a bountiful harvest, about half of the country's total production.

“Rice production stalled in both parts of divided Vietnam in the 1960s with Vietnam War inflicting significant disruptions in acreage. In particular, South Vietnam became an importer by 1965, but the output did rise in the 1970s. 

“Rice production in the Mekong delta has seen a phenomenal increase in recent years. This increase resulted from the planting of modern early maturing rice varieties, better management, appropriate government interventions.

“Forty-two IRRI researched varieties of rice were grown in the Mekong Delta, and these varieties cover 60% of the irrigated rice-growing area in the delta.

“The International Rice Research Institute (IRRI), headquartered in the Philippines, has played a significant role in enhancing rice farming knowledge in Vietnam. Their research efforts have been continually aimed at growing rice faster with higher yields.

“This has boosted the Vietnamese scientists’ confidence level who hope that their country would one day be the rice producer to feed the world.

“The IRRI has trained and worked with Vietnamese scientists since 1970. The scientists trained by IRRI now hold critical positions in rice research institutions and universities and government organizations.

“In May 1994, the contribution of the IRRI to Rice development in Vietnam was recognized by the President of the Socialist Republic of Vietnam with a Friendship Order of the Vietnam Government with the citation, ‘in recognition of the Institute’s ‘very efficient contribution.’

“Apart from introducing several rice varieties in Vietnam, other assistance provided by the Institute relate to the irrigated rice ecosystem to increase their production and income through several measures.” [Wikipedia]

Don’t we have eggs on our face? 

IRRI is right here in the Philippines, yet we have to look at Vietnam to pick their brains? Doesn’t it speak volumes? That because we don’t view problems from multiple lenses, we take the IRRI for granted? 

Like Padre Damaso, we have absolute knowledge. It’s insane when we know that this ship we call the Philippines is foundering. 

Here’s what IRRI says about the Philippines: “The assumption then is Philippine rice cannot compete with cheap imported ones and that the income of Filipino farmers will be adversely affected by open trade. Hence, the extension time for QR was supposed to improve the competitiveness of the Philippine rice industry. Unfortunately, two decades after the country joined the WTO, the Philippine rice industry’s competitiveness is still in question.

“To be competitive, farmers and processors must be able to produce rice with the same or superior quality at lower costs than those of international competitors.

“The Philippines is also second to the last in terms of annual rice yield per hectare (9.52 t ha-1 yr-1), higher only than India’s.

“While rice yield in the Philippines is at par with the others during the high-yielding season (HYS), the country has the least output during the low-yielding season (LYS), owing to the less favorable climate. This relatively lower annual yield is another major cause of its higher production cost per unit.

“In contrast, Vietnam garnered the highest annual yield of 20.59 t ha-1 yr-1. Not only did Vietnam have the highest ‘yield’ in both HYS and LYS, but it also had the most intensive cropping system—three rice crops per annum.

“This was made possible by the continuous availability of water, use of early-maturing varieties, direct seeding, and synchronous planting. The high farm productivity in Vietnam is a significant contributor to its low production cost per unit.

“The Philippines is consistently second to the last in terms of financial profit per hectare, returns above paid-out cost, annual household income in both US and International dollars, and per capita income from rice farming.

“This occurs not because the farmers are receiving a low price for its paddy but because of low productivity and higher production cost. It suggests that the Philippines has to improve its yield and reduce its production cost to increase profitability.

“Among the four Southeast Asian countries, gross marketing margin (GMM) is highest in the Philippines (PhP 9.06 kg-1) and lowest in Vietnam (PhP 4.55 kg-1).

“Transportation and milling costs and high returns to management are the main factors responsible for the country’s high GMM.

“The wider road networks, particularly in Thailand and Vietnam, gave their market players an advantage to hauling more tons of grains per liter of fuel.

“Also, mechanization reduced the labor costs incurred in loading and unloading the grains from each point of destination. Milling cost in the Philippines is high due to underutilized rice mills, which, in turn, is caused by the lower volume of paddy supply and the expensive ‘cost’ of paddy.

“Returns above marketing cost were also observed to be highest in the Philippines (PhP 4.43 kg-1).

“One explanation is the larger number of market intermediaries in the Philippines as compared with those in other countries who must earn a living.

“Layers of marketing agents for the purchase of paddy are common in the Philippines before the paddy even reaches the miller. They are absent in other countries.

“These show that rice prices differ not only from production cost but also from marketing factors.

“Eliminating QR at 2015 prices, Philippine rice (i.e., regularly milled ordinary white rice) at the domestic wholesale market would still be more expensive – compared with rice with similar quality (i.e., ‘ordinary’ white rice with 25% broken grains) coming from major exporters such as Vietnam, Thailand, and India.

“Even with a 35% tariff rate, imported rice from Vietnam, the least expensive among the three, is about 21% cheaper than the domestic ones. After accounting for the exchange rate, tariff rate, and costs of freight, insurance, port administrative charges, and local transport, a kilogram of Vietnam rice will sell at PhP 27 in the wholesale market. In contrast, domestic rice is at PhP 34.

“If the wholesale price in the domestic market comes down after eliminating QR, the farmgate price of paddy will eventually go down. At a milling recovery ratio of 64.5%, the best price that processors can offer to buy a dry paddy kilogram is around PhP 12.

“To maintain the profit margin of farmers, estimated at PhP 5 kg-1, their production cost must come down to PhP 7 kg-1.

“Hence, rice yield must improve, and production cost needs to be reduced for Filipino farmers (at least those in irrigated areas) to be competitive.

“Since labor costs account for the most significant share of production cost in the Philippines, they must decline. For example, mechanize the harvest process, adopt labor-saving practices (e.g., direct seeding in crop establishment.)

“Reducing the use of labor through increased use of machinery will have potentially the most significant impact on improving competitiveness.

“Subsidy can consume large amounts of scarce budgetary resources. If input subsidies lead to less investment in agricultural research, education, and health, that will compromise long-term competitiveness.

“And if input subsidies are awarded to only a limited number of farmers to conserve on budgets, then the impact on the overall competitiveness will be minimal and may probably be zero.

“Increasing the yield is another way to reduce production cost per unit. Among several inputs, the use of hybrid rice varieties, particularly during HYS, is one option to increase yield.

“The Philippines cannot be competitive by enhancing the rice production system alone. Its marketing system must, likewise, improve.” [Competitiveness of Philippine Rice in Asia; Bordey FH, Moya PF, Beltran JC, Dawe DC, editors. 2016. Competitiveness of Philippine Rice in Asia. Science; City of Muñoz (Philippines): Philippine Rice Research Institute and Manila (Philippines): International Rice; Research Institute. 172 p.]

Here’s a quote from a prior posting: “Even the most inscrutable problems have solutions—or better outcomes than have been reached so far.” [Six problem-solving mindsets for very uncertain times, Charles Conn and Robert McLean, McKinsey Quarterly, 15th Sep 2020]

“Great problem solvers are made, not born. That’s what we’ve found after decades of problem-solving with leaders across business, nonprofit, and policy sectors.

“These leaders learn to adopt a remarkably open and curious mindset and adhere to a systematic process for cracking even the most inscrutable problems.

“They’re terrific problem solvers under any conditions. And when conditions of uncertainty are at their peak, they’re at their brilliant best.

“Six mutually reinforcing approaches underlie their success: (1) being ever-curious about every element of a problem; (2) being imperfect with a high tolerance for ambiguity; (3) having a ‘dragonfly eye’ view of the world, to see through multiple lenses; (4) pursuing occurrent behavior and experimenting relentlessly; (5) tapping into the collective intelligence, acknowledging that the smartest people are not in the room; and (6) practicing ‘show and tell’ because storytelling begets action (exhibit).

The blog can’t help but sound like a broken record, given that it is now going in its twelfth year.

Consider another quote from an earlier posting: “The solution to a problem depends to a great extent on one’s awareness of the problem and his attitude towards it. The worse possible attitude is not to be aware of the issue at all.”

That’s from Fr. George Gorospe’s “Christian Renewal of Filipino Values;” Philippine Studies vol. 14, no. 2, 1966; Ateneo de Manila University.

He spoke about authenticity – the authentic person, Christian, and Filipino. To be one is a real challenge because it demands accepting, understanding, and committing – instead of rejecting – maturity as a person, Christian, and Filipino.

It is something that we can only do on our own, without intervention from the outside. And it explains why ours is a culture of impunity. And neither the family nor the Philippine Church can teach something that we can either accept or reject. Translation: That is why, to this day, we deride Padre Damaso.

It comes from free will. We are ‘free’ to accept or reject self-government and its demands of personal responsibility and the common good. In other words, to be parochial and insular, to value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity, come down four square to rejecting democracy. Ergo: We created a Marcos and a Duterte – and we wonder why we’re the pariah nation?

Democracy is an expression of authenticity — and maturity. And why a mature Juan de la Cruz is the key to overcoming our backwardness as a nation. There is no free lunch. Sadly, we in the elite class, see ourselves differently because rank has its privileges.

Gising bayan!