The case for attaining economies of scale at the farming level was the theme of the first session  of the panel presentations.   Dean Arlene Inocencio of the School of Economics of De La Salle University argued that scale in food and agribusiness is structural and necessary because it leads to efficiency, investment capacity and bargaining power.  She pointed out that the primary constraint in improving productivity in Philippine agriculture is farm fragmentation which is a hindrance to mechanization, forcing farmers to be price takers in buyers-dominated markets. She clarified that scale is more about organization than the size of the land.  Corporate farms and land consolidation are not strictly necessary as long as there can be shared services, collective selling, and bundled finance.  The three pathways that can be followed:  horizontal consolidation (cooperatives), vertical consolidation (transparent contract farming), and hybrid models (mechanization hubs and digital platforms. Productivity is an outcome of the appropriate value chain and market power is attained through institution building to ensure fairer negotiations.

              Dr. Lionel Dabbadle, Country Director reframes “competing at scale” as a matter of collective organization and economic coordination rather than simple having bigger farms.  It is meaningful to him that while smallholders (under two hectares) operate only 12% of global hectarage, they produce one-third of the world’s food supply, making them essential to global food security. Dr. Dabbadle supports the Farm and Fisheries Clustering and Consolidation (F2C2) program, which shifts farmers and fisherfolks from individual production units to collective economic actors.  As strategic levers, he emphasizes sustainable mechanization (shared equipment hubs) and digital tools (e.g. AI-supported forecasting) as accelerators that reduce the transaction costs of collective action.  As safeguards, the Food and Agriculture Organization (FAO) promotes “scale with safeguards,”  ensuring  that scaling does not undermine tenure security or exclude vulnerable groups such as the Indigenous People (IP). 

              I fully agree with the ideas above about distinguishing scale from land size. The fly in the ointment is the notoriety of Filipinos in general (not only farmers and fisherfolks) in their inability to cooperate with one another.  Unlike many of our neighbors who have cultures that foster cooperation (e.g. the Japanese and those heavily influenced by the Confucian culture through the Chinese),  cooperatives In the Philippines are more known for failure than success, especially among farmers. That is why, the more practical approach is the nucleus estate approach of the Malaysians in which a farmer does not have to belong to a cooperative but can just lease his skall farm to a large cooperation who can then consolidate the small farms of other lessors into large units that can then be managed by the lessee corporation following the Del Monte or Dole models for bananas and pineapples in Mindanao.  It is not a coincidence that the nucleus estate approach worked better in Malaysia since their Malay farmers have not been influenced either by the Confucian culture and are, like Filipinos, not as prone to cooperativism as their Chinese counterparts.

              Former Agriculture Secretary, William Dar, highlighted the urgency of clustering because of the shrinking average size of farms in the Philippines which fell from 3 hectares in the 1980s to  0.9 hectare in 2012.  I could to this the fact that the average age of a Filipino farmer is already close to 60 years.  Secretary Dar posited that clustering in one form or another is the future of Philippine farming, transforming fragmented lots into community business enterprises ( or large commercial farms).  He referred to the “Big Brother” model, also called the KALAP program, through which large agribusiness enterprises provide mentorship, technology, and market access to small holder clusters.  Where socially feasible, clustering reduces unit costs through bulk purchasing and shared post-harvest facilities, making farmers “bankable” and reliable suppliers for institutional buyers.  He outlined a 36-month implementation plan to move from plot clusters to competitive value chains through public-private producers partnerships.

              Dr. Nerlita Manalili, Managing Director of Nexus Agribusiness Solutions, defined scaling as the strategic growth of capacity in operations, people, and technology.  She echoed what the other speakers identified as the advantage of scaling.  She distinguished between vertical scaling (integration across suppliers and retailers) and horizontal scaling (diversification into value-added products and geographic expansion).  For small players, scale is achieved through farm clustering and partnerships for high-value or organic products to reach premium export markets.  Examples are processing locally produced cacao beans into high-value chocolate candies and other specialized products.  Successful scaling would require an enabling policy environment, data-driven management (monitoring, evaluation and learning) as well as strong social capital built on trust and coordination.  To be continued.