1 month ago
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Department of Agriculture (DA) Secretary Francisco Tiu Laurel is committed to enforcing fiscal discipline within the agency, emphasizing the need to prioritize projects that offer strong and sustainable returns.
As the DA develops its multi-year budget plan, Laurel wants to prioritize initiatives with an internal rate of return of 12 to 14 percent per year or a payback period of no more than seven years to ensure profitability.
“We don’t have infinite resources, and we can’t afford to waste them,” he said in a statement.
Laurel, who previously served as president of the family-owned Frabelle Fishing Corporation before his appointment, is keen on applying his business acumen to the agency’s operations and budgeting.
He stressed that every peso spent by the DA must generate returns that support both the project’s sustainability and national agricultural development.
The agriculture chief told officials that projects that fail to meet investment-grade criteria would not an receive allocation from the agency’s budget, even if they were agriculturally viable.
Laurel recalled that a recent proposal for a mushroom farming initiative would take more than decade to recoup the investment.
“At eight percent, it would take 12 years to recover the investment. That is not good business,” he explained.
Under the ₱6.326 trillion national budget for 2025, the DA received an allocation of ₱237.4 billion.
While this year’s budget is an increase from the proposed ₱211.3 billion, it is a massive cut from the agency’s initial request of ₱513 billion.
Laurel is advocating for a more efficient resource allocation, with a focus on a results-driven approach that balances agricultural viability with financial practicality.
“We need to think like businesspeople, not just farmers,” he said.
The DA chief is likewise calling for a multi-pronged approach in agricultural activities to strengthen the sector’s resilience.
He is specifically proposing that each agricultural town across the country focus on multiple key commodities, instead of relying on a single crop.
Laurel recounted that when Frabelle had a challenging stretch during the financial crisis in the 1990s, it prompted the deep-sea fishing company 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 said.
However, he pointed out that excessive diversification could lead to inefficiencies. As such, Laurel wants towns to have a “balanced approach” in a bid to withstand downturns in one crop while maintaining focus on others.
“We need to invest wisely, so that we can secure the future of our farmers and our agriculture sector for generations to come,” he added.
