Tuesday, 2 April 2013

'PPPs key to agriculture growth'

MANILA, Philippines – The government should tap private sector funding for much-needed facilities and services in the agriculture sector.

In a speech delivered at the Asia-Pacific Agriculture Policy Roundtable on Tuesday, April 2, Socioeconomic Planning Secretary Arsenio Balisacan said Public-Private Partnership (PPP) projects would help grow farmers’ incomes without placing burden on government finances.

Balisacan said the government should find ways to make agriculture projects commercially viable like providing “subsidies, incentives, or availability payments to attract private sector participation.”

“This is either through an optimal sharing of risks or through a transaction structure that would strike a balance between safeguarding public interest by ensuring that a project has a net economic benefit and making the project attractive to the private sector,” he said.

“The government and the private partner could also explore other factors that would achieve such balance through new technologies and innovations that would drive down whole-of-life costs, thus making a program or project economically and financial viable,” he added.

Balisacan said however that PPPs should be structured properly to keep the government from incurring any fiscal liability.

The PPP Center has created effective policy guidelines to ensure that PPPs will be a win-win initiative for the public and private sectors. The government’s PPP program was earlier stalled due to governance and procurement process reforms.

Constraints to growth

Undertaking PPPs would generate savings that the government could use for the other needs of the agriculture sector.

Balisacan said constraints to the agriculture sector include:
absence or inadequacy of efficient infrastructure system, particularly transport, power supply, and communication infrastructure;
prevalent changes in average weather conditions, and vulnerability to climate-related risks;
high tariffs and quantitative restrictions that dampen competitiveness and productivity, encourage rent-seeking behavior, and ultimately hurt the poor who are usually net buyers of food; and
limited access to financing for small and medium farmers, especially in developing countries.
Original Article Here

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