A potential solution to the challenges facing agricultural infrastructure investment has been proposed by a development researcher, who suggests that public-private partnerships (PPPs) could be viable under the right conditions.
According to the researcher, joint investments and a government role could help mitigate some of the risks perceived by private partners in agriculture, which is currently deemed a high-risk investment.
The inability or refusal of private banks to meet their agricultural loan quotas is seen as a major indicator of the perceived risks in this sector.
One potential approach to addressing these risks is for the government to take a lead role in dealing with the permit process or to partner with grassroots organizations to facilitate PPPs.
Technical issues such as financing, government procurement policy, and the applicability of the PPP Code of the Philippines will need to be resolved to attract private investors.
Without resolution of these technical issues, it is difficult to find private partners willing to take on the risk of investing in agricultural infrastructure.
Grassroots organizations, such as farmer cooperatives, may become involved in PPP investments, as seen in the example of the Clark National Food Hub, a 64-hectare agriculture trading hub in Clark, Pampanga.
In this scenario, private partners could secure contracts with large cooperatives to ensure the supply of raw materials, while the government could co-invest by putting up facilities for an agribusiness zone.
