Technological change has been acknowledged as a principal driver of productivity growth. It underscores the need for innovation and proactive changes to sustainably develop an economy, though the pace and direction of change will be determined by the emerging challenges and opportunities. With Philippine agricultural sector having the smallest output share in the economy while still being one of the largest employers, this paper seeks to analyze the implications of Agriculture 4.0 (Agri 4.0) technologies to support the sustainability of agricultural innovation systems. It offers some examples of the application of Agri 4.0 technologies in the agriculture, aquatic and natural resources (AANR) sectors which proved effective in driving productivity growth and recommends transition pathways towards sustainability. The paper is organized as follows: Section 1 examines the current state of Philippine agriculture. Section 2 explains the innovation system of DOST-PCAARRD within the Harmonized National R&D Agenda (HNRDA) and Industry Strategy Science and Technology (S&T) Programs (ISPs). Section 3 features the application of Agri 4.0 technologies in selected DOST-PCAARRD-supported programs and projects. Section 4 discusses the strategic approach towards a sustainable innovation system. The last section gives the concluding remarks.
Keywords: agricultural innovation system; Agriculture 4.0; smart agriculture
THE CURRENT STATE OF PHILIPPINE AGRICULTURE
Agriculture plays an important role in the development of the Philippine economy. Although its relative contribution to gross domestic product has been declining and behind the other sectors over the years, it remains to be a major source of income and employment in the country. From 1998 to 2009, the sector accounted for 13 to 14% of the total gross domestic product (GDP). This steadily declined to 10% in the last 11 years. However, the gross value added (GVA) to agriculture in constant prices has been growing during the same period, which means that agriculture is not shrinking in absolute size. The declining contribution of agriculture to the total GDP can be attributed to structural transformation.
The decline in the share of agriculture showed up in the increasing share of the services and industry sectors which grew relatively much faster thereby accounting for increasing contribution to the growing economy. However, a different story can be told when the COVID-19 wreaked havoc on the global and national economy. The Philippine Statistics Authority (PSA) reported that the agriculture sector posted a positive contribution at 1.2% in the third quarter of 2020 along with financial and insurance activities (6.2%) and public administration and defense, compulsory social activities (4.5%). The other sectors which used to move the economy such as construction, real estate and manufacturing posted negative growth. The COVID-19 reinforced the importance of agriculture.
Agriculture remains to be one of the largest employers representing 25% of total employment despite a mere 10% GDP share (Table 1). The GDP share has been declining faster than that of employment suggesting that labor productivity in agriculture is lower relative to the other sectors and that the structural transformation taking place in the Philippine economy is rather slow and weak. When compared with neighboring countries in Asia, the Philippines together with Bhutan and Nepal, are considered the laggards in the region where labor productivity in agriculture is below 0.6% (ADB, 2013).
Philippine agriculture may be characterized, among others, as predominantly small hold. In the Philippines, 88% of all farm holdings are under 3 hectares, with those under one hectare comprising the bulk (57%), based on the last Agricultural Census in 2012 (as cited by Habito, 2020). Data also provides that average farm size has significantly declined by less than half from 2.84 hectares in 1980 to 1.29 hectares by 2012 as the number of farms jumped from 3.42 to 5.56 million. In addition, the agriculture sector remains very traditional with major crops dominating the sector with very little value adding. While there are ongoing developments, much still needs to be done to make the agriculture sector modern and industrialized.
An important requisite to agricultural transformation is investment in technology and innovation and the necessary support services to spur growth and raise income. The most successful Asian economies have pursued an agricultural development-led industrialization pathway. The new innovations brought by Agri 4.0 have the potential to increase the competitive edge of the sector by allowing businesses to become more profitable, efficient, and more environmentally friendly.
However, Agri 4.0 would have different impacts on the small hold and commercial farms. Though it is expected that agricultural productivity improvements tend to increase income, the extent to which it reduces inequality and benefit small hold farmers is still open to question. For example, the Green Revolution was disputed in terms of equality as it was biased in favor of larger farms and missed the poorer subsistence of small-scale farmers (Griffin, 1979). To prevent this from happening, the innovation system in the era of Agri 4.0 needs to occur in a broader diversification where all economic activities related to input provision, agro-processing, and services (finance, logistics, marketing, etc.) are developed in parallel. This strategy would help us trace poor pathways to be able to develop the necessary intervention models to improve livelihoods in agriculture and market access for small holders and be able to establish efficient value chains. To operationalize this would entail investments in effective research and development, technology transfer, human resource development and facilities development, among others.
TOWARDS AGRI 4.0
Agri 4.0: What is it and its key features?
Agri 4.0 is the convergence of digital, biological, and physical spheres- described as the “fusion of three worlds”- that is made possible through fusion of digital technologies. It changes the way agricultural innovations interact with innovations from other sectors. Much of the attention has been focused on technological innovations such as the Internet of Things (IoT), cloud computing, artificial intelligence (AI), genetic engineering and unmanned aerial vehicles (UAVs), among others, that have the potential to change agriculture beyond recognition.
The IoT features enhanced coordination between machines as well as between machines and humans (Kim 2019). AI is the simulation of human intelligence by machines. UAVs are commonly used for multi-purpose agricultural monitoring with integrated wireless sensor network systems. Big data is used for large quantities of information to increase the variety of decision making in a variety of contexts. Nanotechnology is helping improve many technology and industry sectors through the study and application of matter at the nanoscale. Genomics, on the other hand, is being used to develop new hybrid strains and improve disease resistance, among others.
Implications to Philippine agriculture: positive and negative features
Agri 4.0 offers strong potential for driving economic growth and improving incomes among the rural poor through increased efficiency of agricultural production which are likely to provide social benefits (e.g., greater food/income security). Smart/precision agriculture, in combination with more productive crop varieties/livestock and the use of decision support systems to foster evidence-based decision-making can lead to the smarter use of inputs with greater rewards. Smart farming approaches are also being used to determine optimal planting dates for crops, unmanned aerial vehicles, or drones, are being used to aid weed and pest identification, and robots are helping remove weeds.
The better use of innovations can impact the whole supply chain because it also has the potential to manage mechanization and use of energy resources more efficiently; enhance crop storage techniques and reduce crop losses; provide better information about market demand and seasonal fluctuation; improve transport and logistic services; and optimize retailer stocking and storage (less waste), among others. Thus, the supply chain becomes smarter, more efficient, safer, and more environmentally sustainable due to the combination and integration of production technologies and devices, information and communication systems, data, and services in network infrastructures.
Agri 4.0 would change the way agricultural innovations interact with innovation systems from other sectors. Given its nature, it will bring in a changing landscape with a new mix of players such as IT/Big Data Companies, IoT providers, investment funds/traders, machine manufacturers, startups and research centers. It will also change the way agricultural technology and value chain actors such as input suppliers, farmers, processors, manufacturers, and the broader agri-sector interact with each other. This is a technological revolution that would emphasize the interconnected network of agriculture and business.
However, the potential impacts can also be viewed negatively, if not properly addressed. In a study by Kim et al. (2019) analyzing the Philippine’s readiness to the fourth industrial revolution, it highlights the possibility of social inequality as one of the most important concerns. Agriculture has a sizable employment share and the preference for technology over human labor brings with it increased risk for social unrest. For example, robotics, AI and automation are now accomplishing significant tasks that they are beginning to replace and/or complement manual labor in many fields. It also decreases opportunities for developing countries like the Philippines to offer low-cost labor which could lead to an employment crisis.
Agri 4.0 also poses a threat of greater marginalization because of the already existing wealth gap between small hold farmers and corporations to acquire machinery, chemical fertilizers, herbicide and pesticides, patented seeds, genetically modified foods and now big data. Further, the challenges relating to farm data ownership, privacy, cybersecurity and the equitable sharing of the benefits of digitization and data collection need to be tackled. Wolfert et al. (2017) suggested that the emphasis on big data could further move decision-making power from the farmers into the hands of private companies who have control over such data. The absence of legal and regulatory frameworks around the collection, sharing and use of agricultural data contributes to the range of challenges currently being faced by farmers considering adoption of smart farming techniques. These innovations will affect small and medium farms which must invest in advanced technology to keep up with the evolution. In the Philippines, 96% of establishments in the agriculture, fishery and forestry sector belong to micro (69%) and small (27%) enterprises (DTI, 2020). Some of the challenges relate to issues of access, cost, scale and support, which will determine whether it will be possible, or indeed desirable, for all enterprises to be “big data enabled” or whether it is an inevitable progress of modernization.
DOST-PCAARRD INNOVATION SYSTEM
The DOST-PCAARRD Industry Strategic Science and Technology Plans (ISPs)
In DOST-PCAARRD, the innovations are designed to take place within specific value chains embracing social concerns and involve a large variety of actors. The set of science solutions are designed per commodity to operationalize its S&T vision through the Industry Strategic S&T Programs (ISPs). Each ISP seeks to maximize productivity, improve efficiency of distribution and marketing, strengthen S&T-based enterprises, and facilitate efficient transfer of S&T products to its desired clients, thereby improving the welfare of the key actors in the agriculture, aquatic and natural resources sector.
The ISPs are products of multi-stakeholders’ consultations in effort to understand innovation needs per commodity. This is anchored on the Harmonized National R&D Agenda which likewise involves the rigorous process of multi-stakeholder consultations, starting with round table discussions to presentations to national conferences for validation and eventual dissemination. For AANR, the agenda items are an integration of the existing agenda of government agencies conducting R&D in the sector, as well as inputs from private stakeholders.
Currently, DOST-PCAARRD has 38 ISPs covering crops, livestock, forestry, inland and marine resources, environmental services, and agri-aqua systems. The ISP approach envisioned science-based solutions and innovations that will contribute to poverty reduction, food security, global competitiveness and sustainability, and will eventually improve welfare of the key actors in the AANR subsectors.
Substantial results also entail significant investments in return. Strategic resource allocation and use are necessary to ensure efficient investment in S&T to cover the direct cost of R&D, build a critical mass of human resources, and improve infrastructure in support of the HNRDA and ISPs. The R&D Agenda for the AANR supports the use of advanced technologies, including Agri 4.0 technologies, as R&D tools to find S&T solutions to AANR problems and/or develop new products with significant potential to improve efficiency and positively impact business models in agriculture. This is supported by the World Bank (2009) outlining how investments in agribusiness produce significant multiplier effects through their forward and backward linkages.
Thus, to realize the agribusiness potentials of the R&D outputs to generate impacts, the DOST-PCAARRD Innovation and Technology Center serves as a one-stop-information service and convergence hub for technology generators and users in AANR. Through various programs and projects, clients are supported to gain access to technologies, input and output markets, and services like finance, training (covering both technical and business development) and use of shared service facilities and equipment, in ways that are commercially viable. Through commercial agriculture and improved infrastructure, small holder farmers and fisherfolks can increase their incomes and slowly become self-reliant entrepreneurs.
Application of Agri 4.0 technologies in AANR
Many of the ISPs already incorporate Agri 4.0 technologies with many of them using a combination of these technologies. Existing approaches try to take advantage of modern technologies which proved valuable in revolutionizing agricultural processes. Some of the applications of Agri 4.0 technologies in AANR are discussed below.
The program Smarter Approaches to Reinvigorate Agriculture as an Industry in the Philippines (SARAI) maximized the use of technological advances related to the digitization era, such as precision farming, which makes use of positioning technologies combined with the application of extra sensors and collected data to increase the yield. The SARAI program, through a multi-agency team led by the University of the Philippines Los Baños, has made significant strides in testing several technological systems to harness the present advances in science and technology through an integrated crop forecasting system; employing innovative methodologies to device a crop forecasting protocol that is able to generate sound and near real time crop forecasts for different stakeholders; and in delivering site- specific crop advisories on integrated crop management to farmers. These technologies are now being deployed nationwide through training and workshops in partnership with local government units, Department of Agriculture regional offices and DOST regional offices. All the developed technologies are accessible at the SARAI Knowledge Portal.
In the use of IoT and information system, a mobile near real-time disease surveillance system for banana called ROSANNA was developed by researchers from University of Southeastern Philippines under the Science for Change Program to gather and disseminate disease-related information, particularly black sigatoka and banana bunchy top disease, at farm level. In the case of mangrove crab, a mobile application called “Crabifier” was developed that identifies the species of juvenile crab at the push of a button based on genetic marker technology. It is an open-access Android-based mobile application developed by researchers from De La Salle University that allows fishers to pick their species of choice from juveniles captured from the wild and to confirm the species being sold by traders. Mobile app was also developed with UPLB to determine the mechanization resources based on the outputs of mechanization resource mapping, monitoring, and data analysis systems. Called the M3DAS Data Collection App, the various maps generated have become useful in planning, monitoring, and ascertaining the site-specific mechanization situations.
In livestock, the Native Chicken and Itik PINAS Information System hosted by DOST-PCAARRD provides accessible information source regarding the Philippine native chicken and Itik PINAS breeds in partnership with institutions like the Department of Agriculture-Ubay Stock Farm (Boholano), Bicol University College of Agriculture and Forestry (Camarines), West Visayas State University (Darag), Western Mindanao State University (ZamPen) and the Bureau of Animal Industry-National Swine and Poultry Research and Development Center (Itik PINAS). In the case of swine, one example is the development of computer-aided remote expert (CARE), currently being carried out by the UPLB, for commercial piggery farms to automate the detection of heat stress and estrus-related responses through web-based real time video recording systems. The use of Radio-Frequency Identification (RFID) systems will also be incorporated to enable the tracking and identification of the animals as they are transported.
Genomics programs were developed for commodities such as swine, abaca, banana, coconut, cacao, and shrimp, among others, to address various issues on low productivity. In swine, the genomics program in collaboration with DA-BAI and the Accredited Swine Breeders Association of the Philippines (ASBAP), increased productivity through the DNA marker-aided selection (MAS) technology, which is now being used by both commercial hybrid and native pig raisers. Through this program, a functional swine genetic analytical service laboratory was also established to provide genetic testing services. Similarly, the development of native pig genetic group was supported to ensure sustainable and profitable native pig production. The Philippine Native Pig Research Development and Extension Center (PNP-RDEC) has been established at the Marinduque State College to ensure continuous generation of information and technologies for the budding native pig industry.
To support the surveillance and monitoring efforts on diseases, particularly the African Swine Fever outbreak that tapered down the swine industry, a locally developed test kit called African Swine Fever Virus Nanogold Biosensor was developed and currently being commercialized by the Blitzkrieg Animal Diagnostic Center, a company that was established with support from DOST-PCAARRD. Nano-biosensor for cacao to detect fungal diseases such as black pod rot (BPR) and vascular streak disease (VSD) was also developed in collaboration with the University of the Philippines Los Baños, De La Salle University, and Michigan State University. According to Fernando (2019), among the advantages of nanomaterial-based biosensors are rapid detection time, high sensitivity and specificity, and compatibility with data processing technologies.
The use of remote sensing and satellite image analysis can support plantation monitoring such as with the case of cacao and rubber. GIS-based data management framework for Philippine plantations of rubber and cacao were developed in partnership with UPLB. Through this, cost-effective assessments are being performed for yield estimation and plant-condition data to support decision-making. Remotely-sensed early warning system have also proved to be useful, in partnership with UP Diliman, in the monitoring of harmful algal blooms at a variety of spatial and temporal scales that is needed to come up with a decision support system for its management. GIS-based information is also being used to strategize the production of giant swamp taro in Agusan del Sur in partnership with Agusan del Sur State College of Agriculture and Technology.
AI featured prominently in the AANR especially in agricultural machinery and greenhouses. For example, the Automated Furrow Irrigation System being developed by the Central Luzon State University is a robust, alternative option to facilitate precision irrigation in sugarcane production. The AutoFurrow technology is targeted to increase water application efficiency and productivity by 20%. Moreover, an autonomous navigation system platform in a hand tractor for tillage operation is being developed by the University of Santo Tomas. The Smarter Hydroponics Greenhouse developed by Iloilo Science and Technology University implements a smart management system involving software and hardware components for controlling, monitoring, and automating the provision of correct level and nutrients for optimized production of lettuce. This will be expanded to cover more crops in various environmental conditions.
Realizing these new opportunities for agriculture, PCAARRD is currently finalizing its Smart Farming R&D Roadmap where Agri 4.0 technologies will be embedded. The roadmap includes the development of R&D Center for Smart Farming Development through the Niche Centers in the Region (NICER) R&D Program of DOST.
TRANSITION PATHWAYS/STRATEGIC APPROACH TOWARDS SUSTAINABLE INNOVATION SYSTEM
Taking full advantage of the positive features of the Agri 4.0 and putting in place measures to minimize the negative features, especially for the smallholder sector
While Agri 4.0 technologies could play an important role in achieving enhanced productivity and greater efficiency, the consideration of social implications remains an important part of DOST-PCAARRD’s R&D planning. The formulation and implementation of effective agricultural policies and innovation programs hinge on a clear understanding of the social, demographic and economic conditions of the farmers across various production systems. Socio-economic and demographic characteristics are important determinants of technology adoption behavior and determine to a large extent how farmers will respond to and be impacted by policy reforms. Having a predominantly small hold farming sector, it is therefore necessary to put in place measures to minimize the negative features.
- Strengthening of technology transfer
The technology transfer programs of DOST-PCAARRD will continue to be strengthened. Among these are the Science and Technology Community-based Farms (STCBF), Agri-Aqua Technology Business Incubation (ATBIs), Livelihood Improvement through Facilitated Extension (LIFE), Science and Technology (S&T) Action Frontline for Emergencies and Hazards (SAFE), and Science for the Convergence of Agriculture and Tourism (SciCAT).
The STCBF is a technology delivery system on the adoption of Package of Technologies (POT) for DOST-PCAARRD’s priority commodities. It showcases the effectiveness of S&T interventions derived from R&D outputs of various institutions. Interventions are based on the identified needs of the community. Projects on coffee, ornamentals, bamboo, sea cucumber, seaweeds, dairy buffalo, sweet potato, mango, rice, tilapia, goat, banana, coconut, rubber, shrimp, abaca, jackfruit, cacao, vegetables, coffee, gmelina and falcata have been developed covering 14 regions in the Philippines.
Sixteen (16) Agri-Aqua Technology Business Incubation (ATBIs) were strategically established across the country to diffuse technologies and outputs of R&D and provide direct support to the implementation of the Philippine Technology Transfer Act, the Philippine Innovation Act, and the Innovative Startup Act. The LIFE model was developed in partnership with the Australian Center for International Agricultural Research (ACIAR)- Mindanao Agricultural Extension Project (AMAEP), specially for conflict-vulnerable areas. Through this partnership, six (6) farmer-organizations were established with 241 members. The main goal is to help them restore their trust in the society and government by assisting them to become productive farmers. SAFE was developed to provide S&T-based interventions to prevent or prepare agricultural farms for climate- and environment-related emergencies and hazards and promote environmental conservation and rehabilitation. SciCAT is the newest modality that features common farm tourism-related recreational activities while promoting mature AANR technologies from government-funded R&D initiatives. The development of SciCAT is also in compliance with the Farm Tourism Development Act. To date, 13 ordinary farmers have been transformed into science-based farm tourism enterprises.
- Development of inclusive value chains
DOST-PCAARRD’s inclusive value chain approach sets out strategies towards inclusive value chain participation, which also reveals different inclusiveness dimensions particularly: (1) competitiveness; (2) equity; and (3) resilience. These are the multiple pathways to ensure economic viability and equal participation and benefit sharing in the value chain. To put in place a more institutionalized system designed to assist the development of inclusive value chains in AANR, the Agri-Aqua Business Hub under the DPITC was recently established to enable agri-aqua enterprises that can catalyze the growth of an inclusive and job-creating sector. The hallmark of the inclusive value chain approach is to empower farmers and fisherfolks to become entrepreneurs. They will be assisted by the Hub in the development and operation of their chosen enterprises. Clients are supported through training and mentoring and by providing access to technologies, markets, inputs and services like finance, in ways that are commercially viable.
- Science-informed Policies for accelerated AANR development
Policies uninformed by science are invariably sub-optimal. DOST-PCAARRD, guided by its policy analysis and advocacy framework, aims to bridge this gap by analyzing policy issues, conducting environmental scanning, and identifying policy solutions that are technically-sound and politically-feasible. The right mix of policies backed by empirical information related to a given issue is needed to improve the performance of the sector. DOST-PCAARRD, through its Policy Action Group, has been active in the empirical vetting process of proposed legislation and in the conduct of scientific research addressing specific policy issues.
- Digital inclusion support
Digital inclusion support would be necessary. Market information is being disseminated via electronic or mobile networks, reducing transaction costs throughout the supply chain. Without support, the less capable smallholder farmers and fisherfolks would not be able to cope up with the information revolution in the digital space. Together with other farm advisory systems initially developed, near real-time information on prices, volume and demand in a comprehensive single platform that would manage activities from farm-to-fork and turn data into actionable insights would prove to be valuable. Through such a market information system, supply chains can be better supported to become more efficient, cut labor costs, mitigate risks concerning security, transportation, and more. Above all, it could make farming efficient for growers, decision-based middle men (suppliers and wholesalers) and more transparent for consumers.
Organizing the innovation system to take into account potentially undesirable consequences
- Ensuring a wider representation of stakeholders which would include the diversity of sectoral and societal interests
Agricultural innovation systems involve a wide range of stakeholders including policy-makers, researchers, farmers, private companies, non-profit organizations and consumers. The development of R&D programs and projects should aim to ensure a wider representation of these stakeholders, which include the diversity of sectoral and societal interests, to make the system more collaborative and demand driven to increase relevance and adoption (OECD, 2021). Involving stakeholders more formally and at the early stages would be crucial to develop more coherent strategies and effective linkages and ways to develop agriculture and related agribusiness activities.
The diversity of issues where innovation is required reflects the notion that innovation is a continuous and iterative process since agriculture is taking place in an ever-changing environment. By creating interaction platforms, the multi-actor approach shall enable access to information on innovation processes that are relevant to diverse actors, to clients, and structural dimensions of the system.
- Capacity and capability building
Harnessing the frontier technologies to transform agriculture would need capacity and capability building. That is why continuously enhancing the capability and productivity of scientists, researchers, and other stakeholders of the agriculture, aquatic and natural resources sectors to effectively implement innovative R&D and extension activities is a crucial part of the DOST-PCAARRD’s banner programs. These are operationalized through the following key programs to support the National Agriculture, Aquatic and Natural Resources Research and Development Network (NAARRDN): (1) Human Resource Development Program (HRDP); and (2) Facilities Development Program.
The HRDP has the following offerings: (1) non-degree training program; (2) Graduate Research and Assistantship for Technology (GREAT) Program; (3) Thesis/Dissertation Assistance; (4) Re-entry Grant for Returning Scholars; (5) Publication Incentives; (6) Balik Scientist Program; and (7) Sandwich Program Grant for Graduate Research in AANR.
The Facilities Development Program includes the improvement and upgrading of R&D facilities of the NAARRDN. Through this program, facilities were funded and opened up to support the implementation of the ISPs such as laboratories, research facilities and smart greenhouses.
In the context of the fourth industrial revolution, innovations in agriculture would mean anticipating impacts at all scales: on-farm; across farming landscapes; throughout the food chain; as well as considering effects on rural communities and publics as a whole. To transform agriculture into a more competitive sector, agricultural innovation should be sustainably developed in a broader perspective to take into account the emerging challenges and opportunities, including Agri 4.0.
Agri 4.0 offers innovative and enormous benefits for agriculture and agribusiness. The technological solutions can transform the challenges of agricultural value chain management into opportunities. With Agri 4.0, everything can be interconnected with information and communication infrastructures. To maximize its benefits, a more systemic perspective that considers interrelations between multiple co-existing innovations in agriculture would be needed as well as targeted investments in direct research, technology transfer, and capacity building, that emphasize synergies, collaboration and communication. The more systemic thinking would also lead to more strategic levels of governance and coordination between public, private, and civil society actors involved in steering innovations in the agricultural technology revolution. This would be crucial to transform small farmers to empowered entrepreneurs so that the agriculture sector could also move on to a higher development phase.
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