MANILA, Philippines - More investments in road and port infrastructure are crucial to lowering the transport and trade costs in the country, according to a study titled "Inter-regional Trade of High Value Fruits and Vegetables: Issues on Transport and Shipping" by the Philippine Institute for Development Studies (PIDS).
The study focuses on the transport of vegetable and fruit produce from Mindanao, a major food producing area, to particular regions in Luzon and Visayas, to meet increasing market demands.
It pointed out that good network of roads and ports that links production areas to consumer markets is important in bringing down transport and marketing costs.
"The lack of an efficient transport and distribution system increases the cost of transporting agricultural produce, reduces the quality and quantity of those goods, and diminishes the profitability of actors involved in the supply chain," it said.
The study noted that there is ground for exploring public-private partnership (PPP) in the development of road and port networks and in improving ancillary facilities.
It cited the privately-operated Mindanao Container International Terminal as an example of PPP that can help bring down the cost of investments and the cost of transport and shipping of goods. The study also stressed the need to improve the roll-on/roll-off (RORO) ports and shipping for greater connectivity of markets and mobility of people.
Improving RORO services will require the adherence of shipping companies to the prescribed safety and soundness standards of the shipping industry, it said.
"Inadequacy of infrastructure has been a major reason for the country's lack of competitiveness and attraction as a viable and profitable business destination," it noted.
To make the food market more competitive, the government must also help small producers to get the best possible price for their produce by the provision of timely and accurate market information through various means of communication.
"Linking the barangays, especially those in the hinterlands to the worldwide web is the last mile in telecommunications where government and private sector investments and cooperation will be necessary," the study said.
It also pointed out that access to inputs, technology and credit would also improve the participation of small growers in the food supply chain.
The study recommended that the government must improve governance as well as strictly monitor and impose regulations especially those pertaining to safety and soundness of transport and shipping.
"Good governance is indispensable to reduce the cost of doing business and to ensure efficient market exchange especially for small players in the food supply chain," the study added.