Cablegate: Secretary Vilsack Leads U.S. Agribusiness Trade And

VZCZCXYZ0000
OO RUEHWEB

DE RUEHML #2329/01 3130006
ZNR UUUUU ZZH
O 090006Z NOV 09
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5689
RUEHRC/USDA WASHDC IMMEDIATE

UNCLAS MANILA 002329

SIPDIS

STATE FOR EAP/MTS AND EB/TRA
USDA FOR SECRETARY VILSACK

SENSITIVE BUT UNCLASSIFIED

E.O. 12958: N/A
TAGS: ECON PREL RP
SUBJECT: SECRETARY VILSACK LEADS U.S. AGRIBUSINESS TRADE AND
INVESTMENT MISSION TO THE PHILIPPINES

1. (SBU) Summary: U.S. Secretary of Agriculture Tom Vilsack led a
U.S. Trade and Investment Mission (TIM) to the Philippines October
24 - 27, 2009. The Secretary's visit, less than one month after the
Philippines was hit by two major storms, highlighted the USG's
continuing support of a long-standing ally during a time of need.
The Secretary announced the donation of 7,000 metric tons of rice
and 680 metric tons of powdered milk from USDA's Food for Progress
program to help feed the hundreds of thousands still affected by
flooding and landslides caused by the storms. The Secretary also
discussed food security and climate change with President
Macapagal-Arroyo, visited the International Rice Research Institute,
a flour mill that uses U.S. wheat, and a school that is benefiting
from U.S. food aid donations. The TIM, which facilitated meetings
between 15 U.S. companies and approximately 100 agribusinesses from
the Philippines, resulted in several solid business deals. End
summary.

2. (SBU) U.S. Secretary of Agriculture Tom Vilsack visited the
Philippines October 24-27 accompanied by a Trade and Investment
Mission (TIM) of more than 15 representatives from U.S.
agribusinesses and business associations seeking to establish or
expand commercial links with Philippine companies. Approximately
100 companies from the Philippines also took part in the TIM, which
continued on for two days after the Secretary's departure. This was
the first TIM of its kind to the Association of Southeast Asian
Nations (ASEAN) region. Several U.S. and Philippine companies
reported successful business transactions while others developed
solid leads to take advantage of increasing market opportunities.

3. (SBU) Secretary Vilsack's visit came less than a month after two
storms struck Metro Manila and northern Luzon island, causing nearly
1,000 deaths, 700,000 persons displaced from their homes, and
hundreds of millions of dollars in damage to households and crops.
He arrived at a time when Philippine government resources were
strained by the response to the disasters, and he was able to add to
the goodwill and gratitude created by the USG's energetic response
to these storms.

Secretary Sees 30 Years of USG-GRP Cooperation at IRRI

4. (SBU) At the International Rice Research Institute (IRRI), an
institution founded by the Ford and Rockefeller Foundations in 1960,
Secretary Vilsack inspected the world's most comprehensive rice
genebank, toured high-technology genetic laboratories and learned
about ground-breaking rice research being funded by the Bill and
Melinda Gates Foundation. After symbolically planting a new
'climate-change ready' rice plant developed at the institute, the
Secretary thanked IRRI scientists for their vital contributions to
rice productivity and food security, and lauded more than three
decades of USG support of and cooperation with IRRI.

5. (SBU) At the Manila American Cemetery and Memorial, the Secretary
laid a wreath in honor of the more than 17,000 dead and 36,000
missing soldiers, sailors and marines who are commemorated there.
At the Memorial, he saw the name of his great uncle, a Congressional
Medal of Honor winner, who died at sea during the Naval Battle of
Guadalcanal.

USDA-Sponsored Dinner Meeting and Cooperator Reception

6. (SBU) The United States Department of Agriculture
(USDA)-sponsored dinner meeting was attended by influential Filipino
businesspeople including James Go, Chairman, Universal Robina
Corporation; Teresita Sy-Coson, Chairman, Banco de Oro Unibank;
George W. Drysdale, Chairman-Emeritus, Marsman-Drysdale Group of
Companies; Jose A. Concepcion III, President & CEO, RFM Corporation;
Francisco Alejo III, President, San Miguel PureFoods Co.; and David
Co, EVP & General Manager, Foremost Farms. Secretary Vilsack
thanked the attendees for their participation and outlined a variety
of USDA programs, both domestic and international. The topics of
discussion included food price increases due to crop damages caused
by recent typhoons in the Philippines, surplus milk production by
U.S. dairy farmers, school feeding programs both in the United
States and the Philippines, the McGovern & Dole program, development
of biotechnology in agriculture, and farmers loan/credit programs.

7. (SBU) The Secretary also met 11 Cooperator representatives, and
thanked them for their commitment and support for U.S. agriculture
exports and the unique partnership USDA has with Cooperators.

Meeting With Philippine Secretary of Agriculture Arthur Yap

8. (SBU) Over breakfast on October 26th, Secretary Yap expressed
strong support for biotechnology, noting that that bio-engineered

crops will be essential in enabling the Philippines to continue to
feed its population, which is growing at about 2% annually. He
expressed interest in visiting USDA's Agricultural Research Service
laboratory in Hawaii to discuss research on saline-tolerant plants.

9. (SBU) Secretary Yap expressed concern about climate change,
showing a sophisticated understanding of the policy instruments that
are now being considered internationally to mitigate climate change
and how they might affect agriculture. He asked if USDA could help
provide satellite imagery to enable the Philippines to monitor crop
production and watersheds and to identify areas vulnerable to
landslides. He was advised that while USDA has the technical
capacity to provide such assistance, outside resources would be
necessary to support the work. (NOTE: USDA is now developing a
draft proposal that might be used to solicit such funding.)

10. (SBU) Secretary Yap also expressed concern about global rice
supplies in light of recent weather conditions in the Philippines,
India, and China. He noted that high food prices can be
destabilizing and suggested that an international food reserve might
be of help to stabilize prices in the event of short supplies. Yap
was advised that reserve schemes do not fit well with U.S. market
systems.

Meeting with President Macapagal-Arroyo

11. (SBU) Secretary Vilsack expressed his sympathy to President
Arroyo over the loss of life and property caused by tropical storm
Ondoy and Typhoon Pepeng, and said he was prepared to provide 7,000
metric tons of rice and 680 metric tons of powdered milk under the
USDA Food for Progress program. This would be sufficient to feed
approximately 438,000 people for 60 days, he added. President
Arroyo thanked him for the donation, and for all the USG assistance
provided in response to the back-to-back natural disasters. She
then turned to climate change, explaining that the Philippines was
deeply affected and how the issue dominated discussions at the ASEAN
summit she had just attended in Thailand. She expressed the hope
that the upcoming Climate Change Conference in Copenhagen would
result in binding targets, and urged the U.S. to be a leader in
achieving this result.

12. (SBU) Secretary Vilsack underscored the USG's commitment to
mitigate climate change, and noted that he is a member of a
Cabinet-level group - the "Green Cabinet" - that meets on a monthly
basis to discuss climate change and other environmental issues. He
then explained the Administration's commitment to improving food
security, highlighting USDA's "Know Your Farmer, Know Your Food"
program, and emphasized the need to increase productivity through
research and applied science. Both principals concluded by agreeing
to build on the strong, trusting relationship between the
Philippines and the United States.

Flour Mill and School Visits

13. (SBU) Secretary Vilsack toured a large, automated flour mill of
the Universal Robina Corporation (URC), where he saw U.S. spring
wheat being converted into flour for commercial and home use. URC
officials said they had been using U.S. wheat for decades, and they
preferred it over all others because of its consistent quality and
high protein content, which produces a higher-quality flour ideal
for bread baking. Secretary Vilsack then traveled to an inner-city
school, Sagad Elementary, where he saw photos of the school's first
floor inundated after the recent storms. Together with the
Ambassador and Secretary Yap, he distributed USDA-donated
high-energy biscuits and rice to the children.

14. (SBU) The Secretary's visit received widespread positive
coverage by print and television media. He gave an in-depth
interview on a widely-viewed business news program, and his meeting
with President Arroyo and announcement of the donation of food was
covered extensively.

Trade Mission Build Business Ties

15. (U) The Philippine TIM was initiated as a means to further
promote two-way trade in a developing country which has a population
growth rate of 2% per year. The Philippines is a staunch ally, and
represents a gateway to Southeast Asia. This TIM was USDA's first
in Asia, signaling the strategic importance of this bilateral
relationship. Investment opportunities between the U.S. and
Philippine businesses appear promising.

16. (U) Briefings at the TIM were presented by high level U.S. and
Philippine government officials, as well as private sector
agribusiness representatives both in Manila and Davao City. They
were followed by one-on-one business-to-business meetings.

17. (U) The USDA delegation and U.S. agribusiness also had the
opportunity to tour a banana processing facility and an aquaculture
farm while in Mindanao.

18. (SBU) Comment: The Secretary's visit was a timely addition to
the overall USG efforts to promote economic development and
stability in the Philippines. It also added to the goodwill
engendered by the U.S. Government's rapid and effective response to
the damage wrought by the twin storms. The Secretary's donation of
food at a critical time, and his engagement on key issues such as
food security and climate change, underscored the USG's commitment
to help the Philippines cope with the challenges of improving
agricultural productivity, overcoming poverty and improving the
lives of its citizens.

Kenney

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