1. Identify the situation (Describe it to yourself and to others so that it is clear what the social reality is that you are trying to analyze)2. Collect information (Collect as much info as you can about the situation or problem; Your resources should include more than one authors opinion, as well as a variety of different perspectives)3. Reflection (What caused you to become concerned? Why do you think there is a problem? Does the situation affect you or a loved one personally, or someone else? Why is someone elses problem important to you? What do you value in life that this situation is disturbing?)4. Ask questions (Find out about the history of the situation. How did it come to be? How long has it been going on? When did it begin? What important decisions were made over time? Why were decisions made? Who was involved? What are the laws and policies concerning this situation? Who made the laws and policies? What is the political climate? What role does the government play, as well as the churches, civic organizations, business and industry, and any other related group? What are the relationships between the various groups and persons involved? What are the traditions involved? What are the other value systems and beliefs involved?5. Understanding the situation (Essentially, the goal is to ask as many significant questions as possible, so as to arrive at as complete a picture as possible of the situation of concern)6. Strategize and plan for possible means for resolving the problem (Understanding the situation, however, is not the same thing as finding a solution to the problem. The next step is to strategize and plan for possible means for resolving the problem, using as a foundation our newly acquired understanding of the situation
I. Introduction Philippine Economy Poverty Statistics Poverty in Mindanao Vicious Cycle of Poverty Vulnerability of Small Farmers Productivity, Market Access, Infra Access, PH Handling, Value Chain ParticipationII. Assessment of the Situation Philippine Agriculture Review of Agri Sector Bottlenecks in Agri Sector Vision for AgricultureIII. Factors preventing farmers from harnessing their potentials Distorted and Inefficient Market Inadequate Investments Institutional BottlenecksIV. Ongoing and Planned Interventions 2004-2010 MTDP 2011-2016 MTDP Other SupportV. Key IssuesVI. RecommendationsVII. Conclusion
Farmers are considered the backbone of economy. In many developing agricultural countries, almost 1/3 of the world’s population depend on smallholder farming. As such, smallholder farming is important in terms of agriculture and food security.
Poverty in the Philippines is essentially a rural phenomenon. Magnitude of poverty is highest in the rural areas in terms of both level & incidence Accounts for 20% of GNP, or 1/5 of the economy One-third of the population is employed in agriculture or agri- related industries Agriculture plays a major role in the generation of incomes and employment The development of the sector is essential to any antipoverty program
Indicator 2006 2009Poverty Threshold and Poverty IncidenceAnnual Per Capita Poverty 13,348 16,841Threshold (in Pesos)Poverty Incidence of 21.1 20.9Families (%)Poverty Incidence of 26.4 26.5Population (%)Food Threshold and Subsistence IncidenceAnnual Per Capita Food 9,257 11,686Threshold (in Pesos)Subsistence Incidence of 8.7 7.9Families (%)Subsistence Incidence of 11.7 10.8Population (%)
Root causes of high poverty are conflict, historic dispossession of land, & internal displacement. 62% poverty rates are in provinces such as Maguindanao while only 29% nationwide. 6 of the 10 poorest provinces in the Philippines were located in Mindanao (in 2006) Child stunting is 34% compared with 28% nationally Acute malnutrition rate is 4.8% nationwide, but 7.1% in Maguindanao, 8.3% in North Cotabato, & 8.2% in Sultan Kudarat. Poverty is partially attributable to decades- long stagnation in smallholder agriculture.
Many cycles overlap or perpetuate new cycles and therefore any attempt to depict the cycle of poverty will be far more simplistic than realistic
Causes of vulnerability: Exposed to an environment where they are vulnerable Lack of info & training to to exploitations: interpret movements of trade in the market, By traders, informal lenders By manufacturers Lack of capital, By politicians Lack of post-harvest facility Total no. of farmers is at 5M, logistics to augment & improve their economic livelihood. 2.1M are rice & corn farmers.
Land holdings of poor farm family range from 0-3 has. Limited access to irrigation; Cultivate on remote, sloping hills, which provide for low productivity Tend to produce staple crops (corn, rice) w/c they can consume & market locally, but for low prices. Lack technical capacity to increase production, or employ NRM to be resilient to calamities
Limited access to markets There is strong market demand & strong private sector for delivering produce to market. However, lack the scale required by institutional buyers, access to credit, & info about market requirements. At planting, small farmers go to local traders to secure high-interest loans. At harvest, return to the same local traders to repay loans & sell crops at prices far below the formal market. The cycle continues.
Incur significant losses due to Typically dry their produce using poor post-harvest handling. rudimentary methods, such as drying on tarmac roads & roofs. Post-harvest losses can reach up to 50% as a result of spoilage & Only 80% of domestic rice waste at the farm level, poor demand is met by domestic drying & storage, pest infestation, production. & poorly maintained or outdated rice mills (studies from IRRI).
Small farmers have few key linkages to diverse stakeholders: Unfamiliar &/or unknowledgeable about financing options beyond local usurious creditors; Do not know about government resources; Lack infrastructure (such as irrigation canals, roads, dryers, warehouses, or other); Not linked to agricultural research; Lack the knowledge to diversity towards formal markets.,They tend to have low yields of low quality, and sell to local traders for rock-bottom prices.
Agriculture and Fisheries Sector an important contributor to the economy: Contribution of 18.1% to GDP Employed 34.3% of the labor force (in 2009). Grew 3.2% on ave. over the last 5 years, but below the target of 4.3-5.3%. Gains in agricultural labor productivity, with annual ave. gains of 1.6% in the last 5 years. Major drivers of growth are banana, corn, fisheries, agricultural services and palay
In comparison with selected Positive trade balance for SEA countries, land HVCs (e.g., vegetable and productivity and cost fruits) & fisheries. competitiveness of traditional crops, (e.g., rice, corn and The sector’s growth had low sugarcane) ranked low, but impact on the welfare of the rated higher with HVCs like rural sector, still accounting for banana. 70% of the poor population, Export value at its lowest in Exhibiting declines in per 2009, as we continued to be a capita income (-1.4% from net importer with a trade 2000 to 2006), amidst rising deficit of $2.4 B prices of food commodities
More than 70% of the country’s population is dependent on agriculture. Provides income & livelihood to the million of farmers & their dependents. Attaches the high priority of transforming agriculture into a modern, dynamic & competitive sector. A sustained expansion of the national economy requires sustained growth in the agricultural sector.
Over the past 6 decades, confronted by internal & external bottlenecks that constrained its performance & growth. Reforms to increase productivity, efficiency, competitiveness, market adaptability, & sustainability of agri-based industries, were hampered by: Inadequate resources, Limited implementing capabilities of national and local government units (LGUs), and Weak coordination among implementing agencies. Occurrences of natural disasters, international market crisis exacerbated the real growth of the sector, resulting to contraction in output.
The Philippine government’s vision is the transformation of farmers into business entrepreneurs. Recognizes the need for farmers to move from their present state of subsistence to where they are driven to produce more efficiently making farming more profitable. The successful development of this sector would depend on a well- functioning marketing system which would allow farmers to reap their returns for their produce. If this will be attained, more investments are expected to come in, thereby generating more employment & income in the farm sector.
Distorted and Inefficient Market Lack of Market Information and Ability to Analyze Same Poor Transport Facilities Inadequate Post-Harvest Facilities Excessive Government Intervention/Regulation Lack of definite product quality standards Inadequate Investments Lack of Financing and Credit Facilities Provision of Low-Cost Financing Uneven Tariff Protection Inadequate Government Spending Uncertainties about the Comprehensive Agrarian Reform Program (CARP) Institutional Bottlenecks Lack of Organized Farmers Weak Linkages Lack of Entrepreneurial Skills Among Farmers
Lack of Market Information and Ability to Analyze Lack of knowledge makes farmers price-takers, leaving them at the mercy of traders. The lack of info opportunities & capability to analyze limits their ability to plan their activities for longer periods of time.
Poor Transport Facilities Rural infrastructure is in a deplorable condition. Increasing percentage of farm do not have access to FMRs. The poor state of transport infrastructure has prevented efficient movement of agri goods & raised their prices in the market.
Inadequate Post-Harvest Facilities The inadequacy of post-harvest equipment & facilities limited farmers’ option in marketing their produce. Added post-harvest losses Constrained farmers from producing more due to the lack of facilities Prevented farmers from adding more value to their produce
Excessive Government Intervention/Regulation Price controls, government monopolies, subsidies & other forms of interventions have distorted agricultural markets, constraining production growth, increasing imports, & weakening the country’s food security situation. Made farmers vulnerable to political exploitation
Lack of definite product quality standards Absence of a definite product quality standard does not allow producers to command a better price for their produce. Without the guidance on the appropriate variety & quality of products that the market requires, local producers find it difficult to directly penetrate both the domestic or export market
Lack of Financing and Credit Facilities Most agricultural producers are small farmers with inadequate financing. Their financial requirements are usually provided by traders at high interest rates. Small farmers borrow money from informal sources because these are accessible, require no collateral and voluminous documents like those required by formal lending institutions.
Uneven Tariff Protection The low tariff protection received by the agriculture sector compared to the non- agriculture sector is one of the factors which have contributed to the unattractiveness of agriculture to investments
Inadequate Government Spending Government expenditures for roads, bridges, ports & irrigation systems as well as for R&D of productivity-enhancing technologies in support of the agricultural & rural sectors have been inadequate & less proportionate to the sectors’ share in the GDP. This neglect for the sector has kept investments away from agriculture
Uncertainties about the Comprehensive Agrarian Reform Program (CARP) Risks & uncertainties emanate from the set of rules which govern the CARP’s implementation. Many areas remain undefined for prospective businessmen & local agribusiness firms are unfamiliar with the new organizational & institutional arrangements under CARP. Ambiguities & uncertainties about CARP have aggravated the unattractiveness of agriculture to investments
Lack of Organized Farmers Many farmers are unorganized & this limits their ability to market their produce more effectively. Left to the mercy of traders who can dictate farmgate prices. Being organized into coops or producers’ associations allows them to buy inputs & sell produce collectively, transport it in bulk, for more efficient operations Gives them stronger bargaining power to command better prices for their produce
Weak Linkages Farmers fail to realize maximum return because linkages between them are weak. Thus, are deprived of access to stable markets and therefore, stable prices. Deprived of access to a steady and stable supply of raw materials. Impede the formation of greater and stronger forward & backward linkages in the sector
Lack of Entrepreneurial Skills Among Farmers The farmers’ lack of entrepreneurial skills has prevented them from properly utilizing marketing investment info for longer-term production & marketing planning, & from taking advantage of economic opportunities. The possession of these skills would make their operations more efficient and profitable, thereby enabling them to earn more
Goal 1: Develop at least 2M has. of new agribusiness lands in order to create at least 2M jobs, or 1 job per hectare; andGoal 2: Make food plentiful at competitive prices where the cost of priority “wage goods” such as rice, sugar, vegetables, poultry, pork and fish, & other important non-wage goods like corn must be reduced
Expanding effective production areas: Increasing intensity & diversification Cost-effectively cultivating idle & marginal lands Expanding the product mix: Adopting new/improved agricultural production systems Large-scale program of non- traditional HVCs Value-adding
Production support Addressing the constraints to high yields & low production costs Logistical support Postproduction handling, marketing, & distribution problems that lead to high agricultural input & food retail costs Governance and institutional support Addresses policy & regulatory bottlenecks to efficient agricultural production & distribution as well as competitive food prices Ensure that the reduction in production and distribution costs due to the productivity and logistics measures will result in higher farm incomes & lower food prices.
Agriculture sector has exceeded production targets But remains uncompetitive due to: High cost of inputs (fertilizer, chemicals, seeds), Large post-harvest losses and the Disruption of extension services due to devolution.
Goals/Objectives:1. Raised and sustained productivity & incomes of agriculture & fishery-based households & enterprises;2. Increased investments & employment across an efficient supply chain;3. Transformed agrarian reform beneficiaries into profitable entrepreneurs;4. Reduced risks , including climate change impacts, inherent to the sector;5. Ensured food security at all levels; &6. Strengthened/enhanced policy environment & good governance.
Diversification: facilitate and promote diversification of production base and livelihood options Rural infrastructure: establish climate-resilient agriculture infra Market development: provide effective market assistance RD&E: Update reliable databases and information systems Credit: improve credit access through stronger partnership between government and private financial institutions;
Create jobs - through private investment Localize agricultural promotion & development - regional strategies must take precedent in promoting sector competitiveness Promote value-adding of products and develop capacities for value chain management Promote vertical & horizontal integration of input, production, and marketing Strengthen the country’s agricultural exports through better resource allocation focusing on the country’s existing competitive advantage Create more job opportunities by expanding existing markets & aggressively exploring new markets
Achieve land tenure stability of the ARBs Strengthen organizational capacity of ARBs & ARB organizations to manage & develop agri-enterprises; Transform microenterprises into formal & viable SMEs through clustering of ARCs & establishing networks of enterprises; Facilitate access to credit Establish rural physical infrastructures
Reduced risks inherent to the sector, including climate change impacts. Damage and loss of crops, livestock and fishing grounds; water allocation and prioritization of water supply for irrigation, domestic water, and energy are just a few emerging problems that should be dealt with as early as possible. Proper scientific guidance is needed
National Land Use Policy & Protection of Prime Agricultural Lands. Expected to provide the legal & other mechanisms for not only land reform areas, but also zoned areas for water and water uses, especially for agriculture. NFA Reforms to seek further rationalized grains sector trading. To restructure the NFA to separate its regulatory & proprietary functions. Agricultural Bureaucracy Rationalization. To rationalize the agriculture bureaucracy through the efficient and effective convergence and complementation of the agriculture, agrarian reform and natural resources (AARNR) service agencies & related offices to address institutional overlaps.
Accelerated Irrigation Development. NIA shall undertake a six-year accelerated irrigation program for the construction of irrigation projects in the remaining unproductive, unirrigated lands nationwide. Food Safety. Aims to put in place a coordinated food safety system Amendment of the Tariff & Customs Code (strengthening the anti-smuggling mechanism of agricultural products). Should further strengthen the anti-smuggling mechanism
Address several areas of weaknesses for the government: Limited technical capacity, Unclear communication lines and coordination, Infrastructure support, among others…
The government has excellent strategies. But weaknesses appear in implementation. Which can be reinforced by complementary programs through NGOs and the private sector.
The expansion of the production Often, more production meant base involves breaking out from surpluses that depress farm gate subsistence agriculture by prices. increasing and diversifying the marketable surplus of the farm. Meanwhile, lower farm gate prices also do not automatically However, raising agricultural & lead to lower food retail prices. fishery production & competitiveness have not It appears that an inordinate automatically & consistently led share of the benefits from higher to increased farm incomes. production goes to middlemen.
What is needed, therefore, is a more holistic approach in reducing rural poverty that will not only address the production bottlenecks in agriculture but also its inherent vulnerabilities. This approach calls for the promotion of agribusiness. This will not only address agricultural production constraints but also post-production handling, value- adding, and distribution concerns, all of which are the major and inter-connected determinants of job creation and income stability in the countryside.
Expand substantially the production base Raise production and distribution efficiency Promote equitable distribution of production & productivity gains. Thus, production and productivity improvements will have to go hand-in-hand with governance and institutional reforms to ensure that, among others, production and efficiency gains will indeed result in commensurate farmer and consumer welfare gains.
Address the inefficiencies along the agriculturalvalue chains FARMERS + MARKETS
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• RegulatoryMacro environment • Macroeconomic condition Improve the participation of small farmers in the agricultural value chainsMeso • Efficiency • Effectiveness through increased and better engagement ofMicro • Access • Impact the key stakeholders along the chain.
Government, Institutional Markets, Financial Institutions Academe, Church, Research Institutions LGUs, NGOs, Bus. Service ProvidersThe long-term goal Farmer Leaders, POsStrengthen thecapacity of local Smallcommunities totake control of their Farmersown development