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Increasing agricultural production among smallholder farmers by grouping and organizing them into cooperatives and various types of producer organizations, and forging partnerships with agribusiness companies can help increase their incomes and subsequently stimulate social transformation. -economics of the Philippine countryside.
A report titled “Realizing Scale in Smallholder-Based Agriculture: Policy Options for the Philippines” – jointly launched by the World Bank and the Department of Agriculture (DA) – said that there are rich lessons in the country and beyond. abroad for these regroupings and consolidations. activities on the farm and along the value chain to succeed and transform the agricultural sector.
A notable example of this approach, according to the report, is the Philippines Rural Development Project (PRDP), which is currently being implemented by the DA. The PRDP groups or organizes producers into companies that take a business approach to agriculture and fishing, supported by complementary investments in infrastructure such as farm-to-market roads, irrigation, post-harvest facilities. and cold storage.
“To be successful, consolidation and consolidation efforts must be voluntary, based on trust and collaborative relationships among stakeholders, be they farmers, communities, municipalities, other government units. local or small and large agrifood companies ” said Ndiame Diop, World Bank Country Director for Brunei, Malaysia, Thailand and the Philippines.
“When different approaches to consolidate land management are not feasible, supporting the mechanization of agricultural and post-harvest operations can be an alternative or complementary strategy for smallholder-based systems to increase productivity and farmers’ income, both on and off the farm ” said Diop.
Philippine agriculture is dominated by small farmers and fishermen who operate independently, using mostly traditional production practices and earning low incomes. A typical farmer earns an average of 100,000 pesos per year, well below the poverty line (based on 2015 PSA figures).
The average farm size fell from three hectares (ha) per family per farm in the 1980s to just 0.9 ha per family per farm in 2012. These increasingly small farms are often divided into more fragmented blocks. . The country has some 5.56 million farms, totaling 7.2 million hectares, of which more than half (57 percent) are one hectare or less, 32 percent are one to three ha, 9 percent are three to seven ha and only two percent are seven ha or more.
Agriculture Secretary William Dar stressed that by using modern technology, programs such as block farming, trust farming and contract farming can make farming more efficient and profitable for farmers and their partners in agrifood companies. With higher and better production, it is easier to link agriculture to domestic and global manufacturing sectors and to access markets, he said.
“Find opportunities for grouping and consolidating small and medium-sized farms as well as partnerships with agribusinesses – to achieve economies of scale (and reduce the unit cost of production), especially for crops that require mechanization and intensive use of technology – part of the “new thinking” of the Ministry of Agriculture “ said Secretary Dar.
“We want to collectively empower farmers, fishermen and the private sector to increase agricultural productivity and profitability, taking into account sustainability and resilience” added the DA chief.
Global experience shows that forcing collaboration between farmers and agribusinesses through decrees or subsidies (top-down approach) usually does not work, but those that emerge from bottom-up collective farmers’ initiatives work.
The report says the country can explore various arrangements based on global experiences, including:
- Achievement of scale in primary production. In the Philippines, perhaps the most promising areas for further clustering may be among selected irrigation schemes where water user associations are already well established; and within land reform communities supported by the land reform ministry.
- Support market-oriented producer organizations. Encourage the growth of cooperatives and producer organizations. In the East Asian region, Japan, South Korea and Taiwan have had particularly rich experiences in promoting groups or cooperatives of farmers.
- Foster contract farming, productive alliances or other links between farmer groups and farm businesses. These are well understood in the Philippines and can be extended.
Elsewhere in the region, contract farming has become increasingly common in certain value chains, including value chains for specialty rice varieties or rice production systems.