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Home arrow Newsletter arrow Focus on the Philippines Number 42
Focus on the Philippines Number 42 PDF Print E-mail
FOP 42 : Hunger and Poverty in Mindanao: 2 Perspectives (Part 1)



[1] HUNGER STALKS THE COUNTRY’S FOOD BASKET
by Billy de la Rosa



[2] AGRIBUSINESS CAN WIPE OUT RURAL POVERTY
by Ibarra Malonzo


In this Issue



The Social Weather Stations (SWS) survey on hunger and poverty and the government’s plan to distribute food coupons for the poor, drew a number of reactions from civil society organizations and triggered a public debate on the root causes of poverty and hunger in the Philippines and ways of addressing these issues.


The SWS survey pointed out a most glaring paradox—hunger in Mindanao, the foodbasket of the Philippines. Hunger incidence in the region was estimated at a national high of 23 % of the population. In this issue we present two perspectives on hunger and poverty from two prominent researchers from Mindanao. The first article is Billy dela Rosa’s Hunger stalks the country’s foodbasket. The article is highly critical of the export-oriented agribusiness strategy that has become the dominant paradigm for agricultural development in Mindanao. Dela Rosa laments that "the drive to make Mindanao the country’s food basket has contributed to chronic hunger that is made worse by economic shocks brought about by natural or man-made disasters." Dela Rosa is the Executive Director of the Alternate Forum for Research in Mindanao (AFRIM), a research and advocacy organization based in Davao City. The second article is Ibarra Malonzo’s Agribusiness Can Wipe out Rural Poverty. Malonzo counters Dela Rosa’s criticism of the agribusiness strategy. He contends that “On the contrary, it’s the absence of a well-rounded agribusiness strategy that addresses local, national and global markets, that is the bane of agriculture.” Malonzo asserts that "agribusiness strategy is the opposite of subsistence and marginal farming prevalent in Philippine agriculture and the principal cause of poverty and hunger in Mindanao." Malonzo is the Executive Director of Kasanyangan- Mindanao Foundation, Inc. (KFI), a Mindanao-based service NGO advocating agrarian reform and rural development, particularly by promoting local convergence initiatives for social enterprise development in agriculture.

The Dela Rosa-Malonzo debate reflects the sort of tensions and issues that complicate the question of agriculture, food and even trade policies in the Philippines.

The first article is reprinted from the Philippine Daily Inquirer, Oct. 10, 2004; the second piece came out in PDI Oct. 17, 2004.
HUNGER STALKS THE COUNTRY’S FOOD BASKET
by Billy de la Rosa

Close to a fourth of households in Mindanao have been found to suffer from hunger. What might strike one as supreme irony is that the region with the most incidence of hunger is also the country’s food basket.

The idea of Mindanao as the country’s food basket was first hatched during the Ramos presidency. It was picked up and continued by succeeding presidents from the short-lived Estrada to the Arroyo administration.

During her recent visit to Davao City on the occasion of the 13th Mindanao Business Conference, President Macapagal-Arroyo said that in line with the government’s food basket policy for Mindanao she wanted that most of the two million hectares targeted for agribusiness development under her 10-point legacy agenda should be in Mindanao. “Because Mindanao is the food basket of the country, I’d like to develop Mindanao as the agribusiness center of the country,” she said.

Agribusiness

Thus, the food basket strategy for Mindanao has been translated into an agribusiness strategy, which in turn became an export-oriented agribusiness strategy. During the last Mindanao Food Congress, Presidential Assistant for Mindanao Jesus Dureza emphasized that Mindanao must look to foreign markets for its agricultural food products with east Asean (Association of Southeast Asian Nations) an immediate target. “There is a big market out there when we look at the 50 million BIMP-EAGAns”, Dureza told the participants of the food congress.

He was referring to huge market potential of Brunei, Indonesia and Malaysia, which, together with the Philippines, comprise the east Asian growth area. His remarks were echoed by Charles Feibel, program chief of party of the Growth with Equity in Mindanao (GEM) program, who went further by saying that an accelerated development for Mindanao should be promoted “to make it the food basket of Asia.” GEM is funded by the United States Agency for International Development.

Mindanao as food basket for the country and food supplier of the world is not really a new concept. In the past, Mindanao was called the “rice bowl” of the country next to Central Luzon’s “rice granary” title. As early as the 1930s, Mindanao exported pineapple to the US market through the American agribusiness giant Del Monte.

After the Second World War, coconut production grew in Mindanao in response to the demand for coconut oil in Europe and the US for the manufacture of cooking oil, margarine and other food products.

Pineapple

Today, a good portion of the country’s agricultural food production comes from Mindanao. Coconut, banana and pineapple are among the country’s most important agricultural exports.

Sadly, the drive to make Mindanao the country’s food basket has contributed to chronic hunger that is made worse by economic shocks brought about by natural or man-made disasters. Not too long ago, newspapers headlined deaths among the upland population in Mindanao as a result of hunger brought about by El Niño. Upland dwellers were reduced to eating poisonous wild yam to stave off hunger.

The periodic outbreak of war between the forces of the Moro liberation fronts and government forces has disrupted livelihoods and destroyed farms and means of production, affecting people’s capacity to produce food and to feed themselves.

Because agricultural food production has been supplanted by agribusiness, the emphasis has shifted from meeting domestic needs to filling the demand of global markets. The total land area devoted to banana, pineapple, oil palm and other high-value export crops has increased while that for food crops like rice has decreased.

As a result, rice self-sufficiency had dropped from 90 percent in 1995 to 66 percent in 2000. People in the past had been at least able to feed themselves with food that they themselves produced. With the advent of export crop production and plantation agriculture, people must rely on their incomes to obtain their food requirements.


Chronic poverty

The promise of prosperity from export crop production has not been realized for most Mindanaoans even as agribusiness capitalist and landed families have amassed untold wealth from agribusiness ventures in Mindanao. Half of all Mindanao provinces belong to the country’s 25 poorest provinces. At least half of the population in most of these provinces lives below the poverty threshold.

Invariably, poverty and hunger go hand in hand. In its report on the Millenium Development Goals, government admits that poverty is a major cause of food intake inadequacy, particularly in the rural areas. Official statistics indicate that per capita food supply outstrips food requirement by 45 percent. There is enough food to go around but people don't have money to buy enough to meet their needs.

Official statistics look even worse than results of the Social Weather Station’s hunger survey of August 2004. Three out of four of the poorest Mindanao provinces saw dramatic increases in the number of families that are unable to meet their food requirements between 1997 and 2000. In half of the cases, the increases exceeded 30 percent.

The 1998 offensive waged by the Estrada administration against the Moro Islamic Liberation Front cost about P250 million in rice and corn production in Maguindanao and Lanao del Sur. The Department of Agriculture estimated that 12,000 hectares were rendered unproductive as a result of the fighting. The uncertain political outlook has prevented full rehabilitation of these farms.

Tens of thousands of families in the war-affected areas had been displaced by war. Many of them continue to live in evacuation centers and protection areas, only visiting their farms during the day. Economic life has been disrupted. It is not surprising, therefore, that the provinces worst affected by the conflict are also the poorest provinces in Mindanao. They have also the highest increases in the incidence of hunger.

The global economic shock brought about by the war in Iraq has exacerbated chronic hunger in Mindanao. Increases in the cost of fuel and petroleum-based products have increased agricultural production and transport costs. Fertilizer prices have increased 50 percent thus eating into farmers’ incomes. Increases in farm gate prices of corn, for example, have been virtually offset by increases in production and transport costs. Small farmers are especially vulnerable.

The government response to the hunger situation – distributing food coupons to the poor – is mitigation, not cure. Clearly, a more strategic approach is in order. The two most important are: 1) the hastening of the Mindanao peace process; and 2) a re-examination of priorities in the government’s Mindanao agricultural policies.#


AGRIBUSINESS CAN WIPE OUT RURAL POVERTY
by Ibarra Malonzo

As a loyal Mindanaoan, I share Billy de la Rosa’s sense of outrage in his article “Hunger Stalks the Country’s Food Basket” in PDI Oct. 10, 2004, referring to a land where a third of the population lives below the poverty line and goes to bed starving half the year.

I also agree with his conclusion that government, rather than giving out food coupons to salve mass hunger, should take a strategic approach by hastening the peace process and reexamining its agricultural policies.

But I disagree with Billy’s analysis that the cause of widespread poverty is “export-oriented agribusiness strategy”. On the contrary, it’s the absence of a well-rounded agribusiness strategy that addresses local, national and global markets, that is the bane of agriculture. Most of the country’s agriculture and forestry lands are still in a subsistence mode of development with marginal productivity.

It is not clear, though, what Billy is objecting to: is it the export destination of crops, or their being high-value crops, or the involvement of big agribusiness corporations, or is it the whole agribusiness strategy? Billy singles out “pineapple, bananas, oil palm and other high-value crops” as prime examples of the grievous error of replacing lands planted to food staples such as rice with these high-value crops.

What, in fact, is the impact of these crops on Mindanao’s farmlands and economy? Out of six million hectares of agricultural lands, commercial pineapple and bananas for export take up only 70,000 hectares. In 2000, 30,000 hectares of pineapple plantations made $140 million in export earnings equivalent to P257,000.00 per hectare. In the same year 40,000 hectares planted to export bananas earned $245 million equivalent to P335,000.00 per hectare.

In comparison, irrigated rice lands yield an average of 4,000 kilos of palay per hectare valued at P40,000.00. Irrigated and rainfed rice lands total a million hectares with the latter having lower yields. Mindanao has two million of the country’s 3.5 million hectares of coconut lands that yield an average of one ton of copra per hectare per year. At the current price of P20 per kilo, this amounts to P20,000.00 per hectare yearly. Likewise, Mindanao has a million hectares planted to corn with an average yield of 2.5 tons per hectare per year valued at P20,000.00 at current prices.

Rice, corn and coconut lands in Mindanao total four million hectares with an average annual yield of P25,000.00 per hectare. With an average of 1.5 hectares per farming household, the latter’s gross income amounts to P37,500.00.00 yearly, or a net of P16,450.00 with half going to production costs. Add P20,000.00 from other income sources, thus raising the farming household income to P36,450.00 which is half of the poverty line of P70,000.00.

Low productivity of corn, rice and other farm lands is the main cause of poverty in rural households.

On the other hand, 70,000 hectares of pineapple and bananas easily create 280,000 jobs, of which 70,000 are in direct employment and the remainder, in auxiliary employment, servicing requirements of the plantations, factories and workers communities (e.g. education, mechanics, shops). The 70,000 workers directly employed as workers in banana and pineapple plantations earn twice the average minimum daily mandated wage. This does not yet include the income of landowners most of whom are agrarian reform beneficiaries.

Dole and Del Monte do not own a single piece of agricultural land. Dole leases 8,500 hectares from DARBCI (Dole Agrarian Reform Beneficiaries Cooperative, Inc.) which also manages a 200-hectare pineapple plantation as grower and sells its products to Dole. Dole also engages in pineapple growership covering 3,000 hectares of small farm lands that are consolidated farms managed by cooperatives. The yield of cooperative growers in Dole equals, if not exceeds, the average yield of plantations directly managed by Dole.

Del Monte, on the other hand, leases 6,000 hectares from DEARBCI (Del Monte Employees Agrarian Reform Beneficiaries Cooperative, Inc.) and leases the rest from other small landowners.

Dole-Stanfilco banana plantations in Davao have all been covered by agrarian reform and are now under growership agreements between Dole-Stanfilco and beneficiaries-turned-growers. Former plantation workers turned beneficiaries own an average of not more than one hectare. Many beneficiaries earn as much as P100,000.00 a year in net income from their hectare, excluding wages if they work.

Let’s turn to palm oil. We have only 20,000 hectares of oil palm plantations categorized thus: 15,000 hectares fruit-bearing and 5,000 hectares of immature trees. The productive 15,000 hectares generate 45,000 tons of crude palm oil (CPO) and palm kernel oil (PKO) yearly valued at $25 million. These are refined into cooking oil and consumed locally, saving our economy $25 million in imports.

Still we import 150,000 tons of palm oil and by-products yearly worth $75 million. A noted agricultural economist believes the country, in fact, imports twice this amount. By this reckoning, we need 150,000 hectares of oil palm plantations today to save $150 million in imports.

Why do we have to import palm oil instead of consuming our own coconut oil? Simply because coco oil is more expensive than palm oil by 30% in the world market. So we export coco oil and import palm oil. Fast food chains and food manufacturers prefer to use the cheaper palm oil.

What if the government follows Billy’s food first policy and stops the export of coco oil? Seventy percent of coco oil is now exported. The price of copra will plunge to P5 a kilo giving the farmer a gross income of P5,000.00 per hectare per year. Farmers will not harvest their coconuts at this price. They would rather cut their trees for sale as coco lumber but there will be no buyers for this volume of coco wood.

Should President GMA follow Billy’s prescription of food first and No to coco oil exports, the two million coconut farmers will most probably burn their 3.5 million hectares of coconut lands (2.1 million of which are in Mindanao) in protest; and Malacanang, Batasan and the Supreme Court will not be spared the farmers’ wrath.

I submit that the problem of Mindanao’s widespread poverty and hunger is not brought about by export-oriented agribusiness strategy. Instead we should spread the application of Dole and Del Monte’s agribusiness strategy to the six million hectares of agricultural lands, most of which are marginal and unproductive. Contrary to popular perception, agribusiness strategy can be applied to small family farms as well as to corporate estates.

By applying hybrid agricultural technology employed by Bukidnon farmers on 50,000 hectares of corn lands, we can easily raise the yield to four tons per hectare. With four million tons of corn in Mindanao, we will have enough corn to cover the deficit of one million tons that we import yearly. There will still be two million tons left to export.

By planting the Philippine Coconut Authority “synvar” (synthetic cultivar from nine cultivars) and following its fertilization and maintenance protocols, coconut will yield four tons of copra per year. We can supply all the world’s requirements of coco oil. If we go into downstream manufacture of higher-priced products such as shampoo, soap, lotion and facial cream, not to mention the miraculous virgin oil, the Philippines can give the Malaysian oil palm industry a run for its money.

The same agribusiness strategy can be applied to coffee, rubber, mango, native bananas (gardaba, lacatan, latundan, senorita, etc.), vegetables, soya beans, livestock, dairy and cotton, all of which are being imported (except mango and banana) in great volumes because of poor productivity. If farmers can produce crops and products to meet domestic requirements, there is no stopping them to produce more for export. Better still, farmers should aim to export their produce and it will follow, as night follows day, domestic requirements will be more than met. We can then wipe out rural poverty in ten years.

What do I mean by agribusiness strategy? It is applying science and technology to farming and market solutions to agriculture. It involves organizing and managing the supply chain from production (farm machinery, seeds, breeds, technology, credit) to post-harvest (dryers, silos, slaughter houses, refrigerated vans) to manufacture (flour and feed mills, corn flake factories) to transport (ships, ports, trucks, Ro-Ro) and, finally, marketing to deliver the goods to the customer.

Agribusiness strategy is the opposite of subsistence and marginal farming prevalent in Philippine agriculture and the principal cause of poverty and hunger in Mindanao.

Agribusiness practice in the Philippines is not all sweetness and light. From 35 years of trade union work among corporate plantation workers in Mindanao, I personally know of the prevalence of union-busting and labor exploitation by agribusiness corporations. I also know from 15 years’ experience working in agrarian reform in Mindanao’s plantations how corporations have made a mockery of agrarian reform through leaseback agreements. One palm oil corporation has such an agreement on 8,000 hectares of oil palm plantation lands at rentals less than 5% of the value of farm gate production, that is, P3,000.00 rental per hectare per year out of P60,000.00 produce per hectare. But such abominable practices do not negate the value of corporations’ contribution to raise land productivity and incomes of workers and farmers.

I also have my beef against government’s agricultural policies in Mindanao. Not that they are wrong but that these policies in the main consist of cheap and meaningless words.

I support the ambitious goal enunciated by President Arroyo to develop two to three million hectares of land into agribusiness over the next six years. But my question is, how will the President back up her words with deeds?
 
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