Jun 10, 1988 - chapter discusses the various salient transformations of rural life in the ..... featuring a mix of violent repression and an offer that would become highly ... Borras and Franco (2005) describe CARP as a liberal programme.
Philippines: Fragmented agriculture and aquaculture and vulnerable livelihoods Forthcoming in: Thompson, E., Rigg, J. and Gillen, M. (Eds), The Asian Smallholder. Amsterdam: Amsterdam University Press. Edo Andriesse In the immediate post-WII period, observers forecast a bright future for the Philippines. In several ways, the Philippines was indeed better positioned than neighbouring Southeast Asian countries. The country was spared massive Cold War devastations and enjoyed agricultural successes in the 1960s and 1970s. The Green Revolution in rice was initiated at the International Rice Research Institute in Los Baños, Laguna in the mid-1960s with the introduction of genetically engineered high yielding varieties, most notably the IR8 variety. The Philippines became an international knowledge centre for the agricultural sciences. Rice production surged and the country managed to achieve self-sufficiency in the late 1970s (Ulack, 2000, p. 422). In addition, the plantation economy thrived. The export value of raw sugarcane, the traditional colonial plantation crop, increased from US$137 million in 1965 to its peak level of US$ 624 million in 1980 (Doner, 2009, p. 143). As Balisacan and Hill (2003, p.1) noted: ‘By the mid-1960s there was still little evidence that things were to go seriously wrong. Indeed, the country was largely free of the major problems then besetting Southeast Asia’. In the 1980s however, economic development in various sectors, including those of agriculture and fisheries, started to lose vibrancy. Meanwhile, other Southeast Asian countries in the 1990s, such as Thailand, Indonesia, and especially Vietnam were enjoying a period of impressive agricultural performance, livelihood improvements for smallholders, and overall rural poverty reduction. They are now globally recognized exporters of rice, rubber, fruits, tea, seafood, poultry, and other products whereas the Philippine agriculture and fisheries sector has had to contend with several economic and political challenges, natural hazards, and periods of stagnation. Despite the establishment of the Comprehensive Agrarian Reform Programme in 1988 and multiple export successes (banana, coconut products, 1
pineapple, mango, tuna, seaweed), ‘[…] agriculture is [nevertheless] the seat of poverty in the country. Seventy percent of the Filipino poor can be found in the rural areas, where the dominant source of livelihood is farming and fishing. Poverty incidence is also highest in rural areas (at 40 percent, against only thirteen percent in urban areas and 3.9 percent in Metro Manila); and it is worst among coconut farmers and fishers’ (Philippine Daily Inquirer, 2016a) The Philippines lost its status as a dominant sugar exporter – Brazil and Thailand currently are the leading players – as well as its self-sufficiency in rice. Overall, Philippine agricultural exports have shifted from sugar towards coconut products, fruits and aquaculture. The most important agricultural export in 2015 was coconut (copra) with a value of US$ 1.1 billion (Comtrade, 2015), but as introduced in the quote above, coconut farmers remain among the poorest sections in society. This chapter analyses the state of smallholders in the Philippines and discusses the reasons for the relative underperformance of Philippine agriculture and fisheries as well as the inability to translate robust economic growth rates and agricultural export successes into rural poverty reduction. Between 2006 and 2012, the poverty incidence among families remained stable at approximately 25 per cent; the period 2012 and 2015 hopefully mark the beginning of more positive development, with the decrease of the poverty incidence down to 21.6 per cent (PSA, 2016a). It should be noted however that the latest of this data does not include rural-urban differences. Since the Philippines is a large archipelagic country with approximately 2000 inhabited islands, this chapter will pay considerable attention to fisheries, most notably aquaculture. In thousands of coastal Barangays (the smallest administrative division, equivalent to a village) throughout the country, residents attempt to make a living through a combination of smallholding agriculture, fisheries, aquaculture, and non-farm income. An increasingly important share of rural income is derived from remittances from household members working in larger cities (e.g. Manila) or abroad. Approximately 10.2 million Philippine people reside abroad (Commission on Filipinos Overseas, 2013), who in 2013 sent home remittances equivalent to 9.81 per cent of the Philippine gross domestic product (UNDP, 2015, p. 263). Yet, as will be elaborated below (see Section E), rural remote communities in peripheral regions find it hard to benefit from the Philippine model of ‘exodus capitalism’ (Kondo 2014, p. 169-191; Andriesse 2017).
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The internationally accepted definition of a smallholding is a maximum of two hectares. In the Philippine context this definition was appropriate around 2000, but due to significant land fragmentation and high population growth, average smallholdings have gradually become much smaller; from 2.84 hectares in 1980 to 1.29 hectares per holding in 2012, according to the preliminary results of the 2012 Census of Agriculture. Meanwhile, the number of farms increased from 3,420,323 in 1980 to 5,562,577 in 2012. 88.9 per cent of these farms had a size of less than three hectares (PSA, 2015a). Unfortunately, the final results of the 2012 Census of Agriculture had not yet been published at the time of this writing. Since 99 per cent of the farms are operated by households, it implies that almost five million farmers grow crops on small plots. Given the average family of two parents and three children, this further means that 25 million people (out of the total population of 100 million persons) are at least partly dependent on smallholding agriculture. The Asian Development Bank, also with its headquarters in the Philippines, estimates that 11.8 million people worked in agriculture in 2014. This would include fisher folk, landless tenant farmers, agricultural labourers and others. Overall, labour productivity in agriculture has remained low. Agriculture and fisheries only account for ten per cent of the gross domestic product (PSA, 2015b). Since the start of the Green Revolution in the mid-1960s, Philippine rural life has changed dramatically. While there are still remnant smallholders and fishers, rural communities have witnessed the growth of agricultural labourers and non-farm workers (Hayami and Kikuchi, 2000, p. 45-71). Also, remittances have led to the construction of many relatively large houses (if not small palaces) in the countryside. While smallholders are sometimes looked down upon as being poor, uneducated and backward, one can also observe a new trend toward ‘modern’ farming households led by the newly educated generation. This chapter discusses the various salient transformations of rural life in the Philippines – particularly in Section D in which topics such as the Communist insurgency, land reform, and the growth of aquaculture will be analysed. The chapter closes with a brief outlook on the future of smallholders in Section F. What is a Smallholder in the Philippines? There is no singular definition of the ‘smallholder’ and a ‘smallholding’ in the Philippines, particularly in terms of the number of hectares cultivated. As mentioned above, the average size of a farm is only 1.29 hectares, at present. A good starting point for official 3
documents is the Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law, dated June 10, 1988: ‘an act instituting a comprehensive agrarian reform program to promote social justice and industrialization, providing the mechanism for its implementation, and for other purposes’. This act envisioned a major land distribution programme against the backdrop of the EDSA revolution that created pressures to bring about social justice. This act distinguishes between farmers, regular farmworkers, and seasonal farmworkers. A farmer ‘refers to a natural person whose primary livelihood is the cultivation of land or the production of agricultural crops, either by himself, or primarily with the assistance of his immediate farm household, whether the land is owned by him, or by another person under a leasehold or share tenancy agreement or arrangement with the owner thereof.’ Beneficiaries under RA 6657 ‘shall be awarded an area not exceeding three (3) hectares which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limits (Philippine Law and Jurisprudence Databank, 2016). Within the context of the 1980s, the normal size for a farm was considered to be three hectares. However, as a result of the land fragmentation which occurred during the last three decades, three hectares is considered nowadays to be a large piece of farmland. In order to better align agriculture and fisheries with trends such as economic globalization and domestic political decentralisation, the Philippine government enacted RA 8435 in 1997; the so-called Agriculture and Fisheries Modernization Act (Llanto and Ballesteros, 2003). This act does not follow RA 6657 precisely. For instance, small farmers and fisher folk are defined as ‘natural persons dependent on small-scale subsistence farming and fishing activities as their primary source of income’ (Department of Agriculture, 2016). Thus, the act does not formulate a specific landholding size in its definition of small farmers. Small farmers and fisher folk are treated equally in this act, a recognition of the fact that small scale fisheries constitute an important part of rural life in the Philippines. The Land Bank (2016) offers loans to both small farmers and fisher folk with the following eligibility criteria: -
small farmers; i.e. those cultivating not more than five hectares of land and/or are engaged as small poultry/livestock raisers, raising a maximum of the following:
poultry (1,000 poultry layers or 5,000 broilers)
swine (ten sow level or twenty fatteners) 4
-
cattle (ten fatteners or five breeders)
dairy (ten milking cows)
goat (50 heads)
small fishers:
Those operating fishing vessels of not more than three tons in capacity;
Those operating fishponds of less than five hectares or fish cages of less than 400 square meters;
Fish workers in fishing boats, fishponds, or fish processing establishments;
Any other individuals who are engaged in processing, and distribution.
Other Acts such as the use of the Philippine Carabao [Water Buffalo] Act of 1992 and the Rubber Research Institute Act of 2010 also follow a maximal limit of five hectares. However, while there seems to be a consensus that smallholders are those owning a maximal amount of five hectares of land, there are in fact very few smallholders who actually own a piece of land between three to five hectares in size. A maximum upper limit of three would better reflect the current conditions of smallholders since 88.9 per cent of landholdings are smaller than three hectares. Smallholders are sometimes negatively portrayed as poor, uneducated and with a limited ability to speak English (as well as Filipino, for rural communities in the Visayas and Mindanao) (Kelly, 2012, p. 233). Also, smallholders are perceived as members of households who send daughters and sons overseas to expand the household income: as female domestic helpers (DHs) in Hong Kong, Singapore, and the Middle East; and male marine employees working on vessels plying the International Waters. Nevertheless, according to the Philippine Rice Research Institute, there seems to be a new trend towards ‘modern farming’ initiated by the new young and educated generation. College graduates consider rice farming to be a profitable and good alternative to salaried work (Philippine Daily Inquirer, 2015). This small group of commercialized smallholders is supported by the government, in particular, the Department of Agriculture. In the Philippine Media, one can read reports about the need to 5
transform remnant smallholders and traditional fisher folk into agripreneurs or rural entrepreneurs. In contrast, indigenous people appear to receive the least support from the establishment (Gera, 2015). The Indigenous Peoples’ Rights Act of 1997 defines indigenous people as a group of people who have lived in a certain way in a specific territory ‘since time immemorial’ (IFAD and AIPP, 2012, p.2) or who have resisted the influences of non-indigenous religions and cultures during the colonial era and therefore have become different from the majority of the Philippine population. This Act also recognises the possibility of indigenous people having been displaced from their ancestral lands. While most indigenous groups currently live in the uplands of the Cordillera Administrative Region in Northern Luzon and Mindanao, there are also coastal indigenous strongholds in Bicol, Southern Palawan and the Autonomous Region for Muslim Mindanao. Indigenous people usually distinguish themselves by pointing out their ethno-linguistic identity. The precise number of ethno-linguistic groups is unclear; estimated numbers are typically between 70 and 140 (IFAD and AIPP, 2012, p. 4). In reality, the rights of indigenous peoples are often not respected and they remain among the most marginalised sections of Philippine society. In fact, the drive to modernize agriculture ‘is seen as the factor that has most extensively constrained indigenous peoples’ food systems’ (IFAD and AIPP, 2012, p. 9). It has resulted in the loss of agrobiodiversity, the emergence of new types of pests and diseases, and has threatened the continued practice of indigenous sustainable agriculture, often swidden cultivation. Montefrio and Dressler (2016, p. 122) investigated reporting on swidden cultivation in popular media and found that during 20012013 ‘at least 140 articles in the Philippine Star and Philippine Daily Inquirer newspapers […]focused on […]impacts of swidden cultivation in the country in reference to land degradation, marginality and idleness’ and that ‘Ninety percent of these articles presented swidden cultivation negatively […]’ In another study, Montefrio (2016) has documented the pressure being put on the indigenous population of Palawan by the elite to switch from swidden cultivation to rubber plantations, and also to destroy sacred forests for the planting of rubber trees. Mindanao is arguably the area most notable for tensions between traditional, remnant forms of smallholdings, and the drive towards modern agriculture. Rola (2011), in a longitudinal study of an upland community in Lantapan Municipality, Bukidnon Province, has laid bare the many 6
institutional, socio-economic and environmental challenges that stand in the way of achieving sustainable development. ‘This community is now a melting pot of different cultures. Cebuano is the most widely spoken, followed by Binukid-speaking Indigenous People, followed by Igorot speakers from the mountainous provinces [who] comprise 12 per cent of the population’ (Rola, 2011, p. 28-29). Nevertheless, she also demonstrated the possibility for the co-existence of both settlers’ and indigenous peoples’ traditions, as well as for cooperation towards increased environmental sustainability and mixed cultures (Rola, 2011, p. 211-214). In sum, while indigenous people no doubt face huge challenges (Gera, 2015), it is important to recognise that bottom-up inclusive development is not impossible. Smallholders in the Philippines Today There are approximately five million smallholders in the Philippines, yet a precise breakdown organized according to crops grown and livelihoods is impossible due to the diversified, pluriactive nature of many households. For instance, many households in coastal barangays combine agriculture and aquaculture. In upland areas, it is typical for several crops to be grown simultaneously, like corn and vegetables. The increasing reliance on non-farm work and remittances from relatives working in big cities and/or abroad further complicates the overall picture of rural livelihoods. Estimates are indeed available for several individual product categories: three million coconut farmers, two million rice farmers, 500 000 people working in the banana industry and 200 000 seaweed farmers. Unfortunately, due to the nature of pluriactivity, the simple summing up these numbers is not reliable. That said, there is information available on land use as well as the aggregate value of crops and aquaculture. Table 1 depicts the top seven crops. Palay (rice) clearly dominates and the value of total rice production has increased significantly in recent years. Yields have also improved between 2009 and 2014. At present, the yield per hectare of irrigated palay is 4.43 metric tonnes; that of rain-fed palay during January –June and July – December is 2.69 and 3.30 metric tonnes, respectively (PSA, 2015b, p. 15-16). Irrigated palay accounts for 76 per cent of total production. Rubber and cassava should be considered as being high volume-low value, whereas fruits have the opposite property. The coconut oil value chain is relatively diffuse, particularly upstream where there are three million smallholders selling copra – the flesh from which coconut oil is extracted – and thousands of intermediaries besides. Despite these figures, most smallholders are poor and face many problems. In Quezon province, for 7
instance, ‘poor roads and high transport cost, lack of market information, limited volume for sale, [all] make it difficult for farmers to link favourably with markets’ (Pabuayon et al., 2009, p. 60). Table 2 indicates that livestock – particularly swine, poultry and aquaculture – are important as well, but, as will be discussed below, only seaweed is exported on a large scale.
[INSERT TABLE 1 HERE] Source: PSA, 2015b [INSERT MAP 1 HERE] Source: PSA, 2015a [INSERT MAP 2 HERE] Source: PSA, 2015b Map 1 provides an overview of the distribution of all landholdings and their average size per region. The average size of landholdings in Mindanao is above average, although this could be an inflated figure due to the presence of large corporate banana and pineapple plantations. Landholdings in the Visayas are the smallest, probably because of the absence of large plains. Map 2 presents the regional significance of four important crops. Rice is the main staple food for 75 per cent of the population. Luzon dominates rice production with providing almost 60 per cent of total production; Cagayan valley, Northern Mindanao and SOCCSKSARGEN are the top three corn producing regions. Furthermore, Mindanao is also the most important region in terms of coconut and banana. [INSERT TABLE 2 HERE] Source: PSA, 2015b While Luzon produces most of the livestock – particularly swine, and poultry – Mindanao is strong in marine fisheries and aquaculture. The city of General Santos is the tuna hub of the Philippines and approximately 80 per cent of seaweeds are grown in the coastal waters of Mindanao, most notably the Zamboanga Peninsula. However, Cebu City hosts virtually all the refineries which produce semi-refined and refined carrageenan; the end product of the seaweed value chain (Andriesse and Lee, 2017a). Carrageenan is a 8
thickener/binder used in foods, cosmetic products, and pharmaceutical products. Shrimps and prawns used to be the dominant aquaculture export category in the 1990s, with an export value even higher than banana and tuna (Ulack, 2000, p. 429). However, due to diseases and competition from Thailand and Vietnam, the Philippines lost much of the global market. Table 3 shows that coconut products have been the largest agricultural export category. In 2008 the Philippines was the largest rice importer in the world (IRRI, 2008), but in recent years the country has managed to improve this situation. Finally, while men usually perform the more labour-intensive farming work, women have become active in smallholder farming and aquaculture, either due to the absence of men who find work overseas (Lukasiewicz, 2011) or due to the perceived suitability of the work, with wives growing seaweed while their husbands continue fishing (Hurtado, 2013, p. 91-114). [INSERT TABLE 3 HERE] Source: PSA, 2015b Processes of Transformation and Persistence The 2016 rural development report published by the International Fund for Agricultural Development put the Philippines together with India and Pakistan as three countries within Asia and the Pacific that have experienced slow structural economic transformation, rural transformation and rural poverty reduction in recent decades. To cite one worrying statistic: ‘the share of landless farmers [in the Philippines] climbed from 58 per cent in the 1970s to 70 per cent in 2010’ (IFAD, 2016, p. 122). In contrast to other Southeast Asian countries, the Philippines has not been able to significantly reduce rural poverty levels, leaving the countryside as ‘the seat of poverty’. A major obstacle has been the concentration of political power in the hands of the landed elite. Since Philippines’ independence, lawmakers – often members of political dynasties – have not been willing to implement policies that would reduce their own sources of wealth, pride and family tradition (Ulack, 2000, p. 422). This section provides an overview of the persistence of rural struggles, the complex issue of land reform, and an introduction to related issues that have hampered the emergence of a broad-based, rural middle-class. Colonial legacy
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The concentration of land in the Philippines and the concept of private land ownership of land may be traced to the arrival of the Spanish. They set up an oligarchic system in which the Filipino upper-class, the principales, were given control of land (Ulack, 2000, p. 411) and ‘[b]y 1800 the provincial hierarchy […]was made up of the estate-owning friar orders, the land owning principalia, and the local populace – the latter consisting mainly of tenant farmers and agricultural labourers’ (Francia, 2014, p. 73). Land concentration further intensified due to a ‘disastrous’ (Francia, 2014, p. 111) law in 1894, four years before the USA took over control of the Philippines. Many farmers owned small plots of land in the 19 th century, but failed to acquire land titles. The 1894 law stipulated that landowners had only one year to secure titles, but small landowners, especially in the rural areas, were unaware of the new law. This resulted in the massive and sudden incorporation of land titles which were secured by big landowners. ‘Toward the end of the nineteenth century, at least 400 000 persons found themselves in this predicament’ (Francia, 2014, p. 111). Thus, the end of the 19th century saw the emergence of huge sugarcane estates or haciendas, one of which includes the infamous Luisita hacienda owned by the Chinese-Mestizo Cojuangco dynasty. Former Presidents Corazon Cojuangco Aquino and, her son, Benigno Simeón Aquino III are direct descendants of this dynasty. The Spanish also ignored the lifestyles of indigenous peoples who were engaged in swidden cultivation and who considered land to be communal and sacred – titling is therefore obviously against their belief systems. The Spanish, however, ruled that public land belonged to the King of Spain with the result that much of communal land today is stateowned (IFAD and AIPP, 2012). While the Americans were somewhat more positively people-oriented, most notably in the field of mass education – ‘Educating the little brown brother’ as the Filipinos were referred to (Francia, 2014, p. 164) – little was done to address the plight of the rural poor and the interests of corporate agribusiness prevailed. For instance, individual landlords were allowed to expand their assets by buying the landed estates of the friars. Low-income farmers were left in the tropical heat and many of them eventually sold their land to wealthy landowners and the urban-based middle-class (Francia, 2014, p. 173). Not surprisingly, many peasants, tenant farmers and urban labourers became disillusioned with both American domination and the Philippine landed elite, establishing the Philippine Communist Party (PKP) in 1930. Field Marshal of the Philippine Army, Douglas MacArthur, failed to push for 10
meaningful land reform in the Philippines during the 1930s, ‘as he and Occupation authorities under his command were to do later on in Japan (Francia, 2014, p. 201).’ Given the Philippines’ problematic colonial legacy with respect to land issues, the nation resembles to a certain extent the situation of Latin America (Balisacan and Hill, 2003, p. 4), where initial conditions featured a heavily skewed distribution of land as well. Indeed, the inequality of land and wealth continues to be high in many Latin American countries today Rural insurgencies and the Marcos land reform programme Peasant discontent did not diminish after the country gained full independence in 1946. Many left-wing farmers became members of the Anti-Japanese People’s Army or the Huks, who helped fight against the Japanese during World War II. The Philippine leadership did not recognise their contribution and did not initiate any policies to reduce land inequality. In the political context of the start of the Cold War and the USA’s containment policy, the national government chose to cooperate with and accommodate the capitalist interests of its former colonizer. The 1946 Philippine Trade Act provided for the further continuation of American privileges, most notably the provision that Americans were allowed to have 100 per cent land ownership in designated areas. The Huks, now renamed as the People’s Liberation Army, took up the fight again, this time against the capitalist pro-American elite, morally supported by the victory of the Communists in China. They did this by renewing the peasant struggle, instigating agrarian uprisings and fighting for the causes of land reform and improved rural livelihoods, particularly in Central Luzon, home to two million poor and disillusioned farmers. Initially the PKP believed more in an urban revolution, as predicted by Karl Marx, but later decided to join forces when they recognised the opportunity of a potential power grab in the event of victory (Francia, 2014, p. 201-206). In response, the Philippine government – with support from the USA – commenced a counterinsurgency programme featuring a mix of violent repression and an offer that would become highly controversial. Nonetheless, part of their success was certainly attributed to ‘the government offer of land in Mindanao for the landless Huk fighter. From 1954 to 1963, the government resettled 20,500 families of the Huks - a resettlement that decades later would contribute to the conflict between the indigenous Muslim and non-Muslim tribes on the one hand, and, on the other, descendants of the original Christian settlers of land rights’ (Francia, 2014, p. 207). Vellema et al (2011) also contend that the insurgency in Mindanao should not only be viewed 11
as a conflict between an Islamic minority and against a Philippine State, but also as a broader part of a historical process of struggle – over land, rural labour, and agricultural modernization. In one instance, they pointed out the crucial role of the Muslim landed elite in their dealings with numerous stakeholders who espoused varied and complex interests. While President Marcos’ agricultural policies prioritized the emerging Green Revolution, he also promised to achieve a more equitable distribution of land. However, his reform programme failed for a number of reasons. Firstly, it did not cover huge cash crop plantations such as that of sugarcane and pineapples, which meant that two-thirds of the country’s agricultural lands were automatically excluded from redistribution. Secondly, it did not pay specific attention to the full spectrum of agricultural groups, like landless rural workers and tenant farmers involved in cash crops. Only rural workers in rice and corn were eligible to benefit. Third, landowners managed to find loopholes in the regulations. Fourth, the increase in rice yields due to the effects of the Green Revolution – which even allowed the Philippines to obtain self-sufficiency in rice during the late 1970s (Ulack, 2000, p. 422) – diverted attention from the poor landless peasant. Fifth, giving tenant farmers a piece of land alone proved insufficient as they did not have the financial means to pay for inputs. Therefore, they were not inclined to participate in the programme. By 1979, only 0.5 per cent of the supposed beneficiaries had received a piece of land. Meanwhile, rural leftist insurgencies continued. Since 1969, these had been led by the newly formed Communist Party of the Philippines and the New People’s Army, co-founded by former Huk member, Bernabe Buscayo, and former PKP member, José Maria Sison. In addition, armed violence in Mindanao rose at the end of the 1960s, and the declaration of martial law in 1972 triggered an intensification of the struggle against the Philippine State (Borras 2001; Francia 2014, p. 244249). The early 1980s was a well-known period of political instability and economic decline in the Philippines. While neighbouring countries had begun to absorb rural labour into new factories in urban areas – an endeavour fuelled by massive foreign direct investments – the economy of the Philippines stagnated. GDP per capita declined whereas the prices of basic commodities, the rural poverty rate, and foreign debt all increased. President Marcos, albeit having lifted martial law, thus continued to face a wide range of domestic problems. Obviously, it did not help that he was responsible for some key problems such as the failed 12
land reform programme, the repression of rural leftist insurgencies – which robbed the state coffers of an estimated US$ five to US$ ten billion – and his alleged order to assassinate his political opponent, Mr. Benigno Aquino Jr., the husband of former President Corazon Aquino. This crisis culminated in the famous People Power mass protests of 1986, the loss of military support for Marcos, and his eventual exile to Hawaii. The mixed outcomes of the 1988 Comprehensive Agrarian Land reform Programme Two years after the start of the Corazon Aquino presidency, the Philippine Congress instituted RA No. 6657, the (in)famous Comprehensive Agrarian Reform Program (CARP), on June 10th, 1988. This programme had the mandate to ‘redistribute 8.064 million hectares of private land and public land, regardless of crop or farm type (Borras and Franco, 2005, p. 336)’. Borras and Franco (2005) describe CARP as a liberal programme. It did not call for a revolution in which wealthy landowners were to be dispossessed, but rather for a package aimed at compensating those who would lose land. [INSERT TABLE 4 HERE] Source: Rola, 2011, p. 65 While Francia qualifies President Corazon Aquino’s CARP as a ‘failure (Francia, 2014, p. 274)’, one also needs to consider certain positive outcomes (Borras, 2001). By 2004, three million households benefited from CARP – translating to almost half of all agricultural land (Borras and Franco, 2005) – and after the first decade of the 21st century ‘7.4 million hectares of lands had been distributed to 4.6 million farmer beneficiaries (Vista et al., 2012)’. Also, land titles have generally become secure. Table 4 shows an example from a longitudinal study in Northern Mindanao. From the perspective of rural development and rural poverty reduction however, CARP has not reached its intended objectives. Firstly, as mentioned above, landlessness has increased and rural poverty reduction has been very slow. Furthermore, ‘[l]and inequality has spawned a continuing rural insurgency, which adds to investment uncertainties in rural areas’ (ADB, 2007). Hayami and Kikuchi 2000 also documented the rise of landless people in their research area (Table 5) [INSERT TABLE 5 HERE] Source: Hayami and Kikuchi, 2000, p. 54 13
The distribution of land is a necessary but not sufficient condition for rural poverty reduction. Studies such as Borras and Franco (2005), Vista et al (2012), and Adam (2013) point out that meaningful rural development requires much more. Access to land and the ownership of land does not guarantee an escape out of the level of subsistence. For example, some disabling informal practices at the local level have ensured that smallholders remain highly vulnerable – often bonded through debts – and in no position to increase their living standards. In addition, loopholes in regulations have led to protracted court battles, most dramatically on the question of whether sugarcane plantations are subject to CARP. As a result, many landowners, such as the Cojuangco family, have been able to keep their land. During the election campaign in 1986, Corazon Aquino (a daughter of Mr. Jose Cojuangco Sr. who bought the land from a Spanish owner in 1957) promised to discuss distributing the family sugarcane plantation hacienda Luisita with her relatives, but 30 years later this plantation is still largely in the hands of the same family (Philippine Daily Inquirer, 2017). Although CARP does include a section on indigenous peoples and ancestral lands – which details how ‘the right of these communities to their ancestral lands shall be protected to ensure their economic, social and cultural well-being in line with the principles of selfdetermination and autonomy, [and that] the systems of land ownership, land use, and the modes of settling land disputes of all these communities must [also] be recognized and respected’ – the reality of the matter has been different. Between ten to fifteen per cent of the Philippine population is indigenous, 61 per cent of which live in Mindanao (IFAD and AIPP, 2012). Those who wish to continue swidden cultivation face a wide range of thorny issues (Montefrio and Dressler 2016; Montefrio 2016). That said, the failure to significantly reduce rural poverty levels obviously cannot be blamed solely on CARP. First, the Philippines has one of the highest fertility rates in Southeast Asia. This has contributed to the severe fragmentation of land (an average of 1.29 hectares per landholding) and the rise of landlessness. The Philippine Statistical Agency (PSA, 2016b) projects a population growth in all Philippine regions, including peripheral rural areas with limited economic opportunities. By 2045, the Philippines is forecasted to have a population of more than 142 million people, the site of which is likely to rival that of the Russian Federation. Second, the weak performance of the manufacturing sector has translated to a 14
lack of decent employment in urban areas (Andriesse and Kang, 2017). Ofreneo (2015) has described the Philippine experience as one of ‘de-industrialization’. The number of people working at least partially in the agricultural sector increased from ten million in 2000 to twelve million people in 2012. The Philippines has become much more urban in the last four decades (Kelly, 2011), but many new urban residents continue to work in the informal sector (see Al Jazeera’s 2014 documentary The Slum on living conditions in Tondo, perhaps the most impoverished slum in the Philippines). State intervention in agriculture and fisheries Besides land reform efforts, the Philippine state has intervened in the agricultural sector in several other ways. President Marcos supported the Green Revolution and many subsequent governments have sought to return to a state of self-sufficiency in rice. At the beginning of his presidency in 2010, Mr. Benigno Aquino III set a target of self-sufficiency by 2013. Current President Duterte had set the ambitious goal of transforming the Philippines into a rice exporter during his term. He appointed a pro-poor Agrarian Reform Secretary and one of the new administration’s first agricultural policy measures was to order a moratorium on the conversion of agricultural lands, in order to stop forced evictions (Philippine Daily Inquirer, 2016b). Yet, at the same time the new administration has also been ambiguous about the future of CARP. Many economic analysts consider the policies to seek rice self-sufficiency as a market distortion and a waste of public finances. Given Philippines’ comparative disadvantages in rice production relative to its neighbouring countries, the prevalence of land inequality, continuing bureaucratic inefficiencies and the lack of agricultural support services (such as access to micro-credits and micro-insurance), one can indeed wonder whether a persistent focus on self-sufficiency – let alone exports – is worthwhile. Davidson (2016) argues that narrowing the rice gap is possible, but will be costly and requires successful reforms from multiple stakeholders. Given the consensus that rice farmers are not the poorest section of rural society, the question then arises on what the ensuing opportunity costs would be. From the perspective of rural poverty reduction, there should be a stronger focus on the three million pluriactive and remnant smallholders whose primary source of income is growing coconuts and the 1.73 million fisher folk (Senate, 2016).
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At present, the role of the Philippine state in the coconut value chain is to maximize exports of coconut products. The state supports mid-stream and downstream activities but is insufficiently involved at the start of the value chain; these include inputs, the livelihood of coconut farmers and the frequently exploitative relations between coconut farmers and middlemen. For instance, Padua (2015, p. 91) laid out an upstream value chain problem in Camarines Sur province in the Bicol region: ‘The miller measures the moisture content of the copra [coconut flesh] that it buys from consolidators [intermediaries] and larger farmers, but consolidators do not provide this service. Consequently, small farms acting individually have no way of validating the discount imposed by the intermediaries.’ It is therefore imperative that the Department of Agriculture promotes diversification in order to reduce farmers’ dependency on unscrupulous consolidators and the increasingly volatile global coconut oil market, as well as to protect farmers’ from the forceful impacts of natural disasters (FAO, 2015). Possible avenues for diversification are rice, corn, vegetables, and root crops (Uy et al., 2011). There should also be more intercropping of coconut trees with other crops, with soil and other conditions permitting. The Philippine Coconut Authority proposes corn, peanuts, bananas, coffee, and pineapples as viable options (Philippine Coconut Authority, 2016). Another option is to learn from the positive experiences of the banana value chain. In recent years, chain actors together with government agencies and nongovernmental organisations have been able to make the banana chain somewhat more inclusive, with increased opportunities and options for banana smallholders (Carandang, 2009). The other segment of poor farmers comprises of the fisher folk. It is increasingly recognised that remnant fisher folk need more state support, since natural disasters such as the 2013 super typhoon Haiyan/Yolanda, global warming, the recurrent phenomenon of El Niño, overfishing, and illegal fishing generates persistent livelihood vulnerability. In addition, fishing communities often have few alternatives, particularly in remote areas. In a study on the trade-off between fishing and tourism on Palawan Island, Fabinyi (2010) wrote that ‘many fishers see the development of tourism as something that actively threatens their livelihood. Confident that the benefits of tourism will be siphoned off by greedy elites and foreigners, these fishers express concern about the implications of coastal tourism for the security of 16
both their land tenure and their rights to fish in nearby waters’. Given these complexities of local political economy, promoting tourism in order to reduce overfishing and environmental degradation is challenging. On September 15th 2016, the Philippine Senate organised a hearing regarding the proposal to establish a department of fisheries, oceans, and aquatic resources. Senator Pangilinan provided some compelling reasons to pay more attention to coastal communities: coastal communities have a high poverty incidence; fisher folk earn 178 PhP per day compared to the 444 PhP official minimum wage in agriculture; around fifteen per cent of the labour force in agriculture work in fisheries, yet only 7 per cent of the budget of the Department of Agriculture is allocated towards this sector. The subsection below illustrates the challenges associated with state intervention in the seaweed industry, a relatively new type of aquaculture. Diversifying into Seaweeds, State Intervention and Coastal Livelihoods In the last two decades about 200 000 persons – many of them wives of fishermen – have ventured into the growing of Kappaphicus seaweeds. During the 2005-2010 period of high prices, seaweed comprised an important source of income. A seaweed smallholder growing seaweeds in an area of 1000 square meters made handsome profits, but in recent years prices have decreased due to a massive increase in the Indonesian supply of seaweed. While Indonesia is the largest producer of dried seaweeds, the Philippines remains the global leader in carrageenan. In 2014, total exports amounted to US$ 262 million (Table 3). Cebu City, where the carrageenan refineries are located, is the seaweed hub of the Philippines. A substantial part of Indonesian produce also ends up in Cebu, especially when natural disasters result in Philippine supply disruptions. The majority of Philippine seaweed smallholders can be found in Mindanao. There, the ocean is clean and it has a somewhat less frequent typhoon disturbance rate. The government of the Philippines, most notably the Bureau of Fisheries and Aquatic Resources (BFAR) (part of the Department of Agriculture), considers seaweed to be a suitable road to diversification for poor fisher folk. In addition, seaweeds are seen as an environmentally and gender friendly alternative to fishing since they can only thrive in clean ocean waters and also enable wives to contribute to household incomes. Yet, current 17
research has shown that improving livelihoods through seaweeds is challenging, particularly in areas outside Mindanao such as the Visayas. In 2016 and early 2017 thousands of households in coastal communities have stopped growing seaweeds and intensified their traditional livelihood activity of fishing (Andriesse and Lee, 2017b). Several factors may serve to explain this trend. Firstly, most seaweed farmers live in remote areas. This hinders coordination among chain actors (for instance the ability to sell collectively), increases the dominance of intermediaries who are able to connect farmers to markets and has thus resulted in continuing low farm gate prices. It is therefore no surprise that fair trade arrangements are lacking in this arena. Secondly, the main end product, carrageenan, is produced in refineries in Cebu City. Product diversification is only in an early stage and is proving to be difficult. Hurtado (2013, p. 110) proposed ‘adding value near crop sources: [t]his practice would provide a higher income and diversify sources of livelihood [for] […] seaweed farmer[s]’. Nevertheless, the remoteness of many coastal communities, their distance from urban markets and the associated lack of economies of scale and scope seriously diminish the viability of diversification initiatives. The Southeast Asian Fisheries Development Centre is experimenting with new end products such as seaweed pickles, salads, biscuits, and capsules – yet it remains to be seen whether remote coastal communities will be able to produce and sell these products successfully. In situ production of carrageenan is impossible as a refinery needs a monthly input of at least 300 metric tonnes of dried seaweeds. Third, man-made pollution of coastal waters hampers the development of seaweed growing activities. For example, the construction of new small ports is unconducive for seaweed yields. Fourth, typhoons and – in some Philippine regions – other weather disturbances such as El Niño destroy seaweeds, so seaweed farmers always risk losing their products and new high quality seedlings are expensive (Andriesse and Lee, 2017a). BFAR does occasionally support seaweed farmers by doling out high quality seedlings and other inputs, yet this distribution process continues to be influenced by local politics. Municipal mayors wield a disproportionate share of power and are capable of directing support to loyal Barangays. This means that seaweed farmers in non-loyal Barangays cannot benefit from BFAR’s support. It also stymies efforts to create pro-active cooperatives and associations since they remain dependent on the Mayors’ goodwill (Andriesse and Lee, 2017b)). 18
Table 6 summarizes the challenges seaweed farmers in Guimaras have faced. Finally, there are also worries that Vietnam will become a competitor of the Philippines (Senate hearing). In sum, given these limitations, seaweeds should not be considered as a silver bullet for remnant impoverished fisher folk. A combination of marine based and non-marine based sources of income would be less risky. [INSERT TABLE 6 HERE] Source: Andriesse and Lee, 2017b Issues Facing Smallholders Today The preceding sections have laid bare the precarious situations in which smallholders, fisher folk, and swidden cultivators live. Despite decade long efforts to lift rural communities out of poverty, agriculture remains the seat of poverty. Borras Jr. (2007) summarised the causes of this situation as follows: 1) a landed oligarchy blocking reforms designed to benefit poorer people, 2) early privatisation and liberalisation hitting the vulnerable farming sector, 3) debt payments leaving few funds for investment in the countryside and 4) the first three factors making the Philippines less attractive to foreign direct investors. For instance, the Philippines shrimp industry has stagnated whereas Vietnam has become a global leader in shrimps, involving many small-scale producers. This overall picture is obviously not uniform across the country. On the one hand, there are rural regions in the core areas of the Philippines’ economic geography that have witnessed a transformation from farm to non-farm employment, as well as a conversion from rural to urban landscapes (Malaque III and Yokohari, 2007). In the process, rural social stratification has also evolved. Kelly (2012, p. 248) concluded in a study on Cavite province that agrarian classes reproduce ‘themselves into other sectors that involve quite different class relations. These sectors include professional and white-collar work, as well as the industrial economy and the local service sector.’ On the other hand, mountainous areas in the periphery, especially in Mindanao, continue to host indigenous remnant smallholders and swidden cultivators. The most vulnerable are those who are squeezed by radicalized Islamic groups and the Philippine police and military.
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Due to the combination of a lack of structural economic transformation (IFAD, 2016) and relatively high population growth, there is no process of de-agrarianisation. The number of people at least partially working in agriculture remains stable at twelve million people, corresponding to 29 per cent of the labour force (ADB, 2015). There is domestic and international out-migration, but this is often temporary and individual rather than householdbased (McKay, 2003). It is also important to point out the geography of international and domestic remittances since it is increasingly recognised that relatively poor regions are not in the position to compensate for a lack of economic dynamism with remittances.
A
disproportionate share of OFWs originates from regions that already perform better than average (Faier 2013; Hill et al. 2007). A major reason is low educational attainment in the least successful regions. Poor households cannot afford to pay for skills training in order to prepare themselves for overseas employment (Clausen, 2010). In sum, remittances do not automatically trigger stronger agricultural performances in the periphery. In fact, the geography of remittances appears to reinforce regional disparities. An example is the impoverished region of the Eastern Visayas. The poverty incidence among families in the Eastern Visayas has steadily increased between 2006 and 2015. One of the most important agricultural products cultivated in this region is coconut, yet coconut smallholders belong to the poorest sections of Philippine society. Furthermore, there is no large urban centre generating employment in the formal and informal sectors here, in contrast to, for instance, Zamboanga Peninsula and Davao Region – regions more dynamic and prosperous than Eastern Visayas. To illustrate, Tacloban City – the largest city with 242,089 inhabitants – is small by Philippine standards and faces a serious lack of private investment (NEDA, 2013). The 2013 Typhoon Haiyan (Yolanda), which killed more than 5,000 people, further deteriorated the region’s socioeconomic situation. Poverty went up and the region experienced a recession; the 2013–2014 regional economic growth rate was -2.3 per cent (NEDA, 2013). Finally, few OFWs originate from the Eastern Visayas—only 1.1 per cent of the total number of OFWs— but the region hosts 4.4 per cent of the total population. The World Bank together with the Philippine government started a comprehensive project in August 2014 aimed at providing a boost towards rural poverty reduction. This is the Philippine Rural Development Project (PRDP) which will run until May 2021 with a total project cost of US$ 664.59 million. The implementing agency is the Philippine Department of 20
Agriculture. The most important themes of the project are to improve rural services and infrastructure, as well as rural markets – in other words, to create commercialised smallholders. Among the many project development objective indicators is the target of ‘at least five per cent increase per year in real household incomes of farmer and fisher folk beneficiaries’, which translates to a 30 per cent higher living standard by 2021. Another target is a twenty per cent ‘increase in number of farmers and fisher folk with improved access to Department of Agriculture services’ (World Bank, 2016). While it is too early to draw conclusions, the first wave of implementation efforts in Guimaras Island paint a rather bleak picture. Seaweed associations in several Barangays have applied for PRDP funds, yet again, municipal mayors rather than BFAR have the final say over PRDP funding. Mayors decide which associations will receive support and they base their decision on political loyalty rather than socioeconomic needs and the capabilities of seaweed farmers (Andriesse and Lee, 2017b)). Given the widespread occurrence of local political patronage and clientilism (De Dios 2007; McCoy 2010; Mendoza et al. 2012), it remains to be seen to what extent smallholders and fisher folk will benefit from the PRDP. While it would be costly to circumvent Mayors and to implement the PRDP directly at the Barangay level, current arrangements seem to be subject to arbitrary and politically biased decisions at the local level. Future Prospects of Smallholders in the Philippines Making a living without occasionally falling back into poverty remains a distant reality for hundreds of thousands of Philippine pluriactive and remnant smallholders. The available evidence presented in this chapter does not indicate any significant trends towards commercialized and middle class smallholders. There are reports on modern smallholding farming involving young college graduates, but the overall picture suggests continuing fragmentation, continuing rural population growth, and a lack of decent urban employment alternatives. Furthermore, there are only a few positive developments that can be detected with respect to the field of aquaculture. Consequently, without fundamental changes in institutional arrangements as well as to agricultural and socioeconomic policies, a sustained and inclusive process of rural poverty reduction will not occur and the countryside will remain, as illustrated in the introduction, ‘the seat of poverty’ (Philippine Daily Inquirer, 2016a). In the medium run, institutional arrangements should address the following obstacles and limitations: the plight of indigenous population engaged in swidden cultivation; high 21
population pressure (in fact a demographic burden rather than a demographic dividend); persistent landlessness and pockets of violent resistance; the annual typhoon threat (a good start would be setting up disaster risk reduction policies pertaining to agriculture (FAO; Noy 2014)); a lack of micro-insurance, as well as a lack of skills formation among inhabitants of rural areas . Specific agricultural policies could reconsider the ways in which smallholders – particularly the impoverished coconut farmers and fisher folk – are inserted in Asian/global agribusiness value chains. In order to expand inclusiveness there is a need to explicitly address upstream value chains, for instance, to facilitate adding value, collective marketing and dealing with unscrupulous intermediaries. One attractive way forward would be organic agriculture, both for domestic and export markets. At present the main products are rice, maize, vegetables, fruits, herbs and spices. However, the number of certified producers is still small and, according to Salazar (2014), involved only 2256 hectares of land in 2011. The prospects are moderately positive: ‘There is enough evidence to indicate that more producers will engage in OA [organic agriculture] if appropriate information and support (e.g., resources, training, extension) were available regarding matters such as market potentials, inputs, technologies, production and processing systems, post-harvest facilities, and the like […] [but] a more proactive government […] [is warranted] that can steer various stakeholders toward clear alternatives, and provide the policies, institutions and resources that are needed to move forward’ (Salazar, 2014, p. 222). A shift to greener production could be complemented with alternative modes of production, marketing and fostering ‘a better capitalism’ (Rigg 2016, p. 242-243; Gibson et al. 2010) involving markets, states and civil society (Ostrom, 2010). In the long run, a shift towards a fairer political system would benefit rural poverty reduction. Nevertheless, generating a sufficient level of political will shall remain a daunting task. Francia argues that ‘serious, reform-minded legislators would have to go against the grain of special interest clan politics – in essence, against their own families – no mean feat in a society long accustomed to the transference of power and privilege along blood lines’ (Francia, 2014, p. 322) and emphasizes that ‘[m]any of these elected mandarins are more in tune with Louis XIV’s dictum, ‘L’état, c’est moi’, than with the democratic notion of a government by the people, for the people and of the people’ (Francia, 2014, p. 322). President Duterte has repeatedly voiced the idea of transforming the Philippines into a 22
Federation in order to bring power to the people and end the influence of ‘Imperial Manila’ in the provinces. The long-term success of such a dramatic transformation undoubtedly depends on the specifics of the institutional design (Andriesse 2017). A more gradual and less risky endeavour would be to seek a clearer separation of the political elite and the bureaucracy, de-politizing the policy arena to a certain extent (Raquiza, 2012, p. 133-153). Political elites remain too deeply ‘embedded in social relations that combine land ownership with benefits of intense interaction with state agencies’ (Reid 2006, p. 1017). In countries like Thailand and Indonesia a more effective embedded autonomy (Evans 2005) - political leaderships leaving room for manoeuvre for technocrats to formulate and implement socioeconomic policies - resulted in economic growth that has been relatively more inclusive. In the event of a broadening policy space, civil servants and other stakeholders will need to rethink future land use options. What should happen with old sugarcane plantations? Will there be more opportunities for tenant farmers? Will there be a higher demand of postproductivist types of land use? While the Philippine historical legacy of a strong and powerful landed elite do make the seeking and implementation of meaningful changes difficult to bring about, retaining the status quo will seize the Philippines firmly in a middle-income and ruralurban inequality trap.
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