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Rolling out: P5 B for farmers

There are a lot of open secrets at the Hacienda Luisita in Tarlac. The most open and the least secret are the arrienda or leasing out of property being arranged by farmers even before the contentious land is distributed to them.

hauling truck for Batangas sugarcane farmers

This hauling truck was recently turned over to a cooperative of sugarcane farmers in Batangas.

The Department of Agrarian Reform has heard the same whispers, too, from different places. But by this time, the government knows talk is cheap, so it’s letting its money talk back—loud and clear.

“It’s illegal and we will not honor that, but it’s real on the ground. That’s why this is what we’re solving first,” Agrarian Reform Undersecretary Jerry Pacturan said.

“If you see the amounts we have now, it’s really quite substantial: P2 billion for credit fund, P1 billion for insurance, P2 billion for ARCCESS, which are mostly equipment and services. That’s about P5 billion that will have to be spent for the year,” he said. Pacturan heads the DAR’s support services office.

ARCCESS is Agrarian Reform Community Connectivity and Economic Support Services, a massive and systematic effort by the DAR to help increase the income of organized agrarian reform beneficiaries (ARBs) by strengthening their business operation and teaching them to grow and manage their assets.

ARCCESS menu

Pacturan said the ARCCESS would fill in the gaps left by foreign-assisted projects (FAP), which provided mostly farm-to-market roads, post-harvest facilities, irrigation sources, potable water supply, health stations and other rural infrastructures.

“There were post-harvest facilities, normally a building used for storage, but what will you put in there? How do you ensure that you have something to store in that warehouse? While we were looking at those components of FAP, we knew something was missing. The missing part was how to maximize input from the foreign-assisted projects,“ he said.

The services offered under the ARCCESS include agri-technology/agri-extension, business development, common service facilities, credit, insurance for crops and livestock, rural infrastructure, and land tenure improvement and stability.

The DAR first rolled out the common service facilities last year, which are basically big farm machines that farmer organizations could not afford, such as tractors, hauling trucks, combine harvester-thresher and decorticating machines.

The machinery requires a 15-percent equity from the recipient ARB organizations but in the form of labor or land. There will be no cash-out for the farmers. They must, however, agree to receive agri-extension and business development services as well.

IMG_1618

A tractor preps a sugarcane farm in Balayan, Batangas for block farming

“Sometimes this concept of entitlement is so strong in the marginal sector that when something is given, they’ll say they will do what they want with it because it’s theirs, not aware perhaps of the implication that while this is free, this is public good given by government. They should utilize it as a business asset. Otherwise, it will be gone in a few months or years. That’s why they should be taught how to set up, how to use it, through the business development services,” Pacturan said.

Since the Comprehensive Agrarian Reform Program was launched in 1988, there have been around 2.5 million agrarian reform beneficiaries, and only half of them are organized, said Pacturan. Worse, more than half of them are poor.

Government data shows that 52 percent of ARB households are below the 2009 poverty threshold, which is P16,841 annual per capita income or P101,046 for a family of six.  The situation is worst in Central Visayas (comprising Bohol, Cebu, Negros Oriental and Siquijor) where 71 percent of ARBs are living below the poverty line.

Among ARBs, income from the farm account for an average of 41 percent of total household income. This is why agri-extension is crucial to improving the income of farmers.

“Agri-extension is market-oriented. It does not look at production only but the types of crops that have market potential. This is what we are studying… Right now, farmers are still not focused on economies of scale,” Pacturan said.

ARBs must be organized to benefit from the ARCCESS because the services are funneled through ARB organizations, which will cascade the services to the farmers. ARB groups who need any of the services under the ARCCESS can apply through the DAR provincial offices. Their needs will be assessed and, when approved, the progress of their project would be monitored and evaluated by partner State universities and colleges.

Hand-holding

Since the ARCCESS was rolled out last year, 233 projects have been approved. Another 255 proposed projects are being assessed right now.

One of the recipient ARB organizations in Isabela, the North Siffu Farmers Multi-Purpose Cooperative, has already reported an income of P50,000 from the combine harvester machine it received under the ARCCESS.

“This is training and hand-holding, not go in, go out. Part of the package is to develop field schools and train ARBs to be farmer technicians,” Pacturan said.

“We’re ending the land acquisition and distribution and so we’re also doing a lot of work as far as support services are concerned, which for the longest time has not been done by DAR,” he said.

He cited the streamlining of the loan process for ARB organizations who are no longer required to present three years’ financial statements and business track record. Those who pay their loans on time will also get an incentive: instead of the 8 percent interest, they will only pay 6 percent.

This is possible through the Agrarian Production Credit Program, which involves the DAR, the Department of Agriculture, which put in the P2-billion credit fund, and the Landbank of the Philippines.

Another government agency that’s boosting support services is the Philippine Crop Insurance Corp., which now has P1 billion in insurance for ARBs.

“One good thing that’s happening in government under this administration is that agencies are working together to provide the necessary services. For example, the law says DAR should provide credit but the mandate for credit is not with DAR, it is really with DA. So this money we allocated for Landbank is actually DA’s,” Pacturan said.

Will P5 billion be enough to convince farmers to keep their lands and treat it as social capital? Can money for support services finally change the landscape in land reform?

The 2008 World Development Report on Agriculture found that for the poorest people, gross domestic product growth originating from agriculture is four times more effective in reducing poverty than GDP growth from other sectors.

That growth may not come from Hacienda Luisita, which is not even in the hands of farmers yet, but it’s bound to come from somewhere. After all, P5 billion cannot be kept a secret for long. ###

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