It is pretty obvious that thinking about expanding agricultural production alone is no longer good enough. So many experts in the Philippines and in other parts of Asia, including the Asian Development Bank, have clearly outlined that farming needs to undergo a complete transformation. But this will require massive adaptation by farmers. It will have to address the severe issue that most farmers in the Philippines today oversee family-owned and -run subsistence farms and lack money and know-how to improve productivity and, finally, profits.
From a European perspective, we have always strongly believed in cooperatives. They have made European agriculture, the financing of farming and the marketing of farm products, what European agriculture stands for today. Europe and other parts of the world have moved on from the old-style of collectivized farming; today’s cooperatives are thoroughly commercial, prioritizing supply- and value-chains, efficiency and profits.
As I and many others have mentioned before, increased agricultural productivity would necessitate improving the security of property rights by amending the antigrowth and development provisions in the Comprehensive Agrarian Reform Law and removing the restrictions on sale and conveyance on agricultural land patents. Nobody will invest in agriculture if land titles are not available.
If Agricultural Productivity and Profit (APP)—the (needed) heavy budget allocation for APP—will happen, there will be more investments in agriculture, farmers will get easier access to finance, there will be lower unemployment and supply/value chains will be created. The easiest way to achieve that will be through modern cooperatives. In modern cooperatives, agricultural enterprises as well as farmers pool their resources to create economies of scale, reduce costs and lift incomes. While cooperatives can buy farm inputs, like fertilizers, seeds and equipment, at lower prices, cooperatives also cooperate in planting, add value during and after harvest and get involved in postharvest activities, from crop cleaning to drying from packaging to storage to transport.
Cooperatives can also help farmers manage the effects of climate change and play a strong role in getting crop insurance going, and make climate-smart technologies more affordable. Cooperatives could, with the support of government financing, buy greenhouses to prolong their production season and shield crops against erratic weather.
Let’s have a look what happens in other Asian countries with regard to cooperatives. China is already modernizing farms through cooperatives and by using e-commerce platforms to tap into high-value markets. In Vietnam, a cooperative program has improved the quality of produce for urban consumers and lifted tea, fruit and vegetable revenues by nearly one third. There are encouraging example of cooperative movements in Bangladesh, India and Nepal also. However, although cooperatives are gradually catching on in Asia, they will need much more support. Most of the region’s cooperatives are fragile, informal arrangements. But, with the right legal framework in place and good managers running cooperatives, they could become far more efficient and durable.
For the Philippines, a modernized cooperative system would be ideal. More emphasis should be put on this movement. There is plenty of expertise available locally (a number of good cooperatives exist) and European expertise has been offered/is still being offered. I suggest that the Department of Agriculture form an interagency technical working group, involving the private sector, to get this going.
Comments are welcome; contact me at Schumacher@mca.com.ph.