Economic resources

Labour and capital. It is said that the most abundant resource poor farming households have is their own labour. Findings showed that family labour is the biggest input to the production of major crops such as abaca (Plaridel, 82.0%), sweetpotato (Plaridel, 83.3%; Alegre, 58.2%), taro (Alegre, 67.4%). Coconut uses about just as much family and hired labour because of the various post-harvest activities (collecting, de-husking, drying, sacking) before the dried meal, copra, is finally produced. The cultivation of rice also used a bit more of hired than family labour (Plaridel and Alegre, 38.9%

vs.22.4%; 54.5% vs. 27.1%, respectively) because of the labour needs in both production and postproduction activities (Table 6.5). Thus, cash inputs are critical for rice and coconut to pay for wages and workers’ food. When farmers run out of cash, they usually try to get advances from their suki trader.

Also, for a very few specialised farmers, the growing of vegetables such as eggplant, cabbage, and pepper require some capital for seeds and fertilizer.

Remittances from children working outside the village and other non-farm sources helped to significantly defray the costs.

The generally low inputs to production understandably produces low yields per hectare for most crops, except relatively for abaca (Plaridel, 974 kgs/ha) which is still grown in fertile soils, and rice (2.26-3.69 tons/ha) which is fertilized. Coconut yields ranged from 1.3 (Plaridel) to 3.6 (Alegre) tons/ha;

sweetpotato at 1.9 (Plaridel) to 4.1 (Alegre) tons/ha; and taro at 4.5 (Alegre) tons/ha. On the average, coconut and sweetpotato which are grown mainly on slopes in Plaridel, and thus relatively less fertile soils, performed less well than those on the Alegre plains.

Table 6.4 Percentage distribution (%) of variable input costs of major crops per village

Alegre Plaridel

Cost of

production Rice

Coco-nut Sweet-

potato Taro Rice

Coco-nut

Sweet-potato Abaca Family

labour 27.4 53.3 58.2 67.4 22.4 48.6 83.3 82.0 Hired labour 54.4 45.4 26.2 10.8 38.9 49.8 13.0 17.5 Seed/planting

materials 14.0 - 15.2 11.9 5.8 - 0.9 -

Fertilizer 2.4 - - - 17.4 - - -

Pesticide 0.6 - - - 6.0 - - -

Capital 1.2 1.3 0.4 10.0 9.5 1.6 2.8 0.5

Capital generation is very low, if at all. It is often dependent on remittances or occasional surplus after dividing the receipts between farm investment and immediate home consumption. Also, some investments are in the form of shifts of surplus income from backyard pig raising, local crafts, or selling of surplus farm produce. A number of households are indebted in several cycles.

Farm land. Most farmers do not own the land they till except the cash crops abaca and coconut in Plaridel where about 60 percent of the land is owner-cultivated (Table 6.6). The non-owners are either tenants, farm labourers, or have family use rights. The latter is the case of undivided family farms where a son or daughter is granted the right to farm certain portion(s) of the total family farm. This could either be longer term in the case of one or two children farming or on rotational basis in the case of more children interested in farming, per season or per year depending on what has been agreed.

Households differ in the size and quality of the farm lands they cultivate. Most are working on 2-4 parcels of land but the average is less than 0.5 ha. The quality of the land is generally poor in terms of fertility, terrain, and exposure to uncertainties in weather, and consequently moisture inadequacy.

Table 6.5 Tenure status of farming per crop per village in percentage

Alegre Plaridel

Crops

Non-owned Owned Non-owned Owned Abaca

Coconut Rice

Sweetpotato Taro

n.a.

78 85 87 76

n.a.

22 15 13 24

41 43 74 79 n.a.

59 57 26 21 n.a.

n.a. not applicable

In Alegre, most farmers are tenants, and to a lesser extent hold use rights on family farms. In both villages, tenants can double as exchange farm labourers in other farms or off-farm wage workers.

Market. Food crops are usually sold in towns during market days (Tuesdays and Saturdays for Baybay; Thursdays for Dulag) or in the village if produce is not much. Prices of food crops are dependent upon local supply and prevailing prices in the regional markets and to a certain extent on the cultivar.

Aromatic, exotic and glutinous rice have higher prices than the normal hybrid or common cultivars. The same is true of preferred cultivars of sweet potato and taro. Taro from Alegre is supplied to neighbouring towns and the city of Tacloban. Usually, rice is milled in the village mills when for home use, and

brought to the town mills if sold. The cash crops abaca and copra are sold through an intermediary system of village assembler-traders, wholesale town buying stations, and city-based (Cebu city) oil millers or exporters. As in the case of any primary export commodity, abaca and copra producers are price-takers. The past two years were good years because of an improved foreign market for both abaca and copra. But they could also just have some bust as experienced in previous years. Fibre from abaca has bright prospects for Asia, U.S. and European markets. It is also used in local crafts which are exported to Manila or abroad. Research on abaca has been intensified in recent years in order to make full use of its comparative advantage as the country is a major centre of diversity for this crop, and is second only to Ecuador in world trade.

But it is facing the threat of the disease called alcojeres, which is currently a focus in research and extension activities. Coconut-based oil faces competition in the world market with canola oil, but has sustained the market even then as domestic industrial demand has improved.

The non-farm labour market is quite limited in the villages, and Alegre is particularly highly constrained because of the smallness of both village and town. So, labour migration tends to be in longer cycles in the neighbouring provinces or cities. Plaridel is relatively better off in terms of market because of the relatively bigger size of both the village and town, which offered a bit more opportunities than Alegre. There are seasonal aspects to village off-farm and non-farm work because of the labour demand in abaca and coconut (35%), and that of bag and mat weaving for women (25%); construction and carpentry for men, private business, and domestic services (30%); and labour migration to Manila (10%). Although, workers are paid the prevailing local wage rates (2-3 USD per day), these still are lower than the legal minimum wage.

The suki system prevails in almost all types and levels of market transactions, both in the villages and towns. This is true for both product and labour markets (e.g. farm, bag factory). It is basically a case of interlocking market relations where the producer is assured of a buyer who is also a source of credit for home and farm uses. And, the trader/buyer is assured of a regular supply of products as well as client for other services (credit, goods). Such relations are usually initially built upon kin or social ties because trust is an important element of the suki system.

In Plaridel, market promotion and sales assistance of bags, mats and other crafts are provided mainly by the women’s group, UPWARD (United Plaridel Women’s Association for Rural Development). It channels orders to members, promotes the products in fairs and exhibits in the cities and towns, and facilitates trainings for members (e.g. design, new products).

Credit facilities. Villagers claimed that credit is the lifeblood of their lives, for some to the point of perpetual debt. Credit is obtained from formal and informal sources. Only Plaridel has more local formal credit sources. Alegre farmers have the rural bank in town but only very few irrigated rice farmers can access it. The farmers’ cooperative no longer functions as a credit facility.

Formal credit in Plaridel is provided by the parish cooperative, farmers’

cooperative, the BIDANI microfinance project, and the externally introduced self-help groups. Members of the parish cooperative could avail of credit which usually helped them in welfare type household expense such as education, sickness, or important trips. The farmers’ cooperative likewise grants loans to members for farming purposes. Craft makers were also able to obtain loans from the BIDANI microfinance project which started in the late 1990s, but which has recently lost patronage due to some policy change, and competition from other credit services. Two self-help credit assistance initiatives (TSK, tulay sa kaunlaran or bridge for progress; Green Bank), with mostly women members, were established in the early 2000s to provide financial assistance for productive or entrepreneurial ventures. They operate on the principle of mutual help and social responsibility as failure of one member to pay penalizes everybody in the group. All these require membership and training before loan is availed, and thus cater only to a small-er numbsmall-er of villagsmall-ers.

Informal credit is common in both villages, and accessed by villagers from local usurers, suki traders, and informal self-help groups. Interest rates are at least 10 percent per month, even with the suki. Credit, in fact, binds the suki relationship as the debtor is obligated to sell his produce to the trader-financier. Credit in kind (consumption goods) is also available from retail stores. At times, this becomes problematic to store owners. There are also various informal self-help financial assistance groups known locally as bubo-ay. This is like fund pooling of certain agreed amount at regular times (weekly, bi-weekly, monthly) with members drawing lot, or by mutual agreement, determine the schedule by which each could draw from the pool.

Knowing their schedule, members can budget their contributions to the pool, and usually have an item in mind to buy when their time comes. This kind of adaptive strategy of mutual financial reliance formed voluntarily among members (i.e. 5-20 persons), who maybe neighbours, persons of the same trade, work (e.g. village health workers group) or similar interests. It has existed for years in the villages, even in towns. Members have always found this helpful, especially for relatively more expensive purchases. This practice of self-help credit facility is comparable to the arisan in Indonesia which has been well-documented and known as rotating savings-and-credit associations, abbreviated as ROSCA (Hospes, 1995).