Subsistence farmers: What now?

RECENTLY, I was seated beside a noted economist, Emmanuel de Dios, in a competitiveness workshop by the Management Association of the Philippines. He asked me: What is the percentage of subsistence farmers in the country? I blurted out a high figure which he was hesitant to accept. That meeting is the origin of this piece.

What is a subsistence farmer, or fisher for that matter?

Various references define subsistence farming as one in which a family grows only enough to feed themselves. There is usually not much harvest to sell or trade, and what surplus there is tends to be stored to last the family until the next harvest. By comparison, commercial farming is farming that provides products for sale.

There appears to be no consensus on the definition of subsistence farming. A farmer may be “subsistent” for rice, but semi-commercial for, say, fruits.

Turning to Philippine agriculture, there are no precise estimates of the number of subsistence farmers. Definitely, low farm yield or low catch for a fisher is a sign of subsistence livelihood.

Let us start with some metrics. The Philippine Statistics Authority estimated that in 2012, 38.3 percent of farmers and 39.2 percent of fishers earned incomes below the poverty threshold. This is a slight improvement from 38.5 percent and 41.2 percent, respectively, in 2006.

There are no estimates of the poverty rate of landless farm workers. Note: As a guesstimate, I use 40 percent for rural poverty as compared to urban residents’ poverty rate of 13 percent in 2012.

My take is that not all poor farmers are subsistence farmers. In the first half of 2014, the per capita food threshold for a family of five was P6,125 per month, while the poverty threshold was P8,778 per family per month. The figure in the rural areas may be lower.

With the food threshold of P6,125 a month, the percentage of subsistence groups (farmers and fishers) could be lower. But they are still large in numbers if farm yield is the basis.

Let’s factor in that many rural families receive remittances from relatives in urban areas or overseas. For example, two helpers are in Singapore earning from P12,000 to P15,000 a month, and they are the main source of income for their families. Their families obviously are no longer in subsistence.

My friend’s helper in Davao sends practically all of her income to her family in the Visayas as her parents and siblings have little source of livelihood. Her family lives on subsistence income.

Subsistence farming is a deterrent to rural development because it has no upward progress. Unless it switches to a semi-commercial model, it will continue to prevent people from generating income.

Increasing farm yield as well as crop diversification are keys to bringing them to semi-commercial model, and eventually, commercial model. This is not a walk in the park.

Take most coconut farms. Industry players claim there are about three million farmers and workers dependent on this crop (which could be on the high side). My guess is that most of them earn incomes below the poverty line, and many of them are subsistence farms.

With 40 nuts per tree that generate one ton of copra per hectare, that is barely P2,500 per month in most localities. But intensive farming with fertilization and intercropping with, say, banana and cacao, can yield a net income of P100,000 per hectare, or P8,300 per month under good agriculture practice.

It is a similar story for white corn farms that average only two tons per hectare per harvest. Even at two harvests a year, that is only a gross sales of P50,000 per hectare a year, or P4,200 per month, which makes the net income a bit lower.

Similar story for coffee farmers which, on the average, get one half kilo of beans per tree per year compared to two kilos per tree for Vietnamese farmers.

If the definition of subsistence is that of growing food enough only for the family’s needs, there are probably fewer of these than the overall 38.3 percent of farmers, or 39.2 percent of fishers.

The country can learn from the experiences of its neighbors in the Association of Southeast Asian Nations region on going from subsistence to commercial farming.

Thailand’s commercialization of agriculture owes much to three drivers in the 1960s and 1970s. First, the expansion of large irrigation projects in the 1960s and 1970s and a shift to cost-effective small systems in the 1990s and 2000s.

Second, the massive road construction during the 1960s and 1970s, which helped facilitate the cultivation of new farmlands and improve the marketing efficiency of products. These roads later facilitated rural-urban and rural-rural migration to take advantage of the seasonal and spatial variation in employment opportunities.

Third, government investment in agricultural research transformed agricultural patterns. The Department of Agriculture was the lead agency for agricultural research and development of new technologies. During the periods of early 1970s and late 1990s, funding for research increased fourfold (Isvilanonda, 2011).

Indonesia, Malaysia and Vietnam all benefited from similar efforts, most especially from high-yield crop diversification. Oil palm and rubber for the first two, and coffee, pepper, and cashew for the latter.

Turning subsistence farmers and fishers to semi-commercial ones remains the main challenge of rural development and poverty reduction. It is not easy but the country can start by addressing market access, extension services, infrastructure and education. Political will, at the national and local levels, is imperative.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is the vice chair of the M.A.P. Agribusiness and Countryside Development Committee, and the Executive director of the Center for Food and AgriBusiness of the University of Asia & the Pacific. Feedback at <map@map.org.ph> and < rdyster@gmail.com>. For previous articles, please visit <map.org.ph>)