Last October, Agriculture Secretary, Manny Piñol wandered into an Agricultural Field Office in Tupi, a country town in South Cotabato on the southern island of Mindanao. And what he saw there, in an open field, was enough to make his blood boil – hundreds of millions of pesos worth of unused agricultural machinery and equipment corroding with rust. And what angered him even more was the reason they’d been left to fall into that state.
All that agricultural plant – part of some PHP2 billion worth held at Department of Agriculture (DA) regional sites – had been intended for use by small farmers in the region. The only snag was that for them to take possession of the equipment they first had to stump up 10% of the equipments’ retail value. On a PHP3 million piece of machinery, that would mean the farmer would have to pay over PHP300,000 before he could take it away and put it to work.
The problem is, there are very few small farmers in South Cotabato – or most places in Mindanao for that matter – who can get their hands on PHP300,000. If they had that sort of money lying around they wouldn’t be ‘small farmers’, and they wouldn’t have been struggling like they have been doing.
They desperately needed this equipment to harvest their crops. If they can’t do that, the crops are left to rot and can’t be processed – saddling the farmers with a greater financial burden. On top of that, the rural community also suffers. Farms that can’t produce and process, can’t pay the farm workers, who in turn can’t feed their families
Consequently, unable to come up with the 10%, the equipment stayed where it was and was allowed to deteriorate. Apparently, to someone in government at the time, that was a far better option than releasing the equipment where it could have done some good. It was an outrageous and wasteful decision and the only farm the person who made it should be anywhere near is the funny farm.
These were items paid for out of the public purse; so it wasn’t just the farmers and their workers who lost out from this ridiculous arrangement; the public did also. Their taxes had paid for it.
So, too, did the economy. According to Piñol, Philippine agriculture annually loses 16% of the crops harvest through lack of farming equipment. In the fisheries sector it’s even worse – losses there from equipment shortages are as much as 40% of the catch.
That unnecessary hoarding of farm machinery also will have impacted on the country’s exports of agricultural products – something which the Agriculture secretary is now starting to improve. In the 4th Quarter of last year, the Philippines’ top five agricultural exports – coconut oil, bananas, pineapple & pineapple products, coconut products, and tuna – all showed marked increases over the same period of the previous year. Banana shipment values more than doubled; coconut oil, the biggest export item, was worth PHP20.77 billion – an increase of PHP3.89 billion, or 23.6%, on 4Q2015.
As with the country’s industrial sector where manufacturing has lagged behind much of Southeast Asia, Philippine agriculture, too, is caught in a game of catch-up following decades of under-investment in the sector, and particularly in the southern region of Mindanao – a region with immense agricultural potential.
Under the previous administration of Benigno “Noynoy” Aquino, efforts were made to improve farm mechanisation by distributing modern farming equipment and providing technical assistance to farmers. Notwithstanding the distribution failure that came to light in Tupi, it was a vast improvement on what had gone before. The aim was to achieve a mechanisation target of 3.5 horsepower per hectare (hp/ha) by last year.
It came in at around 3 hp/ha. But that was good considering the low base it was coming from. In 2010, before this programme was properly launched, the farm-mechanisation level of the Philippines was 0.75 hp/ha. By 2013 it had reached 1.23 hp/ha.
But it has a long way to go reach fellow Association of Southeast Asian Nations member countries such as Thailand where agricultural mechanisation started half a century ago, and Vietnam which is becoming increasingly mechanised with the support of robust government funding and initiatives.
Last year, the Philippines exported US$5.13 billion worth of agricultural products. Thailand and Vietnam – the biggest suppliers of rice to the Philippines – shipped out nearly three times that amount; US$15 billion. This gap, then, is an indicator for how much the mechanisation of the agricultural sector needs to be stepped up across the archipelago.
Last week, Piñol returned to Tupi and revisited that same Agricultural Field Office. This time though, it was under far more pleasant circumstances. He was there to hand over PHP200 million worth of farm machines and post-harvest equipment to farmers from the four Central Mindanao provinces – North Cotabato, South Cotabato, Sultan Kudarat and Saranggani – as well as those from General Santos City. (Photo: Piñol, left with Mindanao farmers).
This was part of the DA’s Agricultural Mechanization Program (AMP) – a scheme aimed at increasing productivity and lowering losses from poor harvests. This week, the Agriculture secretary is in Iloilo where he’ll be handing over more farming equipment under the scheme.
What made that possible was intervention by President Rodrigo Duterte who’d issued a directive saying that farmers should no longer be required to pay 10% of the equipment’s value. He also urged Piñol to ease farmers’ access to the AMP.
That’s all good, but the question still unanswered is why the farmers were put in that position in the first place. Apparently, they were expected to enter into a binding legal contract which would make them liable for 10% of the equipment value.
It’s also unclear whose pocket those 10% payments went into. If they had to be charged at all, it should be the government coffers, seeing as how they paid for the equipment in the first place – though the government burdening the small-farms sector with that sort of additional cost makes little sense, given the dire straits it was going through in 2015 and 2016.
There was a suggestion at the time that the money went to the dealer who sold the government the equipment in the first place – apparently he saw a way of making money at both ends of the deal. Given the propensity for corruption in the Philippines – not least where government contracts are concerned – that explanation makes a whole lot more sense and helps explain why tractors, harrows and harvesters were put out to grass to rust.
We understand that when this issue first came to light, Piñol ordered the Internal Audit Service (IAS) to produce a comprehensive report on the misuse of government funds and assets relating to the DA. As well he should – 10% of the total PHP2 billion worth of equipment is PHP200 million. And all of that was intended to be leeched from the small farmers. We haven’t heard of that IAS report since, but if and when it’s completed we’d be very interested to know what it discovered.
This wasn’t the first dealer-scam Piñol has come across since taking over at the DA. In August last year, he uncovered an arrangement between government officials and dishonest goat traders by which top dollar was paid for pedigree dairy animals while what the dealers supplied were old and inferior creatures. Piñol – a goat farmer by trade – wasn’t going to be fooled by that.
This scheme was funded by the United States Agency for International Development (USAID) – the idea was to genetically improve the domestic goat stock and boost the quality and volume of goat-milk output.
The Philippine national dairy herd comprises some 22,500 dairy cows, around 17,300 dairy carabao – between them responsible for the bulk of domestic milk output – and under 2,000 goats. Less than 2% of all Philippine-produced milk comes from goats, but the USAID funds would also have helped to develop a niche market for goat-milk products – milk, cheese and soap.
Farmers in the Philippines are used to pests, such as rodents, slug caterpillars, corn-plant hoppers and coconut leaf beetles. Infestations of these destroyed some PHP7.5 million worth of crops in South Cotabato – including around Tupi – earlier this year. That was across 254 hectares of farmland, worked by some 320 farmers in nine affected barangays. This province is prone to pest infestations – others include locusts, rice stemborers and rice-devouring black bugs. Last year they chewed their way through PHP164.42 worth of South Cotabato crops.
However while insect pests and vermin are responsible for the majority of crop damage in this province and other parts of Mindanao, human pests – such as Officialis corrumpere (corrupt officials) – within the DA, its agencies and associated dealerships are capable of far greater destruction to the farms. As of course they are throughout every other sector of the economy.