Too much land, too little income

It looks like a banana tree. It has trunks, leaves, and color like a banana tree but it will drive you mad waiting for a banana fruit to grow from it. Even pigs could not digest its trunks. It is barren of fruit. But it is productive in fiber that’s uniquely of the Philippines. The tree is abaca.

Many would not know that 85 percent (some say as much as 95 percent) of the world’s abaca supply comes from the Philippines. Abaca trees can thrive well in any part of the country that has elevation. Some of the abaca hails from Ecuador and Costa Rica, and a little from other Asian countries. But as we’ve learned from our plant tour of a major abaca pulp exporter, abaca fiber from elsewhere is not as strong and productive as that from the Philippines. You may know abaca as the material for strong rope, special paper used for Philippine money, medical tape, and special clothing fiber. They are also used as base for laminated floorings, or metalized labels (those you see as “hard” liquor bottle labels). It may give you a special sense of pride to know that anywhere in the world, at any time of the day, when anyone takes time out to enjoy instant hot tea, the tea bag they dip in their cup is made of natural abaca fiber, and almost all of them come from the Philippines.

During our climb of Mt. Gabunan this weekend (on an SUV, which feels like riding a horse on very rough road), as far as our eyes can see, there are merely forests and mountains. But they are claimed as ancestral domain by indigenous people in this part of Mindanao. I learned from our entrepreneur/agriculturist guide and friend that the clusters of abaca trees, many of them wild, do grow unattended because of the tropical climate. The elevation provides rich moisture, and the country’s soil has the ideal chemical composition for the tree. The quantity of abacas currently grown by farmers in the area barely scratches their potential to help respond to an unsatisfied international demand.

Ownership of land, other than by the government, is private. So you may find it strange that individuals, or group of individuals, can own not only land in plains, but also in mountains, rivers, and forests. It is certainly not documented by Torrens title. The legal proof you can find is the Certificate of Ancestral Domain Title (CADT) of ownership for an entire clan or clans, in the custody of the Tribal Council that also maintains a record (“claim folder”) to which family specific tracts of land belong. This ownership or the rights of the indigenous people over the ancestral domain are recognized and protected by Republic Act 8371 or the Indigenous People’s Rights Act of 1997 (IPRA). The specific land ownership of individuals or their family is based on their occupation of the land like an owner since time immemorial. This means that their linear ancestors occupied or exercised ownership over that piece of land as evidenced by history, existing in memory and knowledge passed on from one generation to the next.

During our trip, we met tribal leaders and heads of families who own 10 to 50 hectares of land. They realize they can earn from abaca, but so far, many of them who are into abaca farming earn just P2,000 or less a month as they only farm on less than 10 percent of their land. Their concept of farming, however, is largely planting, leaving alone what they planted, and coming back for the harvest. The ideal farming process requires preparing the ground, planting, fertilizing, maintaining (removing weeds that compete for soil nutrition), and planting intercrops (like the acacia falcata tree that is the source of paper). Intercropping not only gives the needed shade for the abaca trees, but also gives a boost in nitrogen in the soil. The first harvest will come after 18 months. After they harvest (cut the trees or stems), they need a decorticating machine to extract the fiber. If they cannot access one, they will weave it manually with so much labor and little produce.

It is easy to appreciate that in order for them to farm abaca on their vast tracts of land, they will need money to pay for workers (migrants whom they pay P200 per day to help the plant, maintain and harvest), seedlings and equipment; not to mention funds to sustain them in the meantime. Without the cash resource to develop their abaca farming enterprise, they will live life as they do, day after day, hopefully with some income, and hopefully they can hunt wild boars in the forest, too. With access to resources, mentorship and guidance, a net income of P8,000 a month (after all costs) per hectare is doable. (As much as 1,600 trees per quarter, per hectare can be harvested on an ideal scenario). It is estimated that about 40,000 hectares in Cagayan de Oro, Iligan, Bukidnon and Zamboanga are good for abaca farming. Just in these areas alone, there can easily be a multi-billion peso industry, even just for the abaca fiber supply side.

By the way, you may ask what was I doing this weekend in the midst of the indigenous people in Iligan, 1,000 feet above sea level, breaking salted boiled kamoteng kahoy with them, breathing the purest of air, and drinking the freshest of spring water? You see, I am an emissary of the Management Association of the Philippines (MAP), which has a program called EMERGE. It is a legitimate attempt to actually do something about inclusive growth outside of just preaching it. It seeks to provide a bit of capital assistance to get loans from financial institutions, and to mentor driven marginalized entrepreneurs. The impact of these entrepreneurs on all people/stakeholders who are in their network can elevate each one’s standard of living and improve their quality of life.

What the world has come to is that for improvement to happen, public-private partnership is indispensable. The government, businesses, NGOs, and the farmers in this case build an ecosystem, which will be as good as its weakest link. With diversified issues, we can work to achieve inclusive growth; each issue is like a bottomless well of opportunity. For instance, this Sunday, we are reminded that God gifted the country with a differentiated, almost exclusively Philippine-grown product in abaca. Like the parable of the buried gold, it is the country’s obligation to make this gift yield a thousandfold.

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the Educated Marginalized Entrepreneurs Resource Generation (EMERGE) program of the Management Association of the Philippines (MAP). Email your comments and questions to [email protected]. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.