World Bank: Farm clustering a boost to agriculture sector

MANILA, Philippines — Consolidating small farmers in the Philippines into cooperatives and organizations could improve income levels and help the agriculture sector contribute more to economic growth in the country.

In a joint report, the World Bank and the Department of Agriculture said there is a need to expand production among small farmers through clustering and forge partnerships with agribusiness firms.

This would aid in raising the incomes of farmers and spurring the socioeconomic transformation of the country’s rural areas.

To date, the local agriculture sector remains dominated by small farmers who still use traditional production practices and only earn an average of P100,000 yearly.

Average farm size is also declining over the years. The Philippines has roughly 7.2 million hectares of farm lands, nearly 60 percent of which are smallholders.

The DA is implementing the Philippine Rural Development Project (PRDP) which clusters producers into enterprises that take a business-oriented approach to farming and fishing.

They are supported through complementary investments in infrastructure such as farm-to-market roads, irrigation, post-harvest facilities, and cold storage.

“Efforts at clustering and consolidation needs to be voluntary, built on trust and confidence, and collaborative relationships among stakeholders – whether they are farmers, communities, municipalities, other local government units, or small and larger agribusiness enterprises,” World Bank country director Ndiame Diop said.

“Where different approaches to clustering land management are not feasible, support for the mechanization of farming and post-harvest operations may be an alternative or complementary strategy for smallholder-based systems to increase farmer productivity and incomes, both on and off the farm,” he said.

Agriculture Secretary William Dar said that the use of modern technology, schemes like block farming, trust farming, and contract farming can make the industry more efficient and profitable for farmers.

“With higher and better-quality production, linking agriculture to the domestic and global manufacturing sectors and accessing markets become easier,” Dar said.

Further, the World Bank maintained that collaboration among farmers and agribusiness enterprises through decree or subsidies usually does not work but those that emerge from farmers’ bottoms up collective initiatives yield good results.

The World Bank-DA report suggested that the country can realize scale in primary production, support market-oriented producer organizations and foster contract farming and productive alliances.