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WINNING STRATEGIES FOR PRIVATE SECTOR INVESTMENTS ON SMALL PRODUCERS IN THE PHILIPPINES

Back in the Game:


WINNING STRATEGIES FOR PRIVATE SECTOR INVESTMENTS ON SMALL PRODUCERS IN THE PHILIPPINES

Back in the Game: Winning strategies for private sector investments on small producers in the Philippines
Acknowledgements This brief was written by Dante Dalabajan with contributions from Eusebio Jacinto Jr. and Maria Golda Paz Hilario. Commissioning manager for this brief was Kalayaan Pulido-Constantino. Oxfam acknowledges the insights and comments provided by Kalayaan Pulido-Constantino, Marie Madamba Nunez and Rohit Malpani. Substantial comments and inputs from several Oxfam partners in the Philippines, namely: Hazel Tanchuling, Dennis Calvan, Ernie Lim, Edgardo Ligon, Tony Salvador, Maria Mendoza and Daryl Leyesa were sought for the completion of this report. This is one of a series of papers written to inform policy discourse around increasing investments in smallholder agriculture and to contribute to Oxfams GROW campaign. For more information, or to comment on this brief, email Kalayaan Pulido-Constantino kconstantino@oxfam.org.uk. www.oxfam.org/grow Production of this policy brief is managed by Joseph Edward Alegado with assistance of Maria Golda Hilario. Layout by: Mervin Concepcion Vergara Photos by: Veejay Villafranca Dante Dalabajan is currently the manager of Oxfams Building Resilient and Adaptive Communities and Institutions in Mindanao (BINDS) project. He was a former policy and research officer of the Philippines economic justice program of Oxfam. He has 17 years of experience in public policy research, and advocacy and campaigns. Eusebio Jacinto Jr. is a freelance consultant whose expertise is on fisheries and coastal resource management. Golda Hilario is Oxfams economic justice policy advocacy officer. She has had over 10 years of experience in research and policy analysis in the areas of sustainable agriculture and trade. About the cover In 2010, there are about 3.24 million rural women who are actively engaged in the agriculture, fisheries and forestry sector according to a report by the UN Food and Agriculture Organization. (photo by Veejay Villafranca)

GROW is Oxfams campaign for better ways to grow, share, and live together.

Oxfam is an international confederation of 17 organisations networked together in more than 94 countries, as part of a global movement for change, to build a future free from the injustice of poverty. In the Philippines, we work with poor people to sustain their livelihoods, and reduce their risks to natural and human-made disasters. We strive to enable poor people to have a voice in economic issues affecting them and we support poor women as they lead in transforming unequal social and economic relations. 4F 150 Corporate Center,150 Panay Avenue, Quezon City, Philippines Telephone: +63(2) 9294470 Fax: +63(2) 9270499 Website: http://www.oxfamblogs.org/philippines

This publication was printed using 100% recycled paper and soya-based printing ink.

WINNING STRATEGIES FOR PRIVATE SECTOR INVESTMENTS ON SMALL PRODUCERS IN THE PHILIPPINES

CONTENTS
5 6 7 14 16 18 19 20 INTRODUCTION WHO ARE THE SMALL PRODUCERS IN THE PHILIPPINES? WHY ARE SMALLHOLDER PRODUCERS CURRENTLY OUT-OF THE GAME? WHY SHOULD THE BUSINESS SECTOR INVEST IN SMALL PRODUCERS? HOW CAN THE BUSINESS SECTOR HELP SMALL PRODUCERS GET BACK IN THE GAME? GOVERNMENTS ROLE IS CRITICAL CONCLUDING NOTES NOTES

BACK IN THE GAME:

WINNING STRATEGIES FOR PRIVATE SECTOR INVESTMENTS ON SMALL PRODUCERS IN THE PHILIPPINES

INTRODUCTION
We are so broke, laments farmer Arnel Britalyer of Brgy. Kanlurang Bukal, Liliw, Laguna. Truckloads of tomato in his and the nearby villages are left to rot by the roadside as the price of tomato plunged from P12 in January to P1 per kilo in May 2011 1 . Farmers in Kanlurang Bukal are left without money for the next planting season and face more hardships down the road. Leonardo Nepomuceno, another farmer, wonders, How can we get back on our feet? We borrowed from the bank. We borrowed from loan-sharks. We borrowed medicines in the stores. Who is going to loan us if we cannot pay? The situation in the cities, however, conceals the desperation that pervades in rural villages like Kanlurang Bukal . Here, the towering presence of supermarkets and food retail outlets in almost every major street and district seem to conjure an image of a vibrant agriculture, an encouraging sign of the bright prospects facing this important segment of the economy. This paper is one of three Oxfam briefers on private sector investments in agriculture in the Philippines. This outlines why majority of the smallholder farmers in the country are being left out of the game and builds the case on why the business sector should invest responsibly on smallholder agriculture. This paper also discusses the public policy environment that hinders the growth of private sector small producers partnerships and what choices the government must make to nurture these partnerships.

WHO IS FEEDING THE GROWING POPULATION?


By 2010, the share of urban population has reached over 67 percenta spectacular rise from about 37 percent in just over two decades. 2 A growing number of families in the urban areas have dual income households which have vastly improved their purchasing power on one hand and increased their demand for convenient, one-stop shops on the other. 3 This demographic shift has brought about a domino effect in the way food products move along the value chain and has consequently reconfigured the structure of the agriculture industry. There has been a radical shift of consumer preference to high valued commodities over grains and starchy staple crops 4 with an emerging middle class fueling the demand. 5 A study, for instance, noted that families in urban areas consume food outside home almost twice as much as their counterparts in rural areas. 6 The shift of consumption patterns has, in turn, fueled the explosion of supermarkets, hypermarkets and fast food chains which have become the dominant modality for transmitting high value commodities. 7 From 1994 to 2007 alone, the number of supermarkets and hypermarkets in the Philippines have increased from 496 to 5,000with value of sales of over 100 billion pesos

The situation may be even graver for women farmers and fishers like Rosario Mendoza of Cavite who are generally not recognized and whose economic contribution in the agriculture and fisheries are often overlooked.

BACK IN THE GAME:

in 2007, accounting for over half of retail food sales. 8 In 2011, the retail sales of packaged food and non-alcoholic drinks sold at major grocery stores has reached US$ 14,976 million or close to 643 billion pesos 9. The supermarket revolution has influenced the agriculture sector in no uncertain terms. First, specialized procurement agents have sprung up to make spot purchasesby-passing the traditional wholesale markets. This mode of procurement served the purpose of reducing transaction costs and ensuring a greater degree of control over quantity, quality and timely delivery. Second, up in the value chain stream, specialized procurement agents have been instituting private grades and standards to be able to exact the kinds of specification (e.g. quality, quantity, and delivery) demanded by the market downstream (e.g. supermarket, hypermarket, and food retail outlets). About seventy percent of fresh produce in the Philippines is sold in the wet markets 10, but the current trends clearly show that this will not go on indefinitely. There is evidence, for instance that, more and more consumers are moving to supermarkets because of concerns about safety 11. Filipinos now spend roughly 49% of groceries on fresh food. A parallel trend is also happening in the fisheries sector. There is an increasing share of aquaculture in total production relative to capture fisheries from 36.7% in 2000 to 48.7% in 2009. The iconic poor mans fish - round scad or galunggong - is being replaced by farmed species such as tilapia and bangus(milkfish) . The latter are better suited for larger scale production and integration into fisheries value chains that feed into urban-based retailers. These commodities are also mostly produced by medium and large scale aquafarms who have the capacity to meet the criteria of timeliness, volume, quality, and traceability that modernizing markets increasingly require. Such stark dualism leaves majority of the smallholder farmers and fisherfolks currently out-of-the game in an uneven playing field where eventually nobody wins. It can only harm the long term growth prospects of the business sector, buries the small producers deeper into poverty, and consequently, put the countrys food security in great peril.

WHO ARE THE SMALLHOLDER PRODUCERS IN THE PHILIPPINES?


Agriculture broadly covers the farm, fisheries and forestry sectors, and its downstream industries (e.g. food processing, manufacturing and trading of agricultural products). Agriculture comprise 40 % of the Philippine economy and employs about two-thirds of the workforce. Strictly speaking, agriculture small producers falls under the private sector category in as much as they are private actors engaged in risk taking to earn profits and income . 12 The National Agriculture and Fisheries Council (NAFC) broadly defines private sector to cover farmers, fishers, farm input providers, traders, processors, members of the academe, industry captains, and personalities of the various nongovernment and peoples organizations . 13 Distinction should be made between private sector agribusiness and small producers. For the purpose of this paper, agriculture small food producers encompass those producers within the agriculture, fisheries and subsistence forestry subsectors producing on a small-scale level. On the other hand, private sector refers to agribusiness, domestic and multinational/ transnational companies and small and medium enterprises (SMEs). It therefore includes agribusiness firms along the value chain such as those engaged in input provision, food processing and manufacturing, distribution and logistics, wholesaling and retailing. By sheer number and the aggregate size of landholding small producers have always dominated the Philippines agriculture sector: The highest concentration of small-scale producers is found in fishing, coconut, rice, sugarcane and corn sectors. 14

WINNING STRATEGIES FOR PRIVATE SECTOR INVESTMENTS ON SMALL PRODUCERS IN THE PHILIPPINES

Figure 1. Where the smallholder producers are in the Philippine agriculture and fishery sector. (Source : NEDA (2011). Philippine Development Plan 2011-2016. page 104. Accessed from < http://www.neda.gov.ph/PDP/2011-2016/CHAPTER%204.pdf> )

In 2010, there are about 3.24 million rural women who are actively engaged in the agriculture, fisheries and forestry sector 15. An estimated 514, 978 of the countrys agriculture holders those making major decisions over resource use and management over their production system are women 16; The highest concentration of the rural poor is also found in the agriculture, fishery and forestry sector. Some 1,685,148 farmers and 346,345 fishers are living below the poverty threshold in 2009 17.

WHY ARE SMALLHOLDER PRODUCERS CURRENTLY OUT-OF-THEGAME?


By 2025, the Philippine population is projected to breach the 120 million mark 18. With the recent trends in consumer demands and the market modernization, it would have been conceivable that the rural economy will grow in tandem with the rest of the value chain. After all, there seemed no other way that the private sector could fill the demand domestically if not for the rural areas.

BACK IN THE GAME: so called financers, traders and input suppliers). Contrary to loans offered by banks, informal lenders respond to small producers needs more efficiently, without the necessary collateral requisite and voluminous documentation required by the banks. Repayment among farmers is just a secondary issue given that loan terms coincided with the length of cropping season; loan interests are not monetized but are often charged against the crop value collected during the harvested season. This arrangement, however, is disadvantageous to the farmer given that the interest rates are high (more than 12%) and fixed, leaving them with little option but to accept the terms determined by the informal lenders. Informal lenders are also operating on limited funds, dealing with the same borrowers seasonally and are operating in contiguous areas, which is essentially a risky undertaking. Low farm gate price for their produce Small farm producers are disproportionately getting a small share of the value of their produce every growing season. In rice alone, the ratio of farm-gate price compared to wholesale price has accordingly averaged at 47 percent over the past 15 years 24. In 2012, an equivalent kilo of well-milled rice just cost an average of PhP 19.37 kilogram when sourced from the farm-gate, around 41% lower than the average the wholesale price which was fetched at PhP 32.82 per kilo 25. Their share is lower compared to other rice producing countries where farmers get more than half of the value of their produce (Figure 2) . The reasons why farmers are getting a pittance from their hard work are varied and former NEDA Director Cielito Habito offered an explanation. Farm gate prices are often determined by traders who in most cases also act as their financers that often charge the interest rates by lowering the value of the farmers yield. Second, poor infrastructures poor state of farm roads and bridges continue to hinder farmers from delivering their produce to markets that offer more competitive prices. The high cost of transportation entices farmers to rather sell directly to traders who buys directly at the farmgate at the latters terms. Third, situations where there are only one 26 or few 27 buyers for farmers produce are prevalent in the rural communities. With only one processor operating in the locality, the processor can control the buying price of the commodities. Cartels control local trading. 28 Trade Liberalization The continuing effect of trade liberalization, a policy decision that was enacted when the Philippines ratified to the Uruguay Round agreements and subsequent realignment of Philippine laws to deliver its commitments to the World Trade Organization, effectively removed protective mechanisms that could have insulated the countrys agriculture subsectors and further contributes to lowering of farm-gate prices. 29

However, a confluence of factors creates a situation that makes it hard for small producers in the countryside from rising. Continuing cyclical challenges hamper small food producers capacities and their ability to be active players in the value chain. Lack of capital Farmers and fisherfolks need to infuse financial capital to be able to increase their production and derive a decent livelihood from farming but where to access affordable and efficient loans remains a perennial bottleneck. Republic Act 8435 or the Philippines Agriculture and Fisheries Modernization Act (AFMA) which was legislated in 1997, ensured access to credit by small producers 19, small and medium enterprises (SMEs) and industries engaged in agriculture and fisheries by outlining the scope of subsidized credit through Agro-Industry Modernization Credit and Financing Program (AMCFP). Under the law, an initial PhP 2 billion and a subsequent PhP 1.7 billion across the span of six years was allocated for the implementation of the AMCFP. Yet, annual appropriation for such subsidized credit has not fully materialized with the AMCFP implementation relying mainly on recycled funds from terminated agriculture credit programs. The private banking sector that was mandated by law to allocate 25% of their total loanable portfolio to agriculture 20, has veered away their investments from the sector. Rather, banks opted to pay penalties and resort to alternative compliance measures because they consider the agriculture and fisheries sector as high-risk, high-cost 21. Despite purported increase in the amount of bank loans to agriculture, fishery and forestry sector to PhP 624 billion in 2010, the credit gap in the agriculture and fishery sector has reached PhP 252 billion, this was dismally higher than the PhP 156 billion credit gap noted in 2008. 22 The passage of the Agri-Agra Reform Credit Act of 2009 limit the alternative compliance and imposes stricter penalty for failure to lend out to the agri-agra sector and in the process, infuse more credit capital. However, this does not necessarily equate to greater access for small farmers and fisherfolks. Within the agriculture sector, commercial banks tend to prioritize loans to large agricultural firms such as agribusiness and plantations. Likewise, loan distribution is concentrated among large farm owners who can present acceptable loan collateral and have better risk management practices. Formal lending to small farmers has particularly been limited to the rice and corn loan production support extended by government-owned Land Bank of the Philippines and rural banks 23. Majority of the small producers still rely on informal credit offered by informal lenders (or the

WINNING STRATEGIES FOR PRIVATE SECTOR INVESTMENTS ON SMALL PRODUCERS IN THE PHILIPPINES

Figure 2. Rice farmers share over wholesale price: Average farm gate price versus wholesale price of rice in four rice producing countries.

source of data : Habito, C. (2011). Do Farmers Have to Be Poor. No Free Lunch. Philippine Daily Inquirer. The Agriculture Tariffication Act or RA 8178 (1996), for instance, repealed the prohibition of the importation of onions, potatoes, garlic and cabbages. The prices of potatoes collapsed to almost half of their 1990-levels owing to the flooding of the market with machine-sliced, ready-to-fry potatoes from the United Statesa fact that virtually decimated the 50,000-strong Benguet potato farmers. 30 The export receipt of the US relative to the Philippines is especially instructive as it clearly showed the widening trade deficit of the Philippines with the US in food and beveage alone (Box 1).
Box 1. Food and beverage imports from the US In 2010, U.S. food and beverage exports to the Philippines increased by 42 percent to a record $601 million on the strength of exceptional sales increases in fresh vegetables, dairy products, tree nuts, breakfast cereals, and processed fruits and vegetables. This remarkable growth follows an impressive export achievement that went on for most of the decade. Since 2005, U.S. sales to the Philippines set records in four out of five years. As of the end of 2010, the Philippines was the largest U.S. export market in Southeast Asia and the 13th largest export market in the world for U.S. food and beverage products. Source: Singian R. (2011) Top Growth and Top Sales Market for U.S. Foods and Beverages, US Department of Agriculture Foreign Agricultural Service.

A similar flood of importation is also happening on other agricultural fishery commodities that are the domain of smallholder producers. In the fishery sector, the DA-BFAR reports that about 900,000 metric tons of imported fish enter the country every year, intended for institutional buyers that process seafood 31. To the detriment of local fishers and traders and to the consumers however, the poor mans fish galunggong are now being sold at the local markets at a much higher retail price than the import price declared by the importers at the Bureau of Customs. Local backyard hog raisers have likewise dramatized their plight during a self-imposed pork holiday when imported prime meat cuts are being allowed and sold into the country at lower tariff rates as offal (variety meats). Public sector investment in agriculture is not enough The share of Philippine agriculture sector relative to the national output has been declining. For the period of 2007-2010, the gross value of goods and services of the agriculture sector has been on a steady declining average at 12% (Figure 3).

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BACK IN THE GAME: Figure 3. Declining contribution of Philippine agriculture, fisheries and forestry sector to its overall gross domestic product.

(Source: http://data.worldbank.org/ ) Compared to the national expenditure, government investment to the agriculture sector over the last three decades is almost insignificant (Figure 4). The decline in investments on agriculture is very glaring in the case of public spending on agriculture research. In the early 1970s, it had one of the highest levels in Asia. But the continuing fall in public spending on agriculture which began in 1980s went on such that by 1990s, the Philippines had one of the lowest public expenditures for agricultural research relative to its gross value addednext only to Nepal. 32 Figure 4. Government Expenditures in Agriculture, 1981 2011.

( source: www.bas.gov.ph)

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The cause of the dualism within the agriculture sector becomes startlingly obviousfood retail is growing but food exporting countries and their agribusiness allies and the domestic small producers are not the ones primarily benefitting from it.
We may conclude that the declining share of agriculture in the national output could be a sign of economic progress in as much as increasing incomes has a corollary effect in the demand for non-agricultural, manufactured goods and services. 33 In more advanced economies, this is accompanied by rising incomes and a lower incidence of poverty among agriculturedependent population. However, such is not the case in the Philippines where the biggest concentration of the poor is in the said sectors with poverty incidence over one third of the total for both farmers (36.7%) and fishers (41.4%) 34. Viewed at the backdrop of increasing liberalization of agriculture and the falling public investments, the cause of the dualism within the agriculture sector becomes startlingly obvious food retail is growing but food exporting countries and their agribusiness allies and the domestic small producers are not the ones primarily benefitting from it. Calamities have become a seasonal norm Small producers not only grapple with the lack of productivity as a result of decreasing investments in agriculture, but must also now deal with the increasing frequency and magnitude of extreme weather events brought about by climate change. Experts agree that such events will become even more severe and more frequent in an increasingly warmer world. The damage and losses incurred during the typhoons Ketsana and Perma in 2009, for instance, were estimated to be equivalent to about 2.7 percent of the countrys gross domestic product, the same year when the Philippines posted 1.1 percent growth. 35 In 2011, tropical storm Washi devastated coastal and low-lying communities in north and north eastern portion of Mindanao. In December 2012, a more powerful and bigger storm left catastrophic effect in eastern and north eastern portions of the island that were very seldom on the track of seasonal typhoons. Bopha (Pablo) left US$ 830 million worth of damage to agriculture, properties and infrastructure to predominantly agriculture and fishing municipalities 36. While an extreme weather event could devastate food supply in one sudden blow, so could slow onset climate change cripple the ability to produce food over a long period of time. For example, there is evidence to suggest a 10 percent fall in rice yield for each 1C increase in night temperature during the growing season. 37 Lack of effective safeguards that protect farmers assets and resources Aside from labor, land is one of the remaining resources that smallholder farmers hold as leverage. It is estimated that 76.5% of the countrys agricultural areas are in the domain of small producers 38. There is a lack of effective safeguards that render them virtually powerless to negotiate for better and fairer share with a handful of private agribusiness firms that are willing to invest in their land. As it is, the prevailing policy environment governing investments is tilted towards favoring large-scale agricultural land investments. 39 Lacking the necessary capital to infuse production, agrarian reform beneficiaries found themselves on a lop-sided situation wherein leasing out their lands either to their former land owners or to big agricultural plantations at an undervalued rate over a long-term period has become their first option. There are also cases where farmers groups who were able to secure production and marketing contracts with agribusiness corporations ended up trapped in a cycle of debt to the latter. To be able to meet the prescribed quality that the market requires, farmers groups are bound to specific technologies prescribed by agribusiness corporations. Such technologies do not come cheap. The required inputs (e.g. fertilizers, pesticides, seeds) being supplied and charged by agribusiness corporations to the farmers groups are often in the form of loan with accrued interests. Farmers are ill-equipped to scrutinize the terms of the contracts and negotiate for more equitable terms. In the event that there are conflicts arising over the terms of the contract, there is no dispute resolution mechanism that is accessible to the farmers or the farmers groups. Farmers groups find it costly and time-consuming to pursue cases through the judicial system. The 2008 food price crisis sparked a renewed interest among foreign investors and governments to invest in offshore food and biofuel crops production. The move was initially welcomed by the Philippine government as it saw the potentials that such investments could bring in, in terms of job and revenue generation that will fuel the rural economy. In 2010, some 1.37 million hectares of land was reportedly under negotiation for possible private sector land investments with an expected

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BACK IN THE GAME:

The cause of dualism within the agriculture sector becomes startlingly obvious - food retail is growing but food exporting countries and their agribusiness allies and not the domestic small producers like Nita Oigoan of Rizal are the ones primarily benefitting from it.

accumulated worth of PhP 72.4 billion 40. Only a handful of these deals materialized mainly due to lack of consolidated landholdings, overlapping policies on land and natural resources and conflicting land use. Civil society groups and farmers organizations sounded their alarms citing domestic food security concerns, lack of transparency and consultation, possible displacement of poor smallholder farmers from their own lands. More so, concerns were justified by prevailing predicament faced by smallholder farmers and farmers groups who have bad experience in dealing with leasehold and/or contract growing arrangements with agribusiness companies and former landowners. There is currently no formal oversight as to whether large scale land investment agreements are beneficial or fair to small farmers. Farmers lack of organization Small food producers as a sector can be generally characterized as fragmented in that they lack economic organization in terms of production, access to markets, financing and technology, which holds true whether they are in the farming, fishing or forestry subsectors. This gives them

less power in negotiations and inhibits their integration within agricultural value chains. It must be noted that the small producers are not homogenous. Their needs are diverse depending upon their context such as land holding, access to assets and productive environment, orientation to different markets, livelihood strategy and entrepreneurial attitudes 41. Within their sector, they also face different forms of exclusion, including proximity and remoteness, gender, ethnicity. They can be differentiated along different rural worlds (Box 2). Among small farmers who have lands, the lack of a coherent strategy that will structure the rural communities in a way that they will be able to capitalize on the asset reform programs of the government is visibly lacking, leaving the small producers in the countryside at the mercy of the big players in the market. In 1985, average farm size in the Philippines was 1 hectare, but by 2004 this has fallen to 0.76 ha, and the proportion of landless households had risen from 22 to 24 percent. 42 From the standpoint of production and distribution, the wide dispersion of smallholders presents a problem of coordination and consolidation which are the stocks of trade in the modern markets.

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The size of land holding alone cannot sufficiently explain why small producers are being politically and socially marginalized. For example, indigenous peoples and upland dwellers that hold forest land-use instruments (e.g. CADT,CADC and/or CBFMAs) have bigger landholdings than agrarian reform beneficiaries but they face the same predicament. They lack the skills and resources to make the land more productive. Similarly, smallscale fishers and artisanal fisherfolks have a unique livelihood structure, having retained much of their hunting and gathering characteristics for ages. Unlike the farmers who have a relatively predictable seasonal calendar, fishers are more vulnerable to the vagaries of nature, and their archaic
Box 2. Differentiation among rural producers First rural world - comprise 2-10% of small food producers with access to capital, organization, information and infrastructure and who can step up to formal and coordinated markets. In the Philippines, these are farmers who have small landholdings and possess some assets, whose landholdings are located near town centers, and have access to social capital (whether through membership in an organization, or affiliations with family, community or local leaders). These are the ones who have shown interest and are capable of entering into formal agreements with private sector. Small fishers belonging to this segment may be engaged in either capture fishing with their own gears and motorized fishing vessels or in mariculture in their own defined and informal territory. Second rural world - comprise the majority, who are just hanging in there. They are less likely formally organized in the market. They are more likely to trade with the informal sector. Among fishers, these are the ones who would have a non-motorized boat for capture or those who work in mariculture in exchange for a share of the harvest. Third rural world - landless farmers who engage in seasonal farm labor and receive wages as payment. They are also more likely to depend on off-farm opportunities. They may be considered the poorest of the poor. For fishers, these are engaged in capture fishing but rent the equipment of other fishers.

systems have remained despite the inroads of technologies on fish capture and mariculture. The threat of exclusion of small producers is therefore real, and in fact, various reports have cited cases that excluded small producers. As such, small producers are not only in no position to take advantage of the opportunities in the changing market; but, the lack of productivity in farms also puts the Philippines objective of food self-sufficiency in such a precarious balance. Private sectors perception of small producers as a risky proposition Given the problems associated with small producers, the dominant view within the private sector is that small producers are a threat to its value proposition which is built on consumer assurance, high standards for food quality and safety, low prices, and reliability of supply. 43 They are a drag in a very competitive setting where consolidation and vertical coordination within the value chain are the stocks of the trade. Farmers with assets and capacities to access the necessary finance, information, and technology are in a more favorable position to benefit from participating in the modern markets 44. In the rural areas however, they are more of the exception than the general rule. For the most part, the inability of the small producers to meet the demand of the industries is brought about by the fact that quality standards are too stringent for smallholders to begin with, or that they simply lack access to extension, and modern inputs and credit. 45 Regardless of the reason, very few agribusiness firms have the patience or the resources or the foresight needed to nurture the growth of the small producers. This is even more so for small fishers, whom traders consider an investment risk that are subject to the vagaries of weather, seasonality and dwindling resources. The situation may be even graver for women farmers and fishers who are generally not recognized and whose economic contribution in the agriculture and fisheries sector are often overlooked. Ultimately, small farmers and fishers are not bankable and thus have almost no access to the resources they need to be productive and compete in the market.

Sources: Vorley, B (2002). Sustaining Agriculture: Policy, Governance, and the Future of Familybased Farming: A Syntheis of the collaborative Research Project Policies that Work for Sustainable Agriculture and Regenerating Rural Livelihoods, IIED, London. Vorley, B, L.Cotula, C Man-Kwun (2012). Tipping the Balance: Policies to Shape Agriculture Investments and Markets in Favour of Small Farmers. IIED and Oxfam. London.

Small producers are not only in no position to take advantage of the opportunities in the changing market; but, the lack of productivity in farms also puts the Philippines objective of food self-sufficiency in such a precarious balance.

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BACK IN THE GAME: Sourcing from local producers can reduce fuel costs and carbon footprints. Realities that the current production system is already on the margins of planetary boundaries should also propel private sector to act now, as long-term consequences will harm their business prospects. Sourcing from local food producers, rather than prioritizing importation can help reduce fuel costs and carbon footprints of the company. Ethical sourcing from small producers can be a good marketing strategy . Making supply chains inclusive for small scale producers in an equitable manner and communicating how these actions can improve the lives of men and women farmers through their brands can also provide a good marketing strategy for the company; it can capture new customers and increase consumer patronage 46. Working with small-scale farmers is also a means to build community goodwill, contributing to companys license to operate 47. There is a growing evidence to show that consumers are concerned about their food sources. The Philippines registered the highest percentage of women who have shown concern over how 48 and where 49 their food is produced as suggested by a survey result released by Oxfam involving 5000 women households in six countries 50. b. Development case

WHY SHOULD THE BUSINESS SECTOR INVEST IN SMALL PRODUCERS?


a. Business case Small producers can provide opportunities for partnerships with business sector. Despite the milieu of challenges that justifies reluctance to invest in their sector, small holder producers can offer comparative advantages for the business sector to invest in rather than putting money in large corporate farms or resorting to importation from other countries (Box 3) Sourcing from small producers can contribute to more secure supply. Supply constraints and volatile conditions as highlighted during the 2008 food price crisis, has also shown a compelling case why the business sector needs to consider small producers in their value chain. The business sector must diversify its supply base and sourcing from small producers can contribute to a more secure supply.

Investing in smallholders can reduce poverty and hunger . A study shows that the growth in gross domestic product from agriculture is at least twice more effective in reducing poverty than growth from other sectors 51. Growth in agriculture increases demand for goods and services, generates jobs and creates incomes for the rural population. It has a rippling effect at different levels household , community and even at the national levels.

Box 3. Opportunities that small producers can provide to private sector Majority of the prime agricultural lands are still in the hands of smallholder. Given the limited size of landholdings, small farms are more efficient in terms of labor per productivity output. Small farmers tend to maximize family and community labor than source outside of the community. Hence, lesser cost is required for capitalization. Small farmers and fisherfolks have extensive local knowledge of their environment. While the effect of extreme weather events does not distinguish large and small scale farms, small holder farmers have proven ways to adapt their practices to slow onset changes

caused by a changing climate regime. Majority of the smallholder farmers have a diversified livelihood base built around local agriculture systems that the business sector can take into as a potential business prospect. Small scale producers are using remittances of their migrant relatives as investment leverage (in the form of capital) and insurance. It is estimated that about forty percent of overseas migrants come from the rural areas; a study have shown that farmers tend invest the remittances to produce high-value and, or specialized crops, adopt mechanized farming methods in rice production, or as a risk-scoping strategy. Their migrant relatives can also be potential market and a new consumer base of companies products offshore.

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Agricultural investment is also considered crucial in eradicating hunger and creates a chain of positive effects to improvement of nutritional status of consumer population.

Oxfam and Unilevers analysis of the value chains suggest that linking smallholders with wellfunctioning local or global markets ranging from local street markets to formal global value chains plays a critical part in long-term strategies to reduce rural poverty and hunger 52. Agricultural investment is also considered crucial in eradicating hunger and creates a chain positive effect to improvement of nutritional status of consumer population. Accordingly, investment by farmers and the public sector in agriculture and supportive sectors can increase the availability of food on the market and help keep consumer prices low, making food more accessible to rural and urban consumers 53. Lower price of staple food provide consumers with diverse array of food to improve their diets and thereby improves their nutrient uptake. Agricultural investments also reduce vulnerability to food price shocks.

Investing in small producers can spur local development. Within the locality, private sector investments can provide smallholder farmers with better options e.g. where to buy cheaper agricultural inputs, where to get cheaper loans or better credit service, where to sell produce in the process promoting competition among other private sector stakeholders in the community and levelling the playing field for small producers to get better deals out of their investment. Investing in women producers can improve lives of rural women. Investing in women producers by ensuring that they can overcome genderbased constraints has shown improvement in productivity and overall efficiency of supply chains. Increase income in the hands of women can have rippling effect it translates into improved nutrition and educational outcomes, especially for girls 54.

Realities that the current production system is already on the margins of planetary boundaries should also propel private sector to act now, as long-term consequences will harm their business prospects.

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BACK IN THE GAME:

HOW CAN THE BUSINESS SECTOR HELP SMALL PRODUCERS GET BACK IN THE GAME?
1. Do no harm. Business practices must be guided with respect for basic human rights of men and women small producers, agriculture laborers in their supply chain. It is never too early or too late to correct unjust business practice that harms or compromises small producers and communities health and well-being. In 2011, the UN outlines a set of foundational and operational principles on business and human rights mandating business enterprises, regardless of their size, sector and context to adhere to the principles of Human Rights (Box 4). Methodology and tools are already well-developed to assist businesses respond to the development needs of the poor in general and assess to the needs of women small producers in particular 55. Policies should be reflected operationally and company standards that makes adherence to basic human rights principles should be established.
Box 4. The Corporate Responsibility to Respect Human Rights as stated in the UN Guiding Principles on Business and Human Rights Foundational Principles Business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved. The responsibility of business enterprises to respect human rights refers to internationally

recognized human rights understood, at a minimum, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organizations Declaration on Fundamental Principles and Rights at Work. The responsibility to respect human rights requires that business enterprises: (a) Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur; (b) Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts. The responsibility of business enterprises to respect human rights applies to all enterprises regardless of their size, sector, operational context, ownership and structure. Nevertheless, the scale and complexity of the means through which enterprises meet the responsibility may vary according to these factors and with the severity of the enterprises adverse human rights impacts. In order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances, including: (a) A policy commitment to meet their responsibility to respect human rights; (b) A human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights; (c) Processes to enable the remediation of any adverse human rights impacts they cause or which they contribute. For operational principles, see page 16 onwards of UNs Guiding Principles on Business and Human Rights Source: UN (2011). Guiding Principles on Business and Human Rights. <http:// www.ohchr.org/Documents/Publications/ GuidingPrinciplesBusinessHR_EN.pdf>

Likewise, there is growing social and environmental pressure coming from both producers and consumers end for the business sector to adopt sustainable sourcing policies for health, dwindling natural resources and climate change consideration. The increasing trend among consumers who are paying a premium price for organic food products and the presence of national and international organic certifying bodies can attest to this. 2. Invest in partnerships.

Chain-wide collaboration approach and innovation guided by shared goals on developing sustainable commercial trading relationships and fair returns agreed by all actors 56 are keys to an effective private sector small producers partnership. Along the supply chain, there are different business models that have been documented to be inclusive of smallholder farmers.

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Producer-driven models . Producer cooperatives and federations are small farmer or fisher organizations that serve their members, whether individuals or organizations, in terms of building their political agency, improving their access to information, increasing their collective knowledge, skills and capacities, and, ultimately, their power in markets.

Buyer driven models. The business sector can seek efficiencies in organizing the supply from small-scale farmers by directly sourcing from small producers groups and in the process, do away with traditional middlemen. Buyers achieve efficiencies in the chain by integrating backwards and coordinating production. Contract farming is a familiar feature of buyer-driven business models, whereby buyers link small producers to modern markets where capital, technology and market access are visibly lacking. 58 Technology transfer has proven to be very crucial in upgrading the productive capacities of the small producers. Other private sectors have also positioned themselves as a provider of value added to small producers on top of the incomes that small producers earn from their income products. Experiences of buyer-driven models negatively affecting smallholders abound and they usually relate with stringent norms and standards relating to quality and volume. Experience also show that buyers tend to benefit more from the deal than small producers and therefore it is particularly important to provide a transparent mechanism for distributing gains 59. As alternative to leasehold agreements, a potential contract growing arrangement that can be mutually beneficial to both company and small producers is the growership arrangement. Growership arrangement, in contrast to traditional contract arrangements, does not loan out production inputs to farmers. The producers are paid a predetermined growers free, all inputs are provided by the contractor and all the produce being contracted are collected at the end of the growing cycle. This arrangement effectively addressing the issues of side-selling and theft for the business sector, and at the same time, reduces risks of the farmer 60.
Box 7. Business example of company investing in technology. Bote Central, Inc., a family owned corporation and manufacturer of Coffee Alamid and 18 days, deploys community roasting business units (CBRUs). This enabled coffee farmers to add value to low grade coffee beans unsuitable for the export market. Small producers were able to have the option to sell their roasted coffee as brewed, grounded or roasted. In return, Bote Central was able to have a sustainable supply of Grade A coffee beans. Sources : SCOPE. <http:www.pbsp.org.ph> Bote Central Online store. < http://www.arengga. com/index.php/Coffee-Alamid.mpc>

Box 5. What women producer organizations can do: An example of producer-driven model. Conchita Maasin or Nay Conching, leader ofthe all-women group, Agraryong Repormang Samahan ng mga Kababaihan(ARSK) in Barangay Nangan, Governor Generoso, Davao Oriental, had in her associations command some 65 hectares of cocolands awarded thru CARP. ARSK can collect 156,000 liters of mature coconut water per year. Nay Conching and her group saw the potential of producing thick gourmet sauce out of continuous boiling of coconut water such that the association started selling the soy sauce to their immediate community. Such move enabled the members to generate additional PhP 12,000 per hectare. Source : COIR. (2012) A Small Farmer- Centered Approach to Sustainable Coconut Industry Development. <http://www.scribd.com/ doc/110980624/Coco-Farmers-ConferencePaper-102912>

While there is a mixed record of successful cooperatives in the country, organizing farmers into smaller nucleus such as the clustering strategy was found to be potential option of organizing small producers into a viable unit where quality assurance and traceability is more manageable. Clustering is a method of organizing farmers into small groups of 5 to 15 based in a particular area (sitio, barangay or town) 57. Clusters can be further aggregated into producers federation or cooperatives.

Box 6. Business example of sourcing from producer groups. Jollibee Foundation (JF), the corporate social responsibility arm of Jollibee Foods Corporation was able to source 70% of the onion harvested by KALASAG Farmers Producers Cooperative, an organization of two farmer clusters who have been growing onions in San Jose, Nueva Ecija. The clustering initiative was part of the Bridging Farmers to the Jollibee Supply Chain project by Catholic Relief Services (CRS) Philippines, with Jollibee Foundation and the National Livelihood Development Corporation that was started in 2008.

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BACK IN THE GAME: Setting a grievance system in place and a formal or informal dispute resolution mechanism are indicative of fair governance.

Intermediary-driven models. Cutting all those stakeholders in the middle is not always a viable option. In some cases, intermediaries provide specialized services. This is especially true in situations where the producers are too dispersed or are too far out from the markets such that integrating forward (for producers) or backwards (for buyers) could be cumbersome and expensive. There has been an emergence of doublyspecialized intermediaries intermediaries that are business oriented and developmentmotivated at the same time 61. Such a business model has been particularly instructive in the case of poultry farmers, where the producers can be characterized as dense, dispersed, small and autonomous.
Box 8. An example of growership arrangement by an intermediary Manok Mabuhay Incorporated, a social enterprise involved in backyard/smallholder poultry entered into growership arrangement with Bounty Fresh Chicken, supplier of rotisserie Chooks to Go! Mabuhay Manok organized some 100 backyard farmers on a growership arrangement of 1000 poultry each in the municipalities of Laguna and Cavite. Manok Mabuhay unloads inputs, technical and logistical services at agreed intervals to farmers and the farmers are paid a predetermined growers fee. In November 2011, its production areas in Laguna and Batangas ranked 6th and 8th among the top commercial growers of Bounty Fresh Chicken. Sources : People Powered Market : Business to Empower the Poor. < http://www.pinoyme. com/consortium/people-power-models-doingbusiness-with-the-poor.html> Lim, E. Jr (2012). Policy Paper on Regulating Large Scale Agricultural Land Investments in the Philippines to ensure Food Security, Land tenurial Rights and Livelihood of Resource Users. ARNow! Unpublished.

GOVERNMENTS ROLE IS CRITICAL


In the face of resource constraints, the government is faced with tough choices. Its priority should include skills development of small producers such as technical and managerial capacities, providing market linkages for goods and services, brokering and effective alliances with other chain actors and building an effective enabling environment. Enabling policy for both small producers and private sector to thrive There has always been uncertainty within the public sector on how best to connect with small producers. The default response has invariably to make the small producers as the sole targets of public policy rather than ensuring that the value chain works efficiently and inclusively. The primary role of the government in markets should be to provide opportunities, promote fair play, setting a framework for competitive markets and ensuring a level playing field between domestic and imported products 62. For majority of small food producers to successfully get back into the game, crucial policies that would secure their productive assets are needed. Examples of policies include: Comprehensive land use policy and asset reforms specifically in land tenure. The former would rely heavily on the enactment of a national land use law to set aside and secure strategic agricultural areas while the latter would be dependent on achieving national government targets in land distribution currently at 250,000 hectares annually from 2011 to 2014. Attaining these reforms would strengthen the position of small food producers in relation to other actors in the value chain such as traders, processors, financiers and large agribusiness firms. It will also give them more leverage vis-vis large agricultural investors who are poised to enter local agriculture. However, while these conditions are necessary, they are not sufficient for small food producers

3.

Instill Fair and transparent governance

Ensuring transparency in the supply chain is a start towards fair investments. Ideally, contracts with small producers groups should be properly explained and should be mutually agreed in a layman and localized language that small producers can well understand. Allowing a mutually trusted third party to scrutinize the contents of the contract can be mutually beneficial in a manner that conflicts can be avoided.

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to integrate vertically with national and international value chains. A national competition policy is needed for business players to be able to compete on a more level playing field, rather than crowd out the supply chain. More business players will foster innovation in business models and in the process, generate more options for small producers. Onerous contract growing contracts have marred the relationship between buyers, intermediaries and small producers. The establishment of a mechanism on mediating on issues related to contract laws, contractual enforcement and taxation is also needed.

harvest and processing facilities, and enhanced irrigation; financing and credit mechanisms that are friendly to small food producers; and research, development and extension services). Such requisites would be publicly provided, at least initially, given that these are mainly public goods although there can be specific instances where public-private partnerships may be appropriate and effective.

CONCLUDING NOTES
For millions of small producers in the Philippines, agriculture has become a perpetual poverty trap rather than the ladder of prosperity that it ought to be. Ironically, agribusiness ventures have shown remarkable resiliencegrowing even during periods of economic downturns. As this paper showed, the growth on the part of the private sector cannot be sustained indefinitely for as long as the rural communities continue to be left behind. The small producers need to get back in the game. Fast. The stakes are simply too high and the price too steep to ignoredomestic food and income security, poverty in the countryside and its attendant social issues, and the sustainability of economic growth of the agribusiness sector itself. Fortunately, there are emerging trends for private sector-small producer partnerships that bring about mutually beneficial returns. The government must ensure that there is an enabling environmentthe rules are fair and the systems are in placewithin which these partnerships could thrive.

Creating an enabling environment for the private sector to invest in risk transfer and risk sharing instruments such as insurance can be done by providing necessary information for development of appropriate and risk-specific insurance packages, review of taxation rates for microinsurance providers or facilitating financial literacy among small producers. Public sector investments needed Before small producers can be vertically integrated into the supply chain, a horizontal integration for those who have land but does not produce beyond subsistence or who do not have land at all is needed. Priority for these small producers would be horizontal integration starting with facilitating the development of producer organizations and cooperatives for collective action that can push for and benefit from the other requisites for such integration such as infrastructure for agricultural development (i.e. farm to market roads, post-

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BACK IN THE GAME: from Macabasco D. (2007) The Supemarket Business in the Philippines, Center for Food and Agri Business University of Asia and the Pacific. 9 Peso conversion rate used is the 2011 average rate at PhP 43.31. Figures taken from Euromonitor, 2011 as cited by Agriculture and Agri Food Canada International Markets Bureau (2012). Market Analysis Report on Modern Grocery Retailing in Major ASEAN markets. <http://publications.gc.ca/collections/ collection_2012/agr/A74-2-2012-8-eng. pdf?>

NOTES
1 The story of tomato farmers in Liliw, Laguna was featured in a GMA News article on 5 May 2011. See video in: http:// www.gmanews.tv/video/79160/24orasexclusive-kamatis-binibili-lang-daw-samga-magsasaka-ng-p1kilo FAO, the State of Food and Agriculture 2010-2011. Women in Agriculture: Closing the Gender Gap for Development (Rome: FAO, 2010), p. 92. Digal, L. (2001) An Analysis of the Structure of the Philippine Retail Food Industry Philippine Journal of Development Number 51, Volume XXVIII, No. 1, First Semester 2001 Minot N. and D. Roy (2007) Impact of highvalue agriculture and modern marketing channels on poverty: An analytical framework, International Food Policy Research Institute, Washington, D.C. Murray-Prior R., S. Concepcion, P. Batt, M.F. Rola-Rubzen, M. McGregor, E. Rasco, L. Digal, N. Manalili. Montiflor, L. Hualda, and, L. Migalbin (2003) Analyzing supply chains with pluralistic agribusiness systems. Asian Journal of Agriculture and Development, Vol. 1, No. 2. Digal, L. (2001) An Analysis of the Structure of the Philippine Retail Food Industry Philippine Journal of Development Number 51, Volume XXVIII, No. 1 Gulati A., N. Minot , C. Delgado, and S. Bora (2006) Growth in high-value agriculture in Asia and the emergence of vertical links with farmers, in Swinnen, J. (ed.) Global supply chains, standards, and poor farmers. London: CABI Press. (page 15) The values for the growth of supermarkets from 1994-2001 and the retail food sales were taken from: Digal L and Concepcion S. (2004) Regoverning Markets: Securing small holder producer participation in restructured national and agri-food system, The case of The Philippines International Institute for Environment and Development. Accessed from www. regoverningmarkets.org, February 15, 2005; while, the 2007 figures were taken

10 Agriculture and Agri Food Canada International Markets Bureau (2012). Market Analysis Report on Modern Grocery Retailing in Major ASEAN markets. <http://publications.gc.ca/collections/ collection_2012/agr/A74-2-2012-8-eng. pdf?> 11 Wiggerthale M. (2007). Supermarket expansion in the Southa threat to small farmers? 12 The OECD defines private sector as all service and funding providers outside the formal government sector, including forprofit private entities, foundations, nongovernmental organisations, voluntary contributions and private academia. See: OECD, Poverty and Health , 2003, p.43. OECD also ascribes the definition of all private actors to cover the poor and the rich, individuals and businesses engaged in risk taking to earn profits and incomes including the smallholder farmer as well as the very large, multinational corporation. See: OECD, Accelerating ProPoor Growth through Support for Private Sector Development , 2004, p.18. 13 See: NAFC website, Message from the Executive Director. Accessed from http://nafc.da.gov.ph/message.html on 10 October 2011. 14 National Economic and Development Authority (NEDA) (2011). Philippine Development Plan 2011-2016, p. 104. Accessed from < http://www.neda.gov. ph/PDP/2011-2016/CHAPTER%204.pdf> 15 FAO (2011). 2010 2011 The State of Food and Agriculture: Women in Agriculture. UN FAO, Rome, Italy. 16 Ibid.

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17 NSCB (2012). Fishermen still the poorest sector in 2009. NSCB Press Release. Posted June 7, 2012. Accessed from < http://www.nscb.gov.ph/ pressreleases/2012/PR-201206-SS2-01_ pov2009.asp>. 18 Estimate based on the National Statistics Coordination Board (NSCB) at a lower 1.46% growth rate. See <http://www. nscb.gov.ph/secstat/d_popnProj.asp> 19 Small producers specifically referred to small farmers, fisherfolk, particularly the women involved in the production, processing and trading of agriculture and fisheries products as specified under Chapter 3, Section 20 of RA 8435. 20 Section 3 of Presidential Decree No 717., Providing An Agrarian Reform Credit and Financing System for Agrarian Reform Beneficiaries through Banking Institutions mandates all banking institutions, whether government or private, to set aside at least 25% of their loanable dunds for agriculture credit in general, of which at least 10% of the loanable funds shall be made available for agrarian reform credit to beneficiearies... PD717. 21 Quedancors Corporate Plan 2011-2015 22 Alave, K. Philippine Banks Fail to Provide Adequate Credit to Agriculture and Fisheries <http://business.inquirer. net/13591/philippine-banks-fail-toprovide-adequate-credit-to-agriculturefisheries> 23 LLanto, G. (2005) Rural Finance in the Philippines: Issues and Policy Challenges. Agriculture Credit and Policy Council. 24 Habito, Cielito. No Free Lunch: Do Farmers Have to be Poor? Philippine Daily Inquirer. Published February 1, 2011. Accessed from http://opinion.inquirer.net/ inquireropinion/columns/view/20110201317729/Do-farmers-have-to-be-poor. 25 www.bas.gov.ph. 26 This situation is also called monopsony. 27 This situation is also referred as oligopsony. 28 Habito, Cielito. No Free Lunch: Do Farmers

Have to be Poor? Philippine Daily Inquirer. Published February 1, 2011. Accessed from http://opinion.inquirer.net/ inquireropinion/columns/view/20110201317729/Do-farmers-have-to-be-poor. 29 Bernabe M. D. and S. Quinsaat (2009) Philippine Agriculture under the World Trade Organization, 1995-2005: Gains, Losses, and Prospects. Kasarinlan: Philippine Journal of Third World Studies 2009 24 (1-2): 4-34 30 Garcia Z ( ) Impact of agricultural trade on gender equity and rural womens position in developing countries 31 Alave, Kristine (January 31, 2012). Dont belittle GG: Its now imported. Philippine Daily Inquirer. January 31, 2012. Accessed from <http://newsinfo.inquirer. net/137031/dont-belittle-gg-its-nowimported>. 32 Cristina C. David (1995) Philippine Agricultural Research and Development: Issues and Policy Implications Philippine Institute for Development Studies, Discussion Paper Series No. 95-27. (page 4) 33 T. Reardon, S. Henson and J. Berdegue (2007). Proactive fast-tracking diffusion of supermarkets in developing countries: implications for market institutions and trade. Journal of Economic Geography 7 pp. 399431. 34 NEDA (2011). Op cit. 35 Philippines. Typhoons Ondoy and Pepeng: A Post-Disaster Needs Assessment, Vol. 1, 26 November 2009 a report on the PDNA that was jointly undertaken by the Government of the Republic of the Philippines, representatives of the private sector and civil society organizations, multilateral development partners (the Asian Development Bank, European Commission, United Nations, and the World Bank Group, in the context of their global cooperation agreements) and bilateral development partners including AusAID, CIDA, GTZ, JICA, Royal Netherlands Government, and USAID. The 1.1 percent GDP growth was taken from http://www. indexmundi.com/philippines/gdp_real_ growth_rate.html 36 UN OCHA (2012). Philippines (Mindanao) Humanitarian Action Plan 2013 Typhoon Bopha/ Pablo Response Action Plan for

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BACK IN THE GAME: Recover. Revised January 2013. Accessed from <http://docs.unocha.org/sites/dms/ CAP/Revision_2013_Philippines_HAP_ BOPHA.pdf> 37 S. Peng and others, Rice yields decline with higher night temperature from global warming. PNAS, Vol. 101, No. 27, July 26, 2004. www.pnas.org/cgi/doi/10.1703/ pnas.0403720101. 38 In absence of a more updated data, figure was taken from the reported 7,397, 318 hectares of land distributed by Department of Agrarian Reform and Department of Environment and Natural Resources from 1987- 2010 (http://www. dar.gov.ph/index.php?option=com_con tent&view=article&id=92&Itemid=161). Total agriculture area was pegged at 9.671 million hectares (http://countrystat.bas. gov.ph/?cont=3). 39 Lim, E. Jr (2012). Policy Paper on Regulating Large Scale Agricultural Land Investments in the Philippines to ensure Food Security, Land tenurial Rights and Livelihood of Resource Users. Unpublished. AR Now! , Quezon City. 40 Bernabe (2010) as quoted in Lim (2012). 41 Vorley, B, L.Cotula, C Man-Kwun (2012). Tipping the Balance: Policies to Shape Agriculture Investments and Markets in Favour of Small Farmers. IIED and Oxfam. London. 42 Otsuka K. and J. Estudillo (2008) Reducing poverty and hunger in Asia: Changing Sources of Household Income and Poverty Reduction in Rural Asia, 19852004 Food and Agriculture Organization (FAO). Accessed in: http://www.ifpri.org/sites/ default/files/pubs/2020/focus/focus15/ focus15_08.pdf 43 Vorley, B, MLundy and JMacGregor (2008). Business models that are inclusive of small farmers. Accessed from http://pubs. iied.org/pdfs/G02340.pdf. 44 Vorley B and F.Proctor (2008) Inclusive Business in Agrifood Markets: Evidence and Action A report based on proceedings of an international conference held in Beijing March 56, 2008 45 Gaiha, R. and Thapa G. (2007) Supermarkets, smallholders and livelihood prospects in selected Asian countries, International Fund for Agricultural Development (IFAD) 46 Oxfam (2010). Think Big Go Small Adapting business models to incorporate smallholders into supply chains. Briefings for Business No. 6. May 2010. Accessed from http://www.oxfam.org.uk/business. 47 Vorley B., MLundy and JMacGregor. Op Cit. 48 45% of the women respondents in the Philippines strongly disagree while 30% articulated that they tend to disagree that they are not concerned how their food is produced. 49 46% of the women respondents in the Philippines strongly disagree while 28% mentioned that they tend to disagree that they are not concerned about where their food is produced. 50 Oxfam International (2012). The Food Transformation: Harnessing Consumer Power to Create a Fair Food Future. July 2012. Accessed from http://policypractice.oxfam.org.uk/publications/ the-food-transformation-harnessingconsumer-power-to-create-a-fair-foodfuture-234411. 51 World Bank (2008). Agriculture for Policy Development Brief : Agriculture and Poverty Reduction. World Development Report 2008. Accessed from http://siteresources.worldbank. org/SOUTHASIAEXT/Resources /223546-1171488994713/34558471192738003272/Brief_AgPovRedctn_web. pdf. 52 Oxfam (2010). Think Big Go Small Adapting business models to incorporate smallholders into supply chains. Briefings for Business No. 6. May 2010. Accessed from http://www.oxfam.org.uk/business. 53 Alsons (2000) as cited in UN FAO (2012). 2012 The State of Food and Agriculture : Investing in Agriculture for A Better Future. Rome. 54 J Hoddinot and L Haddad (1995) as cited by Oxfam Oxfam (2010). Think Big Go Small Adapting business models to incorporate smallholders into supply chains. Briefings for Business No. 6. May 2010. Accessed from http://www.oxfam. org.uk/business. 55 Oxfam for example has developed Poverty Footprint Methodology Poverty

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Footprint for companies to assess and understand their effects on society and on people living in poverty. See Oxfam (2009) Briefings for Business No.4 : Oxfam Poverty Footprint Understanding Business Contribution to Development. http:// www.oxfam.org.uk/business. On How to enable business tackle gender inequality, See Oxfam (2012) Briefing for Business No. 7. Gender Equality: Its your Business on how to enable business tackle gender inequality.< http://www.oxfam.org.uk/ business. > 56 Oxfam (2010). Op Cit . 57 A Mariano, J Uy, L Mendoza, PT Tuason III, O Cuyco, V Torres, G Tiongson. Farmer Entrepreneurship Program: The Experience of Small Farmer Clusters in Nueva Ecija, Philippines. 58 Vorley B, M Lundy and J MacGregor (2008). Op Cit. 59 Ibid. 60 Lim, E. (2012). Op cit. 61 Vorley B., M Lundy and J MacGregor (2008). Op cit. 62 Vorley and Procter. Op Cit. page 24.

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BACK IN THE GAME:

Oxfam is an international confederation of 17 organisations networked together in more than 94 countries, as part of a global movement for change, to build a future free from the injustice of poverty. In the Philippines, we work with poor people to sustain their livelihoods, and reduce their risks to natural and human-made disasters. We strive to enable poor people to have a voice in economic issues affecting them and we support poor women as they lead in transforming unequal social and economic relations. 4F 150 Corporate Center,150 Panay Avenue, Quezon City, Philippines Telephone: +63(2) 9294470 Fax: +63(2) 9270499 Website: http://www.oxfamblogs.org/philippines

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