Access Improvement of Smallholder Rice Farmers to Agri-Pinoy Rice Farm

Mechanization in Laguna, 2016

Gerdino G. Badayos

BACKGROUND
Agriculture is considered as a backbone of the Philippine economy, employing 30 percent (as
of 2015) of the country’s population (Worldbank, nd). Throughout the years of our country’s
sovereignty, there have been a variation on the policies that sought to develop agriculture and
related activities. Among the agricultural development policies that were implemented, most
of it focused on improving the welfare of smallholder farmers.
Agricultural policies mostly were translated to programs and projects that provided
smallholder farmers with technical assistance, credit services, and farm input subsidies of
which policy makers and economists considered as critical to improve farm production. Such
improvement had been expected to be translated to an increase income, however, such such
outcome had not been realized by majority of smallholder farmers. A failed attempt for one
project, intrinsically lead to reformulation and reimplementation activities.
These projects were largely public-sector driven and funded. The country’s Department of
Agriculture (DA) loosely disburses national funds, as it had been common for the national
government’s budget to allocate a substantial amount to agriculture. Unfortunately, in the
end, such efforts had not been translated to progress for smallholder farmers. Habito and
Briones (2005) believed that factors such as modernization of production technologies and
poor infrastructure development hampered the development of the country’s agriculture.
Government Intervention to the Rice Industry
A major recipient of government’s assistance is the rice industry. Rice has been considered as
a major staple for Filipinos, as it accounts to at least 35 percent of the population’s calorie
intake (Sebastian et al, 2000). In terms of employment, David and Baliscan (1995) estimated
that 11.5 million farmers relied on rice production as a source of income. That being said,
Briones (2013) revealed that there had been an alarming increase on theing trend on thein
government spending to the rice industry. He stated that in 2005, a five percent (5%) share in
the price per kilogram (Php/kg) sold can be accounted to the amount spent by the government
to in the rice industry (Briones, 2013). This had further increased throughout the years up to
11 percent in 2010. This trend is more alarming if compared across other crops. For instance,
government share in corn and coconut products were only 2 to 7 percent from 2005 to 2010
(Briones, 2013).
Despite the significant amount of capital being invested in the rice industry, macro-economic
yield performance showed little progress in the production performance of rice farmers. The
country’s average yield increased from 3.6 tons per hectare (ton/ha) in 2011 to 3.8 in 2015.
However, if evaluated through the range of yield performance across provinces, the figures
can be observed to have had a high variation. Provincial yield performance ranged from as
low as 1.8 tons up toto 5 tons per hectare. Such huge discrepancy in the yield performance
among provinces should have been mitigated by the agricultural development policies that
were implemented, but the data revealed otherwise.

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Figure 1. Yield (tons/ha) Performance across Provinces in the Philippines from Years
2000 to 2015.
6

0
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Source: Countrystat.

Rice Farm Mechanization and Smallholder Farmers

One of the Department of Agriculture’s intervention to improve the rice production of
farmers iswas the promotionpromoting of agricultural machineries. According to the
Philippine Rice Research Institute (PhilRice, as cited by Oxford Busines Group, 2014), labor
accounts for as much as 50 percent of the total production cost of rice. Such information
alone should convince various stakeholders to adopt farm machineries in order to trim down
the cost of production.
As early as 1992, the national government had already sought to empower smallholder
farmers through provisions of technology adoption under the Magna Carta of Small Farmers
(RA 7607). The said policy conceived sections that mandates the Department of Agriculture
to ensure the “availability of machinery and equipment for use the of small farmers.” The
Magna Carta complemented by more recent policies such as, the Agriculture Fisheries
Modernization Act (RA 8435) and Agriculture and Fisheries Mechanization Act (RA 10601),
which aimed to modernize the production practices of farmers.
In order to deploy the ideals of RA 8435, the Department of Agriculture had implemented the
Agrikulturang Pilipino (Agri-Pinoy) program, that generally sets to optimize production
practices of Filipino farmers. Agri-Pinoy specifically focus on foundations of food security,
sustainable agriculture, natural resource management, and local development, where a
substantial value had been placed on promoting farm mechanization as one of its key
component. In conjunction to the government’s aims and methods, part of the program’s
activity is to subsidize farm machineries to a number of farmer’s organization. The said
program initially offered a subsidy of 85:15, where 85 percent of the cost of a machine per
unit is paid by the government. As of this year, the said ratio had further increased to 90:10.
Ideal and typical as it may seem to introduce efficiency through technology adoption in the
rice production industry, however, there a number of issues that had been observed upon the
implementation of the Agri-Pinoy Rice Mechanization Program. One was pointed out by a
study conducted by Hermoso (2015) where it was revealed that the machineries that were
given by the Agri-Pinoy program were of poor quality. A respondent stated that their

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organization had only used their hand tractor once and the equipment had already
malfunctioned. This was clarified by an Extension Officer in the Municipal Agriculturist
Office in Bay that there were cases where members of farmer’s organization did not attended
in trainings on the utilization of the machinery, which may have resulted to the poor
performance of the given equipment. Later on this was resolved by requiring famer-
beneficiaries to participate in trainings and field demonstrations prior to the actual awarding
of a machinery. In addition, the Program Coordinator for Farm Mechanization of Office of
the Provincial Agriculturist (OPAg) in Laguna shared cases where farm machineries cannot
be utilized by farmers as the machines do not match with the topography and the scale of
operations of farmers. This had been a result of poor technical information of DA’s regional
field office (DA-RFU IVA) in the area they govern.
A major concern that this paper sought to place focus on is the issue on the farmer’s risk
aversion in response to the low level of adoption of smallholder farmers to the Agri-Pinoy
rice mechanization program. The context of the problem lies on the farmer’s behavior to risk
in accordance to the investment of time and money, which resulted to low number of formal
registration of farmer’s organization. Farmer’s organization cannot avail government
assistance if they are not formally recognized by the government.
Currently, according to the Project Coordinator of OPAg, the Department Agriculture
recognize organizations registered in the Department of Labor and Employment (DOLE),
Cooperative Development Authority (CDA), and the Securities and Exchange Commission
(SEC). Farmers that are of a lower income strata tend to avert from the tedious process of
filing Memorandum of Agreement (MOA) or even registering their organization to the
Securities and Exchange Commission (SEC). Municipal agriculturist office across the
province had been readily available to assist farmers in composing proposals and other
necessary documents needed in formally registering their organization. It came to a point
where Extension Officers assist farmers up to the actual filing of a farmer organization’s
registration requirements. Such support is not sustainable, as most of municipal offices are
undermanned. As a result, farmer's organization tend to depend on other sources that award
them with machinery (eg. provincial and municipal executives), which are only seasonal. 
Scope and Severity of the Problem
With the limited amount of capital that the Philippines can utilize to develop the agriculture,
service and industry sectors, it is vital that national government programs should substantially
generate adequate results. Contrary to this, the government had substantially placed a priority
in developing the rice industry within the Agricultural Sector and such investments had
generated weak results.
The paper builds within the assumption that the problem lies along the gap of the
apprehended security system of organization registry. Smallholder farmer organization
cannot gain adequate support from the government since they had perceived to have an
aversion on formally registering their organization. Analyzing smallholder farmer’s risk
behavior has been a long running method and is globally identified by scientific researches.
In a study conducted by Domingo (et al, 2015), results on the study’s Likert scale showed a
result where 90 percent of the interviewed smallholder farmers were risk averse. Such trend
can be observed in the case of the low uptake of smallholder farmers in the Agri-Pinoy Rice
Mechanization Program in Laguna. This paper aims to provide a solution to this problem.
PROBLEM STATEMENT
Policy Objectives

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This paper aims to increase the access of smallholder rice farmers in the Agri-Pinoy rice
mechanization program in Laguna. Its specifically aims to:
1. Present options that may cater to the improvement of adoption;
2. Analyze the conceived options across a number of factors that may affect its
implementation and reception of small holder farmer, and
3. Formulate an implementation scheme for the chosen option/s.
Stakeholder’s Analysis
The following set of stakeholders (Table 1) are those who will be affected upon the increase
in adoption of Agri-Pinoy’s rice mechanization program. The identified stakeholders were
divided into “major” and “minor” groups in order to place focus on groups that will directly
be affected in the process.
Table 1. Stakeholder’s analysis matrix.
STAKEHOLDER EXPECTATIONS CONSEQUENCE OF
IMPLEMENTATION
Major
Farmer’s Organization- -an increase of member’s -some farmer’s organization
group of farmers that form participation maybe realized may experience a decline in
as group in order to share by the organization as these number of members, as
resources to gain efficiency individuals would demand some farmers would prefer
in operation to access the acquired to form a new organization
machinery that would be near to their
respective farm area

Farm Owner – individuals -through an increase in

that are entitled to the
agricultural land that is used
for production
- smallholder farm owners
are individuals entitled to at
most 2 hectare of
agricultural land
-they are commonly
observed to participate on
day-to-day farm activities
Farm Labor- are a set of
individuals that are hired for
on-farm activities (land
preparation, pest prevention,
harvesting, etc)
Local Government Units-
public institutions operating
in the provincial and
municipal level. These are
the MAO, OPAg, DA
provincial offices and alike.
participation to the Agri-
Pinoy Rice Farm
Mechanization Program, the
incumbent may realize
efficiency operation at a
lower cost in production as a
result of an increase in
access of farm machineries
-these individuals may -displaced farm laborers
experience displacement as
a result of the decline in
demand for farm labor
-increased participation of
women in other production
activities in rice production
-difficulty in facilitating -demand for an increase in
farmer’s organizations due manpower
to the increase in number

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 National Government
Offices- institutions
responsible for formal
registration of farmer’s
organization (DOLE, SEC,
CDA), and the actual
implementation of Agri-
Pinoy (DA head offices)
Minor
Supplier of Machinery
Farm Machinery for Rent
and Service Provider
Consumers
-properly utilized budget
-higher profits
corresponding to an increase
in demand
-decline in demand for such
service
-lowered price and improved
quality for commercially
sold rice
-lower allotted budget for
the development of rice
production in the long-run
-improved quality of service
and machinery offered
-lower price for the rent
services
-improved health of
consumer
-increase in savings

LIMITATIONS OF THE PAPER

The paper specifically focused on the Agri-Pinoy Rice Farm Mechanization program in order
to draw-out a solution that best-fit for the goal on improving the adoption of farmers. Risk-
averse attitude of smallholder farmers can be perceived to be a cross-cutting problem in the
context of financial services, technology adoption, and participation. However, recommended
solutions may be utilized to earlier stated problems, but further insights on farmer’s behavior
should be conducted.
POLICY ALTERNATIVE
Decision Making Criteria and Method
The method for selection largely depends on the positive response among the major
stakeholders upon the adoption of an alternative. The following were sought as properties that
would entail a desirable response for the said stakeholders:
Table 2. Criteria for Decision Making of Alternatives.
CRITERIA (Percent) DESCRIPTION DECISION RATING
Acceptability among Major -determines if the a) farmer’s -a perfect point shall be given if
Stakeholders (15) organization, b) farm owner, c) all the major stakeholders are
farm laborer, d) LGUs, and e) in favor
National Government would be -partial deductions shall be
in favor to an alternative given if some of the
stakeholders would not be in
favor

Ease of Adoption (30) -assesses an alternative if pre- - an alternative’s difficulty in:

existing government
regulations and implementing
agencies do not hamper the
implementation of an
alternative
a) gaining financial assistance;
b) current regulations cannot
fully suppress an alternative; c)
adoption and recognition from
national to local offices are the

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Cost of Implementation (30)-
the financial
-determining the cost of
implementing an alternative
and it corresponding gains
parameters that had been
considered
-ranked score among the
presented alternatives

Sustainability of the Policy -discern if an alternative can
(25) sustain its support in improving
the uptake of smallholder
farmer’s organization over time
-estimate the number of years
that an alternative can be
sustained considering the
limited budget of the
government

A point system (as seen in Table 3) was used in order to scale the desirability of an
alternative across each criterion. Weights were provided on each criteria in order to place
emphasis on a specific criterion that is/are critical for an effective and smooth
implementation.
Description of Alternatives
The paper presents three (3) alternatives in improving the uptake of rice farmer’s
organization to the Agri-Pinoy Rice Farm Mechanization Program. The following are: 1)
provision of an alternative registry of farmer’s organization based in Municipal Agriculturist
Offices in the country; 2) improvement of IEC materials used in informing smallholder
farmers of the Agri-Pinoy program and steps and methods of formally accrediting a farmer’s
organization, and 3) formulation and implementation of specific sets of “Nudges” for
farmers.
Alternative 1: Provision of a Simplified Farmer’s Organization Registry System
The main critique of acquiring poor adoption performance of the Agri-Pinoy rice farm
mechanization lies on the requirement of a farmer’s organization to be formally registered,
which had been perceived to be too time consuming. The Department of Social Welfare and
Development (DSWD) along with the Department of Budget and Management (DBM) and
the Commission on Audit (COA) had devised an accreditation system for Civil Society
Organizations (CSOs), which had been embodied by the Joint Resolution 2015-001. This was
initially done in order for informal CSO that were affected by natural calamities to gain funds
from DSWD. If DSWD had been allowed loosen its dependence on the country’s
bureaucratic system, then such systems can also be transferred to other government agencies
such as the Department of Agriculture. Within the said system, according to Annex A of the
Joint Resolution, CSOs are only required to submit an: 1) accomplished application form; 2)
location sketches and photographs of principal office of applicant; 3) organizational chart; 4)
data sheet of directors, trustees, officers and key personnel, and 5) omnibus sworn statement.
Comparing to other forms of registrations that have been recognized by DA, it can be said
that the system is much easier to accomplish.
Municipal Agriculturist Offices across the country shall accept and file applicants that would
want to register their farmer’s organization. Basic information regarding its members, type of
land ownership, and other necessary information shall be provided by the said farmer-
applicants. Upon accomplishing the necessary documents, these shall be relayed to DA’s

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regional field office, where an office shall handle the evaluation and approval of a farmer’s
organization.
Alternative 2: Provision IEC Materials and Activities (seminars and leaflets) on a Step-
by-Step Process that Specifically Informs Farmers on the Process of Registration of a
Farmer’s Organization
Information, Education, and Communication materials through the conduct of seminars and
distribution of leaflets is a common method of government offices to transfer necessary
knowledge or information to individuals or communities. Seminars and leaflets can be
perceived as an effective method of relaying the necessary information to farmers in
registering an organization, since details on the requirements should be elaborated. A branch
within the Department of Agriculture that specializes on such activities is the Agricultural
Training Institute (DA-ATI). However, during the conduct of orientation to farmers to the
Rice Mechanization Program, farmers where not reoriented to the step by step process of
accrediting their organization. Leaflets being distributed (as seen in Figure 2), only serve as a
tool to inform farmers on the benefits of farm mechanization and available machineries for
them to avail.
Figure 2. Sample of leaflets being distributed to farmers for the promotion of Agri
Pinoy Rice Mechanization Program.

The regional office of DA-ATI should be tapped to conduct seminars and print leaflets that
are tailored-fit to the construct of farmers in the area. These IEC activities and materials
should communicate information as to how the rice mechanization can help their livelihood
as well as to how it can be availed.
Alternative 3: Adoption of MAO’s Extension Workers to “Direct Selling Marketing
Straties” as a Communication StrategyAdoption of “Nudges” in the communication
strategy of Extension Workers
Multi-level Marketing (MLM) is a form of marketing strategy where financial incentives are
received from direct sales of products and recruitment of new distributors. Such marketing
strategy is prevalent in the Philippines and it has been successful in recruiting members
coming from a diversified income strataa diversified income stratum. Companies that are
MLM in nature, has a distinctive method of communication, where an emphasis on the gains
of joining and cases of successful members are being disclosed. These methods can be
identified as “nudges” that does not force an individual to decide in joining, but are enticed to
do so as it highlights the entailed losses if an individual will not join the company.

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Agricultural Extension Workers function as unit that commonly provides technical
information on crop production practices. These individuals are also the direct source of
information on the Agri-Pinoy rice farm mechanization program. Extension workers can
improve its means of delivering its message by drawing-out lessons from the MLM
communication strategy. Monetary incentives of this strategy can be hinged as part of the
municipal office’s performance-based bonus (PBB), where a merit shall be given to the
percentage increase in the number of formally registered organization in the municipality.
Satisfaction of Criteria
Alternative 1
a) Acceptability for Both Parties (4/15)
Smallholder farmers would greatly welcome a system that shall simplify the registration of
farmer’s organization. The problem lies on the national government offices. Approving a
Joint Resolution among the Department of Agriculture, Department of Budget and
Management, and Commission on Audit maybe more complicated as compared to DSWD.
One problem that can be observed is that DA is subdivided to a number of sub branches
(ATI, AMAS, DAR, BSWM, etc.) that conduct varied intervention activities and services for
farmers. Given that the said national office operates at such scale, COA may find it difficult
to trace anomalies in the transactions of farmers and DA, which is alarming considering the
amount of government budget being appropriated to DA.
b) Ease of Adoption (20/30)
Deploying administrative mechanisms for the registration of farmer’s organization can be
perceived to be difficult but feasible task. It should be known that most of the country’s
Municipal Agriculturist Office are undermanned and catering to applicant maybe difficult for
some municipalities. These employees are usually expected to accomplish multiple tasks,
from administrative to extension functions.
c) Cost of Implementation (25/30)
Upon the implementation of a certification for farmer’s organization, it can be assumed that
majority of its expense shall be allocated for training of employees in the municipal
agriculturist and DA’s regional offices. After the said the training, the cost would only be
minimal in amount. So considering the number of farmers that shall benefit for a localized
certification, that benefit of providing such system can possibly be greater than the cost of
implementation.
d) Sustainability of a Policy (25/25)
Considering that the cost of implementation would be minimal on its succeeding years and
national government offices would not implement a policy that would counteract or oppose to
the registration system, the said alternative can be considered sustainable.

Alternative 2
a) Acceptability for Both Parties (15/15)
Considering that the Department of Agriculture has the Agricultural Training Institute (DA-
ATI), a unit that is responsible for the conduct of seminars and distribution of leaflets,
implementation of IEC materials and activities for registration of farmer’s organization

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would be easy. As for the farmer, they usually participate on such activities given that there is
an incentive (free snacks, seeds, etc) for them to attend.
b) Ease of Adoption (25/30)
Similar to what was stated in the first criteria, deploying such activities across the country is
common, making it easier for Municipal offices to facilitate the said activity. Limitations
maybe observed for areas where participants reside in upland areas such as Cavinti and
Pangil Laguna. It would be difficult for the said farmers to engage to such activities, which
are usually held in municipal offices. Also, given that manpower for both ATI and MAO
offices are low, the conduct of such activity would be slow.
c) Cost of Implementation (20/30)
Implementing a specific IEC activity in order to inform farmers on the process of registering
a farmer’s organization entails a significant amount of capital. The cost of printing toolkits,
leaflets, along with expenses incurred in travelling to municipalities. In terms of the
proportion of the cost of IEC as an alternative against the number of farmers receiving the
said information, it can be assumed that the amount needed would be higher than Alternative
1.
d) Sustainability of a Policy (10/25)
Based on the information provided by the previous selection criterion, it can be assumed that
provision of IEC materials and activities will not be sustainable.
Alternative 3
a) Acceptability for Both Parties (15/15)
Given that the implementation of an MLM-oriented communication strategy can be similar to
alternative 2, it is safe to say that the acceptability of alternative 3 would be similar to
alternative 2.
b) Ease of Adoption (25/30)
Since the alternative aims to train agricultural extension workers of MAO for deployment, the
process would be much easier for the national office. The pains of implementation would be
absorbed by the extension workers, especially for municipal offices that severely
undermanned and the ratio of farmers per extension worker is high.
c) Cost of Implementation (27/30)
Among the three alternatives, implementing an MLM-oriented promotion of registering
farmer’s organization entails the least cost. Extension officers should, by default, know the
situation of farmers and the means of reaching to them, this alternative only banks
information as to how they should deliver necessary information to farmers. Other
administrative cost such as transportation and other communication expenses, can be charged
on the municipal office’s budget for operations. In terms of the reach of information, since
the budget would be limited on the municipal office’s finance, some areas within a
municipality would not be fully covered.

d) Sustainability of a Policy (18/25)

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With regards to its sustainability, the alternative has a low dependence on the national budget
making it sustainable given that extension workers had fully grasp the method of
communicating information.
Results
Based on the calculated scores of the three alternatives (as seen in Table 4), adoption of a
simplified registry system ranked highest with an average score of 90 percent. This was
followed by the MLM-oriented communication approach garnering an average score of 85
percent. It goes to show that a direct solution generates the best results.
Table 3. Score summary of the three alternatives.
DECISION FULL ALTERNATIVE
CRITERION POINT 1 2 3
percentag percentag
    score
e
score
e
score percentage
Acceptability for both parties 15 5 33.33 15 100.00 15 100.00
Ease of adoption 30 20 66.67 25 83.33 25 83.33
Cost of implementation 30 25 83.33 20 66.67 27 90.00
Sustainability of a policy 25 25 100 10 40.00 18 72.00
Average Score (%)   90 80 85

POLICY RECOMMENDATION
Results showed that alternatives 1 and 2 are the best choice to generate a solution that can
help increase the uptake of smallholder farmers to Agri-Pinoy Rice Mechanization Program.
A simplified registration and an effective communication strategy can be combined in order
to introduce a more effective solution to the problem.
Implementation Schedule
Below (Figure 3) is a breakdown of activities for implementing alternatives 1 and 3 from
consultation to its monitoring and evaluation. Success in the implementation would be based
mainly on the increase in number of applicants of Agri-Pinoy Rice Mechanization Program.
Figure 3. Implementation Schedule for the Selected Alternatives.

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Provision of Monitoring and Evaluation
Success in the implementation would initially be based on the same selection criterion used in
choosing an alternative. However, a more comprehensive parameter for evaluation shall be
employed during the activity, where the scores on the costs of implementing and the effects
on the farmers shall be systematically computed. Cases farmers and government situation
shall also be evaluated using qualitative techniques of research. uld be based mainly on the
increase in number of applicants of Agri-Pinoy Rice Mechanization Program.
Unanticipated Consequences
If the implementation of these alternatives would gain a certain amount of success, the
consequences initially perceived that some farmer’s organization would slimdown and farm
laborers would be displaced may take into effect. The effects on farm labor should be
addressed if such consequence occur.

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