Bernardo M. Villegas
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Food Security and Rural Poverty

          In the next twenty years, food security in the emerging markets of the world to which we belong must involve significant increases in productivity in the farming of high-value crops such as fruits, vegetables and livestock.  As tens of millions of people move from abject poverty to middle-income levels ($2 to $20 per capita per year), there will be a rapid increase in the demand for these higher-value commodities in comparison with such staple products as rice, corn and root crops.  Already there are signs of these inflationary trends affecting such crops as coffee, cacao, coconuts, fruits, vegetables, poultry, beef and pork.  The major reason for the ongoing rises in commodities prices is the swelling demand in such emerging markets as China, India, Brazil, Indonesia, Vietnam and the Philippines.  Staple crops like sugar and corn involve another complication:  they are being converted into biofuels.

          The focus on high-value crops will be good for our farmers who should be encouraged to either move away from low-value crops or to diversify their crops, especially in the coconut-growing regions where, given more irrigation and other rural infrastructures, farmers can grow fruits and vegetables between their coconut trees.  I am glad to observe that there is a renewed interest in coffee and cacao farming, thanks to the proactive role that Nestle Philippines is playing in helping farmers to diversify into these crops.  I am especially familiar with two projects that Nestle is assisting in Argao, Cebu and Antipolo.  In these two areas, among others, small farmers are being taught how to grow coffee using modern technology.  There is a shortage of coffee in the world market because of the increasing demand from the emerging markets.  Now is the time for the Philippines to help its small farmers to improve their incomes by growing higher-value crops.

          Fortunately, there are multinational corporations like Nestle that are committed to helping increase the productivity and incomes of small farmers all over the world.  In a report on Creating Shared Value and Rural Development published by Nestle for 2010, Robert L. Thompson, holder of the Gardner Endowed Chair in Agricultural Policy Emeritus of the University of Illinois at Urbana-Champaign wrote an article entitled "Global food security and rural poverty," which contains many important insights for our own policy makers on rural development.  Professor Thompson lists "the five ways" of reducing poverty.  These are ways for a poor farm household to increase its income other than from social welfare support, which rarely exists in rural areas of low-income countries:

·       increasing productivity by growing varieties with greater genetic potential, irrigating crops if water is available, providing sufficient nutrients and controlling weed, insects, birds and disease;

·      changing to higher value crops per hectare, replacing staples such as cereals, roots and tubers, with fruits, vegetables and livestock;

·      gaining access to more land through purchase, rental or land reform, or other income-generating assets, e.g. literacy, numeracy and specialised skills;

·      members of the household obtaining non-farm income, by producing something at home for sale or getting alternative employment away from the farm;

·      members of the household moving to non-farm employment, reducing the number of people trying to make a living on uneconomically small pieces of land and increasing the incomes of those who stay behind.

          What the Philippines has in common with other developing countries with a very high rate of poverty in the rural areas is the lack of infrastructures.  As Professor Thompson wrote:  "Poorly developed infrastructure and frequent lack of roads impedes rural development as it raises the cost of transporting good and people to and from the area.  Most improved technologies are embodied in inputs the farmer must purchase.  High transport cost raises the cost of inputs and reduces the price farmers receive for the products they sell, making it unprofitable to adopt improved technologies that could otherwise increase their household income.

          "Until recently, rural areas of many low-income countries have had little, if any, telecommunication links with the outside world.  Such markets do not work well as they create opportunities for unscrupulous middlemen to exploit farmers who have no way of knowing the prices in other markets.  However, this has changed rapidly with the advent of the cellular telephone and construction of towers throughout low-income countries."

          Rural poverty in the Philippines is not a unique phenomenon.  Many countries in Latin America and Africa made the same mistake of neglecting rural infrastructures.  Thanks to experts like Professor Thompson who have studied best practices in the countries that lead in looking for the right solutions to rural poverty, the Philippines does not have to reinvent the wheel.  The insights contained above should merely reinforce the political will of our leaders to make at least the next ten years a decade of countryside and agricultural development.  We cannot afford to be left farther behind by countries like Indonesia and Vietnam that are doing their best to endow their farmers with farm-to-market roads, post-harvest facilities, irrigation systems and other infrastructures they need to improve their productivity and, hence, their incomes.  For comments, my email address is