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Strong Producer Organizations Key to a Vibrant Farming Sector

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Scaling up agricultural production among small farmers through clustering and organizing them into cooperatives and various types of producers’ organizations, and forging partnerships with agribusiness firms can help raise their incomes and subsequently spur the socio-economic transformation of the Philippine countryside.

A report titled “Realizing Scale in Smallholder-Based Agriculture: Policy Options for the Philippines” – launched jointly by the World Bank and the Department of Agriculture (DA) – said that there are rich lessons in the country and abroad for these clustering and consolidation of activities on-farm and along the value chain to succeed and transform the agricultural sector.

One notable example of this approach, the report said, is the Philippine Rural Development Project (PRDP), which is currently implemented by the DA. The PRDP clusters or organizes producers into enterprises that take a business-oriented approach to farming and fishing, supported through complementary investments in infrastructure such as farm-to-market roads, irrigation, post-harvest facilities, and cold storage.

“To succeed, efforts at clustering and consolidation needs to be voluntary, built on trust and confidence, and collaborative relationships among stakeholders—whether they are farmers, communities, municipalities, other local government units, or small and larger agribusiness enterprises,” said Ndiame Diop, World Bank Country Director Brunei, Malaysia, Thailand, and the Philippines.

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

Philippine agriculture is dominated by small farmers and fishers who operate independently, mostly using traditional production practices and earning low incomes. A typical farmer earns an average of P100,000 pesos each year, well below the poverty line (based on 2015 PSA figures).

Average farm size declined from three hectares (ha) per family per holding in the 1980s to only 0.9 ha per family per holding in 2012. These increasingly smaller farms are often split into more fragmented blocks. The country has some 5.56 million farms, totaling 7.2 million hectares, of which more than half (57 percent) are one ha or less, 32 percent are one to three ha, 9 percent are three to seven ha, and only two percent are seven ha or larger.

Agriculture Secretary William Dar has highlighted that using modern technology, schemes like block farming, trust farming, and contract farming can make farming more efficient and profitable for farmers and their partners in agribusiness ventures. With higher and better-quality production, linking agriculture to the domestic and global manufacturing sectors and accessing markets become easier, he said.

“Finding opportunities for clustering and consolidation of small and medium-sized farms as well as partnerships with agribusiness enterprises – to bring about economies of scale (and lower per-unit cost of production), particularly for crops that require mechanization and extensive use of technology – is part of the ‘new thinking’ of the Department of Agriculture,” said Secretary Dar.

“We want to collectively empower farmers, fisherfolk, and the private sector to increase agricultural productivity and profitability, taking into account sustainability and resilience,” the DA chief added.

Global experience shows that forcing collaboration among farmers and agribusiness enterprises through decree or subsidies (top-down approach) usually does not work but those that emerge from farmers’ bottoms up collective initiatives yield good results.

The report says that the country can explore various arrangements based on global experiences, including:

  • Realizing scale in primary production. In the Philippines, perhaps the most promising areas to pursue clustering can be among selected irrigation schemes where water user associations are already well established; and within Agrarian Reform Communities supported by the Department of Agrarian Reform.
  • Supporting market-oriented producer organizations. Encouraging the growth of cooperatives and producer organizations. In the East Asia region, Japan, South Korea, and Taiwan have had especially rich experiences promoting farmer groups or cooperatives.
  • Fostering contract farming, productive alliances, or other linkages between farmers groups and agricultural enterprises. These are well understood in the Philippines and can be scaled up.

Elsewhere in the region, contract farming has become increasingly common in some value chains, including value chains for specialized rice varieties or rice production systems.

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Widodo emphasizes importance of G20 focus on resilient health systems,

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The G20 and advanced economies must work together to create a more resilient and responsive global health architecture to face future threats and pandemics, said President Joko Widodo of Indonesia in his address to the Davos Agenda 2022.

He said the International Monetary Fund should be tasked to mobilize resources to revitalize global health architecture. This should include a global contingency fund for medical supplies, building capacity in developing countries to manufacture vaccines and the creation of global health protocols and standards.

“The costs will be much lower than the losses we sustained due to the vulnerability of the system during the pandemic,” he said.

In discussion with Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, Widodo highlighted that “the G20 will play an important role in mobilizing the development of this global health architecture” and added: “I trust that advanced economies will not object to supporting such initiatives.”

Widodo – whose country holds the presidency of the G20 during 2022 – invited all global business leaders to contribute their ideas to the G20’s three key goals for 2022: creating a more resilient global health system; optimizing digital technology to support societal transformation; and driving a fair and affordable transition to clean energy and a circular economy. “The benefits must be felt by wider society,” he said, adding that six of Indonesia’s sectors are “wide open” for foreign investment – export-oriented labour-intensive industries (including health), renewable energy, infrastructure, automotive (especially electric vehicles), tourism and value-added mining.

In response to a question on how Indonesia – a nation heavily dependent on coal-fired power – could accelerate its own energy transition, Widodo said that developing countries need technology transfer and financial support from advanced economies to ensure the transition does not burden their citizens. Indonesia needs $50 billion for its renewable power sector and a further $37 billion for forestry, land use and marine sectors. “Concrete outcomes can only be achieved through strong cooperation,” he said. “Technology and financing will be key.”

The president pointed out that, as part of its roadmap to reach net zero by 2060, Indonesia had slashed the coverage area of forest fires sevenfold, from 1.7 million hectares in 2014 to 229,000 hectares in 2021. The number of hotspots fell over the same period from 89,000 to just 1,300. The country has restored 3.74 million hectares of peatlands since 2016 and rehabilitated 50,000 hectares of mangrove forests in the past year. Its mangrove-rehabilitation target is 600,000 hectares by 2024 – the most ambitious such programme in the world, providing, he said, a “carbon sink equivalent to four tropical forests”.

To finance the green transition, Widodo has initiated a carbon trading system that will deliver “results-based payments” for actions that reduce carbon emissions as well as a carbon tax on coal-fired power plants, due to start in April.

“Indonesia has the potential to be a global market leader in carbon trading and is predicted to surpass the carbon trade potential of Peru, Kenya and Brazil, as countries with the same tropical forest cover,” he said. The government also plans to raise capital by issuing environmental and social bonds, and through REDD+ projects that reduce deforestation and promote sustainable forest management.

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Davos Agenda Session on Space and Climate Opens Up New Frontiers

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European Space Agency astronaut Matthias Maurer connected live to a session on Thursday at the Davos Agenda 2022 from the International Space Station, somewhere high above the Pacific, to discuss how space research can improve life on Earth.

While in orbit on a six-month mission with the European Space Agency (ESA), Maurer will support a wide range of science experiments and technological research, including those that address transmissions of disease, the reduction of carbon emissions and human health-related activities. Knowledge gained through his mission will contribute to development that benefits life on Earth.

“We have worked hard in the past few weeks and months to send back cargo that we harvested for scientists to analyse all these samples that we produced in space, and to produce science and knowledge for humanity out of it,” he said.

He added that the cross-country and international collaboration aboard the space station should also be a model for how the world tackles major challenges, such as climate change. From his view, Maurer described the beauty of the planet, but also pointed out that he could see the impact of climate change from space.

“When we fly around the Earth (16 times a day), we cross over areas that are very arid and dry and I can see scars on the planet where people are digging deep to extract resources. So we are actively reshaping the planet. We are cutting down trees and burning down rainforests. I see the flames. I also see the flooding.”

Back on Earth, Al Gore, Vice-President of the United States (1993-2001); Chairman and Co-Founder, Generation Investment Management, explained how space technology and artificial intelligence can help address climate action. He highlighted the work of Climate TRACE, a global coalition created to make meaningful climate action faster and easier by independently tracking greenhouse gas emissions with unprecedented detail and speed.

“Some things you can see directly from space, like methane, but the difficulty of measuring CO2 emissions against a highly varied CO2 background on the Earth make it necessary to use AI to get precision we need,” he said. He added that if you consider something like GPS, it is clear how quickly the opportunities offered by space tech and space exploration can become integrated into our lives.

But the data and knowledge that is gained from space should not be limited to those who own satellites, said Sarah Al Amiri, Minister of State for Advanced Technology, Ministry of Industry and Advanced Technology of the United Arab Emirates. “If only countries with access to satellites get access to the data, we deny other countries the opportunity to benefit from that knowledge,” she said.

According to the World Economic Forum’s Global Risks Report 2022, space is increasingly crowded and commercialized. While the diversification of actors is for many an exciting development, dated space governance frameworks are coming under considerable pressure, exposing fault lines between the ambitions of different players and the acceptability of their actions.

Echoing this message, Josef Aschbacher, Director-General of the ESA, noted that the volume of satellites indicates that regulation is important.

However, it will have to keep up with a fast-changing industry, which, according to Chris Kemp, the Founder, Chairman and Chief Executive Officer of Astra, is currently seeing a revolution of sorts. “Access is increasing all the time thanks to significant falls in the cost of putting satellites into space and this has enabled a new generation of entrepreneurs to build companies, to take these companies public and provide new capabilities.”

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World Economic Forum Annual Meeting rescheduled to 22-26 May

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The World Economic Forum is pleased to announce that it will hold its Annual Meeting 2022 in Davos-Klosters, Switzerland, from Sunday 22 to Thursday 26 May. Under the theme, Working Together, Restoring Trust, the Annual Meeting 2022 will be the first global in-person leadership event since the start of the pandemic.

The Annual Meeting 2022, returning to Davos-Klosters after a two-year hiatus, will offer world leaders an opportunity to take stock of the state of the world and shape partnerships and policies for the crucial period ahead.

Topics on the agenda will include the pandemic recovery, tackling climate change, building a better future for work, accelerating stakeholder capitalism, and harnessing the technologies of the Fourth Industrial Revolution.

Klaus Schwab, Founder and Executive Chairman, World Economic Forum, said: “After all the virtual meetings taking place in the last two years, leaders from politics, business and civil society have to convene finally in person again. We need to establish the atmosphere of trust that is truly needed to accelerate collaborative action and to address the multiple challenges we face.”

The World Economic Forum will continue to communicate closely with the Swiss government on the public health situation in Switzerland. The meeting will take place as long as all necessary conditions are in place to guarantee the health and safety of its participants and the host community.

During the Davos Agenda 2022, heads of state and government and international organizations shared their priorities for a challenging year ahead. They joined leaders from business and civil society and spoke on the global economic outlook, inequality, healthy futures, climate and resilience.

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