Abaca’s unfulfilled potential
Last Feb. 6, we interviewed Fiber and Development Authority (Fida) Regional Director Deoben Hivaler (0917-7247954) on abaca’s unfulfilled potential.
Having contributed to abaca production growth of 12 percent in 2011 and 11 percent in 2012 for Region 11, we wanted to find out his perspective on abaca’s national potential.
We supplemented this by talking to Fida Executive Director Cecilia Soriano and Fida Planning Chief Ramon Branzuela.
From information we gathered from these interviews and other sources, we believe more support should be given to abaca because it meets two important objectives—provide farmers with livelihood and bring back to life denuded forests.
Abaca was originally grown only in the Philippines. It has since been adopted in only three other countries. We now produce 50,000 tons of abaca a year, which account for 85 percent of global production. This sector employs 1.5 million Filipinos.
Abaca has many uses. Originally used primarily for raw fiber, it can now be processed into specialty paper used in tea bags and currency, as well as handicrafts, clothing and furniture.
Hivaler reports attractive profits from abaca production. For one hectare, after spending P40,000 during the first year (P20,000 for materials and P20,000 for labor), and P10,000 for the next year, the third year yields a net profit of P60,000. This profit is derived from a revenue of P120,000, from which P60,000 in expenses is subtracted. From the fourth to the 15th year, or the end of the abaca plant’s life cycle, a P60,000 profit can be expected every year. This is a good return on an initial investment of only P40,000 per hectare.
As much as 90 percent of existing forest trees have no plants between them. Consequently, when the low-income farmers in these forested areas need money, they cut down these trees. This further reduces our already very limited forest cover.
In many places where there is a 30 percent slope, which makes it very difficult to plant food crops like corn, abaca is an ideal solution. In addition, abaca needs shade. Therefore, if farmers are making P60,000 per hectare per year, they will have enough income to survive without having to cut the trees to earn their needed income. And since abaca needs the shade for the abaca income to continue, the farmers will be motivated to prevent the trees from being cut down.
Two important benefits are derived: a good income for the farmers and an important motivator for the trees to be protected and thus result in ecological balance.
The Fida budget has remained generally the same for the last 10 years. Thankfully, the 2013 budget for the first time showed a 20 percent increase from P220 million to P265 million for 2013, but this is less than the Fida proposed budget of P311 million.
This is probably because abaca’s potential is not yet fully understood by Congress and other important officials.
It is hoped that abaca production performance in 2013 will allow Fida to get a much larger budget for next year.
Fida money currently allocated to develop a hectare of abaca plantation is only enough to nurture 1,000 out of the ideal 1,600 production hills per hectare.
And, a supplemental grant of only P1,500 is given to the farmer to cover for the 24-month waiting time between planting and harvesting of abaca. This amounts to only P125 a month.
If we compare this to the Cash Transfer Program (CTP) of a family getting P3,400 a month for one mother and three children, with the condition that the mother goes to maternal health visits and the children go to school, P125 looks extremely small.
To motivate the planting of abaca in targeted areas, we recommend that the CTP add the requirement of abaca planting before a family gets the CTP monthly support. We may have to do this since there may not be enough money to fund the farmers who are planting abaca for the first two years.
The third recommendation is that, in support of the government’s convergence program, a national plan be agreed upon between DA and DENR.
As stated earlier, the DENR reforestation program is severely jeopardized by farmers who have to cut trees in order to get income for their survival. In the appropriate areas, if we pair DENR reforestation with the DA-Fida’s abaca livelihood program, both ecological balance and poverty reduction will be attained.
Since abaca originated in the Philippines and we are its global market leader, both the government and the private sector must now give abaca its full support so that it can attain its unfulfilled potential.
(The author is chairman of Agriwatch, former secretary for presidential flagship programs and projects, and former undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, e-mail [email protected] or telefax (02) 8522112.)