Poverty alleviation: Is crop diversification the answer?

Indonesia, Thailand and Vietnam lead Southeast Asia in crop diversification. By contrast, Malaysia focused on just one crop, oil palm. Overall, the peers have half the incidence of rural poverty compared to the Philippines’ 30 percent. And they earned $25 billion to $45 billion in agrifood exports in 2016, five to nine times that of the Philippines.

Meanwhile, Filipino farmers had a poverty incidence of 34 percent in 2015.

Is diversification the holy grail of rural poverty reduction?

In another article on farmers’ poverty in Philippine regions, I wrote that Ilocos and the Cagayan Valley recorded low poverty, mainly due to the high productivity of their main crops—palay and corn—which comprise 90 percent of total harvested area.

This article explores the relationship of farmers’ poverty with crop diversification in selected regions.

Cagayan Valley has high crop concentration with its leading crop (corn) accounting for 52 percent of total harvested areas but with low poverty. By contrast, ARMM, Soccsksargen and Mimaropa have far lower ratios (32 percent to 45 percent) but far higher poverty.

The main explanation is that while diversification is a strategic pillar, the productivity across many crops are of commanding importance.

Take Mimaropa. Its palay and corn productivity are comparable to Cagayan Valley. However, its No. 2 crop (coconut) has low productivity.

Soccsksargen has low yield in corn but high yield in coconut and pineapple. But, the latter has also low yields in rubber and coffee. ARMM’s top crops are coconut and corn, both low yielders. The fourth and fifth crops, cassava and rubber, are also underperformers.

Ilocos is less diversified than its comparators—Bicol, Eastern Visayas and Caraga. However, its main crops—palay and yellow corn—post high yields. The latter three regions have coconut as main crop but with low yield. They are not doing well in palay and corn either.

What can we deduce from the analyses?

Diversification is a grand strategy to reduce rural poverty as shown by neighboring countries, but the crops have to be productive and competitive. Take the case of Thailand with rubber, sugar, cassava and fruits; and Vietnam with coffee, pepper, cashew, jackfruit and dragon fruit.

Relying on one crop (i.e. oil palm) like Malaysia can also reduce poverty, but the crop has to be in the best-of-class and may not be easily replicable.

Productivity and diversification have synergistic effects. They create the scale that will promote investments in agri-based manufacturing.

Admittedly, the success of these countries took time as agriculture has a gestation period. New fruit and tree-crops varieties may take 10 years of research and development, and five more years before commercial production.