Many farmers’ coops turn inactive due to lack of managerial skills — study

MANILA, Philippines — The failure of many farmers’ organizations and cooperatives to sustain a viable operation from the lack of skills and training has repelled several Filipino producers to either join or form such groups.

As a result, most farmers fail to go beyond production and lose the opportunity to earn more.

The latest study of the Philippine Institute for Development Studies (PIDS) titled “The Role of Agrarian Reform Beneficiaries (ARBs) in Agriculture Value Chain” revealed that of the registered ARB organizations (ARBOs) being monitored by the Department of Agrarian Reform (DAR), many groups eventually become inactive from the lack of managerial and organizational skills among members.

The finding, if not addressed, could be a major impediment to the government’s plan to consolidate farms as a means to increase productivity and incomes, especially as billions of pesos are expected to be poured into consolidation programs.

“Most ARBOs in the country are organizationally weak; even among those registered as cooperatives,” the PIDS study said. “The failure of many farmer organizations to be viable has stifled the interests of smallholders to join or form farmers organizations and thus reduce their participation in [the] higher value chain.”

“Low and declining membership has also been observed among ARBOs caused by the withdrawal of membership, inability to attract new members, and mismanagement. This pattern… also implies that adoption of technologies, enterprise development, and other value-adding initiatives may not be sustained,” it added.

Based on DAR’s monitoring, only 10 percent of the country’s ARBOs have a high maturity level as most organizations do not practice capital build-up and often keep their savings idle.

Another observation was that most small-scale farmers leave their respective groups once they are given access to inputs and technology. This approach reverts them to subsistence farming anew and makes consolidation programs purposeless.

While organizations with higher maturity levels may absorb new members, PIDS found that many of these groups are of the closed type, meaning membership is only confined to households in the community or neighborhood.

To address these gaps, the think tank recommended that capacity building among groups must be targeted to achieve two results – the provision of shares among farmer-members and the transformation of cooperatives into enterprises.

It noted that “membership to farmers organizations [must] be built based on entrepreneurial activity rather than community-based” as some government programs suggest.

The country’s farm holdings are generally small and fragmented. Of the 5.56 million farms recorded by the Philippine Statistics Authority, 39 percent are half a hectare (ha) and below, while about 32 percent ranged between 1 and 3 ha.

The average farm size also shrunk from 2.84 ha in 1980 to 1.29 ha in 2012, owed largely to the partitioning of farms among offspring as they are passed on to the next generation.

PIDS underscored that farmers must organize themselves into sustainable enterprises to have greater participation in the trade of more sophisticated products, not just in rice and corn, but in abaca, rubber, and coconut as well where they could rake in higher incomes.

Currently, DAR is looking to inject P5 billion into its mega-farms programs while the DA has recently announced a “no cluster, no assistance” policy to campaign for consolidation.

/MUF