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For over thirty years 80% of rice lands in Kanipaan, Sultan Kudarat is mortgaged to only few landlords. During the 1970’s,  government forces ravaged the area looking for rebels, 10 years ago a land ownership conflict escalated to an all-out war, and  even now armed conflict is a reoccurring event. Due to wars, most people in Palimbang vacated and landowners can’t till their land so they mortgage it in gradual amount for daily expenses, education of their children, etc. As a result, most of the landowner became tenant of their own lands. An example is Kia Lumangka, a veteran farmer   who mortgaged 5 hectares of land for over 30 years. As tenant, he must pay 1000 kilos of Palay or equivalent to 17,000 thousand pesos per hectare for rent. If he cannot pay that amount, the amount of 17,000 pesos will be added to the amount of mortgage until his original debt of 20, 000 pesos sky rocketed to 337,000 pesos as of year 2011. About 90 farmers experience this cycle of debt.

Usurious loans

Usurious loan commonly known as Alili (100% interest rate) is another problem faced by farmers. Farmers tend to borrow on top of their mortgage from other money lender for daily consumption, farm inputs, children’s education and emergencies. If they borrow 1,000.00 pesos they will pay four sacks of Palay equivalent to Php 2,000 pesos. Lender comes during harvest time with sacks to get their harvest as payment. Farmers allow them so they can borrow again for the next cropping. If the harvest fails, due to calamity and rat or pest infestation and they get low harvest, nothing is left for the farmer’s consumption. This debt system leaves the farmers and their family dependent despite hard work while the landlords and money lenders grow richer and richer.

Principal amount Interest Loan
1000 pesos In goods:4 sacks rice( 100 kilos) 2000 pesos
In cash: 1000 pesos 2000 pesos

Rice Contract Farming

Poverty in rural farmers cannot be solved unless the mortgaging issue is dealt with. No amount of technology, microcredit programs will be able to solve poverty among rural farmers if their income only goes to their landlords.  With this, PASALI works to help these farmers redeem their land. Pasali initiated an experiment in 2007 of Rice Contract Farming under the Overseas Pinoy Development and Investment Group (OPDIG) with support from PASALI Netherlands. Under this scheme, an idle rice farm lands are contracted.  OPDIG advanced the inputs of the farmers not in cash but in the form of material inputs such as seeds, fertilizers and pesticides. The OPDIG supplied the right technologies such as application of the right kinds of fertilizer at the right growth stages of the plants. OPDIG supposedly had its technicians to help the farmers in their farming and OPDIG buys the harvest of the farmers. To ensure that the farmers do not sell their harvest to other buyers, OPDIG bought the harvest at 50 centavos per kilo higher than the prevailing market price. This scheme was limited in several ways, due to various factors like high cost of input for hybrid rice, heightened the risks and when OPDIG shifted to organic rice farming SEA (sustainable ecological agriculture) was confronted with limited yields. Nevertheless, the biggest impact to this scheme was the participating farmers were able free their families from debts.

2011 Rice Contract

This year PASALI starts a new Rice Contract Farm supported by PASALI Netherlands. In this scheme the moneylender is paid in full and farmers are developed so they will no longer need to mortgage. Farmers are hired to till their own land using the method on “System of Rice Intensification”( SRI)- a technology that requires less input cost for a yield of 7-10 tons per hectare if fully practiced. New is SRI as production system and farmers work as employees under the PASALI technicians rather than being paid for harvest. In this way, farmers experience the true nature of SRI to its full capacity in Mindanao.

This business model for rice can be extended to any interested bodies, especially overseas Filipino workers and migrants with investment interests.

Article co- writers: Shane Pulmano @ http://gainbrain.wordpress.com/
                                        Marilyn Ty @  blumarty.wordpress.com

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