Farmers who earn 600 euros a year will not go into organic farming because of the establishment of a better world. In the Philippines NGOs had a lot of sustainable and poverty goals and programmes towards farmers in the past, before these NGOs turned into Farmers organisations or now even cooperatives. This demands a shift in their thinking from organic as a public good into organic as a business model for farmers. You have to dare to do the math to convince farmers that organic business will be more profitable. Luckily, going into cooperatives will make this shift happen more naturally.
Farmers who earn 600 euros a year will not go into organic farming because of the establishment of a better world. In the Philippines NGOs had a lot of sustainable and poverty goals and programmes towards farmers in the past, before these NGOs turned into Farmers organisations or now even cooperatives. This demands a shift in their thinking from organic as a public good into organic as a business model for farmers. You have to dare to do the math to convince farmers that organic business will be more profitable. Luckily, going into cooperatives will make this shift happen more naturally.
Mindanao
Last week, I was In Mindanao, Philippines, where I met with staff, members and management of a newly established cooperative (2013) aimed at organic rice production, collection and processing. The cooperative has been established by the NGO in the same region and carries the same name. Still the non-business branche and cooperative are being chaired by the same persons and business mentality is needed. As well focus on improving the members economic position. This requires a huge effort by members, staff and board, but by the decision to start a cooperative this business mentality will be accelerated.
Organic believes
From the foundation of the NGO it has been propagating organic farming (decades ago). In the past this meant that they tried to convince politicians to make organic legislation and provide incentives for “going” organic. At the same time they were providing assistance for farmers to improve the way they use their land to become an organic farmer, again with public money and man power. This goals were merely coming from an ideological perspective to take care for our earth in a sustainable way. They transmitted in the process knowledge to farmers on organic production and now possess some rice processing facilities to assist farmers like planting machines, storage capacity, drying and milling facilities. All paid for by the Philippine government.
Economic impact unclear
Regrettably, this organic programs for farmers have never been thoroughly analysed by economic impact on individual level. Recently a first survey has been made in cooperation with Agriterra. When looking at the individual farmers’ incomes on the basis of interviewing 150 of the farmers, we found out that most farmers didn’t earn more than 30.000 Philippine Pesos per year for their rice production. This is 600€ per YEAR.
In my opinion this means that all the hard work done by the NGO to convert farmers into organic didn’t bring much benefit from an economic perspective for the same farmers. This is also one of the reasons why many farmers are still not organic. Why would they when they are starving? A famous quote states: ”Food comes first and then morality”. I think this is absolutely spot on in this case. The cooperative should start to make a proper calculation of differences between the organic versus non-organic farmers to be able to convince farmers or to analyse which interventions are needed to make the organic case more viable then the non-organic.
Optimization of assets and farmers participation
Nevertheless, the switch to organic can bring economic benefit as market demand is shifting and growing fast for organic rice in Asia. Problem until recently was that the farmers were not organized towards the market and the business mentality to run a farm is not there. At the same time, there are at the moment no clear certification rules or products already branded clearly as organic in the Philippines. This is why it has been a fundamental positive decision of the NGO to establish the cooperative. By establishing this farmer-led business: it can optimize the use of the already possessed assets economically and organize its farmers towards the market. Of course the NGO tried its best to use facilities as good as possible in the past, but there was no control mechanism for farmers to see if these assets are used in the best way and there was no clear economic valuation of the assets.
New business opportunities
At the same time putting these assets into a real business gives the cooperative possibilities to attract more external investment capital. Besides the operational profits of the use of processing facilities can be directly or indirectly benefit the farmer members. This means that first of all they have machines to add value to the rice grown by the farmer members, and they can also make money by using their facilities for other farmers (non-members) and provide extra income for their members.
Of course establishing this cooperative will not automatically solve all problems. It requires hard work to make the farmer-led business profitable. But it will push the staff, farmers and board members to become more business-minded, involved and make their organic goals into economic positive realities for the farmers.
Luc Groot
