1. Relevance of the Action
The overall objective of this Project is to address the increasing income disparities among families through livelihood and community enterprise build-up initiatives in five regions of the Philippines: (1) the Cordillera Autonomous Region (2) Central Luzon (3) Eastern Visayas (4) the CARAGA region and (5) the Bicol Region. However, for purposes of Phase I: Modeling and tools development phase, the pilot sites will be selected Agrarian Reform Communities (ARCs) in Central Luzon, Bicol Region and Eastern Visayas.
In Phase I, the project aims to reach out to 12 ARCs and 24 Agrarian Reform Beneficiaries (ARB) Organizations or Cooperatives in 6 months. As a first step, a network will be set up among two government institutions – the Land Bank of the Philippines (LBP) and the QUEDANCOR–, the local government units concerned, local business organizations/ big local contract growing and/or food processing companies, and local Agrarian Reform Community (ARC)/Agrarian Reform Beneficiaries’ Organizations (ARBOs). The network will conduct a balanced set of activities for all three regions aimed at strengthening the ability of ‘model’ ARBOs in the pilot ARC sites to access planning and management skills as well as implement livelihood and small-scale enterprises with financial support. At the second stage, the ‘model’ developed in the regions will be applied to the other target regions, thus leveraging the long-term impact of the Project. At the third stage, the results of the pilot implementation are then assessed, with program and systems enhancements made in the ‘model’ and brought to the testing ground before the ‘model’ is finalized.
1.1 General Problem Situation Analysis
The Philippines is characterized by a high and growing number of poor population, a high population growth rate and increasing inequalities. Among ASEAN countries, it has the highest inequality, primarily in income and resource distribution, despite recent improvements in the country’s GNP and GDP. Though based on the 2006 Family Income and Expenditure Survey (FIES) of the National Statistics Office (NSO), the total income, in real terms, of families increased slightly by 1.7%, total expenditure however increased by 3.6% between 2003 and 2006. Also in the same report, despite the fact that the Gini coefficient or the measure of income equality within a population, estimated at 0.4580 in 2006 is slightly lower than the 2003 ratio of 0.4605, the five (5) regions named above registered increases in the Gini coefficient, indicating a movement towards a widening income disparity among families. Among the disadvantaged groups are our agrarian reform beneficiaries who have not improved their living conditions even after the land grants distribution.
It is also unfortunate to note that the country’s post-war political administrations have reproduced unstable and unsustainable economic growth. For various reasons, it has been unable to build on and sustain the upward trend in per capita income seen from the 1960s to 1982. Moreover, the transition from one political regime to another, as well as from one growth strategy to another has been conflict-ridden and highly-politicized, proceeding without the necessary institutional arrangements to resolve conflicts, establish secure expectations, and mobilize the required human and social capital and financial resources to build resilience against shocks and maintain productive dynamism.
1.2 Specific problems to be addressed by the action
Despite two decades of implementing the agrarian reform law by the Department of Agrarian Reform (DAR), the execution of the program for agrarian reform beneficiaries (ARB) had been encountering the following hindering factors in the development process:
- At the farm enterprise level, transforming farmers into farmer- entrepreneurs is marred by the inadequacy of interventions in:
At the community level,
- Production inputs
- Market linkages
- Financial services
- Management competence
At the government level,
- Absence of the physical infrastructure and organization for the socio-economic mobilization and development
- Insufficient funds and organizational, administrative and technical skills to plan and implement farm and enterprise activities
- Lack of focus and framework among the field people recreate and maintain the effective role of ARB organizations and cooperatives
- Inadequate provision of socio-economic services
1.3 Brief Description of the Target Group and Final Beneficiaries
The target group refers to Agrarian Reform Communities (ARCs) which have been developed as communities of farmer-beneficiaries of land grants issued by DAR under the Comprehensive Agrarian Reform Program.
Final beneficiaries are defined In this project as the Agrarian reform beneficiaries organizations (ARBOs) or cooperatives located inside an ARC. One ARC has an average of 3 to 5 ARB organizations.
To build a network of ARC cooperatives of Farmer- Entrepreneurs committed to lifelong community progress, using their knowledge and skills in agri-business and entrepreneurship, empowered by partnerships and, managing sustainable farm-based food and cottage industries.
- Build the capability of Agrarian Reform Beneficiaries (ARB) Cooperatives to identify, develop and manage plans and projects for the socio-economic growth of its members, the organization and the Communities; and
- Train ARB Coop leaders in catalyzing, organizing and mobilizing resources & capabilities using the model to be developed in this Program
II. APPROACH TO IMPLEMENTATION
The approach to implementation of the project will consist of five (5) main project components under Phase I: Modeling and Development Phase.
1. Environmental Scanning and Organizational Assessment Component
This component will conduct environmental scanning and scoping activities. This will entail scanning of the external environment of the ARCs, including crop suitability profiles, soil and climate characteristics and local food and crops demand.
The component will also conduct a review of the internal environment of the existing community organizations with respect to entrepreneurial inclinations (as a group and individual members) and capability to provide agricultural management services.
2. Technical and Management Training Design Component
This training design component will cover:
2.1 Target Participants
The course will be designed for ARB organization leaders and key members. Each ARBO will be represented by 5 target participants:
- ARB Organization Leader or Cooperative Manager
- Production Manager or Commodity Expert
- Finance/Accounting officer
- Procurement/Supply officer
- Marketing/Business Manager
2.2 Project Team Composition
The project organization headed by a Project Director will be assisted by two training teams to be deployed to handle two batches of participants per month.
Each team will have a Task Team Leader and 3 specialists - (CO/CD, Agriculture, & Marketing and Finance) in “handholding” the community organization. The agriculture expert specializing on the ARCs’ commodities will be chosen from the Agricultural Training Institute assigned to the region where the ARCs are located.
The training intervention does not focus solely on classroom lectures and workshop discussions. The approach is employing a greater part of the course program in experiential learning through a hands-holding approach from:
- doing an organizational assessment and environmental scanning
- to production planning
- to preparing a farm business plan
- to negotiating a production service/contract growing agreement
3. Modeling and Tools Development Component
Modeling exercises will be conducted by the consultants’ team to develop the tools necessary for the process and/or policy-systems design of the main activities to be handled and managed by a “model ARB organization or ARC cooperative”:
3.1 Environmental scanning
3.2 Organizational assessment
3.3 Network building, information and coordination linkages
3.4 Production planning
3.5 Farm business plan preparation
3.6 Contract negotiations with buying agents/purchasing firms
3.7 Handling marketing and trading transactions
3.8 Handling banking transactions; Resource and investment planning
4. Pilot Implementation Component
4.1 Area Coverage
The participants for the pilot courses will be selected from ARB organizations selected from Levels 1-3 as categorized by DAR as belonging to the lower levels of development. There will be two batches from Luzon and two batches from the Visayas.
4.2 Pilot testing of Course Design and Materials
For purposes of developing a model ARB cooperative or organization, the project team will pilot test the course design and materials to be developed during the first two months based on the results of the environmental scanning and scoping activities. For more details, please refer to Annex B. Selected Pilot Sites and Batching of Participants.
5. Network Building Component
5.1 The objective of this component is to establish a multi-partite partnership with the aim of supporting the development and expansion of ARB Cooperatives while improving performance of their operations.
5.2 Activities: A partnership group with representatives from the ARCs, the agri-business corporations and the development bank/Quedancor will be established and will work on the “Network System for Empowering Local ARB Cooperatives”, a networking and information and coordination systems design model of an innovative and participatory solution to the provision of community-based and sustainable livelihood enterprises for the ARC cooperatives. Please refer to Annex C, Schematic Diagram.
III. Expected Results
1. Organizational Assessment Report
• Profile of the organization, its norms, processes, systems and practices
• General information on existing community-owned enterprises
• Profile of entrepreneurial traits and values of key people in the enterprise
• Recommendations for future organizational & entrepreneurial development programs
• ARB organization (ARBO) leaders exposed to organizational assessment methodologies
2. Design of Hands- On Technical and Management Training
It is anticipated that ARB organizations, though initially focused on economic concerns, will mature into more well-rounded institutions that address larger concerns like improving the quality of life of community members and protecting the environment.
3. Completion Report on ARB Cooperative Modeling and Pilot Implementation
From the experience gained during the pilot phase, a framework for developing a model ARB cooperative/organization will be established.
The results of pilot implementation will be reviewed, processed and documented in a written report on the proposed model. This documentation report will then become the guide for ARB organizations in other ARC locations.