A Development Puzzle: Granaries and Poverty

Why is it that top grain producers in the country differ widely in poverty incidence?
In this article, we compare four Luzon provinces with four Mindanao provinces. They ranked among the top in production and harvested areas in 2015. Why 2015? That was the latest year of official poverty statistics.
Findings:
1. The average poverty incidence of the Luzon granaries — Nueva Ecija, Isabela, Pangasinan, and Cagayan — was 17% in 2015. This was exceedingly lower than the average poverty incidence of 50% of the Mindanao granaries — North Cotabato, Bukidnon, Sultan Kudarat, and Maguindanao.
2. Production in Luzon is far higher in part due to high productivity as it has larger and higher percentage of irrigated areas than Mindanao: 83% of total rice areas versus 59%. Cagayan and Nueva Ecija are served by large dams, Magat and Pantabangan.
3. Luzon grows the high-yielding yellow corn for feeds than white corn: 93% vs. 60% for Mindanao.
4. Luzon leads in yield: 4.4 tons per hectare (ha) for rice and 4.6 tons for corn. These are higher than Mindanao’s at 3.6 tons per ha and 3.2 tons per ha.

There are merits in having irrigation when water supply is available and capital costs considered as well as farming yellow corn for feeds.
However, there are questions why the irrigated yields of Mindanao are far lower compared to Luzon: 4.0 tons per ha versus 4.7 tons per ha. The story is similar for yellow corn: 3.6 tons per ha vs. 5.4 tons per ha. Cultural practices are key.
Maguindanao has very high poverty (57.2%) because, among other reasons, it has low yields across the crops. Low productivity makes it the second poorest in the country.
Bukidnon is an enigma. It has relatively high yields for rice and corn but its poverty incidence is very high at 53.6% (fifth poorest) not that far from Maguindanao’s. It is higher than the Mindanao’s average of about 36%. The province also hosts large sugar (65,000 ha) and pineapple (24,000 ha) areas as well as poultry farms.
Why is this? Average landholding cannot be the factor as Bukidnon’s average is higher than North Luzon provinces. Are farm costs higher and farm prices lower due to lack of rural roads? Is tenancy high?
A Mindanao expert said that, perhaps, having more corn makes the province more poverty prone. Even if productive, the price swing during the harvest season may be more considerable for corn.
These questions deserve answers from the authorities
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
 
Rolando T. Dy is the Chair of the MAP AgriBusiness and Countryside Development Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.
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