Essays in Social Science and Development (A Tribute to Gelia T. Castillo) by Ronald Yacat

Essays in Social Science and Development ATributetoGeliaT.Gastillo

IDRC CRDI

CANAOA

Philippine Institute forDevelopment Studies

International Development Research Centre

Copyright 1995 by Philippine Institute for Development Studies (PIDS) and International Development Research Centre (IDRC) Printed in the Philippines. All rights reserved. The publication of this book was made possible by the financial support of the International Development Research Centre. The findings, interpretations and conclusions in this book are those of the authors and not necessarily those of the PIDS and IDRC. Please address all inquiries to Philippine Institute for Development Studies 4th Floor,NEDA sa MakatiBuilding 106 AmorsoloStreet,Legaspi Village 1229 Makati City, Philippines Fax Nos. (632) 893-9589 and 816-i091 Tel. Nos. (632) 893-5705 and 892.-4059 ISBN 971-564-024-9 RP - 8-95 - 500

CONTENTS

Foreword ................................................ Ponciano S. Intal, Jr. Acknowledgments ........................................

x/x xxiii

SECTION I

Philippine Social Science Study in the 1990s: Status, Methodology and Relevance Reflections on Philippine Sociology in the 1990s .................. Maria Cynthia Rose Banzon Bautista Comments _............................................. Sylvia H. Guerrero Highlights of Discussion ... .............................. A Retreat from the Ideal: Reflections on a FrustratedAttempt to Study a Social Phenomenon the Natural Science Way ........... Ledivina V. Cari_o Comments ............................................. Jose V. Abueva

3 21 25

27 57

Highlights of Discussion ..................................

Policy Researchers and Policymakers: Never the Twain Shall Meet? ................................. David Glover

s]_CTION II

Philippine Agriculture and Rural Development Dynamics of Rural Development: Analytical and Policy Issues ...... Romeo M. Bautista Comments ............................................ Gwendolyn R. Tecson Highlights of Discussion ..................

93 135

:...

..........

139

GATT-UR and Philippine Agriculture: Facts and Fallacies ........ Cristina C. David

141

ComrI_ents... ................................. Fermin D. Adriano

........

Highlights of Discussion

177

Yargcting Transfers to the Poor: The Case of Food Subsidies ....... Arsenio M. Balisacan Comments. Mahar K. Alangahas Highlights of Discussion ...............

171

179 217

.................

Policy-basedLending Programs in the Philippines ................ Mario B. Lamberte Highlights of Discussion Old Images and New Challenges: Rethinking the Mission of Agricultural Support Systems in Asia Bruce Koppel

219 221 257

259

vii SECTION III Human Capital: Issues and Monitoring Concerns Social Science Research on Reproductive Health in the Philippines .......................................... Mercedes B. Concepcion Comments ............................................ Corazon M. Raymundo Highlights of Discussion ............................. Population, Health and Women ............................... Alejandro N. Herrin Highlights of Discussion ................................ Beyond Socioeconomic Status: Some implications for Planned Health Intervention Among the Poor ................ Exaltacion E. Lamberte

311 331 ...

333 341 383

385

Marriage in Rural Philippine Households ...................... Robert E. Evenson

411

Engendering Development .................................. Solita C. Monsod

429

Monitoring Systems for MIMAP ............................. Celia M. Reyes Comments ............................................

445

Rodolfo E Florentino Highlights of Discussion ................................

463 465

viii

SECTION IV

Environmental

Concerns: Of Revisits and New Paradigm

Sustaining Resource Use in Upland and Coastal Communities: Macro and Micro Analyses Revisited .......................... Marian S. delos Angeles Highlights of Discussion ................................

469 519

Adjusting to the New Trade and Environmental Paradigm: The Case of the Philippines .................................. Ponciano S. lntal, Jr. and Paul Quintos Highlights of Discussion ......... i .......................

521 561

SECTION V

A Word from the Honoree: Rural Development Reconsidered Rural Development Reconsidered: Some Emerging Niches for Population Studies .................. Gelia T. Castillo

565

SECTION VI

Symposium-Testimonial in Honor of Dr. Gelia T. Castillo: Highlights of Proceedings Opening Remarks ......................................... Dr. Ponciano Intal, Jr. Dr. W. Randy Spence In Honor of Dr. Gelia T. Castillo ....................... Emil Q. Javier Remembering Gelia ....................................... Sam Hsieh

601

......

605

609

Testimonial ............................................... Gordon Prain Response from the Honoree -Agricultural "Fatigue" and Rural Development "Blues": Are They Both Passe? ...................................... Gelia T. Castillo About the Honoree ....................................... List of Contributors ......................................

613

615

623 627

TABLES

Cariho Paper 1 2 3 4 5 6 7

Length of Rural Road Projects Under Study .................. Date of Construction, Periods of Data Collection and Organizational Sources of Data ..................... Mean Household Monthly Incomes Before and After Construction ......................... Household and Per Capita Income Mabilao-Binday Road Influence Area 1979, 1980, 1981 ....................... Mean Monthly Income of Various Occupational Groups, Laurel-Tamayo Road Influence Area, 1980 and 1981 ... .... Mean Income of Farmers Laurel-Tamayo Road Influence Area, 1980 and 1981 ......................... Use of Alas-as Bridge in LaureI-Tamayo Road Project for Purchasing Goods Before and After Construction, 1980 and 1981 ...................................... Average Monthly Income of Different Types of Transporters, Before and After the Project Construction (At current prices) ...................................

34 39 41 42 44 45

Bautista Paper 1

2 3 4

Average Rural Household Income, Average Rural Household Expenditure, and Agricultural Terms of Trade, 1957-1985 ............. "............................ Distribution of Rural Employment by Sector, 1965-1989 (In percent) ........................................ Relationship of Value-added Per Farm Area to Farm Size. 1960 ............................................. Farm Size, Average Yield, and Labor Use Per Hectare (IRRI surveys) .....................................

103 110 119 121

David PaPer 1

2 3

5 6

Changes in Tariff Rates of Japan, US, and European Union (EU) Philippine Major Agricultural Exports by Year 2005 Under the GATT ................................... Projected Increases in World Prices of Selected Commodities by Year 2005 Under the GATT-Uruguay Round .......... The Nominal Protection Rates, Current Tariff, and GATT Binding Tariff and Minimum Access Requirement for 1995 and 2005 ....................... Average Growth Rates of Domestic Product, Agricultural Value Added, Food Production Per Capita, Agricultural Exports in Selected South and Southeast Asian Countries, 1970-1992 ................................ Trends in the Share of World Trade of Selected Philippine Agricultural Exports, 1960-1992 ....................... Summary of Rates of Return Estimates of Public AgriculturaIResearch .......................

146 147

149

155 157 166

Balisacan Paper 1 Priority Provinces for Poverty Alleviation ................... 2 Share of the Poor in National Rice Consumption ............. 3 Share of the Poor in National Corn Consumption ............. 4 Share of the Poor in Total Change of National Consumption .... Appendix 1 Population Distribution by Poverty Type and Region, 1991 .....

187 198 200 203 210

M. Lamberte Paper I 2 3 4

Profiles of Credit, Guarantee and Insurance Programs ......... Loan Portfolio of the Banking System .... .................. Growth Rate, Loans Outstanding and ALF Loans Outstanding of the Agricultural Sector, 1980-1990 ........ Growth Rate, Loans Outstanding and ALF Loans Outstanding of the Manufacturing Sector, 1980-1990 .................

222 249 252 254

xii

Herrin Paper I

Mortality by Major Cause of Death (17 cause groups) and by Sex, 1990 (Rate per 100,000 population) .......... Mortality from Neoplasms by Sex, 1990 (Number and rate per 100,000 population) ............... Mortality from Complication of Pregnancy and the Puerperium (Number and rate per 100,000 population) .............. . Micronutrient Deficiencies by Type of Nutrient, 1987 (Percent of population group) ......................... Prenatal Care: Percent Distribution of Live Births

in,the Five Years Preceding the Survey by Source of Prenatal Care During Pregnancy, and Percent with Tetanus Toxoid Injections Given to the Mother During Pregnancy, 1993 ............ Birth Deliveries: Percent Distribution of Live Births

2 3 4

352 353 354 355

360

in the Five Years Preceding the Survey by Type of Assistance During Delivery, and by Place of Delivery, 1993 ........................ 362 Vaccinations by Background Characteristics: Percentage of Children 12-23 Months Who Had Received Specific Vaccines by the Time of the Survey, 1993 ....................... 363 Prevalence and Treatment of Acute Respiratory Infection: Percentage of Children Under Five Years Who Had a Cough Accompanied by Rapid Breathing During the Two Weeks Preceding the Survey, and the Percentage :of.Children Who Were Taken to a Health Facility or Provider, 1993 .... 364 Prevalence and Treatment of Diarrhea: Percentage of Children Under Five Years Who Had Diarrhea in the Two Weeks Preceding the Survey and Percentage Who Were Taken for Treatment to a Health Facility or Provider, 1993 ...................

366

xiii

10 Trends in Contraceptive Use: Percentage of Currently Married Women Aged 15-49 Using Modem Contraceptive Methods and Traditional Methods, 1968-1993 ................... 11 Current Use of Contraception: Percent Distribution of Currently Married Women by Contraceptive Method Currently Used, 1993 ........... 12 Source of Supply for Modem Contraceptive Methods: Percent Distribution of Current Users of Modem Contraceptive Methods by Most Recent Source of Supply, 1993 ................. 13 Reasons for Discontinuation of Contraception: Percent Distribution of Discontinuation of Contraceptive Methods in the Five Years Preceding the Survey by Main Reason for Discontinuation According to Specific Methods, 1993 ................... 14 Reasons for Not Using Contraception: Percent Distribution of Currently Married Women Who Are Not Using a Contraceptive Method by Reason for Not Using, 1993 ........................ 15 High Risk Fertility Behavior: Percent Distribution of Children Born in the Five Years

368

369

370

371

372

Preceding the Survey Who Are at Elevated Risk of Mortality, and the Percent Distribution of Currently Married Women at Risk of Conceiving a Child With an Elevated Risk of Mortality by Category of Increased Risk, 1993 ......... 374 16 Need for Family Planning Services: Percent of Currently Married Women With Unmet Need for Family Planning, 1993............. 377 17 Fertility Planning Status: Percent of Births in the Five Years Preceding the Survey by Fertility Planning Status, According to Birth Order

" xiv

18 Wanted Fertility Rates: Total Wanted Fertility and Total Fertility Rates for the Three Years Preceding the Survey, 1993...........

378

E. Lamberte Paper 1 2 3 4 5 6 7

Research Objectives .................................... Research Methodology .................................. Point Biserial Coefficients and Chi-Square Values for Visits to RHU ................................... Regression Coefficients for Number of Visits to RHU Physician .................................. Forward Step Wise Regression Results for Number of Visits to RHU Physician ................. Correlation Coefficients: Number of Visits to Doctor .......... Correlation Coefficients: Number of Visits to Barangay Health Center ...........................

387 391 394 397 399 402 403

Evenson Paper 1 2 3

Variables and Definitions: Second Generation Respondents in Laguna .......................................... Probit Estimates: Probability of Marriage Son and Daughter Second Generation Respondents in Laguna .............. Selectivity Corrected Estimates: Probability of Marriage and Age-at-Marriage Second Generation Respondents in Laguna .......................................... Multinomial Logit Regression Estimates:Probability of Marriage and Migration Son and Daughter Second Generation Respondents in Laguna .....................

418 420

421

425

Reyes Paper 1

MIMAP Indicators and Variables for Various Geopolitical Levels ........................

452

Delos Angeles Paper 1

Natural Resource Depreciation Estimates, 1988 (In million pesos) ................................... 2a Measures of Economic Inefficiency from Forest Depletion (In billion pesos at constant 1985 prices) ................ 2b Implied Data Discrepancies, Various Indicators (In million cubic meters) ............................. 3 Modified Gross Inputs and Outputs for Forest and Agriculture (PSIC Nos. 15 and 11), 1988 (In million pesos) ........... 4 Conservation Practices Adopted in Central Visayas Regional Project Upland Agriculture Project Sites, 1992 ........... 5 Adoption of Conservation Technologies, Central Visayas Regional Project Upland Agriculture Project Sites, 1991 .... 6 Determinants of Adoption in CVRP Upland Agriculture Project Areas, 1992 ................................. 7 Comparison of Gross Income Between CVRP Participants and Nonparticipants, 1985-1992 (In pesos per year) ....... 8 Integrated Social, Economic and Environmental Impacts of the Jala-jala Agroforestry Program in Rizal, 1986 ....... 9 Selected Regression Results of the Jala-jala Integrated Agroforestry Program of Rizal, 1986 ................... 10 Length of Years Required to Deplete Soils of Given Depth and Bulk Density by Pedo-Ecological Zone (PEZ) and by Region ..................................... 11 Selected Indicators on Philippine Fisheries .................. 12 Estimation of Small, Pelagic Fishery Resource Depreciation (Appreciation) at 1988 Prices and Cost .................. 13 Regression ofFish Catch on Factor Inputs by Selected Fishing Area and Fishing Gear, Central Visayas Regional Project Nearshore Fisheries Sites ............................. 14 Regression of Fish Catch on Effort and Time by Fishing Area and Province, Central Visayas .........................

471 473 474 479 484 485 486 488 489 490

492 498 501

507 508

xvi

•

15 Regression of Fishing Effort on Nearshore Fishery Project Activities and Time, Selected Cases from Fish Catch Monitoring Data, 1988-1991 .......................... 16 Tests for Differences in Gross Fishing Income Central Visayas Nearshore Fishery Project Participants vs. Nonparticipants, 1991 .................. 17 Values of Key Fishery Indicators at Open Access, MSY and MEY .................................... 18 Top Users of Waste Disposal Services Provided by Water, 1988 .............................................

510

511 513 514

Intal and Quintos Paper 1 2 3 4 5

Comparative Performance of Countries by Trade Regime ...... Prospective Abatement Costs (In thousand pesos, 1988) ....... Philippine Industries Ranked by Pollution Intensity, 1988 ..... Some Measures of Protection and Competitiveness of Selected Sectors ..................................

526 531 537

Trade Regimes and the Environment (In percent) .............

547

541

xvii FIGURES

Cari_o Paper 1 2 3 4 5

The Impact of Road Projects on Households .................. The Classic Experimental Design .......................... The Alternative Design ................................... Examples of New Causal Chain Showing Effect of Factors Other Than Road Project ........ Rubric Environment of a Road .............................

30 31 47 48 49

Bautista Paper 1 2

A Framework for Policy Analysis ......................... Direct Effects of the External Environment ...... . ...........

113 116

David Paper 1 2

Trends in Agricultural Research Expenditures in Real Terms 3-year Moving Average .................. Trends in Agricultural Research Intensity Ratios (Percent of Agricultural Research Expenditures to Gross Value Added in Agriculture) 3-year Moving Average ......

164

165

Balisacan Paper 1

Universal Transfer and Ideal Solution

2 3 4

to the Targeting Problem ............................. Optimal Targeting ...................................... Monetary Gains of Targeting (In billion pesos) ............... Incremental Gains and Administrative Cost of Targeting .......

183 185 190 195

M. Lamberte Paper 1

Gross Spread by Size of Borrowers

.......................

244

xviii

Koppel Paper 1

How a Support System Learns About Farmers ...............

289

Herrin Paper 1 2 3 4 5 6a 6b 6c 6d 7a 7b 7c 7d

Determinants of Women's Health and Fertility ............... Survivors at Exact Ages (Ix), 1990 ........................ Life Expectancy by Region, 1990 ......................... Infant Mortality Rate, 1990 .............................. Mortality from Anemia, 1990 ............................ Underweight Children Aged 0-6 Years, 1989-1990 ........... Underweight Children Aged 7-10 Years, 1989-1990 .......... Stunted Children Aged 0-6 Years, 1989-1990 ................ Stunted Children Aged 7-10 Years, 1989-1990 ............... Blindness by Age and Sex, 1990 .......................... Mental Illness by Age and Sex, 1990....................... Orthopedic Handicap by Age and Sex, 1990 ................. Persons with Any Disability by Age and Sex, 1990 ...........

343 347 348 349 351 356 356 357 357 358 358 359 359

Reyes Paper 1

MIMAP Monitoring System Flow of Information ............

455

Delos Angeles Paper 1 2

Depreciation of Natural Resources ........................ Shifts in Access to Forest Land, 1980 vs. 1990 ...............

477 482

FOREWORD

Preparations for this special book in honor of Dr. Gelia T. Castillo began as early as two years ago in March 1993 when the undersigned put forward the idea in one of the Institute's management committee meetings. At that time, the Institute learned that Dr. Castillo was about to retire from the University of the Philippines. The Institute had long wanted to hold a symposium and publish a book touching on various social and economic issues wherein the insights and viewpoints of a number of experts/authorities are presented. It had also long wanted to pay tribute to former members of its Board of Trustees who have contributed immensely to its growth and development over the years. The news about Dr. Castillo's retirement provided the opportune occasion. As a former member of the lnstitute's Board and advisor to many of the Institute's research projects, Dr. Castillo is one of those who have vastly helped in building up the Institute's research agenda and in establishing linkages with other local and international institutions. Her perspective from a noneconomics point of view and her multidisciplinary approach to looking at key policy and development issues has, on many occasions, urged the lnstitute's researchers to take a second look at the problem on hand and view it outside the context of purely economic theories and principles. With the concurrence of the lnstitute's management committee and consultations with members of its present Board, the Institute, led by the undersigned and Ms. Jennifer P.T. Liguton, began conceptualizing, planning and implementing the project and its related activities. Meetings were held on the themes/topics for the book and the prospective line-up of article contributors. Consultations were likewise made with the honoree on

possible names to be included. The idea of presenting the papers in a special symposium prior to their publication was also firmed UP,with the accompanying suggestion to tap funding support from an external source. As soon as the line-up of authors/contributors was finalized, letters were sent to them, inviting them to contribute a paper/article for the special volume that the Institute is planning in honor of Dr. Castillo. The choice of topics was left to the paper writers, with the caveat that the theme is something within the research and intellectual interests of the honoree. All invitations were accepted. At the same time, the International Development Research Centre (IDRC) of Canada, an institution with whom Dr. Castillo has had a long-standing professional and advisory relation, graciously agreed to finance the publication of the special book. From thereon, it was "all systems go." The symposium was held on September 2%28, 1994, with some of the country's great minds in the social sciences in attendance. The two-day symposium was proof that not one field of discipline is sufficient to respond to the country's development and policy concerns. If at all, it became even more evident during the symposium that the interaction of all fields --and social scientists --was crucial in addressing our people's social and economic woes. The papers presented in the symposium, together with the comments, reactions and highlights of discussion in_s_gmeof the modules, are included in this book. In addition, four other articles whose authors were not able to make it during the symposium are also included. A special article on gender issues is likewis e included. This article, which was originally written for and presented during the 6th Rafael M. Salas Forum, is being reprinted here with the permission of the Rafael M. Salas Foundation. The topic is one of the issues that is of close interest to the honoree. Hopefully, all the papers:will help shedlight onmaior;developmentslinjsociai ]ssues_and, at the same time, tickle our brains into thinking of numerous and innovative ways of resolving them. A number of individuals and institutions are responsible for putting this publication and the symposium together. Foremost, of course, is IDRC without whose assistance this. book may not have been completed We

xxi

tried to list down as much as possible all the other names in the Acknowledgment. In the event, however, that some were inadvertently omitted, it is simply because there are too many. Outright, we apologize for it. Finally, we thank the honoree herself for serving as our inspiration to push for and complete this project.

PONCIANO S. INTAL, JR. PIDS President

ACKNOWLEDGMENTS

We sincerely thank the following for contributing to this special and the symposium-testimonial in honor of Dr. Castillo: •

•

• •

•

book

the International Development Research Centre (IDRC), through its Singapore regional director, Dr. W. Randy Spence, for the financial support given this publication; the PIDS Board of Trustees and PIDS Management Committee for their all-out support in the various stages of preparation of both the symposium and this book; Dr. Emil Javier, president of the University of the Philippines system, for his testimonial in honor of Dr. Castillo during the symposium; Dr. Samuel Hsieh for sending his warmly-written tribute to Dr. Castillo, thereby lending further proof to the "internationality" of the honoree's works; Dr. Gordon Prain for his words of appreciation to Dr. Castillo, showing once again the honoree's all-consuming desire to see ideas put into action and rendered useful to the target beneficiaries; all the paper writers/contributors, namely, Dr. Arsenio Balisacan, Dr. Cynthia Bautista, Dr. Romeo Bautista, Dr. Ledivina Carifio, Dr. Mercedes Concepcion, Dr. Cristina David, Dr. Marian delos Angeles, Dr. Robert Evenson, Dr. David Glover, Dr. Alejandro Herrin, Dr. Ponciano Intal, Jr., Mr. Paul Quintos, Dr. Bruce Koppel, Dr. Exaltation Lamberte, Dr. Marie Lamberte, Dr. Celia Reyes, and Dr. Edita Tan;

xxJv

• the commentators/reactors, namely, Dr. Jose Abueva, Dr. Fermin Adriano, Dr. Rodolfo Florentino, Dr. Sylvia Guerrero, Dr. Mahal Mangahas, Dr. Corazon Raymundo, and Dr. Gwendolyn Tecson; • Professor Solita Coll_is-Monsod for her special article on gender issues; • the Rafael M. Salas Foundation, through its Executive VicePresident, Atty. Francisco L. Llaguno, for giving us the permission to reprint Professor Monsod's article in this special publication; • the moderators/facilitators of the symposium modules, namely, Dr. Emmanuel de Dios, Mr. Mario Feranil, Dr. Ponciano Intal, Jr., Dr. Mario Lamberte, Dr. Gilberto Llanto, and Dr. Aniceto Orbeta; • the rapporteurs, namely, Ms. Mildred Belizario, Ms. Loretta Jovellanos, Ms. Marife Magno, Ms. Lezyl Ponce, Mr. Mervin Samadan, and Ms. Suzy Ann Taparan, as well as Ms. Odette Saleedo who supervised the preparation and reformatting of the documentation of the module highlights; • the Research Information Staff which handled the organization of the symposium and the publication of this book,, headed by Ms. Jennifer Liguton with the able assistance ofOdette Salcedo as well as Jane Alcantara, Necy Aquino, Ann Cleofas, Cora Desuasido, Genna Estrabon, Gati Godes, Lezyl Ponce, Wilbert San Pedro, Suzy Ann Taparan, Tina Tolentino, and Ores Ulzame; • the Operations and Finance Staff, especially its head, Ms. Andrea Agcaoili, its reproduction and messengerial units, and Ms. Pelagia Holasca; the Management Information Staff, especially Doris Remolador; and the Project Services Staff, especially Laila Garcia; and • finally, the honoree herself, Dr. Gelia Castillo, and theparticipants in the symposium for their insights and stimulating comments.

The Publishers

PHILIPPINE SOCIAL SCIENCE STUDY IN THE 1990s: Status, Methodology and Relevance

REFLECTIONS ON PHILIPPINE SOCIOLOGY IN THE 1990s

MaMACrNTmAROSEBANZON BAVrlSTA

HIS PAVERin honor of Dr. Gelia T. Castillo, one of the pillars of Philippine social science, shares initial reflections on Philippine sociology in the 1990s. It takes off from previous assessments of the state of the social sciences as well as from observations regarding the current involvement of Filipino sociologists and the substantive and methodological developments in their discipline. 1 The paper revolves around three points. First, compared to the 1970s and the early 1980s, there is, in the 1990s, greater pluralism or convergence of theoretical perspectives and more common elements in the stance which sociologists have taken vis-a-vis develOpment concerns. 1. The assessments are contained in Castillo (1994), Talledo (1993), Madigan (1987), Miralao (1986), Abad and Eviota (1982), and Panopio and Bennagen (n.d.). Castillo, Gelia T. "The Social Sciences in the UP System: A Commentary on Mission, Vision Goals and Objectives." In UP In Search of Academic Excellence, edited by G. Abad ct al., Quezon City: UP Center for Integrative and Development Studies, College of Public Administration and UP Press, 1994. Talledo, Tomas. "Philippine Sociology in the 1980s." Masteral thesis, Department of Sociology, University of the Philippines, 1993. Madigan, Francis, S.J. "Problems of Research in Provincial Colleges and Universities." Paper presented at the Workshop on the Role and Challenge of Regional Academic Institutions in Meeting Regional Research Needs, Philippine Social Science Council, December 8-9, 1987. Miralao, Jean. "Research Trends in Contemporary Philippine Society." Philippine Studies Newsletter 14 (February 1986). Abad, Ricardo, and Elizabeth Eviota. "Philippine Sociology in the Seventies: Trends and Prospects." Philippine Sociological Review 30 (1982). Panopio, Isabel, and Ponciano Bennagen. "The Status of Sociology and Anthropology in the Philippines." Report submitted to the UNESCO Regional Office, Bangkok, Thailand. Typescript.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Second, Philippine sociology in this decade is characterized by an increasingly interdisciplinary framework, a broader definition of what constitutes sociological problems, and a blurring of the distinction and hierarchy between basic and applied fields.. Third, the final decade of the century highlights the imperative to mobilize sociologists to aggressively fill the gaps in our understanding of Philippine society, critically review existing paradigms in ligl)t of empirical realities, and incorporate disparate findings, insights and developments into more conceptual or theoretical publications which elaborate on existing models or advance alternative perspectives. It is important to note that some of the observations which constituted those reflections are manifested in Dr. Castiilo's writings and lectures. FROM POLARIZATION TO PLURALISM

AND CONVERGENCE

Sociology as an academic discipline emerged in the West as a specific response to concrete social problems generated by the formative and maturation phases of capitalism. Its "purpose was to understand the chaos and disorder wrought by the industrial Revolution and trace the sources of human progress and misery. Some of its forefathers also spel led out a range of means to improve the human condition. In their assessment of the state of Philippine sociology in the 1970s, Abad and Eviota (1982) asserted that while Western sociology was ro6ted in the concrete problems of the societies which engendered the discipline, Philippine sociology was a colonial implant. From a social philosophy course instituted in the latter part of the Spanish colonial period, sociology developed as an academic discipline during the American period. The biggest boost to its growth occurred, however, after World War II when a substantial number of foreign-trained sociologists returned from the United States. The theories and perspectives disseminated to Filipino students

BAUTISTA:REFLECTIONS ON PHILIPPINESOCIOLOGY

constituted arich body of knowledge that was somehow alien to the concrete realities that confronted the country then. 2 Although conscious efforts to break out of the colonial mold were more apparent in the 1970s, the early sociologists were equally interested in making themselves relevant to what they perceived to be the needs of Philippine society. They were concerned not only with generating Philippine data to substantiate the ideas learned abroad but, more importantly, to ground the impressionistic assessments of Philippine realities on systematic empirical research. In response to the destruction brought about by World War II, for instance, sociologists in the 1950s highlighted the contributions of the discipline to social planning and reconstruction. As for thelgeneration of Philippine data, sociologists in the 1950s and 1960s focused, among others, on the areas of ethnic relations, social institutions like religion and the family, community_studies, and the norms and values of Filipinos. These thematic foci and the obvious silence with regard to the Huk Rebellion and peasant unrest reflected the concerns of American sociology during the period and the dominance of functionalism, empiricism, and the view that sociology's role in the academic division of labor is the separation of the economic from the social sphere. Up until the 1960s, there were no marked ritts among sociologists. By the 1970s, however, significant sources of polarization became evident within the discipline. Reflecting the substantial developments of sociology in other parts of the world, the dominance of functionalism was challenged by the acceptance of Marxist traditions (i.e., the Critical School of Sociology or the Frankfurt School, the humanism of Lucian Goldman and, later, the structuralism of Louis Althusser) in the field. 3Thus, students were exposed 2. Bennagen and Panopio (1981) claimed that US-educated sociologists who returned to the Philippines in the 1950s and the 1960s were influenced by the neopositivism of George Lundberg, the functional theories of Emile Durkheim, Talcott Parsons and Robert Merton, and the sociopsychological theories of George Mead. 3. The shifts in the thematic focus of Frankfurt School theorists and Goldman to the realm of culture and consciousness facilitated the acceptance of their Marxist works within Western mainstream sociology.

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

to the functionalist consensus model, on tile one hand, and the Marxistinspired conflict model of society, on the other. These polar models had their counterparts in the areas of Development Sociology and Rural Sociology. For instance, the dependency theory, which was latter replaced by various models of articulation of modes of production, was poised against growth and modernization theories. The inroads of Marxism in the discipline brought to the fore the charge that sociology as a discipline had an ideological character. By systematically focusing on the social and cultural aspects of Philippine life without establishing their links to the wider socioeconomic and political structure, sociologists were said to mask the structural roots of social ills and contradictions. Their studies were deemed to have contributed to more efficient means &social control by power wielders. This position lay at the heart of the critique of the Institute of Philippine Culture's studies of values and modernization .4 The polarization extended to methodological positions. Just as the positivist tradition that demanded the rigorous training of sociologists in survey methods and statistics was becoming dominant in universities, its ontological and methodological claims were questioned. 5 The interpretive and phenomenological schools of thought stressed the significance of language and meaning in the social construction of reality rather than the search for generalizations. Thus, quantitative methods were counterposed to ethnography and other qualitative methods of data gathering and analysis. The methodological distinction between sociologyand social anthropology at the height of the dominance of positivism began to blur at this time. Perhaps the most evident division within the ranks of sociologists in the 1970s was in the stance taken towards policy research and planning under the Marcos regime. Many professional sociologists were absorbed by the expansion of bureaucratic activity, and researches were commissioned 4. See David (1982) for a Marxist-inspired as well as Samsom (1981).

perspective on the study of values in research

5. In the University of the Philippines, undergraduate sociology majors in the first half of the 1970s were required to take 18 units of mathematics and statistics..

BAUTISTA:REFLECTIONS ON PHILIPPINESOCIOLOGY

within the technocratic framework of the period. Government agencies like the National Economic and Development Authority recruited sociologists to aid in the formulation of national plans. New agencies such as the Development Academy of the Philippines and the Philippine Center for Advanced Studies became employers of sociology majors (Makil and Hunt 1981). Furthermore, evaluation and family planning research conducted in conjunction with government projects became the vogue, accounting in part for the significant share (42 percent) of articles published in the Philippine Sociological Review in the areas of development/social change (including evaluation research) and population/family planning (Abad and Eviota 1982: 143). The active participation of professional sociologists including those in academe in policy research and planning during the Marcos regime was severely criticized by their colleagues in academe. 6 In serving as technocrats, consultants, and researchers, they were seen not only to have taken for granted the predefined standard of rationality and value assumptions of the powerful but to have also legitimized the structure of domination by providing a scientific aura to the courses of state action. 7 The Marcos regime's rapid loss of credibility in the late 1970s and especially_n the wake of Senator Benigno Aquino's assassination further mobilized nonpartisan sociologists and other members of the social science community to support the mounting protest against the regime. The downfall of authoritarian rule in the aftermath of the successful EDSA uprising in 1986 increased public awareness of the economic, social, cultural and ecological problems at the historical juncture of the mid-1980s. 6. For a discussion of the positions of Filipino social scientists during Martial Law, see Carifio, Ledivina. "Research Under Martial Law: The Tasks and Risks of the Filipino Social Scientists." Philippine Sociological Review 28 (1980). 7. As articulated, this criticism is woven out of the arguments in David (1977, 1978, 1982): "'The Sociology of" Poverty or the Poverty of Sociology: A Brief Note on Urban Poverty Research." Philippine Sociological Review 25 (1977); "The Use and Misuse of Social Research." Philippine Sociological Review 25 ( 1978): and "Sociology and Development in the Philippines." PhilippineSociological Review 30 (1982).

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

The Philippines was deeply indebted, and despite the number of Filipino social scientists who achieved recognition in international bodies like the United Nations and the World Bank, the country lagged behind other nations it once surpassed in terms of economic development and quality of life of its citizens. Dire poverty and the lack of employment opportunities resulted in the diaspora of Filipino migrant workers to all parts of the world. Furthermore, ecological degradation had reached alarming proportions with projections of the possible loss of forest cover by the 1990s if logging activities remained unabated. The magnitude'of the problems and the challenge of substantiating the process of democratization paved the way for a convergence of the polarized positions which sociologists took vis-a-vis policy research. Among those who produced studies within the technocratic framework of the authoritarian state, there was dissatisfaction with the impact of their work. Except for a few government agencies and nongovernment organizations (NGOs), other institutions had neither the interest nor the compulsion to seriously take their studies into account. Several reasons accounted for the underutilization of those research studies: the ad hoe process of policy formulation that took many other considerations into accounts; the failure of some sociological studies to grapple with the complex problems on hand because of their inappropriate analytical tools and methodologies; and the poor links of researchers with popular organizations, people at the grassroots, the media, and different actors in government agencies. In the latter half of the 1980s, prominent sociologist-technocrats of the 1970s began to articulate a growing interest in the conduct of research formulated and implemented in consultation with a wider network of actors including other government agencies, NGOs, and people's organizations. Among social critics of the 1970s, on the other hand, the challenge posed by the social context of the late 1980s and the 1990s was the testing of the valid ity of ideas drawn from theories and perspectives of social transformation for concrete alternative policies and programs. Several roles for critical

BAUTISTA: REFLECTIONS

ON PHILIPPINE SOCIOLOGY

sociologists that were once unattractive during the Marcos years presented themselves with the demise of authoritarian rule in 1986. From that time on, sociologists,.together with other social scientists, could specify a range of alternative policies that help initiate, document, and analyze localized social and economic experiments and lend their expertise to help enhance the success of these experiments. These experiments, in turn, were viewed as mechanisms for strengthening the local political and economic organization as well as boosting the confidence of people at the grassroots so that they could pressure government to pay attention to ideas documented by field research and fed back by a more organized local constituency. Apart'from supporting, documenting and analyzing the process and results of creative social and economic experiments, the sociologists' contribution in the area of consciousness-raising has been suggested. Drawing from people's categories and definitions of the situation as gleaned both from field research and public opinion surveys, they helped to sharpen the public's awareness of problems, issues, and their possible resolution through vigorous intellectual debates and discussions disseminated in popular form. The convergence in the activities of sociologists in the 1990s as they illuminate and address concrete problems at the macro and micro levels and as they link with other groups has drawn support. This probably reflects unprecedented global developments since the latter half of the 1980s. It is occurring at a historical conjuncture when the world witnessed two years ago the breakdown of the Soviet empire and is now seeing the intensification of ethnic conflicts, despite Opportunities for erstwhile adversaries to resolve deep-seated antagonisms in the pursuit of negotiated peace -- a conjuncture where the balance between market forces and state intervention is also being sought. The convergence also coincides with theoretical attempts to integrate opposing perspectives and different levels of analysis. The polemical debates in the late 1970s and 1980s between Marxism and Functionalism, Positivism and phenomenology, Interpretive or Hermeneutic Sociology, Marxist Structuralism and Hegelian or Humanist Marxism, the different

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

variants of Marxism and modernization theory, and the macro level theorists and the theorists of small groups, albeit mirroring developments in Western sociology, had positive effects on the discipline. Sociology moved much closer to achieving at least partial integration of political economy and social analysis with each theoretical encounter. Concretely, the debates were the impetus which led to (1) Gidden's theory ofstructuration combining political economy's focus on structures with human agency; (2) attempts to constitute a Marx-Weber theory of society; and (3) the macro-micro nexus which brought together micro theories emphasizing the contingency of the social order and the centrality of individual negotiations, on the one hand, and macro theories that focus on structures, on the other. In the realm of methodology, the criticisms which phenomenologists hurled against positivism sensitized the new breed of sociologists to people's taken-for-granted meanings and prodded them to use ethnography and qualitative techniques for the analysis of texts, songs, and other products of popular culture. The ideas of the Critical or Frankfurt School of Sociology as translated into a critique of the discipline as a mode of thought, further weakened the hegemony of quantitative methods and legitimized the use of the once "inferior, soft, and unscientific" qualitative methods. In short, by the !990s, the limits of sociology as a scientific enterprise began to widen and a pluralism of methods prevailed. Quite apart from the polemical theoretical debates, the new sentiments which moved sociologists to reconsider old theories and methods of research emanated from the practical experience of more applied sociologists. The failure of development efforts in the 1960s and the 1970s, for instance, gave rise to a more participatory development paradigm and, with it, participatory modes of research that creatively combined traditional and new methods (i.e., censuses or surveys, long interviews, process documentation, focused group discussion) in the spirit of enhancing people's participation in their Own development. That empirical findings comparing participatory and nonparticipatory projects revealed achievements that ex-

BAUTISTA: REFLECTIONS ON PHILIPPINE SOCIOLOGY

ceeded expectations further reinforced participatory projects and research evaluation strategies. 8 The need to integrate different methodologies as reflected in the liberal use of the concept of triangulation or the multiple-strategy approach among sociologists in the regions derives from the problem of issue-orientation of many researches conducted from the mid-1980s to the 1990s. Traditional and new funding sources that supported many of the studies during this period were not as concerned with academic understanding alone as with specifying concrete alternatives for alleviating suffering based on sound research. This trend emphasized the need for sustained and intensive field-based research, the immersion of the researcher in the issue, and the establishment of links with actors in the field. BROADER

DEFINITION

OF SOCIOLOGICAL

AND THE BLURRING BETWEEN

PROBLEMS

OF LINES

BASIC AND APPLIED

FIELDS

The confluence of the following factors -- the need to understand and address concrete issues and problems at the macro or micro level; the thrust of funding agencies toward research that have concrete applications for development and those that require linkages with various actors in the field; and the new openness to the substantiation of theoretical claims --not only highlighted tile need for theoretical and methodological triangulation but also undermined the artificial boundaries which set academic disciplines apart from one another. 9 8. In the National Irrigation Administration's experiment on participatory communal irrigation, for instance, the participatory method resulted in larger irrigated areas, greater productivity, stronger associations, improved water distribution, and better compliance with government policy, among others (De los Reyes and Jopillo 1986). De los Reyes, Romana and Sylvia Ma. Jopillo. An Evaluation of the Philippine Partieipato_ Communal Program. Institute of Philippine Culture, Ateneo de Manila University, 1986. 9. The use of intensive case studies, historical material and ethnographic data, together with one-shot surveys and other quantitative techniques and interdisciplinary trends, was noted by Miralao (1986) in her paper.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

While a specific substantive problem may be within the traditional purview of one discipline, the understanding of something concrete entails a more holistic, albeit interdisciplinary or muitidisciplinary, framework. The essentially interdisciplinary character of the sociological perspective is deemed useful in the 1990s when academe is pressured to confront concrete issues and areas of concern relevant to the multiple sectoral and regional demands of transforming the economy and society. Sociologists generally do not make major adjustments when heeding the demand for inter- or multidisciplinarity. The discipline, as envisioned by its forefathers and practiced by professional sociologists, is claimed to be a general science of society. As such, sociologists venture into the study of the most diverse phenomena, focusing on their various aspects including the economic, political, and social psychological, making use of historical, anthropological and survey data, and constantly engaging in philosophical debates about the theoretical and methodological foundations of the discipline. The loose boundaries and increasing pluralism of the discipline make it more likely for sociologists to transgressthe turfs of other social sciences while allowing other social scientists into their areas of interest. This explains why, for instance, the specialized areas of the discipline have grown alongside theoretical and methodological developments. In the Department of Sociology of the University of the Philippines, for instance,the research work of the faculty and the thesesof students cluster around a variety of concerns: sociology of healthand medicine, sociology of agriculture and technology transfer, overseas migration, sociology of institutions (law, media, the family),, sociology of deviance, sociology of popular culture, ergonomics and industrial sociology, sociology of science,political sociology, development sociology, sociology of newly industrializing countries, environmental sociology/human ecology, demography, and sociology of_women,each with subfields of its own. It is interesting to note that development in the discipline's areasof specialization have coincided with the greater participation of sociologists in multidisciplinary projects involving other social scientists and natural

BAUTISTA:REFLECTIONS ON PHILIPPINE SOCIOLOGY

scientists within and outside the university. In the aftermath of the EDSA uprising, they have also been active in tripartite experiments composed of representatives of academe, government, and nongovernmental and people's organ izations. The theoretical and methodological insights from these multidisciplinary and multisectoral exchanges, however, have not fed back systematically to the discipline. The loose boundaries and increasing pluralism also explain why the Philippine SociologicalReview, the official journal of the Philippine Sociological Society, and the society itself have opened their doors to nonsocioIogists. In the 1980s, Talledo (1993) noted the significant contributions of nonsociologists who employed the analytical tools of phenomenology, semiotics, and critical literary theory. I0 The increasing looseness of the boundaries of sociology with respect to other disciplines is matched by the blurring of lines demarcating basic from applied sociology. The sociologists' immersion in concrete issues and problems has undermined the distinction and hierarchy between the two. it has also called into question the implicit assumption that an applied social science is one which applies the principles of the pure or basic disciplines like sociology to practical concerns. There is a growing realization that sociology and the other basic social science disciplines in their current state can hardly provide the theoretical or conceptual systems needed by those who grapple with concrete and changing realities. They are as yet unable to constitute some of the findings of those in the field into raw materials for theory construction and methodological innovations. The blurring of the division between basic and applied sociology lias been facilitated by the existence of institutional links among sociologists. In the University of the Philippines, for instance, sociologists in the more

10. See, for instance, Ileto (1984), Contreras (1989), and San Juan (1987. 1989). Ileto, R. "'Bonifacio, the Text, and the Social Scientist." Philippine ,Sociological Review 32 (1984). Contreras, A. "The Discourse of Development: Some Implications Local Power/Knowledge in the Philippine Uplands." Philippine Sociological Review 37 (1989). San Juan. E. Jr. "'Western Sociological Literary Theory: A Historical Survey." Philippine Sociological Review 35 (1987), and "Making Filipino History in a Damaged Culture." Philippine Sociological Review 37 (1989).

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

applied fields such as demography, public administration, mass communications, and social work and community development have participated in graduate school teaching and thesis advising. While such links are in place, the enriching contributions of the different fields to the discipline need to be further enhanced by regular exchanges and dialogues among sociologists. THE CHALLENGE FACING PHILIPPINE SOCIOLOGY IN THE 1990S Convergence, on the one hand, and the theoretical and methodological pluralism within sociology, on the other, have pushed the frontiers of the discipline in the 1990s, linking it not only to the basic and applied social sciences whose boundaries it has traditionally traversed but to both the natural and engineering sciences as well. It is noteworthy, however, that as far as sociology is concerned, the refinement or development of theories anchored on Philippine realities preferably expressed in Filipino has been exceedingly slow. This is not primarily because of the lack of raw materials to stimulate theoretical production. The experiences since the 1980s of sociologists based in tile universities, NGOs and government agencies regarding concrete problems and issues they have worked with are rich in insights although many of these remain undocumented. For instance, there may be preliminary material for reconceptualizing the nature and forms of Filipino families--from the single-parent families created by separation and overseas employment, to the gypsy families without homes, to families led by homosexuals, down to the families of siblings formed by street children. There are also initial materials for rethinking the nature of Philippine cities and of urban poor squatter communities in the Philippines, the social psychology of urban violence in these communities, the process of technology transfer in agriculture, leadership and Filipino organizations, the social mobilization of communities, the role of the informal sector in waste disposal and management, and even the politics of the weak and the strong at the local level.

BAUTISTA:REFLECTIONS ON PHILIPPINE SOCIOLOGY

Quite apart from raw materials for initial theorizing on substantive topics, there are also some leads which call for shi_s in perspectives or paradigms. It is interesting to note, for instance, that urban sociology continues to be counterpoised to rural sociology despite the increasing urbanization of rural communities and the transformations in the agricultural sector. In the testimony presented to the Independent Commission on Population and the Quality of Life, Dr. Mary Racelis argued eloquently for a change in the paradigms of urban society. II Urban problems have generally been relegated to the background because of the assumption that life in the urban areas is generally better than in rural places and the emphasis on rural areas in development models. This emphasis is bolstered by the fact that existing "pockets of affluence" in urban areas where 46 percent of the urban population live below the poverty line have afffected the overall estimation 12 of urban poverty. While there are initial raw materials for conceptual and theoretical work in areas such as those mentioned above, the process of thinking and theorizing will have to be continuously stimulated by new insights from the available literature, from discussions with those immersed in the field, from actual field exposure, and from the collection of additional materials to validate intial insights. Apart from the refining or building of theories anchored in Philippine realities, the challenge posed by the 1990s is to continue to understand and address concrete issues and problems at the macro and micro levels. One way of responding to this challenge is to undertake what sociologists who are armed with intellectual curiosity and an investigative mind, an arsenal I I. The testimony was given during the Southeast Asian Regional Consultation on Urbanization and Threats to Human Security and Survival held at the Hotel Nikko Manila Garden on September 21, 1994. 12. The estimates are based on the testimony ofCecille Joaquin-Yasay, Executive Director. Commission on Population. The testimony was presented in the Southeast Asian Regional Consultation on Urbanization and Threats to Human Security and Survival held at the Hotel Nikko Manila Garden on September 2 I, 1994.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

of theories and innovative methodologies, a willingness to be immersed in the field, an openness to listen to people and shift gears, and a basic commitment to improve the human condition especially of the marginalized segment in Philippine society, do best -- sound, field-based research. There are presently many gaps in the sociologists' understanding of society which, when filled, may enable those in the discipline to participate more actively and meaningfully in public discussions and debates. These gaps include the need for more basic research to reconceptualize Philippine social institutions in the fast changing world of the 1990s -- the family, media, church and religion, political institutions, economic organizations/sectors, and the NGOs. If, indeed, the, Philippines is a center of creative organizing, successful social innovations in the country will have to be documented and analyzed. It is also necessary to generate a social map of industries -- their structure and social organization, level of technology, labor arrangements, and the links between the formal and informal sectors. Against the backdrop of satellite television and overseas migration, it is time to take stock of the changes in Filipino values, world-views, and consciousness. Despite rapid urbanization and the projection that by the next century a half of the country's population will be living in cities, sociologists have yet to understand the urban phenomena. This list, which can goon and on, can best be drawn up by various communities of sociologists. One can argue, of course, that lists such as this have been with us for decades. Since those concerns should have been addressed long ago, one of the challenges of the 1990s is the speeding up and intensification of the research process by organizing teams of sociologists or social scientists with ties to various groups, informants and other actors in the field. While each one may be pursuing a different angle of the problem, the team can process insights and build their expertise together. There are proven advantages in working as teams in a Collective research or in study groups, with leeway and respect for individual styles of scholarship. In the research process, approaches and methods can be modified by the inputs of colleagues. Teamwork can also provide leads

BAUTISTA:REFLECTIONS ON PHILIPPINE SOCIOLOGY

which may be quickly relayed to the appropriate member who could then observe the dynamics of a relevant process which an individual scholar working single-handedly may take time to comprehend. In addition, a team can more easily implement and capture the benefits of theory and data triangulation. it is important for teams of sociologists to include graduate and undergraduate students whose interests and commitment to their research project and the discipline can be sustained. Inclusion of these students through a system of apprenticeship will contribute immensely to the training of a new generation of sociologists. Thus far, training in sociology has been confined to academic discourses involving readings, most of which are removed from Philippine realities. Actual student involvement in field-based research with mentors can provide the opportunity to translate abstractions to reality and to reconstruct abstractions. For the full-fledged sociologist, direct involvement in research in conjunction with others provides an excellent training opportunity for regearing perspectives. In conclusion, the 1990s pose three major challenges for sociologists, especially those based in academe: (1) to undertake solid research which will expose and physically link sociologists to actors and other social scientists in the field and enable them to help address concrete issues and problems; (2) to process, codify, analyze and transform experiences and empirical findings into raw materials for theoretical production; and (3) to translate the shifts in mental gears and the theoretical and methodological developments achieved so far into a training program which will stimulate and sustain the interest of the next generation. While there are communities of sociologists like those that comprise the Department of Sociology of the University of the Philippines who are ready to take on the challenge, there are institutional constraints to be surmounted. The infrastructure for field-based research, theorizing, collective discussion, and more intensive training has yet to be set up. As it is, those who are training the next generation hardly have time to be exposed while those who have such exposure have no time to integrate their insights

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

into their teaching and writings, much less develop conceptual or theoretical innovations (Madigan 1987). For now, it is noteworthy that universitybased sociologists are beginning to cluster along significant areas of research to discuss with social scientists in other universities, NGOs, and in government and to see the value of linking with other actors in the field. More importantly, they are now beginning to conceptualize new modes of organizing teaching and research in the university and are pressing for much needed changes. Implicitly, the courses taught at the Department of Sociology of the University of the Philippines are gauged by their success in imparting a "sociological imagination" -- that quality of mind which enables the possessor to see the interrelationships of biography, history, and the social structure and in moving easily from the micro to the macro levels and from the abstract to the concrete. The promise of the discipline which has sustained us has been lost among the more brilliant minds of the next generation. 13It is our fervent hope that the multiple research and theorizing projects of communities of sociologists in the 1990s will revitalize the discipline and fulfill its promise to the future sociologists who will carry the torch to the 2 l st century.

13. The survey of sociology teachers in 1985 revealed that teachers in all the regions considered poor quality students to be a major problem (Philippine Sociological Review 1987). The recent realization among graduates that sociology may after all be an excellent preparation for law school seems to be improving the situation.

BAUTISTA:REFLECTIONSON PHILIPPINESOCIOLOGY

BIBLIOGRAPHY Abad, Ricardo and Elizabeth Eviota. "Philippine Sociology in the Seventies: Trends and Prospects." Philippine Sociological Review 30 (1982). Carifio, Ledivina. "Research Under Martial Law: The Tasks and Risks of the Filipino Social Scientists." Philippine Sociological Review 28 (1980). Castillo, Gelia T. "The Social Sciences in the UP System: A Commentary on Mission, Vision Goals and Objectives." In G. Abad et al. (eds.) UP In Search of Academic Excellence. Quezon City: UP Center for Integrative and Development Studies, College of Public Administration and UP Press, 1994. Catapusan, Benicio. "Development of Philippine Sociology." Philippine Sociological Review (July-October 1957). Contreras, A. "The Discourse of Development: Some Implications of Local Power/Knowledge in the Philippine Uplands." Philippine Sociological Review 37 (1989). David, Randolf. "The Sociology of Poverty or the Poverty of Sociology: A Brief Note on Urban Poverty Research." Philippine Sociological Review 25 (1977). .

"The Use and Misuse of Social Research." Philippine Sociological Review 25 (1978). . "Sociology and Development in the Philippines." Philippine Sociological Review 30 (1982). De los Reyes, Romana and Sylvia Ma. Jopillo. An Evaluation of the Philippine Participatory Communal Program. Quezon City: Ateneo de Manila University, Institute of Philippine Culture, 1986. Ileto, R. "Bonifacio, the Text, and the Social Scientist." Philippine Sociological Review 32 (1984). Madigan, Francis, S.J. "Problems of Research in Provincial Colleges and Universities." Paper presented at the Workshop on the Role and Challenge of Regional Academic Institutions in Meeting Regional Research Needs, Philippine Social Science Council, December 8-9, 1987.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Makil, Perla and Chester Hunt. "The Impact of Martial Law on Philippine Sociology." Social Science Information (January-March 1981). Miralao, Jean. "Research Trends inContemporary Philippine Society." Philippine Studies Newsletter 14 (February 1986). Panopio, Isabel and Ponciano Bennagen. "The Status of Sociology and Anthropology in the Philippines." Report submitted to the UNESCO Regional Office, Bangkok, Thailand. Typescript. Samson, Laura. "Kahirapan at Ideyolohiya sa Panitikang Popular." Masteral thesis. Quezon City: University of the Philippines, Department of Sociology, 1981. San Juan, E. Jr. "Making Filipino History in a Damaged Culture." Philippine Sociological Review 37 (1989). . "Western Sociological Literary Theory: A Historical Survey." Philippine Sociological Review 35 (1987). Talledo, Tomas. "Philippine Sociology in the 1980s." Masteral thesis. Quezon City: University of the Philippines, Department of Sociology, 1993.

Sylvia H. Guerrero

COMMENTS

Cynthia's [Dr. Cynthia Rose Bautista] reflections on Philippine sociology in the 1990s are perceptive and provocative. The first five pages of her paper trace the road travelled by sociology in the last two eventful decades -from the 1970s divisions and debates on the polar models in sociology; functionalism vs. conflict/Marxist model of society; dependency vs. modernization theories; to the greater pluralism and convergence of theoretical perspectives in the 1990s. I like the broad sweep that Cynthia made. Of the three points she raised, five pages were devoted to the first point: on convergence. To me, her discussion was like going back to memory lane. Back in the 1970s, many of us had been participants in debates and had witnessed the divisions and polarization in the university's social science community in particular and in the country in general. How she traced the shift from sociologists' debates on models (conflict versus modernization models) in the past to greater pluralism and convergence of theoretical perspectives in the 1990s was very interesting. I would like to add that the experiences gained by the community has also imbued Philippine social scientists with a more focused view of reality. 1myself feel a renewed confidence in pursuing our new roles. The debates between the theoretician and the practitioner, and the researcher and the academician on whether the academician should be immersed in the realities of Philippine society or not have ended. There is now a convergence in terms of the role of sociologists and social scientists.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Cynthia discussed very briefly her second point, given her time constraints. I suggest that she further develop the key issues here, namely, the increasing interdisciplinary framework, the broader definition of sociological problems and the blurring of lines between basic and applied fields. A discussion of the institutional structure of the sociology discipline in particular and the academic setting in general may help identify the obstacles that constrain effective operationalization of some of the suggestions found at the latter part of her paper. As Cynthia pointed out, a major challenge facing sociology is the issue of how to refine and develop the theories anchored on Philippine realities. She admitted that in this area, work has been increasingly slow. I realize that even within the University of the Philippines, academic sociologists are actually dispersed in various applied fields. For instance, you have sociologists in community development, public administration, population studies, women studies, communication, agricultural education and even nursing. I do not know about the other fields at UP-Los Bafios but during my student days, rural sociology as a subject was never called as such. It was offered as an agricultural education course. When I took my masteral degree in the university, we were.taught about rural sociology, but the degree was in agricultural education. This has to do with UP's so-called turf considerations. Within the academic set'dng itself, there are courses offered in other fields with different names but are really courses in sociology if we look at the content. To rne, that will limit tile access of students to some of these course offerings. But I think there is a rule in tile university that says courses that are not in sociology cannot have a sociology title. We have been stuck with this rule over the last decades. It is time we look at these turf considerations because 1 feel that linkages are critical if we are to take on the challenges posed in Cynthia's paper. I do not think we can -- what she says -- "stimulate theoretical production" if we keep de-linking these communities of sociologists. We have to link the different fields of specialization because some of the experiences Cynthia mentioned and the raw data and materials are found in these other fields. In fact, these materials are in a variety of forms,

GUERRERO: COMMENTS

both oral and written. There are notes, diaries, minutes and proceedings waiting to be systematically transformed so that sociological theories can be refined and developed, in research on community development, for example, there are stocks of materials on participatory development culled from the experiences of the UP College of Social Work and Community Development in participatory research, political advocacy and community organizing. These experiences are a rich source for the development of sociological theories. I would like to suggest some of the appropriate, realistic and creative forms of collaboration and linkages among sociologists within and outside the university. Let me outline these linkages: I. within academe ,, among sociologists in different specialized fields • among social scientists across disciplines • among sociologists and other social scientists across academic settings within and outside Metro Manila 2. between academic sociologists and practitioners in government, NGOs and grassroots or people's organizations The Philippine Social Science Council (PSSC) provides the organizational umbrella to promote greater collaboration among social scientists. The Philippine Sociological Society can also facilitate the linkages between academic sociologists and practitioners so that the raw materials which abound in a variety of forms -- diaries, proceedings of seminars and conferences, organizational records and other forms of NGO and PO documentation --can be analyzed and transformed systematically to advance societal theories. Cy,lthia also talked about paradigm shifts and some of the emerging alternative paradigms. I feel that there is a need to further explore and advance the alternative paradigms, including those that were previously aborted such as the participatory development program and the people

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

program of tile PSSC. Upcoming sociologists should be challenged to elaborate, test and validate some of these emerging alternatives. A new form of theorizing has been suggested by a feminist sociologist. She opines that theorizing "is a continuous, conscientious process of collective thinking where the experiences of women are validated not as each one's individual phenomenon, but as a social one ... An important ingredient is participation in the women's movement where dialogue and systematic reflection in themselves are considered indispensable goals." Finally, I congratulate Cynthia once more for her excellent paper and reflections.

Highlights of Discussion

PHILIPPINE SOCIOLOGY

IN THE 1990s

There have been a lot of debates on development paradigms where sociologists figured significantly. Some might have thought that sociologists are "dabbling" in economics or other fields that are beyond their scope of expertise_.This observation, however, is quite misplaced. There is certainly no need for "dabbling" since there are many opportunities for sociologists and economists and other social scientists to work together and learn from each other. Economics is a possible source of enrichment for sociologists. There are new developments in economic theory that have substantial implications on sociology. The shift in economic theories from neoclassical to those involving transaction costs, for instance, may stir the structural bias of many, if notall, sociologists toward a more behavioralist view of social change and social responses to external disturbances. On the other hand, linking with sociologists would help economists get a better understanding of groups and communities. This would have a significant impact on economic policies. For instance, economists view labor unions as organizations with bargaining tools. However, if we bring in sociologists into our inquiry, we begin to look at how individuals interact with one another and with the firm in order to internalize and smoothen the adjustment processes associated with change. Sociology as a profession and field of study has undergone changes over the decades. Immediately after the second World War, the proponents of the empirical approach to research began to argue for its benefit. At that time, everyone was commenting on the society but was not bringing a

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

certain order or discipline in the analysis of society, The empiricists therefore argued that one cannot simply assume events to be true. Rather, one has to hypothesize, test the hypotheses and discover new ones in order to strengthen or debunk certain theories about society. Since the 1970s, there emerged some committed sociologists who moved toward the applied field in the micro level in their bid to effect social change. Meanwhile, in the 1980s, the dichotomy between applied and basic research, and the macro and micro analysts has somewhat blurred. Participatory research became a very promising alternative. Today in the 1990s, sociologists are also talking about the cluster concept whereby graduate programs in sociology could move from its traditional scope toward issue-oriented topics such as issues on family, environment, migration, and health, among others. Those outside the purview of sociology find that the strength of sociologists lies in their appreciation of institutions and understanding of people. They can effect the needed change if they are able to strike a balance between fundamental research and applied research. Sociologists need to undertake fundamental basic research in order to know more so that they can come up with policy recommendations. However, the approach to basic research should not be the way it was done before, i.e., scientists enseoned in ivory towers. Instead, there ought to be a lot of institutional linkages and immersion. The sociologists should also pursue applied research for it is the stimulus for theorizing. They need to interact with people and get their feel about issues and policies, or at the very least, link with institutions like nongovernmental organizations (NGOs) and people's organization (POs) which often interact with people. Finally, the dilemma of sociologists and other researchers with regard to the dichotomy between fundamental and applied research, between the theory-oriented and empirical approach seems to apply only to those based in Metro Manila. If one travels to provincial colleges and universities, the problem is much less. For there, the sociologists are really immersed in doing research. They provide research data and at the same time develop, to some extent, the theories for their areas of study.

A RETREAT FROM THE IDEAL: REFLECTIONS ON A FRUSTRATED ATTEMPT TO STUDY A SOCIAL PHENOMENON THE NATURAL SCIENCE WAY

LEDIVINA V. CARI_O*

LMOST15YEARSAGO.Filipino social scientists were provided a rare opportunity to design their own methodology for the analysis of the social and economic impacts of a wide range of governmental programs. A series of workshops assembled twenty or so researchers periodically, during which they agreed on the eleven types of impacts to be studied, the timetable for the work and the sharing of their results at special workshops. Called ESIA-WID (Economic and Social Impact Analysis/Women in Development), the research program had a set of American and Filipino consultants I who led the critiquing of the papers and presentations. The program assembled what up to that time was probably the largest single group of social scientists who ever worked together on a single research program D economists, sociologists, demographers, political scientists, psychologists, and public administrators. The ESIA/WID program ran for three years. Because it was as interested in the methodology to be developed as in the project impacts themselves, it gave researchers the luxury of eight months just to write the design. Rebecca P. Albano and I submitted a proposal in 1979 with all the

* University Professor, University of the Philippines, College of Public Administration. I. These included the top Filipino social scientists at that time m and even up to now -Dean Jose Encamaeion, Dr. Paul P. de Guzman, and, of course, Dr. Gelia T. Castillo.

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

elements of a proper statistical social evaluation: a comprehensive review of the literature, reasonably creative and appropriate operational definitions, and a battery of data collection techniques, 2all of which were to be analyzed using a quasi-experimental design. I have been told that some colleagues used it as a model proposal for.their students and that it still sits on library shelves for that purpose. I showed my gratitude by not implementing the design as it was laid out in that paper. Instead, I worked with a drastic modification of the original design. The transformation of the design occurred because of practical difficulties I met in the course of implementation. These problems, in turn, made it necessary for me to look more closely at the implicit assumptions behind the various elements of a research design. Instead of taking them for granted as we usually do, I was forced tostudy each element and to retain, modify or delete it as seemed appropriate and proper. Revisiting the project after a long passage of time, I think it might be useful to share with other social scientists some of my mistakes and some surprises I encountered as well as some reflections on the decisions I made. In the process, I shall expose what I see as the unexamined theories behind the usually accepted assumptions of the classic evaluation design and the casual model it implies. In so doing, I hope to contribute to an understanding not only of how social science differs from natural science but also of the reasons why social scientists need to take the linkage between methodology and theory more seriously. To my mind, this has been made necessary by the fact that the assumptions mask substantive theoretical questions that social researchers need to address directly to improve social science and social reality as well.. THE

MODEL

FOR THE STUDY

My assignment was to find out the impact of rural road projects on Philippine communities. As agreed upon in the larger study, a road was to 2. Among these are a household survey, transporters' and the market basket technique.

survey, origin-destination

survey,

CARII_IO:A RETREAT FROM THE IDEAL

be evaluated on its direct and indirect effects on eleven development concerns: production and productivity, income growth, income distribution, employment, health, nutrition, education and literacy, political participation, population, energy, and the environment. The extensive literature I reviewed identified roads, not surprisingly, as infrastructure for transportation. This suggested a clear line of analysis: the first direct effect of a road is its capacity to generate and divert traffic. All other effects flow from this the increased access to production inputs, markets, employment opportunities and social, economic and political facilities. And only then would effects on the eleven development concerns be felt. The initial model is presented in Figure 1. THE IDEAL

DESIGN

FOR IMPACT

EVALUATION

To test thehypotheses implied by the model, I needed a design that would be able to show how a rural road changes a community. ! then turned to the classic experimental design straight out of natural science. Ideally, that design has the following elements: 1. The project (or "treatment" or "independent variable") 2. Random assignment of units to different groups 3. Comparison with a group that did not receive the treatment 4. Without- and with-project comparisons. Figure 2 depicts how these elements go together in the classic experimental design. The "treatment" is the activity or item that constitutes the experiment. In a laboratory, it is easily identifiable and measurable and can be withheld or provided by the researcher at will. The units under study are expected to be equivalent at Time One. Such equivalence is statistically vouchsafed by random assignment, under which each unit has an equal chance of winding up in either experimental or control group. When units are complex and have characteristics that may have a

FJGURE 1 The Impact of Road Projects on Households

Increasedaccessto: I I

Energysourcesfo_" householdsr agriculteral,

Increasedproduction

Iransportationand Productioninpuls.•

and productivity

Change inincome

"< 03

markets,etc.

Changed employrnen[patterns /

disWbu_n, cleave irhlivingpatterns

cornrreting) [typesefeccupaBc,n,

study,etc.} (wheretowork.

_(3' O 03 0

pa_temsand spalial Changedse_ernenl disldbutrenor peapre

orientation, Fert,lity, market integrationwith larger community

Z ('3. m

otheruses

Coeuerate and divert traffic(decrease

Road f Bridge

alternativeroutes, relianceon i_rease dislance

Project

[raveled, inoreane otvehictes_/ nummber and quality

"""""_

_ '/

, opportunffres En'=ploymenl

IJ f

InfluenceArea(RIA) Am.asinside Road

Facilitiesi_v,orvedare heal_ and nul_n, I

educationand literacyparl_pation, lI

InfluenceArea [RIA) ' AreasoutsideRoad

Increasedincome

Improvedrevelsof heal_ and nutriBon,

Increased useof

educatre,nand literacy and

thesefesilities

_articipalren_

IncreasedrcigcalJon

Z 0 O m 0

Z "O --I

CARI_O:A RETREAT FROMTHEIDEAL

FIGURE2 The ClassicExperimentalDesign TIME R 1

Experimental group el X

Controlgroup

whereR standsforrandomassignment el forexperimental groupatTimeOne(withoutproject) e2forexperimental groupatTimeTwo(withproject) cl forcontrolgroupat TimeOne c2forcontrolgroupat TimeTwo X fortheprojectortreatmentvariable.

systematic effect on their behavior, such bias is expected to be minimized by randomization which cancels out the effects of residuals. In any ease, the amount of bias that may still creep in to the system can be calculated statistically. In laboratory situations, the researcher randomly designates which group will be "experimental" (the recipient of the treatment), "control" (recipient of no treatment) or "placebo" (another treatment not expected to have a systematic effect on the group under study). If these rules and procedures are followed, the observation at Time One simply documents that the groups were indeed equivalent prior to the treatment. With the introduction of X to the first group being its only distinguishing feature from the second, any differences between them at Time Two may be regarded as a result of X. In social experiments with human beings as units, other factors have been identified as capable of changing each group between the two time • periods. These are the passage of time or maturation, instrument decay, the

.ESSAYSIN SOCIAL SCIENCE AND DEVELOPMENT

test-retest problem, history, and regression towards the mean. The influence of such extraneous variables is expected to be captured by the comparison of the differences between el and e2 and between cl and c2 (Campbell and Stanley 1963). The factors affecting the difference between the experimental and control groups are biased selection and the mortality of units in the samples. They are expected to be captured by comparing the differences between el and ci and between e2 and c2 (Campbell and Stanley 1963). The analysis of such a design would be straightforward and easy to do if all the elements were in place. I shall illustrate the problems using primarily my retreat from the use of most of these elements in undertaking the impact evaluation of rural roads under the ESIA-WID program. THE ELEMENTS OF AN IDEAL DESIGN X: The Rural

Road Project

It seemed easy enough to define Xm a "road," a transportation infrastructure and a "rural road" as one located in a primarily agricultural area. Since the ESIA-WID program was funded by the United States Agency for International Development, it was also clear that, among the many projects dealing with rural roads, I was expected to study the one funded by USAID, simply called "the Rural Roads Program" (RRP). Once I started the research, however, the definition of X became slightly more complicated. For one thing, it turned out that RRP, and then the Ministry of Public Works and Highways, for that matter, classified as "road projects" infrastructure built solely on land (what lay people call "roads") or built over water ("bridges") as well as "road and bridge" combinations. Moreover, RRP constructed roads not only in really rural areas but also in census-defined urban areas of largely rural municipalities. In addition, rural roads differed in terms of their expected average daily traffic (major, minor or penetration), ownership (by the municipal, city, provincial, or national government), materials (soil, gravel or all-weather, asphalt, and concrete), length (from a few meters to several kilometers), the

CARII_O: A RETREATFROM THE IDEAL

terrain on which they are built (flat, rolling, mountainous, over water), distance from thepoblacion or other population centers, etc. These characteristics described only the road per se, but already, one could think of variations in effects depending on the kind of road chosen. For instance, roads in really rural areas and in urban parts of rural areas could affect their communities differently, if only because of variations in ease of access. Besides, bridges might be expected to have stronger impacts than roads because they link areas previously unconnected or those linked only for people with light loads. The impact of a one-kilometer road may not be half as that of a two-kilometer road. In any case, it could very well depend on whether or not the road (1) is connected to another road or to a hinterland, (2) traverses a heavily populated area, or (3) links the farms of ordinary people and so on. Note that none of these characteristics was within my control as a researcher. What all of these meant was that I needed to have a clear definition of theXwhose impacts would be my major concern. More than that, I needed to have a theory of what characteristics of the road would be neutral or sensitive to the communities and impacts I would study. Ownership of the road by one level ofg.overnment was one characteristic that seemed unlikely to influence the behavior of people relative to the road. On the other hand, distance from the poblacion or from farms/school/markets, the type of terrain, or the size of its traffic seemed likely to have differential effects on a community. These not only suggested that an "ideal-type road" would be difficult to get, but could also lull me into thinking that the effects I could get would be representative of the effects of roads with other categories of "sensitive" characteristics. Instead, I got a sample of different types of roads in order to get a "feel" of the range of variation of impacts which a rural road project could provide. Given limitations of time and resources, I decided to study four projects that were planned to be road-and-bridge combinations ranging in length from five to 11 kilometers. I then faced an administrative problem: like my research design, the plans were changed in the process of implementation (Table 1).

ESSAYSIN SOCIALSCIENCEAND DEVELOPMENT TABLE 1 Length of Rural Road Projects Under Study

Project

Length of road (km)

Length of bridge (km)

Expected Completed at time of study

LaureI-Tamayo Road Laurel, Batangas

Palsara-Alangilan Road Balete,Batangas

Mabilao-BindayRoad San Fabian,Pangasinan

5.6

Dapdap-Nipaco-Rangayan Road, Paniqui,Tarlac

All the implemented projects were shorter: two built bridges only (the first was constructed in 1979 and the second partly in 1979 and partly in 1980) while the other two built roads only (both of which were constructed in 1980). Serendipitously, length,

in location

were very different

they provided

and in time elapsed

variations

in the type of road, in

after construction.

from one another, I would be constrained

If their effects to talk of the

effects of a particular case, with the recommendation that similar cases be studied to make us understand more how, say, a bridge, changes the life of a community.

If the effects of the four cases were similar to one another,

would strengthen the hypotheses about the impacts of rural road projects as a whole since the results show that the effects of the different factors in the package

of these cases seem to have cancelled

1 would still be constrained

about generalizing

each other out. Nevertheless, their results because

of both

the smallness of my sample, and the fact that I selected them in a purposive manner.

CARI_O: A RETREAT FROM THE IDEAL

Randomization The research under discussion may be classified as a "natural social experiment." As the name suggests, a natural social experiment is a situation occuring "in nature," or in the actual field condition, which lends itself to treatment as an experiment ( i. e., observations at time periods without and with the project, and comparison with a real-world condition that escaped or did not receive the project that is the focus of study). At the outset, a natural social experiment already relaxes the first requirement of an experiment, in that the project is not randomly accorded to any local area. Moreover, the people already living and working in that community cannot be randomly assigned to transfer to another community which will . serve as the control group. In most cases, it would be impossible to move people to allow a scientific study to get underway; one can only imagine the costs of moving whole communities around, with the concomitant disruption of work, residence, relationships, etc. Even when costs are attainable, the ethical undesirability of such disruption for the sake of scientific purity is obvious. The pragmatic reason is thus joined by the ethical in the decision to drop randomization. The original design omitted randomization from the start and thus earned the title "quasi-experimental." Even in social experiments in the laboratory where randomization is empirically possible, questions have been raised as to whether or not the advantages of randomization are attainable. Such laboratory experiments otten use people who volunteer. By that act alone, they may set themselves apart from the ordinary run of human beings and thus produce results which cannot be generalized beyond the small group from which they sprung. Critics have dubbed the results emanating from such studies as "the social science of the sophomore class" if conducted in laboratories using student volunteers since these are usually the volunteers or conscripts in social experiments, freshmen being too new in the university and juniors and seniors likely to be either too smart for the experimenter or already helping the researcher to conduct the study. When volunteers come from outside academe, the findings from their involvement are called "the social science

ESSAYS INSOCIAL SCIENCE ANDDEVELOPMENT

of nice people," implying that their amiable qualities could confound the results of the experiments. It is a hypothesis that should be tested. The Control A control is a sample deemed to be equivalent to the experimental group before the introduction of X. The issue at hand, then, is: What would constitute "equivalence"? In the RRP, a control road was designated for every road project that was identified. This was a proposed project for a transport infrastructure that was not approved by the program but was comparable in length and type to one that had been constructed. Thus, contrary to the expectation that the communities would be similar, the presumed equivalence in the RRP control resided on the X, not on the communities to be affected by X. It should be noted that RRP also had a regulation that barred any construction from being made in the control road's community for five years from the period of its designation. This was made for purposes of ensuring scientific purity. However, the ethics of withholding a needed good to a communityfor the sake of establishing a reasonable scientific finding could be questioned. The next step was to study the communities of the putative control roads of the projects we had chosen for intensive study. Generally, these were adjacent to the "experimental community" and would have the same provincial and ethnic background, but in all cases, their similarity ended there. The pair of control and experimenta! communities differed in their size, economy (dependence on rice, level of diversification of crops, size of the trucking industry), distance from important landmarks (the town center, theprovincial capital, etc.), political characteristics (type of mayor, partisanship and activeness of the community), presence of government supplementary investments (other special projects located in the town, e.g., irrigation, electrification), and private firms (rice mills, factory, etc.). All these could be hypothesized to affect the direction and pace of development of the town, that is, the operation of the eleven development concerns. As such, they constituted rival hypotheses which could then confound the

CARII_IO:A RETREAT FROM THE IDEAL

problem of attribution of effects to the rural road project. Because these factors could not be randomly distributed or controlled, I decided to drop the idea of using control communities. It might be noted, parenthetically, that before I made this important decision on theoretical grounds, I had aireally contended with the practical difficulty of finding communities, not roads, which were equivalent prior to the construction of the road. Suppose I had been lucky enough to find communities equivalent at Time One, should I then have kept up the use of controls7 Based on data on the change undergone by the communities I actually studied, my answer would sti!l be negative. The issue being raised here is: What is the theory of the pattern of change in the communities? The use of controls assumes not just the equivalence of communities before the project, but also the similarity of their rate of change over time. However, this assumption has not been tested. If two children, at age 13, were both five feet tall, their height would be equivalent at this time, but it would not be correct to assume that five years hence they would still be of the same height. A better measure of prediction may be to note their growth over time and thus to establish how they change from year to year. Social methodologists have thus suggested that, instead of independent control groups, a researcher may be better off studying the subject over a much longer time period in order to establish its pattern of change. The spurt of growth of the project under study could then be noted as an aberration in its regular pattern, and thus as an indicator that the road had such an effect. Using this reasoning, in place of control communities I turned to the idea of approximating a "reflexive control group," "reflexive" suggesting that the community was being compared with itself over time. The best data-set for this purpose is the measurement of characteristics over a long period of time, so that a trend could be discerned. RRP was supposed to have made annual surveys which could have allowed for a partial application of this idea.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Unfortunately, even this reflexive control group design could not be used for two reasons. First, RRP annual surveys were either not completed for all the years they were supposed to have_been done, or did not have the data I needed to measure the level of the community on the eleven development concerns. Second, the projects were not constructed as scheduled, in effect changing the X in midstudy. Because of these, I could not test a theory of change for any community. For two cases, I had access only to one "before" and one "after" data which showed the effect of the project but could not establish the pattern of change of the community. For the third, there was one "without" and two "withproject" surveys. For the fourth, where comparable dara were available for three years, the pattern could not be established because construction occured between all surveys (Table 2). Without and With-Project Observations The comparison of without and with-project observations was the element of the classic design that I kept intact. However, having dropped the idea of controls, I decided to use a comparison of in-depth case studies in lieu of a statistical analysis of characteristics of communities at two or more time periods. This required supplementing the survey of structured interviews with other data-gathering techniques. Thus, aside from the RRP surveys and the ESIA/WID household surveys, origin-destination surveys, the market basket technique and a special survey of transporters, unstructured interviews with key informants, and plmmed observations in the areas were undertaken. All of these activities were done for at least two time periods, and included at least one pre-project gathering of data. The comparison of observations at several time periods allows the researcher to see the effects of the introduction of the project into the community, which should be guided, as I have already mentioned, by a theory of how communities change. I also had to tackle two other questions: (1) When does a project begin to show effects on the 11 development concerns? (2) What mediating mechanisms are needed for the effects to occur? As in previous problems, there were implicit assumptions on timing

CARI_O: A RETREAT FROM THE IDEAL

TABLE 2 Date of Construction, Periods of Data Collection and Organizational

Sources of Data

Project

1978

1979

1979-80

1980

1980-81

1981

LaureI-Tamayo Road, Laurel, Batangas

RRP*

ESIA-WIDConslruction ESIA-WID

Palsara-Alangilan Road, Balete, Batangas

RRP*

ESIA-WIDConstruction ESIA-WID

Mabilao-Binday Road, San Fabian, Pangasinan

RRP*

Construction ESIA-WlDConstruction ESIA-WlD

Dapdap-NipacoRangayan Road, Paniqui, Tarlac

RRP*

ConstructionESIA-WID

ESIA-WlD

* No data available: RRP surveys were either not undertaken or had no relevant data,

and mediation of effects. For me to make sense of what I was doing, I felt it necessary not only to make those propositions explicit, but also to convert them from assumptions to hypotheses. The Timing

of Effects

My model posited certain factors as direct or indirect effects, suggesting a certain order in the generation of effects. I also had some notions of which effects

would

be immediate,

the ESIA-WID after at most health prepared

program a year

and other indicators

medium

implied

that most,

of the project.

social

effects

term

or long term. it not all, effects

I had doubts,

however, period

The

schedule

could

be noted

as to how

much

although

1 had

could

occur

at that

of how to measure

them.

If only for practical

purposes,

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

then, I needed to have a sense of how soon each effect might be capable of being observed, in other words, a theory of the timing of effects. Given the ESIA-WID and RRP schedules, this was no armchair theorizing. I was faced with two communities whose road project was built only six months before my schedule for data collection at Time Two: Would it be fair to measure how it had generated and diverted traffic, how it had contributed to production and productivity, income change, income distribution, etc? Fortunately, I was studying two other projects which had different dates of construction. This allowed me somehow to test hypotheses of the timing of effects, even though this was not in my long list of working hypotheses to start with. The findings which Wilfredo Carada and 1 wrote up in the 1982 ESIA-WID report included the following: 1. As suggestedby the model, the effect of road projects on the generation and diversion of traffic was direct and immediate. This was shown not only in the increased usage 0fthe road but also in the growth in the number of transport groups -- trucks, jeepneys, tricycles and, in one case, horses -- found in the markets of those communities within six months of construction. In addition, effects on energy consumption were immediately apparent. They were indexed by the annual savings in vehicle operating costs enjoyed by most transporters and vehicle owners which were estimated to be P4,528.74 in Laurel and P3,760.96 in Balete. 2. Road projects also had immediate beneficial effects on income and production. My model posited that they would be mediated by two factors -- the traffic and the increased access to farms and other places of production which could eat up time. These mediations did take place but effects could be noted within six months of construction anyway. Table 3 illustrates this in the case of the income effect.

CARU_IO: A RETREAT FROMTHEIDEAL"

TABLE3 MeanHouseholdMonthlyIncomesBeforeandAfterConstruction Before (1980)

After (1981)

Percent Increase

Roadusers

P254,17

P472.22

85.8

Nonroadusers

P273.08

P450.00

64.8

Allhouseholds

P259.18

P460.82

77.6

t = 3,57 significant at p< 0.001 n.s. t = 4.42 significant at p< 0.001

Sources:Household surveyat RoadInfluence AreaofAlas-asBddge,Laurel, Batangas,1980and1981(atcurrentvalues), 3. My conclusions would have stopped there if I did not have a project where effects could be observed over a longer time period. It showed that income change not only occurred but accelerated with the passage of time and with the second phase of construction of the road. I was not able to determine how long the fast pace would proceed because th e ESIA-WID project ended then. It was also not possible to test whether to attribute the change to time and/or the additional construction of a larger part of the road (Table 4). 4. It might be said that, in general, social effects needed a longer gestation period. An exception was the increased access to health facilities which was immediate in one case, although health status conditions did not improve even after the lapse of two years. An incipient theory of the timing of effects of a road project might then include immediate results in the generation of traffic as well as in the environment, energy use, and income, but a longer period would be needed to study the occurrence of change in all other development concerns.

ESSAYSINSOCIALSCIENCEANDDEVELOPMENT

TABLE 4 Household and Per Capita Income Mabilao-Binday Road Influence Area 1979, 1980, 1981

Average Annual Income Per Capita Income

1979

1980

Percent difference from 1979

4,827

5,412

11.7

7,765

43.8

60.9

804

899

11.8

1,294

43.9

60.9

1981

Percent Percent difference difference from from 1980 1979

Sources: HouseholdEconomicSurveys, 1979, 1980, and 1981, prepared by the PangasinanProvincialDevelopmentStaff for Rural RoadsProject

The Mediation of Effects Associated

with timing

triggered the generation

was the issue of what factors other than the road of effects. My already complex

model was not able

to anticipate the operation of other factors that would facilitate the generation of effects or falsely attribute to the road effects which they were more directly

influencing.

communities

My decision

to have

intensive

case studies

of four road projects allowed me to recognize

sets of theories missed in my model: (1) the question ofautomatieity assistance, and (2) the presence of rival "causes." Automaticity

versus assistance.

by access to facilities.

of the research

projects

was that the presence

trigger

In the case of truckers

automaticity

My understanding

at the start

of the road would in itself

and farmers,

the hypothesis

was borne out. Indeed, the road immediately

to that area and provided

versus

My model posited that the effects of the

road had to be mediated access.

of the

two other basic

access to the markets they needed.

diverted

traffic

CARII_IO: A RETREAT

FROM THE IDEAL

In case of the health effect, however, the presence of the road was not enough. For it to have an effect on health, the municipal health officer needed to take it upon himself to use the road to regularly bring his team of medical workers to the barangay which has been made accessible. The road's presence and the rural health unit's location along the new road were not sufficient in themselves to generate a small health effect, such as it was. Income distribution effects underscored even more the need to recognize the role of mediating factors. In all four cases, incomes in the four communities increased with the road project. However, although the incomes of the poor also increased, the gap between them and the richer members of the community did not significantly decrease. For instance, in Laurel, a,tthough farmers and drivers realized incomes greater that those of other occupational groups, they remained at the bottom of the totem pole (Table 5). Among the farmers, those who could transport their own goods had the highest income increases followed by road users, while those who did not use the road had only minimal changes in their incomes. These farmers were arrayed according to their status. Those with their own means of transport were the most well-off. Those who transported goods by foot or animals, and who sold them without using the road had lower incomes. Those who used the road were probably bringing heavier cargoes which required the use of motor vehicles (Table 6). Why these differences? The elite had the facilities or the wherewithal to buy facilities that could immediately maximize the use of the road. They had vehicles, money to buy inputs, access to extension workers or new research, or to the capital, and maybe even connections with political leaders. The rest of the community in effect only had the road. They did increase the quantity of crops they could bring to the market, but that was all. In light of this, one hypothesis presented itself: "If government introduces only a rural road, it could exacerbate the income distribution problem. This is because the more wealthy could readily make full use of it since they already have other resources that facilitate this. However, the poor will only receive minimal benefits unless they get some assistance or undertake other

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

TABLE 5 Mean Monthly Income of Various Occupational Laurel Tamayo Road Influence Area 1980 and 1981

Groups

Pre-Construction

Post-Construction

(1980)

(1981)

Mean_,

Rank

Income

Mean

Rank Increase

Income

(%)

Farmers

P161.47

P352.78

118,35

Nonfarmers

398.53

414.22

39.3

Drivers

300.00

550.00

83,3

Sales persons

466.67

733.00

57.1

Janitors

450.00

683.33

51.8

Office workers

750.00

975.00

30.0

Other manual workers

625.00

650.00

4.0

Sources:Household

Survey, 1980 and 1981

activities that could increase their abilityto use the road. For instance, they may need a resourceful municipal health officer or a similar official to increase their access to facilities. Or they could form cooperatives to improve their access to vehicles or markets." On a more general hypothesis, "the introduction of any new technology or facility, unaided, without any supplementary assistance or activities on how ordinary people may use it, will lead to more benefits for the rich than for the poor.' I

CARII{IO: A RETREAT FROM THE IDEAL

TABLE 6 Mean Income of Farmers LaureI-Tamayo Road Influence Area 1980 and 1981

Pre-Constructio-n Post-Construction (1980)

(1981)

Mean Income

Difference

Percent Increase

P161.47

P323,68

151.28 a

118.3

bring produce to wholesalers

198.72

438.23

239.51 b

120,5

use the road

196.15

506.25

310.10 b

158.1

did not use the road

203.85

323,68

119.83 a '

62,9

All farmers Farmers who

aNot significant bsignificant at p<O.O01 SourceszHousehold Survey, 1980 and 1981

Alternative or rival causefoctors. The study was done in an ongoing social situation rather than in a vacuum such as in a laboratory. Thus, despite the RRP taboo o,1 the construction of another USAID road project in the sample communities, other projects might have been introduced in the area which could have theoretically led to effects similar to the ones generated by the RRP road project. These developments, which in general are called the factor of "history" by Campbell and Stanley (1963), confound the attribution problem in this natural social experiment. Such varied factors as the opening of a cotton ginnery in one town, or the election of a new mayor

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

in another coincided with the road construction and could have either accounted for the changes that occurred, or reinforced the effects of a new road. Relying on a structured set of questions for residents ak)ne wou Id have made me unaware of the confounding factors abounding in the area. Gladly, tile need to identify and analyze the complex social situation demanded by the intensive case technique alerted me to the problem. THE ALTERNATIVE

EVALUATION

DESIGN

Based on these considerations, the design I actually implemented in the field was very different from the classic design I started out with. It became a series of intensive and comparative case studies where the community of each road project was observed at several time periods to approximate a reflexive control group (approximate because the RRP timetable for survey and construction did not materialize). This design is shown in Figure 3. As already stated and as can be seen in Table 2, only the 1980 measures were available for Alas-As Bridge and Balete Bridge RIAs. Implementing the new design also produced some changes in the model. They may be grouped into three questions: (1) What other causes were there? (2) What other effects were there? (3) Who were the actual benefi -_ ciaries? Other Causes "['he path of each factor was traced historically rather than statistically, making it possible to recognize other characteristics that mediated or reinforced the influence of the road. Also, greater familiarity with the area required by an in-depth case analysis facilitated the identification of variables not known in the design stage that could have acted as cause factors rivaling the identified independent variable, the road project. Much of this issue, including some examples, have already been discussed in the section on "Without and With-Project Comparisons." Figures 4A and 4B show examples of the more complex chains discovered in the actual study for two development concerns - health and income.

CARII¢,IO:A RETREAT FROM THE IDEAL

FIGURE 3 The Alternative Design

1978

1979

1980

Alas-as Bridge

Balete Bridge

X31

X32

MabUao-Binday Road Dapdap-Nipaco-Rangayan

Road

1981

where: al, a2, a3, and a4 are observations of Alas-as Bridge RIA in different time periods, and Xl is the construction of Alas-as Bridge; bl, b2, b3, and b4 are observations of Balete Bridge RIA in different time periods, and X2 is the construction of Balete Bridge; ml, m2, and m3 are observations of Mabilao-Binday in different time periods, and X31 and X32 cover the construction of Mabilao-Binday Bridge; dl, d2, and d3 are observations of Dapdap-Nipaco RIA in different time periods, and X4 is the construction of Dapdap-Nipaco-Rangayan Road,

Ii1the first, the initiative of a municipal health officer supplemented the road in bringing about new traffic and access to health facilities and health care. Together they brought about a social impact of the road. In the second, it was found that the opening of a cotton ginnery in another part of town, instead of the road, accounted for changes in income for some residents of the community. Other

Effects

The original

model

hypothesized

that the influence

in terms of its nature as a transport interviews

and observations

grave

omission

and needed

Under

the ESIA-WID

(Figure

5). A road,

of a road would

all fell used

to recognize under

be felt

alone. The key informant

in the area suggested to be revised

listing, whether

infrastructure

that the model a road's

the rubric

for transportation

made

other facets.

"environment"

or not, changes

the

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

FIGURE 4 Examples of New Causal Chain Showing Effect of Factors Other Than Road Project A. Initiative of municipal health officer

1 Road project "_*

Generation and "--* diversion of traffic

Access to health facilities

---*

Better health

New factory Road project ---,- Generation

Increased,access to employment opportunities

Increased income

landscape and affects development through that fact. Indeed, that would have been obvious to anyone who has seen a rural road used for rice drying (affecting productivity and income). In this study, a road affected political participation as it became the focus of municipal beautification efforts and, in the absence of a town plaza, became the site of political meetings (not to mention its role in kite flying, as a lovers' lane, etc.). Who Benefits? Throughout focus

this paper,

of the

beneficiary

study,

1 referred implying

to the community that

of the road construction.

it was

the

RRP coined

around

the road as the

at least

the

the term

"road

sole

main

influence

CARII{IO: ARETREAT FROMTHEIDEAL

49,

FIGURE5 RubricEnvironment of a Road

Roadproject

, Generation and

, Increasedaccess

diversion of traffic Environment change

facilities _ todifferent Increasedpolitical participation

area" or RIA to give flesh to that assumption. It was operationally defined as the community within a five- to ten-kilometer radius of the road project. Under the classic design, residents in the RIA would have been the only beneficiaries to be taken into account. An anomalous finding brought the error of this assumption to my attention. As Table 7 shows, significantly more people in one RIA reported walking to the market before the road was constructed than after. This meant that they used the road less, using instead a shortcut that nonetheless required fording a river on foot. Why did they shun the road after it was built and chose instead to use a more uncomfortable alternative? Was it because the road was now full of vehicular traffic that made it dustier and noisier? The dust and noise would have been ignored had the vehicles been able to accommodate the residents bringing their produce to market. As it was, by the time the vehicles reached the RIA, they were already full of passengers from outside the so-called road influence area. Thus, 6ommunity residents with easy access to the road found themselves the ones benefiting less from it as compared to residents from distant places. The message of this table was reinforced by the increased income of truckers and public utility vehicle owners and operators, most of whom did not live in the area. Indeed, to have limited the study to the residents would have given a false picture of the benefits of the road project. While all the feasibility studies extolled its virtues as a farm-to-market road, what seemed

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

TABLE 7 Use of Alas-as Bridge in LaureI-Tamayo Road Project for Purchasing Goods Before and After Construction 1980 and 1981

ALL AREAS Period Road usage

Before

After

Using

Not using

197

119

X2 = 12.85, df= 1, significant at p<0.001 NEAR AREAS (within one kilometer of AlasLas Bridge) Period Before

After

Using

Road usage

Not using

13 56

37 56

50 112

X2 = 19.12, df= 1, significant at p<0.001 FAR AREAS (beyond one-kilometer radius) Period Before

After

Using

Road usage

Not using

13 42

15 43

28 85

X2=0

Sources: Household Survey,

1980 and 1981

CARII{IO:A RETREATFROMTHE IDEAL

TABLE 8 Average Monthly Income of Different Types of Transporters, Before and After the Project Construction (At current prices) Before Income

After Rank

Income

Rank

17,240.00

Truck Cargo/operators * Jeepney.. owners-drivers

1,236.38

1,967.31

Jeepney operators Bus drivers

1,236.00

1,867.40 1,06.q,50

3 4

Jeepney drivers

683.25

1,004.82

901.65

750.00

567.00

417.19

135.00

Tricycle operators ° Carabao cart owner-driver * Tricycle owner-driver * Horse owner-riders Carromata owner-drivers *

371.12

* No transporterof this type was available before construction. $ource_ Transporters' Survey at Alas-as Bridge, RIA, 1980 and 1981

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

to emerge was that it was a market-to-farm road, increasing the access primarily of those who had more to start with, instead of making it possible for the poorer among them to compete on even terms. I also found that market vendors were coming from more distant areas than before and that the proportion of outsiders selling in the market increased. Table 5 already showed that the gap between the highest and lowest income earners in the community had not decreased after the road project. But if one included nonresidents operating in the area, the gap between the highest and lowest income earners would have clearly been greater. For instance, the average monthly income of truck operators who did not live or operate in the area before the bridge construction was P 17,000, several times higher than that ofjeepney owner-drivers, the second highest income earner, and the highest among residents. The assumed concentration of benefits in the RIA m!ght be a case of what Hoover (1975) called mistaking "place prosperity" for "people prosperity." Indeed, all the communities seemed to be more active and to earn more income after the road was constructed. But the prosperity redounded to the place rather than to the majority of the people residing therein. This is, however, not a brief for stopping the construction of road projects. Rather, it suggests the need to supplement the road with support and assistance directed to the less wealthy residents in the area. The initiative of the rural physician could be accompanied by similar initiatives on the part of agricultural extension workers, or better still, the municipal and barangay leaders to enable the poorer residents to reap some of the benefits to be derived from the construction of a road in their locality. LESSONS

AND CONCLUSIONS

This change of a research design from conception to implementation taught me several lessons that have since guided nay conduct of any research prqject. Let me discuss a few of them here. First, the subject and situation surrounding the conduct of social research are different from natural science. Thus, a direct transfer of the

CARII_IO:A RETREAT FROM THE IDEAL

methodology of the latter is probably neither feasible nor even desirable in many instances. In this essay, I have tried to raise the ethical, methodological, practical and theoretical problems related to the use of randomization, the designation of control groups and the complexity of the X to be introduced that transformed what in the beginning looked like a simple natural social experiment. Second, any plan is probably not capable of implementation as is. However, it is important to be conscious of what you are giving up and why, and to enrich your research as you trade one idea or technique for another. I gave up the classic evaluation design for the more humble case study method literally because of forces beyond my control. But being aware of its limitations, I also .tried to make full use of the many opportunities it offered. A study of cases made it necessary to look more deeply into the history and contemporary events happening in an area and to consider several ways of getting at that information. Thus, the case technique opened up to me a whole arsenal of data collection techniques and actual new informatio,a which permitted me to recognize causes, effects and beneficiaries that had been ignored i,_my original model. At the same time, the resort to case studies did not mean that my research had to give up rigor. If anything, using only cases intensified the desire a,_d the need to analyze all the data I had as deeply and as comprehensively as possible. My review of the literature remained comprehensive, and my operational definitions, methods and analyses were subjected by my colleagues and seniors in the ESIA-WID to their usual penetrating criticism. Nor was this entirely a shift to mere qualitative analysis since computations of vehicle operating cost savings, Chi square tests, and t-tests were used extensively throughout the study. Third, while diagrams and figures make presentations easier, they are never really simple. Rather they assume a number of important factors that are often left implicit. As shown in this paper, the assumptions should not be taken for granted because they have complex theories behind them. At this stage of our social science, issues like the pattern of change, the timing of effects and who are the beneficiaries of the road project or of any other

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

intervention are theoretical issues that should be analyzed and tested rather than assumed. All in all, I hope that laying out the mistakes and surprises I encountered is helpful in showing why methodology and factors related to it should be more consciously placed in the service of theory.

CARII_IO: A RETREAT FROM THE IDEAL

BIBLIOGRAPHY

Campbell, Donald P. and Julian C. Stanley. Experimental andQuasiExperimental Design for Research. Chicago: Rand McNally College Publishing Co., 1963. Carifio, Ledivina V. and Rebecca P. Albano. "The Impact of Feeder Roads: A Research Design." ESIA-WID Discussion Paper No. 79-24. Quezon City: Philippine Center for Economic Development, University of the Philippines, 1979. Carifio, Ledivina V. and Wilfredo B, Carada. "The Impact of Four Selected Roads in the Philippines." A Pre-final Draft Presented to the ESIAWID"Research Program, Philippine Center for Economic Development. Manila: Local Government Center, College of Public Administration, University of the Philippines, April 1982. Hoover, Edgar M. An Introduction to Regional Economics. 2nd ed. New York: Alfred A. Knopf, 1975.

Jose EAbueva

COMMENTS

There was a time when we used to say that academic excellence is relevant to the University of the Philippines but gave more importance to administrators than to scholars and researchers. Thus, in the 1960s, I wrote a critique in the Philippine Journal of Public Administration on the university system, indicating that we ought to prove that academic excellence is indeed the university's aim. In my sixth month as UP president, I reinvented the meaning of the word "University Professor." Before, the rank of University Professor had only been given to two of the university's presidents: Gen. Carlos P. Romulo and Ambassador Salvador Lopez; to two of the highest university administrators: Enrique Virata and Emmanuel Soriano; and years later, almost as an afterthought, to four known scholars: Teodoro Agoncillo, Leopoldo Llaves, Cesar Majur and O.D. Corpuz. When I became president, I resolved to make the University Professor the highest permanent position in the university whose basic salary is next to the University President's. In the administrative hierarchy, the rank would be the second highest but in the academic hierarchy, the rank would be the highest. Reinventing the title of University Professor, thus, meant upgrading the individual concerned to the position he/she most richly deserves: the highest in the academic hierarchy. At that time, I had three individuals in mind who were worthy of the position: Gelia Castillo, Jose Encarnaci6n, and Mercedes Concepcion. They are individuals who had achieved excellence in their respective fields and are recognized nationally and internationally. They were therefore the first three who were elevated to this rank. Today, we have 16.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

I am sharing this information with you because I think if we really want to promote serious creativity, scholarship and research, our value system, ranking system and remuneration system should give importance to scholarship and creative work. Let me now comment on Leddy's (Dr. Ledivina Carifio) excellent presentation. I would like to underscore her comment on the difficulty to apply the methodology in the social sciences. As president of the University then, I became a member of the Board of Trustees of the International Rice Research Institute (IRRI). For six years, I was exposed to natural scientists. 1thought how elegant their conceptualization process was -- at that time, they bad this concept of the various ecosystems of rice. In our meetings, they would present to us the ideal rice plant they wanted to produce for each ecosystem. They would describe all the components and then really aspire to produce the plants with all such accompanying characteristics, l thought then, how can we apply all these to political science? How can we have the ideal political leader, the ideal citizen and community? I also felt that the natural scientist was missing a very important social factor. During my six years in the IRRI Board, there were two of us who insisted that natural scientists take into consideration the people when they think of raising and distributing new plant varieties. Often, their distribution of research results and interventions leave out the poor rice farmer and poor consumer in the equation. 1might just be exaggerating but the point is that the human factor should be a major consideration in any research. Another point I would like to make is this: Every public policy or public intervention is really a hypothesis ... We must therefore be on guard for unintended effects which may actually be dysfunctional despite the noble objectives of the policy or legislation. 1like Leddy's review of her research experience and her learning from it. 1 have a political scientist-friend from Hawaii who wrote on the US intervention in Korea and then 20 years later, looked back on his career. When he re-read his book, he saw how "violent" he was in his language and how much of a pacifist and non-violent person he had become.

ABUEVA: COMMENTS

As a young graduate student at the University of Michigan, 1 once observed a debate on behavioralism. The anti-behavioralist's point of view seemed to be: "What counts cannot be counted." I do not entirely believe in that. The point is too simplified. The question should thus be rephrased: "What counts can be counted in different ways." This means that we need rigor in inventing the ways of measuring, and to reach the sophistication demonstrated by Leddy in discriminating among different methods and approaches. It is not that we do not need rigorous, quantitative methodologies. Only, we need to supplement these with other methodologies and know which ones to apply. There are qualitative values that defy measurement but must be considered. This seems very elementary but more often than not, we have to remind our students that events are caused not only by one intervening factor but rather by many causes and intervening factors that sometimes produce multiple effects. Implicit in Leddy's analysis of the effects of the roads is that social scientists should have a clear concept of the good society. The 1987 Constitution is rich, for it describes what constitutes the good society and the kind of society we want. After all, when we come up with policies and analyze them, we ought to trace our decisions to our concept of a good society. For instance, the concept is summed up in our Constitution as peaceful, free, just, democratic, prosperous and contextually, pro-God and pro-country. This value framework is very useful in our social scientific analyses.

Highlights of Discussion

LOOKING AT A SOCIAL PHENOMENON THE NATURAL SCIENCE WAY

Few people write about their experiences in developing and implementing methodologies in their research work, much less the pitfalls that they encounter. To begin with, researchers shun methodological types of research in examining social phenomena because of the false notion that this kind of research involves mainly numbers and statistics, and not much of insights. In a sense, researchers view methodological research from a narrow perspective and in the process, feel that they have little or sometimes nothing more to contribute to its enrichment. A research project developed in the late 1970s, called ESIA-WID (Economic and Social Impact Analysis/Women in Development), was an attempt to convene a broad range of social scientists to analyze the social and economic impacts of government projects. When it started, there were beautiful models put forth to examine the issues. Unfortunately, these models were never operationalized, not so much because models have little meaning to social scientists nor that different types of social scientists have different views on economic and social issues but because reality is more complex than theory. Field research often elicits "surprises" and unexpected findings. And the ESIA/WID research project was no exception. Nonetheless, it is from these "surprises" that we should learn and draw insights. Today that there is greater convergence of methodologies and concepts among different fields in the social sciences, it would perhaps be easier to

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

operationalize a multidisciplinary research like the ESIA-WID. Experts from different disciplines and fields can work together based on an integrative framework. Developments on methodological convergence prompted social scientists to work more closely with natural scientists, thereby earning more respect and appreciation for their own work and role in research. In this regard, more researchers must take up the challenges of social science research. Practicing social scientists should also be encouraged to share their experiences (write papers and essays, teach basic principles and methodological approaches in research, etc.) with young people so that they would not go through the same mistakes as those of their mentors. Finally, the social context of analysis of policies and programs has somewhat changed through the years. Society finds it more difficult nowadays, ideologically speaking, to tolerate the fact that in the process of studying the impact of a policy decision on the majority of the people, certain groups, especially the marginalized sectors, are negatively affected. Which is wily non-government organizations (NGOs) and people's organizations (POs) have become very important. Social scientists now have to "skirt" between the policymakers, on one hand, and the NGOs/POs, on the other, to draw from both sets of perspectives a workable solution and, at the same time, make inputs to actual program implementation and policy development.

POLICY RESEARCHERS AND POLICYMAKERS: NEVER

THE TWAIN

SHALL

MEET?*

DAVID GLOVER

AUTHOR'SNOTE

I( 7overnors FIRSTMETGelia Castillo whenDevelopment she was a member the Board of of the International Research ofCentre (1DRC), where I worked for several years as head of the economics program. One of the themes that ran through her commentaries was the need to ensure that the research we supported was used in decision making. On 1DRC _' Board, and on many others, she has continually reminded us that development research shouM be in the service of the poor and shouM result, not just in books and articles, but in social change. This paper attempts to respond to some of the questions Gelia has confronted us with: How can we improve communication between researchers and policymakers? What can be done to increase the utilization of research results? And how can research meet short- term needs without compromising its role in the development of new concepts and ideas?

*Valuable comments on an earlier draft were provided by Jose Pablo Arellano, Jeff Fine, G.K. Helleiner and W. Randy Spence. The views expressed are those of the author.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

INTRODUCTION

The 1980s saw a heavy emphasis on economic policymaking. As macroeconomic crises shifted attention from sectoral to national and international issues, the quality of policymaking was given increased importance as a factor in promoting stabilization and growth. A frequent observation is that policymaking could be substantially improved if it were based on better information and relied more on the principles of analysis and evaluation developed by economists and other social scientists. Current discussions of this subject in developing countries might benefit from an examination of the literature on research and policymaking during an earlier period in the United States. Under Presidents Kennedy and Johnson, the federal government launched ambitious social programs and at the same time attempted to increase the "science base" of policymaking. It attempted the latter by transferring a system of Planning, Programming and Budgeting from the Defense Department to other departments and by funding advisory and evaluative research related to those social programs. Subsequently, a wave ofstudie s (most notably Weiss ] 977 and Lynn 1977) assessed the impact of that research. The findings were disappointing social science appeared to have had little direct impact, measured by the direct adoption of specific recommendations. However, these studies did identify basic differences in the ways in which policymakers and academicians analyze problems and make decisions. They also identified the more fundamental contributions of social science as "research for knowledge" rather than "research for action." This paper surveys that literature and highlights its importance for developing countries. It examines the differences between policymakers and researchers, and makes recommendations for overcoming those differences. It then critiques the recommendations and discusses alternative concepts of social science's impact. It concludes by examining the implications for agencies financing research in developing countries.

GLOVER: POLICY RESEARCHERS ANDPOLICYMAKERS

"DEMAND-SIDE" PROBLEMS OF UTILIZATION: THE POLICYMAKING PROCESS Four aspects of the policymaking process are frequently incompatible with the utilization of social science research: policy objectives, the timing of decisions, who takes decisions, and the decisionmaking process. PolicyObjectives Rigorous analysis requires a clear definition of a problem and the variables to be measured. Government policies and programs are not often amenable to such analysis because they tend to have loosely defined and multiple, even contradictory, objectives. Stated and real objectives may differ. Furthermore, the relationship between means and ends is not simple. In policymaking, as elsewhere in life, ends are not always chosen first. "Ends are chosen that are appropriate to available or nearly available means;" they are not fixed, but explored, reconsidered and modified (Hirschman and Lindblom 1962). Finally, the pervasive role of government in society and the increased politicization of ethical issues (e.g. population policy, human rights, genetic engineering) have brought highly value-laden issues into the political arena; these are not easily amenable to research or evaluation (Rose 1977). Timing For a variety of reasons, the need for research often manifests too late. Because of inertia and more urgent priorities, governments are usually not receptive to suggestions for improvement unless there is a serious and self-evident problem. They tend to think about changing policies only when time and funding have run out; at that point, it is too late to carry out research (Wilson 1978). Timing usually preempts evaluative research. New policies and programs are usually launched in a research vacuum, partly because ex ante appraisal techniques tend to be less reliable than those for expost evaluation. The latter requires an existing program to study (Sundquist 1978). Further-

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

more, it is only after a program has been established and a clientele created that an effective demand exists for research (Lynn 1978). For these reasons, policy implementation tends to precede rather than follow research. Who Makes Decisions The model of a researcher advising a decisionmaker applies only weakly. In most cases, decisions are arrived at through multilateral bargaining. Even in cases where a client agency requests advice, there is no guarantee that it will be the appropriate audience for the results (e.g., a study done for the Ministry of Education which finds that the principal bottleneck to better student performance is poor nutrition; Weiss 1978). This problem has led some observers to recommend that policy analysis focus on a policy area rather than on specific agencies (Lamb 1987), although it is not clear how this would be operationalized. Furthermore, policies are made, in varying degrees by many actors, including senior civil servants, technicians, advisers and technical assistants (sometimes foreign); it is incorrect to think that only cabinet ministers are policymakers. Finally, many policies are not the result of conscious decisions at all; they are simply the sum of previous ad hoc actions and inaction (Weiss 1977). As a result of these conditions, it is often extremely difficult to identify a client for research. The Decisionmaking

Process

The loosely defined and often inconsistent objectives of many government policies result from the process by which they were formulated. In multilateral bargaining, it is often impossible to obtain consensus on anything more than broad statements of principle; accuracy and specificity must be sacrificed (Rose 1977). Furthermore, these bargains would not hold up if the costs and trade-offs involved were made explicit (Verdier 1984). 1 Research that examines the ex ante feasibility or ex post achievement of objectives is thus extremely difficult, and analyses that highlight costs and

1. As Hattie (1979) puts it. "'[Cabinet] ministers are like undertakers: disguise what everyone knows to be painfully true."

they are paid to

GLOVER: POLICY RESEARCHERSAND POLICYMAKERS

tradeoffs are threatening. Research always has the potential to upset delicate agreements; to take debates out of political back-rooms where they can be controlled by the actors involved (Verdier 1984); and to generally reduce the freedom ofpolicymakers who request studies and then find themselves under pressure to follow unwelcome recommendations (Davis and Salasin 1978). Finally, there are practical problems that prevent decisionmakers from making better use of research. Often, governments are afflicted with too much information; attempts to absorb the data already available can delay and complicate decisionmaking (Sharpe 1977). Furthermore, most senior policymakers have very little time to read: the average US congressman works an'eleven hour day, of which eleven minutes are spent reading (Verdier 1984). DIFFERENCES IN THE LOGIC OF ECONOMISTS AND POLICYMAKERS Some of the objectives and values of economists are particularly divergent from those of policymakers. To the extent that their objectives are identifiable, policymakers tend to emphasize distributional concerns (i.e., winners and losers); economists emphasize efficiency. Policymakers tend to define goals in (sometimes arbitrary) quantitative terms rather than in financial terms, as economists do (e.g., reducing pollution by 25 percent rather than investing in pollution control up to the point that marginal returns equal marginal costs; Leman and Nelson 1981). In measuring the achievement of objectives, economists and policymakers also differ. Policymakers tend to assess costs and benefits in terms of the number of people affected, rather than financial costs and benefits (Verdier 1984). Partly because of the vagueness of many program goals, they assess performance in terms of inputs rather than outputs (e.g., number of new hospital beds rather than improvements in health; Behn 1981). They also weigh losses more heavily than gains, since the credit accruing to the originator of the policy is asymmetrical. As Verdier (1984: 432) says, "a

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

policy that hurts five people and helps five, produces five enemies and five ingrates." There are also differences in the decisionmaking criteria employed by policymakers and those recommended by economists. While economists emphasize the future costs of a potential project, policymakers place much weight on sunk costs to justify further investment, since these reflect the amount of credibility the policymaker has invested, the size of the project's constituency and its expectations (Behn 1981). Opportunity cost usually does not figure heavily in policymakers' calculations (Leman and Nelson 1981); projects and programs are assessed in their own terms, without close reference to alternative uses of funds (particularly alternatives in areas outside the decisionmaker's control). Finally, the issue of compensation is critical to polieymakers; for economists it is usually an afterthought. Economists tend to find a solution satisfactory if, in theory, the losers could be compensated. To push a policy innovation through, policymakers must usually ensure that they will be compensated, and have mechanisms to do SO.

Many sectoral ministries are also dominated by sectoral specialists (i.e., engineers controlling infrastructure policy; doctors controlling health policy). Economic analysis is often absent or done as an afterthought when financing is sought for the investment programs. The last area of divergence is in the means favored to influence the behavior of economic agents. In part because many policymakers have a background in law, they often favor legal and regulatory instruments (Rhoads 1978). That is, they try to affect behavior through legal prohibitions and by redefining rights and duties. Economists, by contrast, emphasize economic incentives, manipulating these so that the desired behavior comes to be in the agent's self-interest. '"SUPPLY

SIDE"

PROBLEMS

OF ACADEMIC

RESEARCH

University research is often unsuitable for use by policymakers. It often takes much longer to produce results than a policymaker with a short

GLOVER: POLICY RESEARCHERS ANDPOLICYMAKERS

deadline can tolerate. It is frequently highly critical, without positive suggestions for action, in keeping with the self-image of many academicians as gadflies. It often avoids simple recommendations that can be acted upon and instead analyzes the advantages of various alternatives. There is also a tendency for some researchers to learn tools and techniques and then search for problems to apply them to. Streeten (1988: 640) calls this "the law of the hammer according to which a boy, given a hammer, finds everything worth pounding, not only nails but also Ming vases." The state of social science research is such that consensus is rare. The incentives in academia are to question and overthrow existing theories and replace them with new ones. A state of conflicting views and information is therefore normal (Aaron 1978). 2 This undermines the confidence of potential clients when they realize that, for every study they examine, another can be found that provides opposite conclusions. Policymakers rightly judge that such research is more likely to complicate a debate than to resolve it (Weiss 1977), and may even delay badly needed action in the face of conflicting advice (Aaron 1978). Academics also tend to search for general laws and patterns of behavior. These reveal phenomena of greater theoretical and long-run importance than highly specific observations. Funding agencies favor this approach because it provides a greater return to the research dollar. Consultants also look for general lessons, since these can be applied to new assignments at little marginal cost (Szanton 1981). Polieymakers, however, are not interested in generalizations; they want answers to the specific problems they face, even though such "small" problems may not attract the interest of researchers. Finally, the easiest kind of policy-oriented research is program evaluation. Policymakers are generally more interested in forward-looking research, however. Evaluations may actually be counterproductive by provoking a defensive reaction from the object of study (Szanton 198 !).

2. Itis thusamisspecification to referto academicresearchas "supply-driven";itsimply respondsto a differentsetof demandsandincentivesthanclient-orientedresearch.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

RESEARCH

UTILIZATION

IN DEVELOPING

COUNTRIES

The wealth of material on research utilization in the US is in contrast to its paucity in developing countries. This paper attempts to glean from the existing literature on generalizations applicable to at least some developing country situations. However, a number of provisos should be made. First and most obviously, the degree of openness in the political system in most least developed countries (LDCs) (both openness to influence by the electorate and researchers, and openness to investigation) is more limited than in the US. However, in those cases where researchers are permitted to express their views on policy issues, the suggestions made subsequently about increasing the likelihood of utilization are applicable, in some countries, the probability may increase from 40 to 80 percent, in others from 4 to 8 percent, but the principle is the same. Second, data are scarcer and less reliable ill LDCs. This will make "quick and dirty" policy analysis more difficult and may lead researchers either into basic data collection or into data-free theory and modelling. Third, in many LDCs, interest groups are less articulated than they are in industrialized countries, and the demand for policy analysis from nongovernment clients is likely to be weaker. Fourth, while the Overt role of domestic interest groups may be weak or repressed, the influence of external agencies like the IMF over policymaking is far greater than in any developed country. However, this "policy dialogue" may actually serve to increase government's demand for research, as ammunition needed in negotiation. Fifth, in those societies where politics is highly ideological, researchers and research institutions tend to be similarly divided, often with explicit partisan affiliations. The process by which research influences policy resembles a lottery: a researcher can hit the jackpot if his or her party achieves power, but' may then be quite marginalized during succeeding regimes. This phenomenon is common in Latin America. Sixth, cabinet ministers in LDCs often tend to be more technically competent for their portfolios than their counterparts in North America or

GLOVER: POLICY RESEARCHERS AND POLICYMAKERS

Britain. In Canada, for example, ministers often hold very different portfolios during their careers and rely on their staff for technical expertise. In Latin America, it is not unusual for a sectoral minister to hold a PhD in the relevant discipline and thus be in a better position to make independent assessment of information. 3 Similarly, casual observation suggests that cabinet ministers in some developing countries (again, Latin America provides the greatest number of observations) come from a wider variety of professional backgrounds than those in North America, where lawyers and businessmen predominate. One might expect that the lesser weight of lawyers might make developing countries less prone to regulatory solutions, though the results do not seem to bear this out. Seventh, decisionmaking tends to be highly centralized, placing heavy burdens on a few key individuals. Eighth, administrative capacity for implementation is weaker, so the practical implications of any recommendation are critical. Finally, it has been observed that the distinction between the formulation and implementation of a policy may be quite difficult in developing countries (Fine 1990). Particularly in negotiations with external agencies, an apparent agreement on a policy may be nothing more than the avoidance of overt disagreement. Only after funding is in place do the hard decisions start to be taken. As the effects of the policy change become visible, resistance mounts, involving conflicts among a larger number of actors at different levels and in different agencies (Thomas and Grindle 1990). This suggests that recommendations aimed simply at defining a desirable policy are unlikely to be effective; only if they are pursued throughout the implementation process will they stand a chance of success.

3. This underscores the testimony of de Pablo's (1988) advice to would-be ministers of the economy: "'Never assume that the failures of your predecessors were the result of incompetence.'"

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

GUIDELINES

FOR THE ENHANCEMENT

OF RESEARCH

UTILIZATION

Many authors have made suggestions about the design and dissemination of social science research with the intention of increasing the likelihood of its utilization. Some authors have discussed the conditions under which utilization ismost likely to occur; others have gone further in providing quite specific recommendations. Many of these flow logically from the diagnoses presented in previous sections of this paper. Weiss and Bucavalas (1977) found, somewhat counterintuitively, that the quality of the research, including the reliability of its methodology, did have an important bearing on its credibility and impact. They als0 found that research that challenged existing assumptions and ways of doing things was not necessarily rejected and was often highly valued. Faulhaber and Baumol (1988) looked specifically at the conditions under which economic research is likely to be utilized. The adoption of economic methods or recommendations was mostly likely in the following circumstances: 1. When they pertained to critical future decisions (e.g., forecasting techniques useful for investment in the stock market). 2. In situations where competitive pressures are strong, and there are pressures as well as incentives to innovate. 3. When a technique provides an accurate signalling function (e.g., a forecast that is not necessarily based on a correct diagnosis of underlying causes, but which itself influences expectations and behavior)i 4. When an agency or firm is highly accountable and must justify the decisions it takes. 5. When recommendations take into account their effects on income distribution.

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A number of authors have gone a step further and provided recommendations for the design and conduct of research. Szanton' s (1981 ) studies of urban policy research in the US provided the following conclusions: 1.Avoid explicit evaluations. Clients are more likely to respond to positive suggestions for change than to criticism of past performance. 2. Give the client credit for successfulinnovations;he will certainlyhaveto taketheblamefor failures. 3. Don't try to developcomplexmethodson thejob; sti_:kto simple,tried andtrue ones.Thesearelessrisky andmorecomprehensibleto theclient. 4. Try anexperimentalorpilotprojectto testa recommendation before proceedingto full-blown implementation. 5. Aim for situation-specificsolutions,notgeneralizablelaws. Goodsolutionswill eventuallycatchon. Verdier's (1984) paper is directed to would-be advisors to US congressmen. His ten recommendations appear sensible for policy advisers in most situations. I. Learn about the history of the issue. By researching previous arguments, the analyst can identify key interest groups, areas of disagreement and data gaps, as well as changes in context that may influence future bargaining. 2. Find out who will be making the decision. Target the recommendations to those groups and present them in a form appropriate to the audience. 3. Timing is critical. Recommendations should be presented when they are most likely to receive attention. Generally, it is best to get into the debate early before positions harden.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

4. Learn everyone's interests and arguments. 5. It's OK to think like an economist but don't write like one. Emphasize the decision at hand, the underlying problem, and options to solve it. Minimize methodology, jargon and equations. 6. Keep it simple. Where it is essential to explain complex features of an issue, illustrate them simply, using examples where possible. 7. Policymakers care more about distribution than efficiency. Explain what groups will be affected by the proposed measures, avoiding general refbrences to "welfare losses for the economy." 8. Take implementation and administration into account. Don't propose measures that are technically optimal but too complex or costly for an agency to administer. 9. Emphasize a few crucial and striking numbers. Use statistics that emphasize the number of people affected, rather than aggregate dollar figures. 10. Read the newspapers. More generally, try to gain access to the same sources of general information as the policymaker, since these sources influence their perceptions. Similarly, Leman and Nelson (1981) provide "ten commandments for policy economists." Those that do not duplicate Verdict's are1. Be economical about the use of economics. Apply economic analysis only to problems where it is relevant. Emphasize basic economic principles. 2. Discount for political demand. If the first-best solution is infeasible push for the second-best and make it as good as possible. 3. Dare to be quick and dirty. Partial analysis is better than none.

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CLIENT-ORIENTED

RESEARCH

AND RESEARCH

BROKERS

Some authors who stress policy impact have gone farther than this and propose the development of a distinct type of inquiry: policy analysis. Behn (1981: 200) defined this activity as follows: "the examination of a particular policy problem in an effort to determine what the government should do; usually but not always, it is prepared for a particular policymaker who wants to make, has to make, or is able to make a specific decision (or take a specific action) about the policy problem." Policy analysis is action-oriented, aiming to produce specific changes and providing suggestions not only on the content of the change but also on how to achieve it. Assessment of political feasibility plays an important role. Theoretical innovation, methodological rigor and primary data collection are downplayed, but the need to deal with political aspects adds different complexities. The challenges of conventional social science research and policy analysis are different; each style will appeal to different temperaments and many would argue that policy analysis is not a second best option. As Behn (1985: 432) says, "many prefer the chess of policy analysis to the checkers of social science." In Behn's definition, the essential difference between a researcher and a policy analyst is that the latter has a particular user in mind for the research product and previous contact with the user. ("If you don't have a client, you're not doing policy analysis;" Behn 1985: 428.) This view is controversial. If the implication is that the client must be situated within government, it is highly restrictive and eliminates much focused, applied research that is appropriately critical of government. At the least, one could argue that research carried out for nongovernment clients should be considered policy analysis. At most, one could argue that economists traditionally view society as a whole as their client when pointing out various inefficiencies, and that some see their role as defending the interests of unorganized but disadvantaged elements of the population. Research carried out in these

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

circumstances, it it provides specific policy reconlmendations, might also be considered policy analysis. A better term for the approach advocated by Behn might be "client-oriented research." An alternative or supplement to the specialized policy analyst is the research broker who, instead of providing policy advice himself, acts as an intermediary between policymakers and the research community. The broker responds to a client's needs by seeking out needed information (or a researcher who could provide it); synthesizing and condensing information; and providing technical assistance to help the client interpret the data (Davis and Salasin 1978). This role would be a difficult one to say the least. Brokers might be liable to the "shoot the messenger" syndrome and could be used as convenient scapegoats for policy failures. They might also be pressured to suppress embarrassing reports and to tell clients what they want to hear (Sundquist 1978). • The precarious nature of the broker's existence has led some observers to doubt the feasibility of such an approach. The broker is an idea "offtouted and rarely instituted" (Weiss 1978: 70); there are few cases to empirically evaluate. Some experimentation with this promising but risky idea would probably be useful. One could reduce the vulnerability of the position by having the broker funded by -- and perhaps reporting to m an external funding agency. The advantage of the broker's greater autonomy might well outweigh the loss of commitment by policymakers to use a service they are not paying for. In practice, the main limiting factor may be the availability of suitable people to play the broker's role. The combination of technical skills, diplomacy, entrepreneurship and relative risk-indifference calls for an exceptional individual. CRITICISMS

OF CLIENT-ORIENTED

RESEARCH

The client-oriented approach to utilization has a number of deficiencies. At the empirical level, it simply has not worked well. The great wave of studies

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AND POLICYMAKER$

surveyed in this paper were done largely to find out why such an enormous investment in policy-oriented research had been so rarely utilized. It is clear from the second (p. 65) and third sections (p. 67) in this paperthat the ways in which policymakers and researchers analyze information and make decisions are fundamentally different in many respects. It is not particularly useful to deny this problem and exhort researcher to "try harder." Some measures can certainly be taken to reduce the gap. The various guidelines cited earlier may be helpful. They are limited, however, by the need to apply them in varying circumstances. Most of those listed earlier could just as easily been phrased as their opposites as follows: 1. Make use of pilot projects before moving to full scale. VS.

Seize the moment. Go straight to implementation while the opportunity exists, including a monitoring and evaluation component. You may not get another chance. 2. Be prepared to sell your proposal, from early discussion through to implementation. (Except in circumstances where your credibility will be greater if you are seen as detached.) 3. Find out who's making a decision and target your results. (Except when it is a nondecision, resulting from unconscious, uncoordinated actions.) Clearly, what is needed is not more detailed lists of highly specific "commandments," but the ability to make good judgments in specific and sometimes unique circumstances. At a more philosophical level, there are other problems with client-oriented research. Selecting the right client is obviously a critical decision, but how do you do it when you don't know in advance what results you will come up with? If the client is an individual, how do you know that he or she will be in the same post when the research is completed? More fundamentally, how legitimate are the interests of any single client? Any given client is likely to have a partial view of its own needs, let

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

alone those of society, and a weak understanding of the broader repercussions of satis_ing those demands. Farmers may want more subsidies, cheaper credit or higher prices, but they are unlikely to calculate the effects on the fiscal deficit, farm employment, or inflation. Client-oriented research does not create an awareness of those conflicts, or an understanding of the broader social system and the legitimacy and interdependence of various interests within it. The question of time lags is probably more serious than what the literature implies. The problems are not only the mechanical ones of coordination, but relate to the setting of research priorities. Except for extremely narrow topics, the research process is lengthy, while the demands of clients are immediate. Furthermore, the crises clients face are frequently the result of previous errors or of trends sent in motion some time ago, but whose effects are felt only now. 4 A suitable slogan to illustrate the danger of this approach might be "Client-oriented research." tomorrow's solutions for yesterday's problems. " ALTERNATIVE

USES OF SOCIAL

SCIENCE

RESEARCH

So far this paper has been relatively pessimistic about the utilization of social science research. The remainder of the paper is more optimistic. It contends that many of the negative assessments of research impact are based on a misspecification of"impact": using a broader definition, the utilization of social science research has in fact been considerable. The most frequent and most important way in which social science research actually affects policy seems to be through its effect, often slow and cumulative, on widely-used concepts and methods. This was the principal finding of a massive 1975 study of research utilization in the United States (reported in Weiss 1978), and the observation seems to be more broadly applicable. The contribution of social science research, is not so much in proposing specific solutions to already well-defined problems, but 4_ This problem is even more severe for technology-oriented research than policy research since Icad times in the tbrmer tend to be even longer (Lipton 1989).

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AND POLICYMAKERS

rather in defining the problems and providing an array of methods with which to analyze them. These can be extremely important contributions. "Determining what issues are discussed in the policymaking process may be the single most powerful political act" (Seekins and Fawcett 1986). Several terms have been coined to describe this more diffused model of research utilization, in contrast to the highly focused, client-oriented approach described earlier. Pelz (1978) refers to conceptual vs. instrumental research; Weiss (1977) to enlightenment vs. social engineering; and Rich (1977) to knowledge for understanding vs. knowledge for action (summarized in Snell 1983). Problem definition can take many forms. It can consist of detecting or imposing a pattern on data, for example, a trend toward worsening income distribution (Rein and White 1977). As Weiss (1978: 31) points out, it can focus attention and "help to turn what were nonproblems or private problems into policy issues (such as child abuse), help to convert existing policy issues into nonproblems (e.g. marijuana use), or drastically revise the way that a society thinks about issues (e.g., acceptable rates of unemployment)." In developing countries, changing approaches to research on the informal sector have had a major influence on how that phenomenon has been viewed over the last twenty years. Once seen as an embarrassing symptom of backwardness to be eradicated, research led to a greater acceptance of the informal sector as legitimate, and more recently through de Soto's (1987) work, as a positive force for development. In fact, it could be argued that the most significant contribution of social science research is at the most general level, the generation of ideas and ideologies. History shows that ideas can be very powerful. The writings of Raul Prebisch had a tremendous influence on Latin American policymakers and led directly to the wave of import substitution that transformed the continent's economic structure in the 50s and 60s. The subsequent implementation of conservative policies had equally far-reaching effects and was also strongly influenced by the intellectual currents of the day. in both cases, ideas took root in aq environment and a time when policymakers were receptive to them.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

All of these approaches to problem definition contribute to what Verdier (1984) calls "structuring the terms of the debate." This can include setting the agenda (for example, predicting long-term trends that will eventually require the attention ofpolicymakers or putting forward specific problems for discussion) and subsequently, injecting into that debate certain concepts and methods used in social science. Concepts like "marginalization" made their way into policy discussion from social science literature; so did analytical methods for appraisal and evaluation. IMPLICATIONS

FOR RESEARCH

FUNDING.

AGENCIES

What does all this imply for agencies financing research in developing countries? First, one should recognize that the likelihood of utilization of any kind of research (social or technical, instrumental or conceptual) is quite small. While the impact of instrumental research is limited it is highly identifiable; the impact of new concepts and problem identification is far-reaching but difficult to attribute. Furthermore, there are rarely total victories or losses in any policy arena and policies are frequently reversed or eroded with changes in personnel or circumstance. In some areas, such as tax reform, continuous revision rather than once-and-for-all change seems to be the rule (e.g., Perry and Cardenas 1986). This also complicates the identification of research impact: what appears to be a strong impact in the short run may be eroded in the long run, while basic research which illuminates certain constant relationships may be drawn on years later to support or justify a policy change. An approach which creates the conditions for both kinds of impact is desirable. This could involve a portfolio approach, financing a variety of projects, each intended to produce a different type of impact. Alternatively, it is possible to finance long-term research programs from which both conceptual and instrumental impacts can be derived. The content of such research should be such that it creates an understanding of basic behavioral relationships and a thorough knowledge of

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existing data and data sources. Research agenda that lead to such knowledge and that deal with long-term issues that have short-term implications can be tapped to provide short-term policy advice. An example is a muitiyear research program financed by IDRC in Latin America since 1983, examining savings and investment behavior and the functioning of financial markets. 5 Knowledge gained through this research has frequently been applied in policy recommendations related to management of inflation, capital flight, and wage and price policies. Similarly, a multiphase network ondebt bargaining 6 has yielded both "instrumental" impact (progress in the adoption of recommendations about provisioning requirements for commercial banks) and "conceptual" impact (by reinforcing general principles about cross-conditionality, no net transfers by least developed countries and so on). In the former case, it is relatively easy to trace a policy change back to a specific recommendation and to claim credit for it. In the latter, the researchers contribute to an ongoing debate; their contribution is partial and less identifiable. In the long run, however, the acceptance of broad principles may have greater effect on the debt problem. Both types of impact are valuable, so we need an approach that does not rule out one or the other apriori. While short-term impacts can be derived from long-term research programs, conceptual innovations rarely result from highly specific, client-oriented projects. It is this asymmetry which makes the case for program support a powerful one. The literature on policy analysis also gives some suggestions about research approaches that are most likely to influence policy. For example, traditional economics is probably not adequate. Something like the style of policy analysis advocated by Richard Behn is probably more suitable, without the single-client orientation. 5. The participating research centers in this program are FEDESAROLLO (Colombia), PUC (Rio de Janeiro). CEDES (Argentina), CIEPLAN (Chile), and Universidad Catoliea (Bolivia). See Ahorroy Inversion en Latino America, IDRC: MR207s. Ottawa, 1988. 6. S. Griffith-Jones (ed.) Managing World Debt. (Wheatsheaf, 1998); E. Rodriguez and S. Griffith-Jones (eds.) Tangled Webs: Cross Conditionality, Banking Regulation and Third World Debt,

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Many of the limitations of economics could be mitigated by paying attention to factors which affect the feasibility of implementation. One of the traditional role of economics in identifying specific inefficiencies, their costs, and who pays them, should receive more emphasis. This does not imply that quantitative economic criteria are overriding, but that the costs of trade-offs, where estimable, are made explicit. For example, countries may deliberately choose to forego the putative efficiency benefits of trade liberalization in return for greater cultural or political autonomy. It helps in making such a decision, however, to know if the price of such autonomy is 2 percent of GDP or 20 percent. In addition, economists should extend their analysis into the implementation phase. In making policy recommendations, they should not stop at recommending the first-best technical solution, but rather present a variety of ranked options, indicating the efficiency and distributional consequences of each. Who are the winners and losers in each scenario? It may be possible to design instruments to compensate the losers (rather than simply saying that efficiency gains will be sufficient that they could, in theory, be compensated). It may also be possible to map out alternative sequences of policy implementation, so that the introduction of measures in sequence progressively neutralizes opponents and strengthens supporters. Improvement in modelling and computer techniques are making this increasingly feasible. This style of research is not common, and there may be a need for specific graduate training to meet this need. Since researchers comfortable with interdisciplinary methods are scarce, there may be at times a need for multidisciplinary teams from economics, political science and/or public administration. This approach also requires knowledge of the history and evolution of policy issues and familiarity with the institutional context and decisionmaking process of government. These cannot be acquired through short-term projects done by individuals. The earlier recommendation of greater reliance on program grants is thus reinforced. Another process which needs somerethinking is the setting of research agenda. There is currently a fixation on the part ofpolicymakers and donors with problem Solving. This is understandable, but we often forget that there

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are other ways of dealing with problems, principally by avoiding them in the first place. Too often "problem-oriented research" means trying to put Humpty Dumpty back together. One of the most important roles of research is to alert policymakers and others to incipient trends, so that they can take appropriate action before it is too late. Those trends can contain opportunities as well as dangers. It can be argued that one of the reasons the Asian newly-industrialized countries (NICs) have done well, at a time when others have done poorly, is that they have anticipated problems and taken advantage of opportunities, rather than simply responding to crises. Donors have an important role to play in supporting theoretical research, though they are often reluctant to do so. They should recognize that "theoretical" and "empirical" is not equivalent to "useless" and "useful." Theoretical research can be extremely useful. A plausible, verifiable theory about how peasants respond to increases in crop prices, or savings to changes in interest rates, is obviously relevant to poverty and can be extremely useful. On the other hand, the collection of masses of data on an irrelevant topic benefits no one except computer manufacturers. The aim should be to support practical, applicable research, be it theoretical or empirical, rather than applied research per se. It is sometimes argued that donors should prefer to support government agencies rather than universities or private centres in order to increase the likelihood of impact. The reverse also could be argued: that non-government research centers may have bettter trained people with more time for research, are less likely to have their findings "smothered," and less prone to shifting their stance with the government of the day. Neither generalization is likely to be robust. Policy impact can best be achieved by adapting the process of consultation to local circumstances. Often this consists of the formation of teams of researchers from government and academia; formation of interinstitutional steering committees (to provide direction for university research); frequent consultations and seminars with policymakers; training of government officials by academicians; and so on. The flexible application of mechanisms such as these is likely a

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

more effective means of increasing the probability of utilization than a priori decisions about institutional affiliation. Whatever kinds of institutions and mechanisms are supported, greater attention should go to dissemination. Donors should be prepared to pay the costs of those "frills" which enhance the quality and utilization of research: training, networking, replication of studies, and dissemination of results through conferences, books, working papers, abstracts and the like. The familiar "project cycle r' syndrome must also be broken, whereby researchers have an interest in finishing a project quickly in order to get on to the next income-earning activity, while donors want to finish it in order to close the books and begin the job of spending next year's budget. Follow-up activities which refine, repackage and disseminate results to different audiences should be seen as legitimate and important, often more so than new data collection exercises. The various "commandments" in the sixth section (p. 72) may be useful to researchers making their first forays into policy advice. The mechanism of a "research broker" is worth experimenting with. In general, the literature should caution donors against excessive riskaversion or emphasis on purely instrumental research. This is at least as true for developing countries as for developed ones. Particularly important is the role of research that detects and analyzes trends (e.g., the implications of new materials and technologies for primary commodity exporters; developments in global financial markets; issues likely to arise in global negotiation over climate change). Also important is the contribution of research to problem definition. Over the last decade, there has been a wave of interest in increasing the role of the market. This has complicated the role of policy analysis since it is increasingly difficult to distinguish ends from means. Many changes that seem most appropriately to be viewed as means (e.g., privatization) have come to be seen as ends in themselves. In such conditions, the fundamental role of research in defining problems and setting the terms of the debate becomes even more crucial.

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BIBLIOGRAPHY

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Sharpe, L.J. "The Social Scientist and Policy Making: Some Cautionary Thoughts and Transatlantic Reflections." In C. Weiss (ed.) Using Social Science Research in Public Policy Making. Lexington, Massachusetts: Lexington •Books, 1977. Snell, Warren. "The Utilization of Social Science Research in Public Policy Making." Australian Quarterly 55, No. 4. Streeten, Paul. "Reflections on the Role of the University and the Developing Countries." World Development 16 ( 1988): 639-40. Sundquist, James L. "Research Brokerage; The Weak Link." In Lawrence E. Lynn Jr. (ed.) Knowledge and Policy: The Uncertain Connection. • Washington, D.C.: National Academy of Sciences, 1978. Szanton, Peter. Not WellAdvised. New York: Russel SageFoundation/Ford Foundation, 1981. Taylor, L. Structuralist Macroeconomics: Applicable Models for the Third World. New York: Basic Books, 1983. Thomas, John W. and Merilee Grindle. "After the Decision: Implementing Policy Reforms in Developing Countries." Worm Development 18 (1990): 1163-81. Thurow, Lester. Dangerous Currents." The State of Economics. New York: Random House, 1983. Tisdell, Clem. "Sustainable Development: Differing Perspectives of Ecologists and Economists, and Relevance to LDCs." Worm Development 16 (1988): 373-84. Verdier, James. "Advising Congressional Decisionmakers: Guidelines for Economists." Journal of Policy Analysis and Management 3 (1984): 421-38. Weiss, Carol (ed.). Using Social Science Research in Public Policy Making. •Lexington, Massachusetts: Lexington Books, 1977. Weiss, Carol and Michael J. Bucavalas. "The Challenge of Social Research to Decision Making." Using Social Science Research in Public Policymaking. Lexington, Massachusetts: Lexington Books, 1977.

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Weiss, Carol. "Improving the Linkage Between Social Science Research and Policy." In Lawrence E. Lynn Jr. (ed.) Knowledge andPolicy: The Uncertain Connection. Washington, D.C.: National Academy of Sciences, 1978. Weiss, Carol. "Evaluation for Decisions. Is Anybody There? Does Anybody Care?" In M. Alkin (ed.)A Guide for Evaluation Decisionmaker. Sage, 1985. Whitehead, L. "Political Explanations of Macroeconomic Management: A Survey." World Development 18 (1990): 1133-46. Wilson, James. "Social Sciences and Public Policy." In Lawrence E. Lynn Jr. (ed.) Knowledge and Policy: The Uncertain Connection. Washington, D.C.: National Academy of Sciences, 1978. Wittroek, Bjorn. "Social Knowledge, Public Policy and Social Betterment: A Review of Current Research on Knowledge Utilization in Policy Making." European Journal of Political Research 10 (1982): 83-89.

PHILIPPINE AGRICULTURE AND RURAL DEVELOPMENT

DYNAMICS

OF RURAL

ANALYTICAL

DEVELOPMENT:

AND POLICY

ISSUES III

ROMEO M. BAUTISTA *

INTRODUCTION

URALDEVELOPMZNT as a social goal has long been given major attention by politicians and policymakers in the Philippines. This is reflected in the concern frequently expressed about rural problems and the plethora of laws and institutions that have been created to deal with them. Gelia Castillo (1983) has provided a stimulating and perceptive examination of rural development institutions in a PIDS book published more than a decade ago. The dominant production activity in the rural sector is of course agriculture. Rural development •is part of the process of "structural transformation" characterized by a diversification of the economy away from agriculture. This process is facilitated by rapid agricultural growth, at least • initially, but leads ultimately to significant declines in the share of agriculture to total employment and output and in the proportion of the rural population to total population (Johnston 1970). The "dynamics of rural development" represents a key element of the overall development process that can provide the basis for a self-sustaining and equitable economic

*Research Fellow, International Food Policy Research Institute. This paper draws heavily from the author's presentation at the Consultative-Workshop on thetDynamies of Rural Development organized by the Philippine Institute for Development Studies (PIDS) on August 30-31, 1991 at Ternate, Cavite.

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

growth. Rural development as such is not an end in itself but a means to an end. The same can be Said of agricultural growth which almost necessarily is a precondition to rural development.I The main objective of this paper is to contribute to the understanding of the links among conceptual, empirical, and policy issues relating to agricultural growth, rural development, and overall economic growth in the Philippines. The second section (p. 95) discusses the nature of the interactions between agriculture and rural nonfarm enterprises (RNEs, d_fined here to include both formal and informal nonagricultural production activities in the rural sector), focusing on the demand stimulus generated by agricultural growth. That rapid agricultural growth does not automatically translate into rural development and self-sustaining economic growth is well demonstrated by the Philippine experience during the green-revolution period, 1965-80. Several factors bearing on the distribution of income gains from agricultural growth (a principal determinant of the magnitude of rural growth linkage effects) are examined and related to the observed changes in average rural income and income inequality among rural households. The third section (p. 107) describes the critical role of RNEs in rural development and the effects of rural industry growth on the development process as a whole. The discussion draws on the contrasting development experiences of Taiwan and the Philippines which recorded comparably high agricultural growth rates during the 1960s. In the fourth section (p. 112), an overall framework for policy analysis of the determinants of RNE growth is presented, indicating various aspects of the policy environment that influence the economic performance of RNEs. The discussion in the fifth section (p. 117) focuses on agrarian reform, an institutional change of current policy relevance, and how it might induce the expansion of rural nonagricultural activities. Concluding comments, as well as some suggestions for future work, are given in the sixth section (p. 125). 1. "Almost necessarily," since it is possible that a small agrarian economy newly opened to foreign trade can shift and mobilize resources (including foreign resources) to nonagricultural production that caters mainly to the world market.

BAUTISTA: DYNAMICS OFRURAL DEVELOPMENT

AGRICULTURAL GROWTH LINKAGES, INCOME DISTRIBUTION AND RURAL DEVELOPMENT Increasesinagriculturaloutputstimulatethedemandfor production-related products(like fertilizer and farm equipment)from the industrialsectorand expandthesupplyof agriculturalproductsusedasinputs(in particular,raw materials) to nonagriculturalproduction.These two types of production linkage are referred to as "backward linkage" and "forward linkage," respectively. Agricultural production is generally characterized by a "weak" backward linkage, especially with respect to the rural economy, and a "medium-strong" forward linkage. This has been borne out by the findings of a study on the Philippines using the 1965 Input-Output Table (ILO 1974i 659-73). In this respect, Hirschman's (1958:110) view that agriculture can generate much less stimulus than manufacturing to production in other sectors is valid in the Philippine context. The Importance of Consumption Linkage Effects Apart from the linkage effects on the production side, however, agricultural growth also raises the real income of rural households and hence their consumption demand for food and other agricultural products as well as industrial consumer goods and services. Such "consumption linkages" set in motion a sequence of employment and income multiplier effects that cuts across the rural and urban sectors. As shown in the seminal work on India by Mellor and Lele (1973) and more recently on Mexico (Adelman and Taylor 1991) and Madagascar (Dorosh and Haggblade 1993) based on economywide model simulations, this source of intersectoral linkages is critical to the extent and nature of the influence of agricultural growth on the overall development process. A greater stimulus to rural nonagricultural production is commonly associated with income growth among the lowerincome rural households, owing to the tendency of richer households to spend more on goods produced outside the local area. Moreover, the type of consumer goods demanded by the poor are made in a relatively laborintensive manner, causing increases in employment, especially of the un-

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

skilled, and further income improvement among low-income workers in the second round. Survey findifigs of Philippine studies--as reviewed by Ranis, Stewart and Reyes (1989)--also indicate the dominance of consumption linkage effects on rural nonfarm activities over the production linkage effects, largely attributable to the greater labor intensity of consumption-related rural industries. Thus, the observed employment growth accounted for by consumption linkages ranges from 63 percent to over 80 percent of the total increase in local nonagricultural employment. Gibbs' (1974) survey in Gapan, Nueva Ecija indicates that nearly 60 percent of total nonfarm employment in 1971 was contributed by RNEs supplying consumer goods and services to the area; public services contributed about one-fourth of the total, and production-related activities only 18 percent. An even lower percentage (6.8 percent) was accounted for by forward and backward linkages in the two towns surveyed in the Upper Pampanga River area bySander (1979). Employment expansion was understandably much more significant in consumption-related RNEs, accounting for 62.8 percent of the total employment growth during 1961-71 in Gapan and over 80 percent during !975-79 in the Upper Pampanga river area. In Malaysia, Bell et al. (1982) find that each dollar increase in agricultural income in the Muda region generates an additional 0.8 dollar increase in nonfarm value added in the local economy. Two-thirds of the rise in nonfarm income is associated with the increased demand of rural households for consumer goods and services, the remaining one-third due to the increased demand for inputs to agricultural production. Again, the production linkage is relatively weak. A major factor contributing to the growth of rural nonfarm activities due to rising consumption expenditure is the increase in agricultural wages, as shown in a study on Thailand (World Bank 1983). The earlier experience of Taiwan also indicates a positive relationship between the agricultural wage rate and rural nonfarm employment (Ho 1979). Indeed, a given increase in income will generate more employment if spent in the purchase

BAUTISTA:DYNAMICS OF RURAL DEVELOPMENT

of wage goods, which are locally produced and labor-intensive, than in the acquisition of consumer durables normally associated with nonwage income spending. Economywide

Effects

of Agricultural

Growth

There are obviously some further demand ramifications of agricultural growth beyond the local economy. Even in the first-round effects, there are goods produced outside the local economy that will be demanded by farmers and rural households in production and consumption. To be able to capture fully the linkages of agricultural growth, one has to go beyond the effects on the local rural economy. Invoking the mechanism of agricultural growth linkages with the rest of the economy, it is reasonable to specify, at the aggregate level, that nonagricultural production is a function of agricultural production, among other possible influences. If one focuses on the demand side (considering that consumption linkages are dominant), a logical explanatory variable to add is the volume of exports, representing foreign demand. Based on such specification, a regression estimate of the "growth linkage elasticity" of 1.27 was obtained(Bautista 1990a), indicating that a 1 percent increase in agricultural production results in growth of more than 1 percent in nonagricultural production. It is notable that even higher estimates were obtained for Indonesia (1.35) and Malaysia (1.60), the two other Southeast Asian countries included in the study. Another approach to the quantitative investigation of the economywide repercussions of increasing agricultural production (generated by an exogenous improvement in agricultural productivity) is employed in Bautista (1986), based on a computable general equilibrium model (CGE) model of the Philippine economy. The model gives emphasis to agricultural activities (producing food crops, export crops, and livestock) and their linkages to other production sectors. Also, rural and urban households are differentiated in their income generation and consumption patterns from private companies and government. Simulation analysis of a 10 percent increase in total factor productivity in agriculture, other things remaining the same, indicates

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

significant macroeconomic effects, including those on government income (3.7 percent), total investment (2.6 percent), and national income (2.2 percent). The induced rise in rural household income (I .9 percent) is notably lower relative to the income gain for urban households (3.1 percent), attributable largely to the decline in relative prices of agricultural and food products. The structure of the model does not make distinctions between small and large agricultural producers and between low- and high-income rural households. As indicated above, the stimulus to RNEs would be stronger if a larger share of the increases in productivity and income went to the smaller farms and lower-income households. Compara.tive Growth Performance The development experience of the Philippines during 1965-80, a period of rapid productivity growth in agriculture, provides a vivid demonstration that accelerated agricultural growth does not necessarily ensure a rapid and sustainable growth of the national economy. The explanation lies in the inequitable distribution of income gains from agricultural growth and the failure to generate rural-based, labor-intensive industrialization that could have significantly helped (1) absorb the rapid growth of rural labor supply during the period, and (2) provide a basis for broadly-based economic growth. Agricultural production grew at an average annual rate of 5.6 percent between 1965 and 1980, nearly double the 2.9 percent estimated for the preceding ten years (David et al. 1987). The acceleration of agricultural growth can be largely attributed to the widespread adoption of improved technologies (most significantly for rice, but also, due to private investments, for nonruminant livestock and, in the 1970s, nontraditional export crops), the expansion of irrigated areas, and the increased use of current inputs (fertilizer for crops and imported feed for livestock). The main source of output growth prior to 1965 was increasing cultivated land area; during 1965-80, it was increasing yield, with the output-land ratio rising by an average 4.2 percent per year (versus 0.5 percent in 1955-65).

BAUTISTA:DYNAMICS OF RURAL DEVELOPMENT

Annual growth rates of agricultural output for 1965-80 were comparable among the Philippines and three neighboring Southeast Asian countries that are also heavily agricultural, namely, Indonesia, Malaysia and Thailand (Bautista 1990b). However, manufacturing growth rates for the same period were much lower in the Philippines (7.5 percent) compared to those in the three other countries (ranging from 10 to 12 percent). This would suggest a weaker stimulus generated by the accelerated agricultural growth to rural-based industrialization in the Philippines, and not unrelated to the lower average annual increase in GDP during 1965-80 (5.9 percent) relative to Thai land (7.2 percent), Malaysia (7.3 percent), and Indonesia (8 percent). Agricultural Income Growth Not Widely Shared An important consideration in the assessment of the contribution of rapid agricultural growth during 1965-80 to rural development and overall economic performance is that the income gains from that growth were not broadly based. First of all, the dramatic productivity improvement associated with the green revolution in rice bypassed a large segment of thefarming population that did not have access to irrigation water. Although there was widespread adoption of modem seed varieties (Herdt 1987), the new technology was notably much less effective in raising yields where water levels could not be strictly regulated. Irrigation investment expanded tenfold between 1966-70 and 1973-77 (Barker 1985: 124); even so, the proportion of irrigated area to total rice area in the late 1970s was only 25.4 percent in the wet season and 17.7 percent in the dry season---much lower than the corresponding percentages for Indonesia (39.9 and 23.4 percent) and Malaysia (36.2 and 29.9 percent). 2 The greater access of large producers to effective subsidies on credit and fertilizer and to infrastructure irrvestments (electricity and roads) also contributed to the bias in the structure of income growth against small farmers (Bautista 1992). Landless rural families that depend on wage labor as their main source of income (about 20 percent of all rural households in 1965) also did not benefit much from the accelerated agricultural growth. Agricultural wage 2. See Table 11 in World Bank (1990: 24).

100

ESSAYS IN SOCIAL SCIENCEAND DEVELOPMENT

rates in real terms fell significantly from the mid-1960s to 1974, after which there might have been a slight improvement (Bautista 1992). 3 Rapid agricultural growth had only a limited impact on total labor force utilization. The open unemployment rate which averaged 7 percent during 1959-64, declined to a 6.8 percent average during 1965-72 (Tidalgo 1976: 187-88). This, together with the full-time equivalent unemployment of the visibly underemployed (laborers at work for less than 40 hours per week and those wanting additional work whose comparative values were 18.1 percent and 15.7 percent, respectively), implied a rise in average hours worked. Among agricultural workers, average hours worked increased slightly from 42.1 per week in 1963-65 to 42.9 in 1966-69 (Tidalgo 1976: 190). There was little change in the open unemployment rate in the 1970s but visible unemployment increased from an average 5.6 percent in 1971-76 to 10.9 percent in 1976-78 (Tidalgo and Esguerra 1984: 91). The aggregate picture contrasts sharply with the development records of other East Asian countries, most notably Taiwan and South Korea, which indicate rising real wages and labor force utilization (Oshima 1985). At the farm level, the substantial mechanization of some operations had the effect of reducing labor demand, particularly in rice land preparation and threshing. There is ample evidence that the adoption of agricultural machinery had both labor-displacing and wage-depressing effects without significantly affecting yields (Ahammed and Herdt 1985). On the supply side of the labor market, the sustained high growth rate of the rural population (2.8 percent annual rate during 1960-80) could have also contributed to the failure of the real wage rate to exhibit an upward trend. The distribution on income gains from agricultural growth has also been shaped by the distribution of landholdings. With an unequal distribution of land and agricultural capital, technological change that increases land rent (and the return to capital) but not the real wage can be expected to worsen the distribution of rural income. As late as 1980, only 3 percent of all farms 3, The "legislated"

wage rate (in real terms) for nonplantation

workers increased signifi-

cantly from 1974 to 1980. However, agricultural employers appeared not to have fully complied with the legislated supplementary payments (cost-of-living and other allowances).

BAUTISTA:DYNAMICS OF RURAL DEVELOPMENT

101

in the Philippines were larger than 10 hectares, but they accounted for about one-quarter of the total agricultural land area. In the early 1960s, about half of Philippine farms were fully or partly owned by the operator, over a third were share-tenanted and the rest were under other forms of tenancy. Reflecting the substantial inequity in share-cropping practices, the net income of owner-operators in the major rice growing region of Central Luzon during 1963-70 averaged about 2.3 times that of share tenants (ILO 1974: 475). The government implemented a redistributive agrarian reform program called Operation Land Transfer, beginning in October 1972. It was limited to tenanted land, however, so that the landless continued to have no access to land. Moreover, the coverage was limited to rice and corn; the exclusion of farms growing other crops, constituting about half of the total crop land area, further restricted the program's effectiveness in redistributing land ownership and in alleviating rural poverty. Based on census data, the proportion of total farm area that was owner-operated decreased only slightly from 73.9 percent in 1971 to 72.4 percent in 1980 (Hayami et al. 1987: 39). Apart from inducing inefficient production shifts toward crops other than rice and corn, the agrarian reform law also had the unsalutary effects of encouraging tenant eviction by landlords and reducing the labor input per unit of land. 4 The concentration of agricultural income growth was further accentuated by the major presence in the export crop sector of foreign firms engaged in plantation farming and large-scale, capital-intensive processing. An interesting comparison between Philippine and Taiwanese experiences in the production and exporting of pineapples and bananas indicates a sharp contrast between the "dispersed small holder production and decentralized processing facilities with low levels of capital and technology in Taiwan, and multinational dominated organizations in the Philippines using sophisticated and expensive equipment and securing supplies mainly from large scale farmers or plantations" (Ranis and Stewart 1987: 159). In pineapple

4. For a systematic discussion, see Hayami ¢t al. (1987).

102

ESSAYS IN SOCIAL SCIEN-_ AND DEVELOPMENT

processing and canning, for example, the capital-labor ratio for the two foreign companies in the Philippines was estimated to range from two to six times higher than the ratios for the 23 dispersed national firms in Taiwan. Apart from the unfavorable equity effects of capital-intensive production, the linkage of the export crop sector to the domestic economy might have been weakened by the minimal impact on the surrounding countryside and the profit remittances of multinational Companies. It is also notable that Taiwanese manufacturers of canned pineapples filled a lower quality segment of the export market both because of the lack of well-recognized brand names (such as principal producers Dole and Del Monte in the Philippines) and because of uneven quality. Nonetheless , there was a large and sustained demand for such products in the world market. Rural Income Growth and Distribution The acceleration in agricultural growth during 1965-80 did not seem to be accompanied by commensurate income growth among rural households. Based on FIES (Family Income and Expenditure Survey) data, the average rural household income in real terms increased by 11.2 percent between 1957 and 1961, and by 17.8 percent between 1961 and 1965, as shown in Table 1. After 1965, however, income growth was only 4.5 percent through to 1971, even negative between ] 971 and 1975, and insignificant from 1975 to 1985. Using a different price deflator, Balisacan's (1991 ) finding is that the average real income of rural households (in 1978 pesos) grew by 19 percent from 1961 to 1965 and by another 19 percent from 1965 to 1971, subsequently declining by 12 percent from 1971 to 1985. Yet another set of estimates is provided by the ILO (1974: 10). With 1956 as base year, the constant-price mean income index of rural income is 110 for 1961, 130 for 1965, and 132 for 1971, implying an even lower proportionate increase (1.5 percent) during 1965-71 compared to that given in Table 1.The FIES series has been criticized for undercoverage of income, among other deficiencies. However, as Table 1 also indicates, the average real expenditure of rural households grew much faster during 1961-65 than during 1965-75.

TABLE 1 Average Rural Household Income, Average Rural Household EXpenditure and Agricultural Terms of Trade, 1957-1985 O

1957

t961

1965

1971

1975

1985

z>. (n

o --n

Average nominalincome(pesos)

989.0

1,203.0

1,755.0

2,818.0

4,745.0

21,875.0

Average nominal expenditure (pesos)

n.a.

1,331.0

2,142.0

3,700.0

5,543.0

n.a.

Consumerprice index

48.1

52.6

65.1

100.0

181.1

833.9

2,056.0

2,287.0

2,696.0

2,818.0

2,620.0

2,623.0

11.2

17.8

4.5

-7.0

0.1

2,530.0

3,290.0

3,700.0

3,061.0

30.0

12.5

-17.3

77.9

100.0

108.6

85.0

Average real income (1971 pesos) Percentagechange Average real expenditure (1971 pesos)

n.a.

Percentagechange Agriculturaltermsof trade

73.2

72.5

m f-

O m -1

Sources:NEDA, Philippine Statistical Yearbook, 1982 and 1989 basedon FIES data; CentralBank,Statistical Bulletin (variousissues).

t.,a

104

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Not only was the growth of rural income unimpressive, income distribution among rural households appeared to have become more unequal. From 1965 to 1971, the index of quantile inequality rose from 0.38 to 0.41 while the Gini coefficient increased from 0.42 to 0.46, based on FIES data. Balisacan (1991) also found increasing income inequality among rural households from 1965 to 1971 based on the coefficient of variation (from 0.797 to 0.920) and on the standard deviation of logarithm (from 0.366 to 0.396). These results are consistent, at least in qualitative terms, with the stagnation of wage earnings in agriculture as observed above at the same time that the agricultural terms of trade was improving, with the index (1971 = 100)rising from 77.9 in 1965 to 108.6 in 1975 (Table 1). It is important to point out that there are potentially serious measurement problems in making intertemporal comparisons of both the average income level and degree of income inequality of rural households based on FIES data. This is in view of the changes over time in the composition of households in the "rural" category. Thus, a particular community might be initially classified as rural, but if it became very progressive, the same group of households after a few years could graduate into the "urban" category based on FIES definitions. 5 There is a systematic bias, therefore, toward underestimation of the average income of the original group of rural households in later years; however, the direction of bias in the estimate of income inequality is ambiguous. Income

Distribution

Effect of Technical

Change

While the above historical associations are suggestive, they do not isolate the impact of the rapid growth in agricultural productivity from other possible influences on rural income distribution. Timmer (|988: 303) emphasizesthat equity issues concerning major technological innovations in agriculture "cannot be addressed satisfactorily by looking only at an

5. A separate issue relates to changes in definitions of rural and urban households adopted by the FIES in certain years. The measurement problem inthis case, however, seems to be relatively minor.

BAUTISTA: DYNAMICS OFRURAL DEVELOPMENT

105

individual farm or even at the agricultural sector." There are likely to be significant repercussions in the rest of the economy that will have a further effect on income distribution. One might add, in light of the above discussion, that it is also necessary to take into account the policy environment that helps shape economic decisionmaking among producers, consumers and traders. In Habito (1987), a Philippine CGE model is used to investigate the economywid¢ effects of neutral technological change in rice production "as might result from research in high-yielding varieties." The model has 14 production sectors, of which seven are agricultural, and 10 household income groups, but does not distinguish between rural and urban households. The simulation results concerning income effects indicate that "the lowest income groups are hurt the most, with middle income groups benefitting the most." The net effect on income inequality among household groups based on an aggregate measure is not examined, however. Hayami and Herdt (1978) employ a partial-equilibrium market model to analyze the income distribution impact of the new rice technology. A closed economy is assumed, in which any increase in rice output necessarily leads to a lower market price. Not surprisingly, their results indicate thatthe income gains to small farmers and urban consumers exceed those of large farmers. Indeed, the principal redistributive mechanism in a comparative static analysis, assuming the nontradability of rice, is the reduction in the domestic price of the staple food crop, so thatthe primary benefit in adopting the high-yielding rice varieties is the increased food intake of small farmers and nonagricultural workers. As Balisacan and Garcia (1986-87) point out, however, the closedeconomy assumption is inappropriate in the Philippine context, inasmuch as the domestic marketing and international trade of rice are heavily regulated by the government, directly influencing the domestic price of the commodity. They argue correctly that the income distribution effect of the new technology is not independent of government price interventions. Based on the small, open-economy framework and alternative assumptions

106

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

about output price elasticities and rates of technological progress for the two farm-size classes, their results indicate that "in all cases, the combined effects of technological progress and the generally protectionist price policy in the 1960s and early 1980s showed positive increases in the incomes of both small and large farmers. Except in the 1970s when rice price policy was generally provisionist (i.e., taxed domestic producers), these effects tended to favor large farmers more than small farmers,' There is some evidence (e.g., Hayami 1979) that the new rice technology was scale-neutral, in the sense that comparable gains in land productivity resulted from its application to small and large farms. Even so, the distributional impact was a function not only of the existing sectoral price policy (as the Balisacan-Garcia findings indicate) but also of other aspects ofg0vernment policy (especially the trade and exchange rate regime, public investment, and credit and financial policies) which, as pointed out earlier, effectively discriminated against small and upland rice farmers. For the full benefits of technological progress to reach these farmers and affect income distribution favorably, it would have been necessary to redress those policy distortions. To recapitulate, the income gains from agricultural growth during 1965-80 tended to concentrate in the higher-income segment of the rural population. This could be largely attributed to the limited benefits of technological change for small and rainfed rice farms that were accentuated by discriminatory government policies -- the large inequality in land ownership, high tenancy rate, stagnation of real wage rates that was in part due to the rapid growth in rural labor supply, and the dominance of plantation production and large-scale processing in the export crop sector. More rigorous studies are warranted on the linkages among agricultural growth, household distribution of income gains and marginal propensities to spend on various product categories. However, it is reasonable to infer from the above discussion that the effect on the structure and growth of rural consumption expenditure was to favor capital-intensive products and im-

BAUTISTA:DYNAMICS OF RURAL DEVELOPMENT

107

ported goods rather than labor-intensive, locally produced goods. This served to weaken the stimulus, from the demand side, to the growth of RNEs and to the overall growth of the national economy. RURAL

NONFARM

ENTERPRISES,

AND OVERALL

RURAL

ECONOMIC

DEVELOPMENT

GROWTH

Rural nonfarm enterprises as defined in this paper correspond to nonagricultural activities producing "Z-goods" whose role in the development of an (initially) agrarian economy has been analyzed in various contexts. The seminal work of Hymer and Resnick (1969) developed an analytical model of a self-sufficient peasant economy under colonial conditions, and showed that the importance of Z-goods, assumed inferior to imported manufactured goods, decreases as opportunities for foreign trade rise and rural incomes increase. 6 The model was subsequently applied by Resniek (1970) to the Philippines, Burma, and Thailand, giving explanation to the observed decline of rural industry in these countries during the period 1870-1938. Ranis and Stewart (1990) recently called attention to some departures from the Hymer-Resnick assumptions that would invalidate the pessimistic prognosis about rural nonfarm activities. In particular, Z-goods are not homogeneous and not all of them are inferior. They can be differentiated into traditional and nontraditional products, the latter category being associated with "small modern factories using mechanical horsepower, sometimes using imported technology, and producing modern higher quality products." As such, nontraditional Z-goods are better able to compete with, and are not necessarily displaced by, imported manufactured goods. Indeed the "East Asian experience" of rural-based industrialization was spawned by the expansion of domestic demand for nontraditional Z-goods that accompanied the growth of agricultural productivity and rural 6. As shown in Bautista (1971), based on a dynamic model of an agrarian economy with neoclassical production functions, the decline of Z-activities does not depend on the inferiority of Z-goods. Also, a deterioration in the external terms of trade, other things remaining the same, leads to a long-run increase in Z-goods production.

1"08

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

incomes. Rural industry growth in the first round in turn "provided additional impetus for further increases in agricultural productivity, leading to a mutually supportive cycle of agricultural and industrial growth" (Ranis and Stewart 1987: 140). In Taiwan, a prominent example which in the early 1960s had many similarities with the Philippine economy (in terms of per capita income, production structure, and degree of openness), agricultural production grew at an average annual rate of 4 percent during 1960-73, accompanied by an 8.1 percent annual growth in manufacturing employment and a 7.7 percent annual increase in the real wage rate. Between 1965 and 1973, the agricultural sector expanded by an average 4.8 percent annually, while manufacturing registered an astonishing 21 percent growth rate (Bautista 1990b). Rapid growth of farm output took place despite the resource movement out of agriculture concurrent with rapid industrialization. The output composition also changed from rice and other staples to higher-value products (livestock, fruits, and vegetables), and nontraditional agricultural exports (mushrooms, asparagus, etc.) became important. The agricultural labor force began to decline absolutely in the late 1960s but production continued to increase due to improvements in labor productivity. The rural-based, small-scale, and labor-intensive character of Taiwanese industrial development is well documented (of. Galenson 1979). The evidence shows a "preponderance of small establishments in the rural areas. In 1961, 96 percent of rural establishments were classified as small" (Ranis and Stewart 1989: 141). Based on 1971 data, the average size and capital intensity of RNEs are shown by Ho (1979) to be much lower than those of their urban counterparts. Contrary to the pessimistic conclusions of the Hymer-Resnick model, the Z-goods sector flourished, its dynamism and modernization paving the way for rural development and structural transformation of the economy. Rural industries participated significantly in Taiwan's "export-led growth," initially exporting in the early 1960s manufactured products with high unskilled-labor content. Over time, with the accumulation of human and physical capital, the composition of their exports shifted toward more

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109

skill- and capital-intensive products. Like the other East Asian NIEs (newly industrializing economies), Taiwan continued to perform impressively in international markets, despite the increased instability and growing protectionism in world trade since the mid-1970s. A remarkable aspect of Taiwan's development record is the continuous improvement in income distribution from 1953 to 1980. Based on Kuo's ( 1983) estimates, the Gini coefficient decreased from 0.558 in 1953 to 0.460 in 1964, 0.318 in 1972, and 0.303 in 1980. This is a departure from the inverted U-shaped relationship commonly postulated between economic growth and income inequality in developing countries, demonstrating the possibility that a worsening income distribution may not happen along with the growth process, even in the early stage of development. It is a consequence of the (initially) agriculture-led, labor-intensive, and decentralized development process that was greatly facilitated by the growth of rural nonfarm enterprises. The Philippine development experience during 1965-80 bears no resemblance to the Taiwanese ease just described, except for the rapid agricultural growth achieved in both countries. The average annual GDP growth rate of 5.9 percent for the period pales in comparison with the growth rates of Taiwan and the other Asian NIEs (ranging from 8.6 to 10.1 percent) and those of neighboring Thailand (7.2 percent), Malaysia (7.4 percent), and Indonesia (8 percent). 7 What is worse, Philippine economic growth slowed sharply in the 1980s. Indeed, GDP per capita declined in absolute terms as the economy struggled under a heavy debt-service burden that resulted from the excessive foreign borrowing in the previous decade. In addition to the failure to sustain growth, the development record of the Philippines is blemished by the uneven sharing of the income gains from growth. The overall distribution of income (including both rural and urban households) has remained highly •skewed, reflecting in part the high rates • of labor unemployment and underemployment through the late 1970s which worsened in the 1980s.

7. See Table I in Bautista (1990b: 3).

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A related problem is that economic activity and income growth have been highly concentrated in Manila and the surrounding areas. As late as the mid- 1980s, Metro Manila accounted for about one-third of the country's GDP and more than one-half of total manufacturing value added. As compared with the other 12 regions of the country, Mero Manila's per capita "gross regional domestic product" was more than twice that of the next highest region, and more than five times that of the lowest region. These dimensions of Philippine growth performance indicate a case of agriculture-led development that failed. The accelerated agricultural growth achieved during 1965-80 did not translate into rapid and sustainable growth of the national economy. The observed gains in national income accrued to only a limited segment of the population which, in turn, contributed to the inability to develop rural-based, labor-intensive industries that could have belped absorb the rapid expansion of the rural labor force during the period. The poor performance and underdeveloped state of RNEs in the Philippines are reflected in the continuing small share of manufacturing in rural employment (Table 2). Also, rural manufacturing employment grew by an

TABLE2 Distributionof RuralEmployment by Sector,1965-1989 (Inpercent) Agriculture

Manufacturing

Others

1965

73.5

8.0

18.5

1970

71.6

9.1

19.3

1975

73.0

8.6

1,8.4

1980

67.9

8.0

24.1

1985

66.5

7.3

26.2

1989

63.6

7.5

28.9

Sources:SpecialtabulationfromNCSO,IntegratedSurveyof Households (variousyears)

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average of only 0.57 percent annually during 1967-75 and by 2.03 percent during 1975-88 (versus 1.42 and 4.01 percent, respectively, for urban), s again suggesting a minimal impact of agricultural growth on rural industry. The decade of the 1980s witnessed a drastic decline in the agricultural growth rate to an annual average of less than 2 percent, attributable in part to the marked decline in the international prices of the country's traditional crops (especially rice, sugar and coconut) since the mid-1970s. Policymakers have recognized for some time now the need to diversify into nontraditional, higher-value crops as well as noncrop (livestock) production. Moreover, apart from agricultural diversification, there has been some policy interest in promoting "rural-based industries ... (to) provide more jobs to the rural population" (NEDA 1986: 28). There are of course many factors that can influence the growth of RNEs. The earlier discussion has focused on the demand stimulus to rural nonagricultural production generated by agricultural growth. Most strikingly, unlike the Taiwanese case, agricultural income gains were concentrated in the more affluent segment of the rural population, weakening the interseetotal (especially, consumption) linkages in the local economy that would have given impetus to the growth of RNEs from the demand side. In addition, the response of nonagricultural production to the demand stimulus induced by the rise in rural income is influenced by supply factors. These include government policies and the external economic environment that affect directly or indirectly the relative profitability of RNEs. As evident from the earlier discussion, various aspects of the policy regime and the international economy would have also influenced the magnitude of the demand-side effect of agricultural growth on rural nonagricultural production. These policy-related issues are examined in the succeeding pages more fully.

8. See Table IVb in Ranis and Stewart (1990: 24).

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A FRAMEWORK

FOR POLICY

ANALYSIS

A schematic representation of the main relationships underlying the influence of government policies on the economic performance of rural nonfarm enterprises is given in Figure 1. Shown in the upper boxes are three major types of policy instruments, namely, price and trade policies, public investment, and monetary and financial policies. These are admittedly not exhaustive of the means by which governments intervene in domestic markets and affect the development of RNEs. In the Philippine context, however, they appear to be among the most relevant. Also represented as a policy instrument in the upper box of the block diagram is agrarian reform which, in fact, relates to an institutional change of particular relevance at the present time. These policies are linked to the "meso economy" of markets (product, labor, credit) and infrastructure (physical infrastructure and human resources). Changes in both markets and infrastructure affect RNE decision making through various mechanisms. A distinction is made between demand and supply factors. On the demand side, consumption and production linkage effects are indicated from households and the product market, respectively. Household incomes and assets, as well as their distribution, are affected by agrarian reform; they are also a function of the physical infrastructure and human resources which are primarily dependent on government investment policy. Furthermore, income is earned by household members participating in any of the three markets. The product market is shown to interact with the credit and labor markets, it can also be affected by agrarian reform through the latter's impact on productivity and the differing expenditure patterns among large and small landowners, tenants, and landless workers. Moreover, it is influenced by price and trade policies directly through import tariffs, export taxes, etc., as well as indirectly through the induced changes in the real exchange rate.

FIGURE I A Framework for Policy Analysis

Agrarian reform

Monetary and

Priceand

financial policies

tradepolicies

_, c

Public

-< z

investment

'-rl ;0

Credit market

Product market

Labor market

Human resources

Physical infrastructure

Households Suppty factors

| (income,assets)

factors Demand I

1 Ruralnonfarm enterprises

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Monetary and financial policies circumscribe developments in the credit market in terms of both the magnitude of domestic credit made available and its allocation. They also affect the labor market through their influence on the interest rate which is a major component of the user cost of capital that partly determines the capital-labor ratio and, hence, the extent of labor employment. Agrarian reform can lead to significant changes in the credit market, e.g., a shift in the sourcing of informal loans from landlords to traders; also, banks' credit rationing practices may change as the value of land-based collateraldeclines. With respect to the labor market, if labor is underemployed in small farms and land is underused in large farms, then land redistribution will increase labor employment as well as land use and farm output, provided that the other input requirements (e.g., seeds, fertilizer) are met. Additional influences on labor supply and demand are the level and composition of human capital (a determinant of labor productivity) and the foreign trade regime. As discussed above, exchange rate overvaluation and low tariff rates on imported capital equipment have a distortionary effect on relative factor prices that penalize labor-intensive industries and the adoption of labor-using production technologies, thereby weakening the demand stimulus to rural nonfarm production through the induced effects on the product market and the purchasing power of rural households. The supply response of RNEs, on the other hand, is determined by relative price signals from the product, labor, and credit markets, as well as by the availability of factor inputs - capital and labor skills - and access to them by rural producers. If the credit market constrains the financing of fixed capital investment and of working capital, or if public investment is distorted against expenditures on health, education, and the development of labor skills in rural areas, the growth performance of RNEs will be hampered. The effects of market changes on rural nonfarm production are also conditioned by the existing physical infrastructure in rural areas, which may or may not permit low-cost marketing to take place. A Strong anti-rural bias in infrastructure policy, for example, is likely to impair the ability of rural producers to respond to favorable price and demand conditions.

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The analytical framework represented in Figure 1 abstracts from the possible effects of external developments on various elements of the linkage between government policies and RNEs. Figure 2 indicates some direct influences of the external environment, and can be grafted on to Figure l for a fuller representation of the underlying relationships. The external environment can constrain policy choice, and this is especially true in the present context of Philippine policymaking. In particular, the maeroeconomic stabilization and structural adjustment programs being implemented by the government effectively limit the scope for policy action. This is obviously the case with monetary and financial policies which, in seeking to restore internal and external balances, are made seemingly unduly restrictive. Also, trade liberalization and associated policies designed to reduce the wedge between foreign and domestic prices are typically a major component of structural adjustment. Furthermore, foreign aid can help meet the financial requirements of public investment such as the massive irrigation projects implemented in the 1970s as well as augment government resources to defray the cost of implementing the agrarian reform program. There are also some direct effects of the external environment on the product and labor markets. World price movements get transmitted at least partly to the domestic prices of tradable products, including those of capital equipment wh'ich have eventual repercussions on relative labor use. Moreover, export demand for the products of RNEs can significantly add to domestic consumption. This will be given a boost, for example, by a reduction in developed country protectionism in labor-intensive manufactured goods. The final point to make concerns the importance of policy interaction effects. The supply responsiveness of RNEs to product price increases arising from, say, trade policy reform would depend on the existing infrastructure facilities and other public inputs determined by the government's investment policy, as well as on the cost of financing the expansion of RNEs which, in turn, is dependent on monetary and financial policies. Similarly, existing price and trade policies can make certain production activities in rural areas so unprofitable that neither additional public investment in

FIGURE 2 Direct Effects of the External Environment

environment

Agrarian reform

Monetaryand financialpo4icies

Priceand tradepolicies

[ "

Public investment rrl o3

Product

Labor

market

o3 0 0

r" 6o m z m

Demand factors

o rn i---

0 Ill .-I

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infrastructure nor more favorable credit terms will do any good. Also, agrarian reform may or may not induce RNE growth, depending on whether there are accompanying improvement in trade policies, rural credit, and infrastructure. Earlier studies (cf. Bautista 1992) have examined the individual and combined effects w generally adverse -- of the trade regime, financial policies, and public investment on agriculture and the rural economy as well as the furtherrepercussions on the national economy, with special reference to the Philippine experience during the green revolution period 1965-80. The following discussion focuses on the potential impact of agrarian reform on the growth of RNEs, a subject that has received little attention in the extensive literature on land reform in the Philippines. AGRARIAN

REFORM

AND RURAL

NONFARM

ENTERPRISES

Apart from its direct redistributive impact, agrarian reform can affect rural household incomes indirectly through induced changes in the product, labor and credit markets, as shown in Table I, all of which, in turn, influence the economic performance of RNEs. 9 The magnitude of the income gain to recipients of previously tenanted land is determined in part by the fraction of gross income formerly payable as rent and the amount payable as the annual installment of the purchase price of the land. It is clear, however, that the actual income effect of agrarian reform to this group of rural households would depend also on the accompanying changes in land productivity, product prices and input costs. A survey conducted by the Bureau of Agricultural Economics (BAEcon) of 525 tenant-recipients of Certificates of Land Transfer (CLTs) in seven municipalities in which Operation Land Transfer was implemented, found that the proportion of amortization payments in gross income de9. Following common practice, the term agrarian reform is used here in the comprehensive sense to include basic land transfer or land reform, together with supportive productivityoriented measures. The distinction sometimes made is between "'simple" and "integral" land' reform (cf. Warriner 1973).

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clined in most locations. In many cases, however, the absolute amounts were roughly equal before and after CLT ownership. '_The growth in yields accounted for most of the growth in farm income ... (so that) the bulk of the financial benefit to the tenant would come only when the amortization shall have been completed" (Mangahas and Barros 1980: 106). The yield increases found in the BAEcon survey were associated with multiple cropping, increased use of modern rice varieties and fertilizers, and improved access to credit. The higher productivity of the redistributed land is therefore not necessarily attributable solely to the land reform. Productivity-enhancing support services must have also played a key role. The preponderance of evidence, in the Philippines and elsewhere, indicates-that agrarian reform has a neutral to positive impact on land productivity. Some of the results are based on the analysis of pre- and postreform data, attributing the observed changes mainly to the reform program. Other studies compare observed yields among different farm sizes on the assumption that new farms of a given size (after land redistribution) will show the same land productivity as existing ones. Clearly, such assumption is valid onlY if the various factors affecting yield remain the same after land reform. Using aggregate data from the 1960 Agricultural Census, Berry and Cline (1979) derived estimates of land productivity for various farm sizes. As can be discerned from Table 3, value added per unit area sharply declines with increasing farm size. Yield differentials were not so significant, however, when distinctions were made among crops, between upland and lowland areas, and between irrigated and non-irrigated farms. For rice farms, Ruttan's (1966) study based on national and regional samples, revealed no systematic relationship between output per hectare and farm size, but large farms of at least 10 hectares tended to be associated with lower yields. No aggregate estimates of comparative land productivity by farm size are available after the widespread adoption of the new rice technology. However, sample data for 325 farms in Nueva Ecija where the modern rice varieties were planted indicated a significantly higher average yield in 1970

BAUTISTA: DYNAMICSOF RURALDEVELOPMENT

119

TABLE 3 Relationship of Value-added Per Farm Area to Farm Size, 1960 Farm size (hectares)

Number of farms (1000) (1)

Total area (thousand hectares) (2)

Value-added/area (pesos per hectare)

0 - 0.2

20,0

2.0

9,559

0.2 - 0.5 0.5 - 1

69.1 160.7

21.0 101,5

1,388 811

(3)

1- 2

642.1

795.6

556

2- 3 3- 4

458.9 252.5

1,000.5 797.0

443 397

4- 5

152.4

629.5

359

5 - 10 10 - 15

289,7 86.2

1,845.3 964.8

292 229

15 - 20

13.7

224.7

249

20 - 25

9.3

206.6

215

25 - 50

7.1

232,7

215

50 - 100

2.5

162.9

196

100 - 200

1.2

164.7

143

Over 200

1.0

633.9

All farms

2,166.2

7,772.5

331

Source: Tables4-18 in Berryand Cline (1979: 70)

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

for farms of less than 2 hectares (3 mt/ha) relative to farms of more than 4 hectares (2.2 mt/ha), l° Similarly, the IRRI surveys in Laguna and Central Luzon during 1974-75 involving 125 farms found generally higher land productivities among smaller farms (Table 4). It also appears that scale economies do not exist in the production of export and cash crops, with the possible exception of sugar. According to Hayami et al. (1987: 7), "if small producers are properly organized through contract farming with processing industries, there will be no loss in efficiency corresponding to the breakdown of plantations into family farm units." The general finding in the wider Berry-Cline study, based on extensive cross-country data and on intensive data sets for six developing countries, is that "the small-farm sector makes better use of its available land than does the large-farm sector" through the application of larger amounts of labor input (mostly family labor) per unit of land. This conclusion is especially significant for countries with a rapidly expanding rural labor supply such as the Philippines. While there is no aggregate evidence on the relationship between labor use and farm size in the Philippines, Ruttan's (1966) study of rice farms in five barrios in Bulacan for 1963-64 indicates a significantly declining lab0r-land ratio as farm size increases. The inverse relationship is also found in the IRRI surveys in Laguna and Central Luzon to be significant during the green revolution years (Table 4). One explanation for the higher labor-land ratio in small farms than in large farms is the difference in effective labor costs arising from labor-market dualism; that is, the price of family labor to the small farm is lower than the wage rate paid to hired labor in the large farm. This results from (l) the tendency for income-sharing among family workers in small farms, (2) monopsony power by large farms in the local labor market, and (3) other factors, l l Capital and land market imperfections also contribute to the lower labor intensity of production in large farms relative to small farms. The 10. See Tables 4-23 in Berry and Cline (1987: 77). I 1. See Berry and Cline (1979) for a fuller discussion and empirical verification.

c -I

o -< z

TABLE 4 Farm Size, Average Yield, and Labor Use Per Hectare (IRRI surveys)

"11 ;0

Laguna •(62 farms, 1975)

Central Luzon-L.aguna (63 farms, 1974 wet season)

c o m

Farm size (hectare)

below 1.6

1.6-2.5

above2.5

below 1.6

1.6- 2.5

above2.5

Yield (tons/hectare)

3.6

3.8

3.1

2.8

2.1

1.8

118.0

117.0

88.0

95.0

78.0

79.0

Labor use (man-days/hectare)

Source: Table 11 in Barker and Cordoba(1978, 125).

o -o _: _

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

limited access to low-interest loan sources by small farms, for example, raises the real price of land for them. Moreover, if the acquisition of landholdings is being done not primarily for production but for the purpose of prestige or political power, then the large farms will not only produce less output but also employ less labor per unit of land. A striking finding from both regional and national surveys is that land productivity was generally higher in tenanted rice farms than on owneroperated farms (Estanislao 1965, Ruttan 1966). This contradicts the traditional view that resource allocation under share tenancy is inefficient. However, as Hayami et al. (1987: 7) point out, "recent empirical as well as theoretical developments have been supporting the hypothesis that the share contract Ganachieve the same degree of efficiency as the fixed-rent contract and owner farming and that the share contract can be more beneficial for tenants because of its risk-sharing ability and the utilization of landlordtenant credit relations." From there, it is but a short step to the conclusion that "the artificial limitation on the choice of land tenure contracts such as prohibition of share tenancy reduces both efficiency and equity." This has been the case, unfortunately, with past land reform programs in the Philippines. One adverse consequence was that large landowners were encouraged to evict tenants and to farm their land under their direct administration -- which had the further effect of employing less labor per unit of land as agricultural mechanization tended to be substituted for labor use. The impact of agrarian reform on the credit market is determined by the coverage of the land redistribution and the nature of government support services for land reform beneficiaries. A share-tenant or landless worker who becomes a ieaseholder or owner-farmer will lose his traditional and most important source of credit, the landlord. Even if there is likely to be a shift toward other informal credit sources such as local traders of farm products and inputs (Floro 1987), improved access to the formal credit market may be needed, perhaps with emphasis on lowering borrower transaction costs. As past experience has shown, government credit programs to benefit small farmers tend to be ineffective and are difficult to

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123

sustain. Alternatively, as Hayami et al. (1987: 29) have argued, land reform does not have to exclude totally "the age-old institution of share-tenancy which is an effective instrument for credit provision and which agricultural wage laborers prefer to their current status." Also, in the case of export crops, contract farming could be promoted, with the agricultural processing companies providing the cash inputs, extension services, and credit requirements of small farmers. While there is extensive literature on the results of land reform to be expected for the beneficiaries and on their further repercussions for the local rural economy, much less attention has been paid to the effects on former landlords and how their response can be made supportive of rural development. This suggests a limited appreciation of the potentially significant role of the displaced landowners in promoting the growth of RNEs. If landowners are given "just" compensation, they can participate in rural nonagricultural activities as investors and entrepreneurs. For example, in Taiwan, landlords "were provided a financial interest in the industrial sector ... (through) the innovative use of land-bank bonds and industrial stocks in financing the land transfers .... (contributing) to the decentralization of industrial developments" (Domer and Thiesenhusen 1990: 75-76). To be sure, the latter result was influenced by factors other than land reform, including a policy climate conducive to the development of labor-intensive industries and their location in rural areas (Galenson 1979). In the Philippines, the promotion of rural industrialization is a stated objective of both the Operation Land Transfer (under P.D. 27, issued in 1972) and the Comprehensive Agrarian Reform Law (enacted in 1988). The few studies that examined how the compensation to landowners was used, as reviewed by Llanto and Dingcong (1991), do not show any marked tendency toward investment in rural industries. Commercial activities seem to be preferred, including the trading of agricultural products and intermediate inputs. This would reflect the prevailing perceptions on relative rates of return, influenced necessarily by the limited information available to the former landlords concerning industrial investment opportunities. There is a

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

need, then, to provide support services aimed at improving their knowledge of nonagricultural markets in the local rural economy. Presumably, investments in NREs are also a function of the total volume of rural household savings. There is a surprising dearth of studies on the effect of agrarian reform on aggregate rural savings. Adams (1973: 134) reports that both "average and marginal propensities to save among Taiwanese farmers, many of whom were beneficiaries of land reform, were remarkably high," but no comparison is given with the corresponding saving rates for displaced landlords. For the Philippines, the TBAC-UPBRF (1981) study, based on BAEcon farm record-keeping data on 127 farm households, gives estimates of the average (but not marginal) saving rate by t_nure group. They range from 0.6 to 13.4 percent for share-tenants, from 10.2 to 19.9 percent for leaseholders, from 16.8 to 21.1 percent for full owners, and from 26.9 to 35.6 percent for amortizing owners. These estimates presumably reflect also the average income levels of the four tenure groups: Bautista and Lamberte (1990) find, from an analysis of FIES data for 1985, that the marginal propensity to save out of either permanent or transitory income is comparable between low-income and middle-income rural households, but that high-income households have higher saving rates. There is no strict correspondence, however, between these income classes of rural households and tenure groups. It bears emphasizing that relative profitabilities of alternative production activities are shaped to a large extent by the macro-policy environment. Thus, in the 1950s, rich landowners participated actively in the financing and management of large-scale, import-competing industries located in urban areas (chiefly, Metro Manila); and this was stimulated by the sudden profitability in the production of import-substituting products (at the expense of other production activities) arising from the imposition of import andforeign exchange controls in 194%50. Small-scale and labor-intensive rural industrial producers continued over the years to be discriminated against by the trade regime, interest rate and credit policies, and public investment (Bautista 1992)i Unless the policy biases favoring capitalintensive, urban-based industries are redressed, it is unrealistic to expect

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that landlords' investible funds and entrepreneurship, with or without land reform, will be directed toward RNEs. There are at least three implications from the above discussion on the relationship between agrarian reform and growth of rural nonfarm enterprises. First, land redistribution into small family farms is potentially an effective policy instrument for increasing farm output and employment as well as for improving the distribution of rural incomes. It would thereby enhance the consumption linkage effect on nonagricultural production in the rural economy, giving impetus from the demand side to the expansion of RNEs. Second, these potential benefits of land reform may or may not be realized, depending on whether existing policy distortions working against RNEs are removed and productivity-oriented support measures are adopted. For the tenant-recipients of redistributed land to be able to substantially increase farm output and labor use, supply-side constraints such as loWproduct prices, high cost of credit, and underdeveloped infrastructure need to be overcome. And third, a similar set of favorable supply conditions is required for RNEs to be able to respond commensurately to the demand stimulus arising from the widely-shared income gains associated with an effective agrarian reform.

CONCLUSIONS

AND DIRECTIONS

FOR FURTHER

WORK

This paper has sought to convey that the expansion of rural nonagricultural activities is acrucial aspect of Philippine rural development, without which the development process as a whole is not likely to be self-sustaining and equitable. Agriculture being the predominant source of income for the rural population, "getting agriculture moving" is necessary to generate the demand stimulus for a decentralized, rural-based industrialization which is a critical determinant of the country's long-run development prospects. However, agricultural growth is not sufficient, as the discussion above of the country's post-1965 development experience clearly demonstrates.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

The impressive growth of agriculture during 1965-80, fueled by rapid increases in farm productivity, did not provide a strong impetus to the development of RNEs. This was due in part to the concentration of income gains to the more affluent segment of the rural population. The effect on the structure and growth of rural consumption demand was to favor capitalintensive products and imported goods rather than labor-intensive, locally produced goods. At the same time, the macro-policy environment effectively discriminated in favor of large industry and Metro Manila-based enterprises. The supply response of RNEs to the rapid agricultural growth during the period was therefore weak. Some research issues warrant further investigation. First, as pointed out above, the usual indicators ofintertemporal perfonrmnce of the rural sector are technically flawed. This arises from the fact that the physical area of the "rural sector" is, almost by definition, shifting over time. In FIES data a poblacion or central district, or even a barangay with at least 1000 inhabitants, having a population density of at least 500 persons or at least six establishments (commercial, manufacturing, recreational and/or personal services) qualifies as an urban area. 12 It is clear that, as population grows and/or economic activity expands over time, an initially rural area (and associated group of rural households or RNEs) will be classified as urban, sooner or later. This is not problematical for purposes of measuring, say, urbanization patterns and trends. However, inter-year comparisons of household poverty incidence or share of manufacturing in total employment in the rural sector are bound to have a systematic downward bias over time. It would be useful to document the past economic performance of the rural sector(and how it has been influenced by the prevailing policy climate) without the intertemporal distortion associated with the FIES urban-rural classification. This can be done by adopting a different definition of tile rural economy that precludes changes in the physical area over time. One such definition that seems reasonable would include all areas except Metro

12. There are some other characteristics used separately in distinguishing and rural areas according to FIES definitions_

between urban

BAUTISTA: DYNAMICS OF RURAL DEVELOPMENT

127

Manila, Metro Cebu and a large subset of the chartered cities; the location of RNEs would be in the towns and central districts that link to the surrounding farm villages in both output and input markets. Whether existing data sources (perhaps special tabulations from the FIES and Economic Census) can be tapped and make measurement feasible remains to be seen. Alternatively, one might focus on some regions (e.g., Bicol and Central Luzon) that are predominantly agricultural in the initial year for which intertemporal data are available. Their comparative economic performance could be analyzed based on a number of possible explanatory factors such as the relevant changes in the meso economy (markets and infrastructure) induced by various government policies. Another data-intensive research area that needs to be further addressed is the demand pattern of rural households, distinguished by various characteristics (e.g., by socioeconomic class: large farmers, small farmers, tenants, etc.; by income level). It would be useful in intersectoral analysis to be able to break down consumption expenditures, both average and marginal (as income increases), into locally produced goods, products of urban-based industries, and imported goods. This would require especially designed surveys that are more intensive as well as extensive than those previously conducted. Empirical analyses of the consumption linkage implications of particular patterns of agricultural growth (e.g., food crops, export crops and livestock as alternative sources of growth) and how the employment and income multiplier effects on the rural economy can be increased merit consideration. Research is also needed to investigate quantitatively the extent to which income redistribution in the rural sector, with or without an effective agrarian reform, can increase the demand for RNE products. How might direct taxation measures be designed, for example, so as to induce a wider sharing of the income gains from agricultural growth? Despite the extensive literature on land reform in developing countries, there has been little attention given to the consequences on rural nonfarm production. Agricultural productivity and income distribution issues are examined in many studies but the linkage to RNEs is typically not pursued.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT ,

In.the Philippine context, this partly reflects a lack of recognition of the wider role of agrarian reform in broadening the domestic market and contributing to a more sustainable growth process for the economy as a whole. There is a need to undertake studies on both ex ante and ex post relationships between land reform implementation and the growth of RNEs, On the supply side it would be instructive to inquire on the special constraints faced by RNEs in the markets for output, inputs, credit and information. What policy or institutional factors are responsible for those constraints? What can government do to help RNEs overcome them? Can a given market be made competitive if it is monopolistic, or created where it is missing? Political economy considerations are surely important; in particular, the sources of resistance to policy and institutional reforms warrant systematic attention. Another important research area concerns the market for information. • The presence of scale economies in the acquisition of information implies that RNEs are likely to underinvest, foregoing some of the benefits of new information on technology and market developments, at least relative to the • large, urban-based enterprises. There is, then, an economic rationale for the government to help finance such investments or perhaps even provide information services directly. How are RNBs being assisted currently in this regard •, and how might existing forms of government assistance be improved? It is also necessary to investigate• the influence of external factors on the growthofRNEs, including the direct effects of changes in foreign prices and in access to world markets of labor-intensive manufactured products as well as the indirect effects arising from institutional and policy reforms such as those associated with the ongoing economic adjustmen t program, Finally, as indicated above, there are interaction effects among various aspects of the policy and institutional environment affecting RNEs -all of which need to be evaluated empirically. It would be useful to examine the effects on the economic performance of RNEs arising from the separate and, alternatively, simultaneous implementation of specific policy, and institutional reforms. How might alternative policy packages be ranked

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129

(from first-best to nth-best) in their effectiveness in promoting the development of RNEs? Systematic analyses of successes and failures of specific RNEs in particular industries and of their relationship to existing policies and institutions would also be valuable in terms of the lessons to learn and their implications for government action.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

BIBLIOGRAPHY

Adams, D. W. "The Economics of Land Reform." Food Research Institute ,Studies in Agricultural Economics, Trade and Development 12 ( 1973): 133-38. Adelman, I. and J. E. Taylor. "Multisectoral Models and Structural Adjustment: New Evidence from Mexico." Journal of Development Studies 28 (1991): 154-63. Ahammed, C. S. and R. W. Herdt. "A General Equilibrium Analysis of the Effects of Rice Mechanization in the Philippines." In Modelling the Impact of Small Farm Mechanization. Monograph Series No. 5. Makati: Philippine Institute for Development StudieS, 1985. Balisacan, A. M. "The War Against Rural Poverty: The Philippines," Quezon City: University of the Philippines, School &Economics, April 1991. Mimeo. Balisacan, A.M. and M. M. Garcia. "Two Decades of Green Revolution: What Has Happened to Farmers' Income and Consumers' Economic Welfare." Journal of Agricultural Economics and Development 16 and 17 (1986-87): 1-18. Barker, R. "The Philippine Rice Program--Lessons for Agricultural Development." Philippine Economic Journal 14 (1985): 116-31. Barker, R. and V. G. Cordova. "Labor Utilization in Rice Production." In Economic Consequences of the New Rice Technology, Los Bafios: IRRI, 1978. Bautista, R. M. "Dynamics of an Agrarian Model with Z-goods." Discussion Paper No. 714. Quezon City: University of the Philippines, Institute of Economic Development and Research, 1971. . "Effects of Increasing Agricultural Productivity in a Multisectoral Model for the Philippines." Agricultural Economics 1 (1986): 67-85.

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"Agricultural Growth and Food Imports in Developing Countries: A Reexamination." In S. Naya and A. Takayama (eds.) Economic Development in East and Southeast Asia: Essays in Honor of Professor Shinichi Ichimura. Honolulu: Institute of Southeast Asian Studies, Singapore and East-West Center, 1990a. "Poverty Alleviation, Economic Growth and Development Policy in East Asia." Working Paper No. 90/5. Canberra: National Centre for Development Studies, Australian National University, 1990b. . "Rural Diversification in the Philippines: Effects of Agricultural Growth and the Macroeconomic Environment." Southeast Asian Jour-

nal of Agricultural Economics I ( 1992): 25-44. Bautista, R.M. and M. B. Lamberte. "Comparative Saving Behavior of Rural and Urban Households in the Philippines." Journal of Philippine Development 17 (1990): 149-81. Bell, C. L. G., P. Hazell, and R. Slade. Project Evaluation in Regional Perspective. Baltimore: Johns Hopkins University Press, 1982. Berry, R. A. and W. R. Cline. Agrarian Structure and Productivity in Developing Countries. Baltimore: Johns Hopkins University Press, 1979. Castillo, G. T. How Participatory is Participatory Development? A Review of Philippine Experience. Makati: Philippine Institute for Development Studies, 1983. David, C. C., R. Barker, and A. Palacpac. "Philippines." In Productivity Measurement and Analysis: Asian Agriculture. Tokyo: Asian Productivity Organization, 1987. Dorner, P. and W. C. Thiesenhusen. "Selected Land Reforms in East and Southeast Asia: Their Origin and Impacts." Asian-Pacific Economic Literature 4 (1990): 65-95. Dorosh, P. and S. Haggblade. "Agricultural-led Growth: Foodgrains versus Export Crops in Madagascar." Agricultural Economics 9 (1993): 165-80. Estanislao, J. P. "A Note on Differential Farm Productivity by Tenure." Philippine Economic Journal 4 ( 1965): 120.

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Floro, S. "Informal and Formal Credit Interlinkages in the Philippines." Ph.D. dissertation. California: Stanford University, 1986. Unpublished. Galenson, W. (ed.).Economic Growth and Structural Change in Taiwan. ithaca: Cornell University Press, 1979. Gibbs, A. "Agricultural Modernization, Nonfarm Employment and Low Level Urbanization: A Case Study of a Central Luzon Subregion of the Philippines." Ph.D. dissertation. Michigan: University of Michigan, 1974. Habito, C. F. "lntersectoral Linkages and Agricultural Policies: A General Equilibrium Analysis." Makati: Philippine Institute for Development Studies, 1987. Mimeo. Hayami, Y. "Economic Consequences of New Rice Technology: A View for the Barrio." Agricultural Economics Development Paper 79-05. Los Bafios: International Rice Research Institute, 1979. Hayami, Y. and R. W. Herdt. "Market Price Effects of New Rice Technology on Income Distribution." In Economic Consequences of the New Rice Technology. Los Bafios: International Rice Research Institute, 1978. Hayami, Y., M. A. R. Quisumbing, and L. S. Adriano_'In Search of a Land Reform Design for the Philippines': UPLB-APRP Monograph Series No.l. Los Bafios: University of the Philippines, Agricultural Policy Research Program, 1987. Herdt, R. W. "A Retrospective View of Technological and Other Changes in Philippine Rice Farming, 1965-1982." Economic Development and Cultural Change 35 (1987): 329-49. Hirschman, A. O. The Strategy of Economic Development. New Haven: Yale University Press, 1958. Ho, S. P. S. "Decentralized Industrialization and Rural Development: Evidence from Taiwan." Economic Development and Cultural Change 28 (1979): 77-96. Hymer, S. and S. Resnick. "A Model of an Agrarian Economy with Nonagricultural Activities." American Economic Review 59 (1969): 493-506.

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International Labor Office (ILO). Sharing in Development in the Philippines. Geneva: International Labor Office, 1974. Johnston, B. F. "Agriculture and Structural Transformation in Developing Countries: A Survey of Research." Journal of Economic Literature 8 (1970): 369-404. Kuo; S. W. Y. The Taiwan Economy in Transition. Boulder: Westview Press, 1983. Llanto, G. and C. G. Dingeong. "Impact of CARP on Landowners." Paper prepared for the Consultation-Workshop on the Dynamics of Rural Development, Philippine Institute for Development Studies, Ternate, Cavite, August 30-31, 1991. Mangahas, M. and B. Barros. "The Distribution of Income and Wealth: A Survey of Philippine Research." In Survey of Philippine Development Research L Makati: Philippine Institute for Development Studies, 1980. Mellor, J. M. and U. Lele. "Growth Linkages of the New Foodgrain Technologies." Indian Journal of Agricultural Economics 28 (1973): 35-55. National Economic and Development Authority (NEDA). Medium-term Philippine Development Plan, 1987-1992. Manila, 1986. Oshima, H. T. "Levels and Trend of Farm Families' Non-Agricultural Incomes and Different Stages of Development." Philippine Review of Economics and Business 12 (1985): 123-54. Ranis, G. and F. Stewart. "Rural Linkages in the Philippines and Taiwan." In F. Stewart (ed.) Macro-Policies for Appropriate Technology in Developing Countries. Boulder: Westview Press, 1987. . "The Dynamics of Rural Development: Theory and Application." Economic Growth Center, Yale University, 1990. Mimeo. Ranis, G., F. Stewart, and E. A. Reyes. "Linkages in Development: A Philippine Case Study." Working Paper Series No. 89-02. Makati: Philippine Institute for Development Studies, 1989. Resnick, S. "The Decline of Rural Industry Under Export Expansion: A Comparison Among Burma, Philippines and Thailand, 1870-1938." Journal of Economic History 30 (1970): 51-73.

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Ruttan, V. "Tenure and Productivity of Philippine Rice Producing Farms." Philippine Economic Journal 5 (1966). Sander, W. "The Upper Pampanga River Project's Impact on Nonfarm Employment and Regional Growth." Discussion Paper 7918. Quezon City: University of the Philippines, School of Economics, 1979. TBAC-UP Business Research Foundation. "Research Project on the Rural Financial Markets in the Philippines." Manila, 1981. Tidalgol R. L. "Labor Absorption in the Philippines: 1956-73." Philippine Economic Journal 15 (1976): 183-237. Tidalgo, R.L. and E. F. Esguerra. Philippine Employment in the Seventies. Makati: Philippine Institute of Development Studies, 1984. Timmer, C. P. "The Agricultural Transformation." In H. Chenery and T. N. Srinivasan (eds.) Handbook of Economics, Vol. 1. Amsterdam: North Holland, 1988. Warriner, D. "Results of Land Reform in Asian and Latin American Countries." Food Resource Institute Studies in Agricultural Economics, Trade and Development 2 (1973): 115-31. World Bank. Growth and Employment in Rural Thailand. Report No. 3906. Washington, D.C.: Country Programs Department, 1983. . Agricultural Diversification: Policies andlssuesfrom EastAsian Experience. Policy and Research Series II. Washington, D.C.: Agriculture and Rural Development Department, 1990.

Gwendolyn R. Tecson

COMMENTS

The paper of Dr. Bautista is clearly an important study that highlights the crucial role of rural-based industrialization in the development process. It is crucial not only in sustaining the process itself, but also in ensuring that it is equitable, i.e., that the fruits of development will be shared by the large majority of the population. The paper calls our attention to the agriculture-industry nexus and to intersectoral linkages, when the tendency, especially among economists agricultural economists on the one hand and industrial economists on the other -- is to think along parallel lines, that is, to consider each sector independently of the other. If they temporarily abandon their respective camps, they often pit one sector against the other to stress how one sector encroaches on the other, instead of considering how one sector is indispensable in the development process. Dr. Bautista, having been the outstanding international and industrial economist that he was before he opted to cross over the other sector -- I would say, with equal ease and scholarly rigor B is eminently suited to confront the problem of rural-based industrialization. Reflecting on the experience of economic growth in the country, one that contrasts sharply with that of our Asian neighbors, Dr. Bautista explains why the country had lower GDP growth rate during the 1965-80 period when agricultural growth was comparable with that of our ASEAN (Association of Southeast Asian Nations) neighbors. He traced this lower growth to the drag of lower manufacturing sector growth, due in part to the failure of agricultural growth to significantly stimulate rural-based industrializa-

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tion. This failure is in turn a •result of historical, institutional, and policyinduced weaknesses of the system, leading to consumption-expenditure patterns adverse to the development of rural nonfarm enterprises (RNEs). The question is how to remedy these weaknesses in order to achieve the appropriate patterns. The paper emphasizes the influence of government policies on both the demand and supply forces that determine the emergence and viability of the RNEs. I agree very strongly with Dr. Bautista on this point because I am convinced that there is a lot that the government can do, undo, or cease to • do in policy •terms to dynamize the rural economy. For instance, the past policy of excessive protection of the manufacturing sector at the expense • of agriculture is now gradually •being reversed by trade and industrial policy reforms started in the early 1980s. If the government is able to keep the momentum of the reforms, the salutary effects on rural development can be expected. Already, even after only a partial trade liberalization, we are able to see the dismantling of some of the biases of the protective system in favor of large-scale enterprises. The environment is now becoming more neutral in terms of encouraging the growth of appropriate sizes of enterprises, including small and medium enterprises .(SMEs) which are probably• more appropriate for rural-based •industrialization. We are also starting to see some regional dispersal of industries and firms away from Metro• Manila. What we still have to validate empirically, however, is whether such regional activity is attributable, even in part, to such reform. It would also be interesting to show, using plant-level data available in industrial censuses and which carry Iocational characteristics of plants, to determine the rural and urban patterns and direction of change in response to the reforms. Or whether the regional changes reflect the overall positive impact of the reforms on efficiency and improved resource allocation. How did the more liberal trade regime actually affect the environment for rural development? A similar question could be asked and empirically verified for each of the different policies identified by Dr. Bautista in his analytical framework. What he had done for the 1965-80 period in terms of analyzing the individual and combined effects of the trade regimel financial policies,

TECSON: COMMENTS

137

and public investment on the rural economy could be extended to the 1980s andthe 1990s, this time with emphasis on the effects of policy reforms. Dr. Bautista also correctly pointed out the importance of policy interactions in determining the supply responsiveness of RNEs (rural nonfarm enterprises). In particular, he stressed the need for the availability of infrastructure facilities and other public inputs to make other policy instruments effective in inducing the development of RNEs. I would like to emphasize the importance of rural electrification. There are numerous studies in Japan's experience documenting the birth of industries in the countryside with increased access to sources of electric power. In particular, we see the development of an indigenous machinery sector as factories began to be set up in the non-urban areas. It seems too that aside from just correcting its own policy-created distortions and biases against RNE development, the government could possibly do something more positive in the direction of creating or strengthening institutions. For instance, the difficulty of access to credit in the rural areas is a real bottleneck to RNE development. Hence, strengthening institutions such as the rural banking system or redirecting incentives towards the creation of other forms of credit institutions that are more adapted to and closer to RNE activities are steps in the right direction. I am also thinking of the greater use of the informal credit markets D or at least their techniques of lending and collection m which are home-grown and therefore more appropriate to the needs and cultural orientation of the RNEs. The supply of entrepreneurial skills is another important bottleneck. The Department of Trade and Industry (DTI) has been actively trying to help. tap entrepreneurs in the regions and providing them with whatever assistance it can offer. One can legitimately ask, of course, whether this activity is part of government's sphere of intervention or whether it is something that comes naturally when the right policies are in place. What are the institutional reforms needed to coax former landlords under the agrarian reform program to invest in rural industries? What about the role of the decentralization process started by government in recent years? It is widely believed that with greater fiscal autonomy,

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regional dispersal of industries will take place. Are there any emerging trends in this direction or is it too early to tell? If there aren't, why not? What are the existing barriers to the achievement of the desired objectives? Dr. Bautista's frequent reference to Taiwan's experience in contrast to that of the Philippines points to the importance of a serious study of country experiences in this field. Such a study promises to yield important lessons and learning points that could help in policy formulation for RNE development. Finally, the long list of Dr. Bautista's suggested areas and topic for research are enough to fill up someone's research agenda for the next few years. They are not only very interesting but are also valuable to pursue to understand better and in greater depth the dynamics of rural development.

Highlights of Discussion

DYNAMICS OF RURAL DEVELOPMENT

Has agrarian reform spelled the difference in levelling the concentration of wealth and income inequality in the rural economy, thereby, allowing the development and growth of rural nonfarm enterprises (RNEs)? An effective agrarian reform program might have worked, but restrictions on the trade regime like import controls and high tariff rates would also have indirect effects on the growth rate of RNEs. How the payments to landlords are invested (i.e., whether they are invested in the local economy or invested in import-substituting products in Manila), for instance, is critical in determining the effect of land reform on RNEs. The incentive for import-competing products being artificially raised by import controls and high tariff rates can lead to higher domestic prices. In effect, what happens is that such incentive leads the economy to produce the "wrong" type of goods, i.e., those very products that are consumed only by the elite and middle class. With the doubling of population, land distribution alone will not be able to alleviate rural poverty. Instead, corresponding policies on how to improve human capital and infrastructure must also be prioritized. The basic and traditional areas of development such as investments in electrification and irrigation are guaranteed to improve rural economy. Moreover, incentives are inadequate for farmers to undertake investments in nonfarm enterprises. An effective agrarian reform must address the need to have a clear sharing of costs and benefits in production because there are farmers who are either risk-averse or risk-taker. The solutions to the investment bottlenecks in the rural areas are not necessarily agriculture-specific.

For instance, the rapid growth of agricul-

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ture in other countries was due to high prices of agricultural produce in the world market. The real exchange ratemay also provide the key to rural development as shown in the Chilean and Vietnamese experiences. Another alternative option is to have more equal distribution of returns to land. The lost opportunity to grow in the 1965-1980 period may be similar to what is happening at present in terms of the foreign remittances of overseas contract workers (OCWs). It seems that remittances are not stimulating rural development. Thus, a systematic study that will look into how these remittances are being utilized for linkages in investment activity would be useful. A pioneering study on remittances was done by Dr. Mario Lamberte, but it was limited to themacro picture. Although some computations were made, the result was not good because of the methodology used. The World Bank used a different methodology and got better results. In his study, Dr. Lamberte pointed out that housewives sometimes become moneylenders in the rural setting and finance small businesses. Such businesses, however, are focused more on trading rather than on manufacturing. As to the configuration of moneylenders in the countryside, it seems that new sources of capital are emerging such as housewives who now have more money as a result of remittances received from OCWrelatives. Meanwhile, some areas may have been overlooked in Dr. Bautista's study such as the importance of functional literacy or the ability to apply knowledge in the workplace, the role of cooperatives in savings mobilization, credit and market information, and the tradeoffbetween development and environmental deterioration. The impact of discipline on a country's economic progress was also noted. One probably has to use a more sociological explanation, beyond the economic paradigm to explain the progress of some countries. However, discipline, according to another observation, may be a function of economic environment.

GATT-UR

AND PHILIPPINE AGRICULTURE: FACTS AND FALLACIES

CR/ST/NA C.DAviD

INTRODUCTION

OAGRICULTURAl, POLICYissue in recent decades has generated as much controversy as tbe provisions on agriculture in the General Agreement on Tariffs and Trade-Uruguay Round (GATT-UR) intended to "level the playing field" in world trade. As expected, approval of those provisions would be most difficult in developed countries that do not have a comparative advantage in agriculture and'whose heavy subsidies promote agricultural production and even agricultural exports. GATT-UR's agricultural provisions should be welcomed in agricultural exporting countries, particularly developing countries that will benefit through greater trade opportunities and higher agricultural incentives. Judging from newspaper accounts, however, this does not appear to be the case in the Philippines: an agricultural exporter. Those who are most vocal in opposing GATT-UR, i.e., leaders of some farmers' groups and some members of the academic community, are ideologically against international trade. Interestingly, those who will be potentially hurt in the short run, i.e., the sugar and poultry sectors dominated by large producers, are not vehemently articulating their objections. And because GATT-UR and its impact are not so easily understood and its benefits are widely diffused, potential beneficiaries, including much of the agricultural sector, have not strongly defended their interests.

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This paper contains three sections. The first section presents the provisions of GATT-UR with respect to agriculture; in the second section, the impact of GATT-UR on Philippine agriculture; and in the last section, several issues with government's intended actions in connection with the Senate ratification of GATT-UR. It should be pointed out at the outset that the GATT-UR provisions on agricultural trade policies are consistent with the policy reforms espoused by local agricultural economists (Bautista 1987; Clarete 1992; David 1983, 1988, 1993; Intal and Power 1991) since the 1980s. These are -1. overall trade liberalization to correct the overvaluation of the peso; 2. abolition of nontariff barriers (NTBs) and substitution of reasonable rates of tariff protection; 3. lowering of excessive trade protection that applies to a few agricultural commodities (sugar, corn, garlic, poultry etc.); 4. elimination of direct government marketing operations; and 5. strengthening of government support services for agriculture through organizational restructuring among agencies concerned with agriculture, reallocating budget resources within agriculture away from administering market interventions in favor of increasing productivity-enhancing investments, and rationalization of the agricultural research and development system.

DAVID:GATF-UR AND PHILIPPINEAGRICULTURE

GATT-UR

PROVISIONS

143

ON AGRICULTURE

Under GATT-UR, the four major areas of commitment for agriculture are aimed at the following: 1. Expanding market access by -• Replacing nontariffbarriers with their tariffequivalents • Imposing ceilings (or binding) on all existing tariffs on agricultural products at rates not more than 10 percent of the current tariff rates • Reducing tariffs by 36 percent over six years among developed countries and 24 percent over 10 years among developing countries • Allowing a minimum level (access) of imports at a tariff lower than the initial binding tariff rate. This minimum level of imports should be at least 1 percent of production in 1995, rising to 4 percent of production over 10 years. 2. Reducing distortions in agricultural production, imports, and exports caused by production and trade-distorting domestic support for agriculture to at most 10 percent of the gross value of agricultural production. For developed countries, such domestic support should decrease by 20 percent over six years, and for developing countries by 13 percent over 10 years. Public expenditures for agricultural research, extension, irrigation, market infrastructure, and other productivity-enhancing investments do not belong to this category; neither do income support programs to farmers that do not affect the levels of production and trade. 3. Minimizing the international dumping of agricultural exports by reducing the average quantity of subsidized exports and the value of export subsidies. Developed countries must reduce quan-

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

titi_esof subsidized exports by 21 percent and the value of export subsidies by 36 percent over six years. Developing countries must lower quantities of subsidized exports by 14 percent and the value of export subsidies by 24 percent over 10 years. 4. Removing the antitrade bias of sanitary and phytosanitary measures by harmonizing those measures according to international standards, guidelines, or recommendations. Stricter regulations may be allowed based only on scientific justifications.

For the Philippine case, only the provisions on market access expansion and harmonization of sanitary and phytosanitary measures apply. There are no subsidies on agricultural exports. And the country's agricultural public expenditures that may be distorting production and trade levels such as fertilizer subsidies, credit programs, and the like are much lower than the allowable rate of 10 percent of the value of agricultural production. With the harmonization of sanitary and phytosanitary regulations, the Philippines will, as a small country exporter of agricultural products, undoubtedly be protected frorn overly strict regulations intended to restrict trade in importing countries. For example, implementation of GATT-UR will lead to the favorable resolution of our protest against the unnecessarily low maximum acid insoluble matter content imposed on carageenan imports by European countries that limits the growth of our exports. There have also been widespread objections to GATT-UR's market access provisions in the belief that the agricultural sector, especially the small farmers, will be adversely affected. In the next section, I argue that the GATT-UR provisions on agriculture will ultimately benefit the Philippines in general, and the agricultural sector in particular.

DAVID: GATT-UR AND PHILIPPINEAGRICULTURE

IMPACT

OF GATT-UR

145

ON AGRICULTURE

The Philippine agricultural sector will potentially benefit from GATT-UR through the policy changes that will be adopted by our trading partners, and the changes in our own trade policies. Changes

in DC Policies

Because of the political economy of agricultural protection, developed countries (DCs) generally provide heavy protection or subsidies to their agricultural sector, while developing countries (LDCs) generally tax, or at least do not protect, their agricultural sector (Anderson and Hayami 1986; Krueger et al. 1991; Lindert 1991). The high agricultural protection in DCs hurts agricultural exporters by limiting access to their agriculti]ral markets and by lowering world prices. GATT-UR's objective of global trade liberalization is aimed at increasing market access worldwide and reducing distortions in world commodity prices. To illustrate why market access of our agricultural exports will expand under GATT-UR, Table 1 lists the reductions in tariff rates on our major agricultural exports in Japan, the United States, and the European Union (EU) which together absorb nearly three-fourths of our agricultural exports. Tariffs in these countries for the listed commodities are in general much lower than the book tariffs of our agricultural products. Although there may be nontariff trade barriers (NTBs), these are to be abolished and replaced by tariffs. The reductions in tariffs in the US and EU are relative!Y small but significant nonetheless; and for mangoes, for instance, these reductions are substantial. Moreover, tariffs are bound at low rates, often at zero percent. Greater reductions in tariffs (in the order of 50 percent or more) can be observed for Japan which is the most important destination for our agricultural exports. Indeed, under the Generalized System of Preferences, banana exports to Japan can come in only at 10 percent tariffwhile mangoes are duty free.

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ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT

TABLE 1 Changes in Tariff Rates of Japan, US, and European Union (EU) -Philippine Major Agricultural Exports by Year 2005 under the GATT

....

Japan

Cocooil

From10 to 4.5%

Bindat 0%

From3 to 20% to 2,5 to 9,6%

Sugar

From35 to 25%

Tarrifyand reduce by 15 % over 6 years

Reduceexport subsidy

Barianas

From 40 to20% 1 From 50 to25%2 GSP3 at 10%

Bindat 0% From3.5 to 0% for dried bananas

From 20 to 16% for dried bananas

Mangoes

From 6 to 3% GSP3 at 0%

From 8,27 cents/kg From6 to 0% to 6.6 cents/kg From 3.3 cents/kg to 1.5 cents/kg for driedmangoes

Prawns

From 15 to 4.8%

Bindat 0%

Bindat 12%

Bindat 0%

Bind at 22%

Nt_ Tuna4

From5 to 3.5% . -

...__._

.........

Carageenan5

. _-

Bind at 0%

From5 to 3.2%

Bindat 0%

_Augustto Septemberseason. 2Octoberto Marchseason 3GeneralizedSystemof Preferences. 4In Thailand,tariff isreducedfrom60 to 5%. 5In Brazil,tariff is reducedfrom85 to 35% and in Mexicofrom 50 to 25%. Source:"UruguayRoundAgriculturalTrade Agreement:Implicationsfor PhilippineAgriculture,"Departmentof Agriculture,1994.

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147

By liberalizing agricultural imports, reducing production and tradedistorting agricultural support programs, and reducing export subsidies in developed countries, GATT-UR will not only increase demand for agricultural exports but also increase world commodity prices. Thus, export earnings from agricultural exports will further increase and the price competitiveness of importable commodities in the domestic market will improve. The estimated increases in the world prices of a number of our major agricultural products are shown in Table 2. TABLE 2 Projected Increases in World Prices of Selected Commodities by Year 2005 under the GATT Uruguay Round

Commodity

% increase

iiii

Rice

Corn

Coconut oil

Sugar

Pork

Beef

Chicken

Extracted from N. Andrew, I. Roberts, and S. Hester, "The Uruguay Round Outcome: Implications for Agricultural and Resource Commodities," Outlook 94, 1993,

t Changes

in Philippine

Policies

There is a common belief that the structure of book tariffs and nontariff trade barriers confers relatively high protection on agriculture. Book tariff rates are still as high" as 50 percent for rice, vegetable oils, chicken, and many kinds of fruits and fruit juices. Most tariffs on agricultural products

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

are in the order of 3() to 40 percent. Those subject to the minimum tariffof three percent are seeds, breeding animals, selected feedstuffs, and other agricultural inputs; Wheat, milk, and other major food products that are not produced locally in significant quantities are levied relatively low tariffs of from 10 to 20 percent. Commodities subject to nontariff trade barriers are rice, corn, sugar, onion, cabbage, potatoes, garlic, seeds,, livestock, and poultry. With a few exceptions, however, the potential protective effects of those trade barriers have not or have only been partially realized because agricultural commodities are largely exportable or effectively nontraded, in other words, those highly restrictive trade barriers were in many cases not needed to promote agricultural growth. Ironically, by overvaluing the domestic currency, the overall trade protection system had been and continues to be the main policy instrument that artificially lowers agricultural incentives. Fears have been widely expressed that the dismantling ofnontarifftrade barriers will adversely affect the agricultural sector, particularly the small rice and corn farmers. To show that these fears are not justified, Table 3 presents the actual average nominal protection rate (NPR) in 1990 to 1992, the 1995 tariff set by EO 470, the binding tariffs provided under GATT-UR for 1995 and 2004, and the tariffs and quantity levels under the minimum access requirement. The NPR, which is the percentage difference between domestic and world prices at our border, is a measure of the impact of government price intervention policies on domestic pri6es. It is the equivalent tariff of nontariff trade barriers; thus, the impact of GATT-UR on agricultural prices may be gleaned from the comparison of the NPRs (based on current policies) with the tariffs under GATT-UR. As requested by the Philippine government, rice has been exempted from the GATT_U R regulations over the_ext 10 years, although a minimum access requirement was imposed on the staple. It should be emphasized, however, that government rice price policy under the National Food Authority (NFA, previously known as the Rice and Corn Administration and later as the National Grains Authority) has been historically pro-urban consumer and antifarmer (Mangahas 1972; David 1983; Unnevehr 1983; Intal and

TABLE 3 The Nominal Protection Rates, Current Tariff, and GAT'FBinding Tariff and Minimum Access Requirement for 1995 and 2005

Tariff I%) NPR 1990192

o .°.

Minimum access

1995

2005

Tariff

Quantity (rot)

_:. ;o z> o "O

(%)

1995

2004

-r-

(%)

EO 479

Binding

Rice

59,730

238,940

Corn Sugar Chicken

20 50 30

100 100 100

50 50 40

35 50 35

130,160 38,000 2,218

216,940 64,000 3,396

Pork Beef Garlic Onions Potatoes

62 89 94 (50) 31 nay 500 01 nay

30 30 30 30 30

100 60 100 100 100

40 35 40 40 40

35 30 nap 30 50

826 15,000 nap 1,610 1,457

1,376 32,000 nap 2,683 2,429

Cabbage

nay

100

2,105

3,509

no -o • "_ tn

;o ° c I"--_ t;o m

_Exportable nc - no commitment nap - not applicable nav- not available _JD

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Power 1991). Table 3 indicates that for 1990 to 1992, NFA monopoly on trade caused the domestic price of rice to be higher than the world price by only 16 percent whereas the book tariff rate stood at 50 percent. In fact, from 1960 to 1990, the domestic price of rice was just more or less equal to the border price, i.e., the equivalent tariff under NFA monopoly was zero percent. Evidently, the domestic price of rice would have been higher if NFA did not exist and that the private sector was allowed simply to export at 50 percent tariff. Because of the 50 percent tariff, the private sector would have imported less (if at all) than NFA in the 1980s. Indeed, NFA has a greater incentive than the private sector to import rice because the former has always been exempt from tariff duties, enabling it to realize larger profits (often to pay for higher cost of operations) than the private sector which has to pay tariffs and thus earn only normal profit margins. Contrary to popular belief, there is absolutely no reason to think that rice farmers will be adversely affected by GATT-UR. To repeat, the rice sector has been exempted from GATT-UR and the minimum access tariff has been set at 50 percent which is much higher than the historical equivalent tariff resulting from NFA trade monopoly. GATT-UR will remove NTBs for corn, sugar, livestock and poultry, garlic, onions, potatoes, and cabbage. But with the exception of garlic, the initial binding tariffto replace the NTBs for 1995 would be even higher (often at 100 percent) than the actual protection (NPR) conferred by the NTBs in 1990-1992 and the tariff rate under EO 470. And even after 10 years, the tariffs under GATT-UR would remain high (ranging from 35 to 50 percent) as compared with the average book tariff rate under EO 470 which is currently about 30 percent. Tariffs on imports under the minimum access would be lower than the binding tariffs, in the order of 30 to 50 percent. But the minimum access levels would be generally low, at most three percent of production. Import demand for these affected commodities at the minimum access tariffs will likely be greater than at the minimum access level, thus, the operable protective tariff will likely be the binding tariff.

DAVID: GAT'r-UR AND PHILIPPINE AGRICULTURE

151

Why Dismantle NTBs? The excessive protection on a few commodities such as sugar, corn, garlic, and poultry draws incentives in favor of commodities in which the country apparently does not possess any comparative advantage in producing, lowers the profitability of food processing and livestock enterprises due to higher sugar and corn prices, and increases food prices to final consumers. The large owners of land and capital, particularly those in sugar and medium- and large-scale poultryand livestock industries, stand to gain from such protective policies. Their workers will not benefit as much because wages are determined by demand and supply conditions in the labor market. The majority of poor corn farmers grow corn mainly for subsistence and are thus not significantly affected by price changes. In turn, poor urban consumers and the vast majority of ruralconsumers are penalized by higher food prices because they are net buyers of these products. Thus, the impact of excessive trade protection on income distribution will likely be adverse. Aside from the inefficiencies caused by distorted relative prices, the use of NTBs instead of tariffs (1) introduces unnecessary and costly uncertainties about import policy, particularly on corn; (2) provides economic rents (i.e., unearned profits) to those that have been granted and those granting import allocations rather than tariff revenues for the government; and (3) increases the transaction costs of implementing policy objectives. Benefits

from GATT-UR

GATT-UR will therefore benefit the country in general and the agricultural sector in particular for the following reasons: 1. Global trade liberalization will generally increase the world prices of agricultural commodities; consequently, the domestic prices of exportable and importable agricultural commodities, as well as net foreign exchange earnings/savings, will increase. 2. Reductions in the import barriers of our trading partners will substantially expand the markets for traditional and nontraditional agricultural exports.

152

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

3. Overall trade liberalization in the country will reduce the degree of overvaluation of the domestic currency, thus raising the relative prices of agriculture vis-h-vis other goods and services because most agricultural commodities are tradeable. 4. With the lowering of the excessive protection conferred on a number of agricultural commodities, a more efficient allocation of resources within agriculture and across sectors will be promoted. This will also improve the consumers' welfare through lower prices of these commodities and processed food products that use sugar and corn as major inputs. 5. It will focus government attention on addressing the problem of declining competitiveness of Philippine agriculture away from counterproductive and administratively costly trade regulations toward a more efficient provision of support services to the sector. Common objections to the GATT-UR provisions on agriculture are therefore misguided. Why should we continue to confer excessively high protection on a few agricultural commodities paid for by the general public to the ultimate detriment of the majority of agricultural producers, particularly poor farmers and landless laborers? To be sure, the rates of protection are not trivial as shown earlier. For 1990 to 1992, the domestic price of sugar was about 90 percent above border prices, while that of corn was more than 60 percent, garlic more than 500 percent, and chicken more than 90 percent. Indeed, the highly restrictive import policy on corn is the main reason why prices of pork and chicken have risen significantly in recent years. Sugar has historically been highly protected because of the US quota policy, but why should the domestic consumers be penalized, further increasing the bonanza enjoyed by sugar producers, specifically large landowners? The ban on imports of garlic, onions, potatoes and cabbage was imposed because of the political clout of the Northern provinces. Chicken has historically been highly protected because of the relatively strong lobbying of the

DAVID:GAT'F-URAND PHILIPPINE AGRICULTURE

153

preponderantly large producers in this subsector. The desire for self-sufficiency in these commodities does not warrant the efficiency and equity cost of such policies. Indeed, the government has been overly conservative in reforming the agriculture-specific trade regulations under GATT-UR. For example1. The National Food Authority's international trade monopoly on rice will effectively continue because the minimum access requirement is at a tariff rate (50 percent), far higher than the historically observed difference between domestic and border prices. The government will likely decide to import enough rice (without tariffs) to maintain a politically acceptable consumer price before the private sector deems it profitable to import rice at a 50 percent tariff. As pointed out, GATI'-UR will not affect the rice market policy. In other words, the very costly subsidies to NFA market operations which have not benefited farmers will continue, diverting scarce government resources that could have been better spent on productivity-enhancing public support services. 2. In most cases, the tariff to be imposed in place ofquantithtive trade barriers will be higher than the equivalent tariffs in the presence of NTBs. Although the tariffs will decline over 10 years, they will still be much higher than projected average tariffs by the year 2000. The relatively low minimum access requirement, i.e., the level of imports to be allowed at lower tariffs, will make the higher equivalent book tariff level operational, providing significant economic rents to those allowed to import within the minimum access level. I believe that the rationalization of agricultural trade policies should be accelerated even beyond the GATT-UR agreement. This means adjusting tariffs for agricultural products to equal the overall average tariffover time which at present stands at only about 30 percent.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

GOVERNMENT

RESPONSE

AND GATT-UR

In the process of trade liberalization there will obviously be adjustment costs in the short run. Whether the government should assist or not in this adjustment process and to what extent depends on who bears the cost, how much is borne, and the cost-effectiveness of alternative assistance programs. Sugar, poultry, and garlic have already been very highly subsidized by the general public for many decades. Why, then, should they not bear the burden of adjustment now, particularly since the cost will be borne mainly by the relatively high income group of landowners and capital owners? Th_ livestock and poultry sectors will not be severely affected because of the trade liberalization in corn. As mentioned earlier, the poor farmers growing corn for subsistence will not be significantly affected. In any case, the more cost-effective approach of assisting the widely dispersed landless workers and small farmers is to proceed swiftly with the policy and institutional reforms that will improve the country's competitiveness and increase employment and economic growth in general. To counter the imagined negative effects of GATT-UR on agriculture, the government plans to provide "safety nets" in the process of GATT-UR implementation by erecting further protectionist measures and earmarking tariff proceeds from imports of agricultural products under the minimum access requirements to substantially raise public expenditures for support services to agriculture. From current discussions on "safety nets," it is possible that many of these will likely reduce, if not negate, the potentially positive impact of GATT-UR on the total economy. The strengthening of agricultural support services must be viewed in the context of improving the competitiveness of Philippine agriculture and not as "safety nets" in response to GATT-UR. The main problem of Philippine agriculture is its declining competitive advantage. Table 4 shows that from 1980 to 1992, the Philippines had the lowest growth rate of agricultural gross value added, agricultural exports, and gross domestic product among developing Asian countries. Declining competitive advan-

TABLE 4 Average Growth Rates of Gross Domestic Product, Agricultural Value Added, Food Production per Capita, Agricultural Exports in Selected South and Southeast Asian countries, 1970-1992 (In percent)

1970-1980

1980-1992

_> < .o. >_

> Z

Gross Agriculture Food per Agriculture Gross Agriculture domestic gross capita export domestic gross product value product value added added

Food per Agriculture capita export

_ -o m

> G3

Chinaa Indonesia Malaysia Thailand

5.7 8.4 9.1 6.7

2.7 4.4 6.5 4.2b

t.5 1.4 5.1 2.1

13.1 17.5 17.5 20.7

8.5 5.6 6.2 9.9

5.6 2.9 3.4 5.8

2.7 2.1 3.9 0.5

9.1 2.6 1.8 5.2

Philippines India Pakistan Nepal Bangladesh Sri Lanka

6.1 3.9 5.3 2.0 4.7 3.7

4.9 1.8 3.0 0.8 1.4 1.9

1.6 0.2 0.5 -0.9 -1.2 1.2

14.3 14.3 15.5 -1.8 0.1 7.8

1.5 5.6c 6.0d 4.5 4.0 4.1

1.1 3.8d 4.2d 4.6 2.9 1.8

-1.4 1.6 0.9 1.1 -0.3 -1.6

-3.2 5.1 1.6 -1.0 -1.5 -0.4

c rc ;o m

aRefersto China and Taiwan. bAverage of 1972-1980. CDataup to 1990 only. dData up to 1991 only.

156

ESSAYSIN SOCIAL SCIENCE ANI_DEVELOPMENT

tage is alsoevidenced by the declining share in world markets of practically all our major agricultural exports since the 1960s in the case of sugar, the mid- 1970s for coconut products, and the 1980s for bananas and pineapples (Table 5). With or without GATT-UR, that problem must be vigorously addressed. The GATT-UR provision on agricultural trade policy itself is instrumental in improving agriculture's competitiveness as discussed earlier. But unless the other equally important causes of the sector's declining competitive advantage (i.e., high cost of transport and limited productivity growth) are addressed decisively, the Philippine agricultural sector will continue to lag behind. The issue therefore is not how to provide safety nets because of GATT-UR, but rather how to take advantage of the GATT-UR trade policy framework to improve the agricultural sector's competitive advantage. Specifically, the challenge is how to strengthen agricultural support services to take full advantage of the trading opportunities opened up by the GATTUR agreement. That distinction is critical in designing the appropriate program of action in the sector. As a "safety net," there is a sense of panic, a tendency to choose short-term rather than more cost-effective, long-term policy and institutional instruments, and a tendency to focus on the affected industries rather than on those with the greatest technological and market potentials. The following paragraphs provide some examples. More Distortions To allay fears that, with the 100 percent tariff on corn, the livestock and poultry producers will substitute wheat for corn (something they are already doing), a complex set of import controls is being proposed to increase the price of wheat when used as feed. The secretary of the Department of Agriculture (DA) himself said that wheat is too valuable to be fed to animals. Why, then, is corn being made artificially expensive? How can the compe.titive advantage of livestock and poultry increase when the government slaps a much higher tariffon the most important feed ingredient (corn/wheat feed) compared to output? Indeed, rice itself may become a major feed

TABLE 5 Trends in the Share of World Trade of Selected Philippine Agricultural Exports, 1960-1992

G> Coconut products C

Total

Copra

Coco oil

D'cated coconut

Copra meal

Sugarb

Bananas

Pineapple

> Z o "0 f--

1960-1964

1965-1969

1970-1974

1975-1979 1980-1984

63 65

60 38a

65 68

61 62

54 59

4 4

8 9

18c 20

1985-1989 1990-1992

57 52

34a 26

59 59

51 43

51 45

1 1

7 5

15 14

"O m

=Four-yearaverage onlybecauseof copraexportban in 1984 and 1985. blncludescentrifugaland refinedsugar. CAverageof 1978 and 1979 sinceworldexportdata on pineapplewere gatheredbeginningin 1978 only. Source:CristinaC. David,"Economic Policiesand AgriculturalIncentives:The PhilippineCase," paperpresented at theConferenceon AgriculturalReformsin Asia in the 1980s, Bangkok,FAO, January1995.

Q ;o C

_--I C

:o m

158

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

ingredient if the l O0percent tariffon corn and the high tariff on feed wheat ever become operational. Perhaps at that point, our policymakers will begin to understand the high cost of such a wrong policy. Import Allocations and Earmarking of Funds The DA proposes a major buildup of government expenditures on agricultural support services to be funded by tax proceeds under the minimum access requirement. A committee is now being established composed of government (including DA as the lead agency) and private sector representatives mainly from the "affected" sectors. The committee is supposed "to develop schemes for managing minimum access importations with the end [in] view of ensuring the stability of supplies and prices; and study and plan out the possible use of the revenues derived from minimum access importations to fund the development of competitive enhancement measures embodied in the Medium-Term Agricultural Development Plan, such as, but not limited to, the establishment of infrastructure (e.g., irrigation, postharvest facilities, farm-to-market roads_ ports) and the provision of support services (e.g., research and development, credit, resources development)." The allocation of import privileges and tariff proceeds using that approach not only violates principles of good public finance management, but promotes corruption as well. Further, it is a highly unstable source of fimding for agricultural support services. One of the main reasons for replacing NTBs with tariffs is to let the market determine import allocation, remove any excess profit invariably accompanying NTBs, and generate government revenues. Import demand will likely be greaterthan the minimum access level for corn, sugar, garlic, etc. Unless the import privileges are auctioned fairly, substantial excess profits will accrue to those given import privileges, and more opportunities for corruption will be created. Not surprisingly, vested interests such as the affected sectors, leaders of cooperatives, etc., are lobbying for representation in that conlmittee. The market will simply be more efficient than any administratively determined

DAVID: GAI-I'-UR AND PHILIPPINE AGRICULTURE

159

level, timing and quality of imports, both in terms of transaction costs and quality of decisions. It will also be a more equitable procedure. Earmarking of tax proceeds for the development of an industry may be justified ifthe tax is ultimately borne by, and benefits accrue to, the industry. This is the case, for example, with a commodity-specific export tax or access earmarked for research and development of an export industry, where the benefits of technological change typically accrue to producers. It should be stressed that tariff proceeds from imports under the minimum access requirements are paid for by the general public, and it is incumbent upon the government to allocate these resources to public sector activities that have the highest social rates of return. After all, expenditures for welldesigned education and health programs may provide greater benefits to poor farmers than poorly-designed support services such as government marketing operations or subsidies to unviable postharvestfacilities. Farmers and especially landless households in rural areas are mobile and not tied to land. They would benefit most from public expenditures that would raise their human capacity, increase employment, and accelerate overall economic growth in the most economical manner. A committee composed mainly of representatives from the "affected" sectors cannot be expected to allocate resources in favor of those commodities with the highest technological and market potentials or the highest pay-off for society. Inevitably, they will be looking out for their own vested interests. Administratively determined import allocations and earmarking of tax proceeds are dangerous precedents that will fragment the budget process, weaken government accountability, and lead to a misallocation of resources. These approaches not only violate principles of good public finance management and promote corruption but are a highly unstable source of funding for agricultural support services. The world prices and domestic production of agricultural commodities which largely determine import values are often unstable as a consequence of which tariffproceeds are also unstable. Ideally, a greater and more stable source of funding is ,lecessary for the efficient planning and implementation of agricultural support services.

160

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Agricultural Support Services Because of certain unique characteristics of agriculture that cause market failures, the government has a more pervasive role in providing support services to the sector to increase productivity, improve market efficiency, and protect the environment compared to tile nonagricu lturalsectors. Nonetheless, public expenditures for those services will still have to be evaluated on the basis of their social rates of return relative to other types of public expenditure. The discussion has so far focused on the level and allocation of additional budgets in broad terms. There has been no effort to address the inefficiencies in the design, priorities, and delivery of agricultural support programs now being undertaken by DA, the Department of Agrarian Reform (DAR), and the Department of Science and Technology (DOST). Weaknesses in the institutional structure limiting the effective design and delivery of programs of these agencies have been documented (David et al. 1993); and countless examples of costly programs that did not have any measurable impact on producers' welfare abound. If tllose issues are not addressed, additional resources for agriculture may go to waste again. There has been no indication that the government will adopt institutional reforms to stream line the bureaucracy, abolish ineffective programs, and reallocate budgets away from government marketing and trade regulations toward productivity-enhancing investments. Although no concrete new programs have been proposed, except to intensify current programs and thrusts, a number of observations could nonetheless be made. i. The importance of improving market infrastructure and rationalizing transport policy is now well-recognized due partly to DA's initiatives. The DA should continue to allocate some resources while conducting studies related to this isstle, disseminating the findings of those studies and to try to influence the regional allocation of the market infrastructure budget. It should be stressed, however, that other agencies in the central government and the local

DAVID: GATF-UR AND PHILIPPINE AGRICULTURE

government units are directly responsible for the efficient delivery of market infrastructure services because a whole range of factors and sector interestsmust be taken into account in allocating public investments for market infrastructure. DA's preoccupation with market infrastructure issues may have deflected its attention from addressing the weaknesses of agriculture-specific support services. 2. Too often, proposals to increase expenditures for irrigation, postharvest facilities, and the like are justified on the basis of some perception of a technical need rather than on social rates of returns. The National Irrigation Administration's estimate of the irrigable area does not consider the economics of irrigation investments. It is very doubtful that irrigation investments for corn often mentioned by the DA will be socially profitable. Studies have already shown that even in rice where only 50 percent of the area is irrigated, there are limited socially profitable opportunities in greatly expanding gravity irrigation. Some rehabilitation projects, small communal systems, and institutional reforms to improve system management may be economically justified. The potentials for expanding the use of shallow tubewells suitable for a wide range of high valued crops have not been sufficiently explored. Very little effort has been devoted for developing property rights and incentive structures to ensure the sustainable use of groundwater sources and complementary support services such as aquifer characterizations, improvement of drilling techniques, etc., which are activities that should be the focus of public sector efforts in this area. 3. The plans to heavily support the expansion of postharvest facilities are also based on the technical observation that postharvest losses are high. It seems that not much thought is being given to the economics of alternative ways of reducing postharvest losses and to the proper roles of the public and private sectors in resolving that problem. Past government programs to improve facilities for grain storage, drying, and milling for rice funded by the World Bank

161

162

! ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

and other foreign donors have basically failed. It is also ironic that the DA is calling for more public money for postharvest facilities when NFA has substantial excess storage facilities nationwide that are rapidly deteriorating. The government can undoubtedly contribute to the minimization of postharvest losses such as in understanding their causes, developing and disseminating qew technologies, and analyzing constraints to private sector adoption of these new technologies and investments in postharvest facilities. Thus far, there are no indications that the government will not make the same costly mistakes committed in the past in this area. 4. The misallocation of public resources in what may be considered "soft" as opposed to "hard" or physical infrastructure is perhaps even worse. The government still plans to allocate substantial funds for organizing cooperatives to turn farmers into traders because agricultural trading is "cartelized." That, I think, stems from a lack of basic understanding of the economic value of specialization, economies of scale, etc., which leads to an economy where producers are not necessarily traders. It also stems from a lack of understanding of the fact that cartels or monopolies are typically created by government policy. A case that is not wellrecognized is the banana plantation cartel created by the banana hectarage limitations law which disallows new entrants from establishing new banana plantations. Increasing budgets for education is definitely better than expenditures on cooperative movements in upgrading farmers' capabilities to farm better or engage in trade, or any nonfarm employment to increase their income. This is not to say that farmers' cooperatives are not worthwhile, but to emphasize that government-supported ones tend to fail, as numerous studies have shown. 5. Emphasis has been too little on technology generation, too much on technology transfer, and too much on community/cooperative organizing. This is in part due to the misconception that-

DAVID: GAT"F-URAND PHILIPPINE AGRICULTURE

there are many economically viable new technologies on the shelf and that technology transfer is the constraint. That is sfmply not the case. The Seed Law, for example, was passed restricting imports of seeds which embody new technologies developed abroad despite the objections of small vegetables growers. Now that the large growers of cutflowers and nontraditionai exports are articulating the importance of having access to improved seeds and planting materials wherever they come from, the government's folly in passing that law in the first place has become obvious. 6. Although increasing public expenditures for agricultural research and development is being mentioned as a "safety net," there is concern that only lipservice is being paid to this effort. The Philippine budget for agricultural research has declined in real and in relative terms since the mid-1970s (Figures 1 and 2). In 1981- 1985, public expenditure for agricultural research as a ratio to gross value added in agriculture was only 0.16 percent in the Philippines compared to 0.46 percent in Thailand, 0.34 percent in Indonesia, 0.41 percent in developing countries, and 2 percent in developed countries. The country has fallen behind even more in the 1990s. We now have one of the lowest budgets for agricultural research in Asia next to Nepal. Table 6 shows that estimated social rates of return for agricultural research are extremely much higher than estimates for infrastructure investments which typically range from 15 to 25 percent. 7, While a much higher budget for agricultural research is necessary, it is not a sufficient condition for strengthening the agricultural research and development system. Unless institutional reforms that will reorganize the research and development structure are adopted and priority is given to institution building and longterm research programs, efficiency and effectiveness will be severely constrained. The higher bt,dget will be quickly dissipated by short-term research projects with questionable pay-off. The prob-

163

FtGURE 1 Trends in Agricultural Research Expenditures in Real Terms 3-year Moving Average

1980-100)

200

150

100

C_ ,

Bangladesh

> rn z

o m

•

m tO "o i

0 1970

1076

1980.

;

1986

1900

11970

1875

1980

1986

1090

-'1

FIGURE 2

Trends In Agricultural Research Intensity Ratios (Percent of Agricultural Research Expenditures to Gross Value Added in Agriculture)

3-year Moving Average %

o._

o.E -o -I-

0.5

0,6 "

0.4

," '

0.3

0.2

Thailand

"""

0.4

Bangladesh

",_donesla_'_

0,3

197

0.2

0., 0

c) c f-

............... ................ I

I 1878

I 1880

I 1986

0 1880

1970

I 1876

I 1980

t 1980

I 1990

3 ¢n

166

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

TABLE 6 Summary of Rates of Return Estimates of Public Agricultural

Research

Percent

Developing Countries (Evenson and David 1992) 5 studies

8 studies

0 - 20

28 studies

30 - 50

37 studies

50 +

Philippines

Rice (Flores, Evenson

and Hayami 1978)

Corn (Librero and Perez 1987) Sugar (Librero,

Perez

and Emlano

SouFces: Poultry (Librero and Emlano

75 29 - 48

1987)

1990)

enson and C. C. David. "Rice Production and Structural.Change." Organion for Economic Cooperation and Development, Paris, 1992. s, R.E. Evenson, and Y. Hayami. "Social Returns to Rice Research in the ippines: Domestic Benefits & Foreign Spill Over." Economic Development Cultural Change 26, 3 (April 1978) o and M. Perez. "Estimating Returns to Research Investment in Corn in the lippines." Philippine Council for Agricultural Resources, Research and velopment (PCARRD), Laguna, 1987 o and M. Perez. "Estimating Returns to Research Investment in Sugarcane he Philippines," PCARRD, Laguna, 1987 ro and M. Emlano. "Estimating Returns to Research Investment in Poultry d Livestock in the Philippines, " PCARRD, Laguna, 1988

51 - 71 100

DAVID: GA'I-F-UR AND PHILIPPINE AGRICULTURE

167

lems with the institutional structure of the agricultural research system and the directions for organizational reforms are discussed elsewhere (David et al. 1993). CONCLUDING REMARKS Agriculture is .just one aspect of the GATT-UR. Yet its provisions appear to be the most controversial. And judging from media accounts, ratification of GATT-UR hinges on the establishment of adequate "safety nets" to protect farmers (and other "affected" groups) from the expected adverse impact on their welfare of GATT-UR provisions. This paper argues that the global and Philippine trade liberalization in the spirit of GATT-UR will benefit the vast majority of farmers and the poor. A few, made up mostly of large landowners and capital owners, may need to increase efficiency or reallocate resources that can afford to shoulder the short-term cost of adjustment arising from trade liberalization. The Senate must therefbre speedily ratify GATT-UR to enable the government to get on with the business of carrying out economic and institutional reforms necessary to achieve sustainable economic growth. There is no need to make ratification conditional to the establishment of "'safety nets" nor to postpone tiffs after GATT-UR has been approved by the US, Japan, and EU. Why waste more time on debates based on wrong premises? Of course, unless we strengthen the very weak agricultural suppotl services that largely caused the sector's declining competitive advantage, the Philippines will not reap the fidl potential benefits from trade liberalization and will continue to lag behind other Asian countries. With or without GATT-UR, that should be done to reverse agriculture's declining competitive advantage. The opportunity cost of not doing so is all the more with trade liberalization under GATT-UR. While ratification need not be conditional to having a detailed program of strengthening support services, the agricultural sector must seize the opportunity to obtain Congress" commitment in principle to do so.

168

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

We propose that a comprehensive assessment of the government's agriculture-specific support services be made soon. And a detailed program of action that includes institutional reforms, program formulation, and budget rationalization should be made before ally substantial increases in the budget for agriculture are approved. That program must be subject not only to a budget review but to a technical review as well. Highest priority must be given to the rationalizatien of the research and development system. Technological change is the key instrument for increasing agricultural productivity, thereby enhancing agriculture's competitive advantage.

DAVID: GATr-UR AND PHILIPPINEAGRICULTURE

169

BIBLIOGRAPHY

Anderson, Kym, Y. Hayami and Associates. The Political Economy of Agricultural Protection." East Asia in International Perspective. London: Allen and Unwin, 1986. Baustista, Romeo. Production Incentives in Philippine Agriculture." Effects" of Trade and Exchange Rate Policies. Research Report No. 59. Washington D.C.: international Food Policy Research Institute, 1987. Clarete, Ramon L. "Structural Adjustment and Agriculture: Developing a Research Analytical Framework." Working Paper No. 92-21. Makati: Philippine Institute for Development Studies, 1992. . "Uruguay Round Final Act: Implications for the Philippine Economy and the Agricultural Sector." Paper presented at the PES meeting, August 1994. David, Cristina C. "Economic Policies and Agricultural Incentives." The Philippine Economic Journal 53 (1983): 154-182. . "Philippines: Price Policy in Transition." In T. Sinclair (ed.). FoodPrice Policy in Asia. New York: Cornell University Press, 1988, pp. 274-324. David, Cristina C., E. R. Ponce, and P. S. Intal. "Organizing for Results: The Philippine Agricultural Sector." In Poverty, Growth, andthe Fiscal Crisis, IDRC and Philippine Institute for Development Studies, 1993. Intal, Ponciano S., and J. N. Power. "The Philippines." In A.O. Krueger et al (ed.) The Political Economy of Agricultural Pricing Policy. Baltimore and London: The Johns Hopkins University Press, 1991. Krueger, Anne O., M. Schiff, and A. Valdes (eds.). The Political Ec'onomy of Agricultural Pricing Policy. Baltimore and London: The Johns Hopkins University Press, 1991. Lindert, Peter. "Historical Patterns of Agricultural Policy." In C.P. Timmer (ed.). Agriculture and the State: Growth, Employment and Agricultural Trade. Ithaca: Cornell University Press, 199 I. Mangahas, Mahar. "Philippine Rice Policy Reconsidered in Terms of Urban Bias." Philippine Review of Business and Economics 9 (1972).

170

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Unnevehr, Laurian. "The Effect and Cost of Philippine Government Intervention in Rice Markets." Working Paper No. 9. Rice Policies in Southeast Asia Project, International Food Policy Research Institute, Washington, D.C., 1983.

Fermin D. Adriano

COMMENTS

Thank you for inviting me to comment on the paper of Dr. Cristina David, a respected economist in the country and our mentor in a major agricultural policy effort in the 1980s, right after the successful EDSA revolution. Considering that in this series of talks, we are honoring Dr. Gelia Castillo for her intellectual legacy that has undoubtedly enriched the field of sociology in the Philippines, 1supposed that the best approach in examining the work of Dr. David is to look at it through the prism of sociology, more particularly political sociology. It is a truism by now to state that policymaking or policy-decision is not merely an economic activity. It is usually a product of intense lobbying and political interaction. It involves not merely factoring the economic costs and returns to the society but oftentimes its political and sociological fallouts. Hilarion "Larry" Henares once disdainfully described economists as sort of "eunuchs." They know all the theoretical stuff on how to do it, but cannot consummate it. Larrydetects that the problem is the inability of most economists to be immersed in the arena of the real world. Call it snobbery or sheer conservatism, but often, economists, once confronted with the swelling protests over a recommendation they made, cannot hold their ground. They would rather prefer playing the role of a policy kibitzer and let somebody take all the flak for the recommendations they made. It was sheer exasperation that jolted Dr. Castillo herself to propose in the past that economists should be held criminally liable for failed recom*Deliveredbelbrethe SenatevotedonGATT

172

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

mendations. There is just too much power conferred to them but no accountability. But to be fair, those who have joined the fray in the real world situation have become more level-headed, or call it realistic, than those who oPted to be ensconced in the security of their academic research room. The reason for this digression is the dilemma which I sense in the paper of Dr. David. Her simple conclusion is that if we cannot ensure the institutional reforms in agriculture and agriculture-related agencies of the government, particularly prioritizing the research and development system, then no substantial increases in the budget of agriculture should be approved. For her, it is more efficient to place the extra money in education than in cooperative development and agriculture per se if these institutional reforms are not pursued. The recommendation comes at the backdrop of the Senate's deliberation on whether or not to ratify the General Agreement on Tariffs and Trade (GATT). Given talks about putting in place the "safety nets" to agriculture and increasing the allocation to the Department of Agriculture (DA) to enable it to build these "safety nets", Dr. David's policy prescription has the effect of saying that our legislators shou Id not accord additional budget to DA if it is not able to undertake the institutional reforms in the agency and related agencies that deliver support services to the rural sector. Realistically, at present, Dr. David's recommendation cannot be implemented and, thus, if we follow her thinking, there should be no budgetary increases for the DA. Her solution is to put it in education and probably to SCUs conducting agricultural R&D. Meanwhile, she wants GATT to be ratified by the Senate who wants for practical and political reasons that "safety nets" are put in place. Who is going to do this? Certainly, not the DA because it does not have tl!e money; it might as well be the Department of Education, Culture and Sports! Economists are fond of formulating models based on an ideal situation. Once proven to be functioning, then they begin to factor in the imperfections of the real world noting that because the model is found in its barest essence,

ADRIANO: COMMENTS

173

then even the imperfections will most likely not distort the fundamental tenets of the model. Yet, when confronted with the real life situation, there seems to be a tendency to forget this approach. First thing first. Let us get this treaty ratified first and move towards the things we want later on. We are not saying that we forget the long-term goal that we have set our eyes on, but the expediency of the time dictates to us that we need to handle the short-term obstacle first. The fact of the matter is that we are still not sure whether GATT will be ratified by the Senate and we are already imposing many conditionalities beyond what we can tackle. Sure, one can argue, GATT or no GATT, these things should have been done a long time ago. In fact, many more should have been done. The fact however is thatthey were not done and we are confronted with the dilemma of whether we can pass this single policy instrument that most economists have been longing for. Should we pass on this opportunity because our research agenda was not served beforehand? Having said this, let us now go to some minor details. On the first and second pages of the paper, the phrase "the government monopoly on international trade has caused domestic price to be much lower than what this would have been if the private sector were allowed to import at the existing tariff levels," may be true in the 1970s but no longer holds valid today as the world price of rice is much lower than its domestic price. The use of the concept border price to measure the rates of protection for agricultural products as stated on the fourth page is sometimes fraught with danger because it is not necessarily a reflection of production efficiency. For instance, border price for corn may reflect the price of American corn, but may not necessarily mirror the efficiency of American farmers because this represents a highly subsidized price or dumped price. Regarding the "safety nets" provided to what is already perceived as a highly protected sugar sector, this is but a product of the highly organized and effective lobbying of the sugar bloc. Thus, the claim that "the government has been overly conservative in reforming the agriculture-specific

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

trade regulations" is not so much of the government's desire but a product of intense backroom negotiation pursued by lobby groups. On the N FA (National Food Authority) issue, schemes intended for the farmers to take over some of its operations like the Project Self-Reliance have failed. Short of starving it with cash and facing the consequent mass protest of laid offNFA employees and possibly another set of protest actions from the farmer groups, I really don't know what other measures to undertake to handle the NFA issue properly. There must be a range of alternatives offered. The ones recommending them should be responsible for the outcomes so that future views will be tempered by the imperatives of the real world. The discussion on tariffs should be made in conjunction with the exchange rate issue. We can certainly re-examine our position on the tariff levels every three years. Let them stand as they are now and let us focus our attention on the ratification of this treaty for the moment. Dr. David is worried that the "safety nets" will have the effect of increasing rather than reducing protection. Indeed, the provision of the "safety nets" must be subordinated to the economic direction or policy this country desires to undertake. There is no quarrel regarding the auctioning of the "minimum access" products. DA Secretary Roberto Sebastian endorses the idea. The institutional reforms for the agricultural agencies outlined in the paper starting from the eleventh page and the subsequent pages are so radical that we probably need to have another dictatorial regime in order to carry them out. Moreover, more studies on infrastructure will help but the more important concern is how we can persuade the LGUs to use their internal revenue allotments (IRAs) for more infrastructure facilities. There seems to be an assumption that cooperatives get a lot of support from the government. That is simply not true because the Cooperative Development Authority only obtained a budget of P90 million this year. Besides, if we are concerned about the poor, investment in education will not be sufficient to meet their needs in the meantime that they are starving

ADRIANO: COMMENTS

175

to death. In lieu of cooperatives, what is the alternative of Dr. David except investing in education? The paper also referred to the restrictiveness of the Seed Law. To put it in its proper perspective, the audience should be reminded that it was passed during the incumbency of Mrs. Corazon Aquino. To remedy its faults, its implementing rules and regulations (IRR) formulated under the term of Secretary Sebastian were interpreted in a more liberal fashion. Dr. David bats for the re-organization of R&D institutions engaged in agricultural research. Too many battles at the same time. ! am afraid we are going to lose the war. As Secretary Sebastian noted, even if you have the technology, but you do not have irrigation, post harvest facilities and farm to market roads, a farmer cannot really attain much.

Highlights of Discussion

GATT AND THE PHILIPPINE ECONOMY

The General Agreement on Tariffs and Trade (GATT) is a complicated issue. Essentially, its main thrust is to replace quantity restrictions with tariffs. Some tariffs that are being described in GATT are higher than the existing tariffs. So if one explains GATT to others in a manner that points out who are being benefitted, people may then come to understand GATT in due time. There seems to be a tendency to stereotype the positions taken by the contending parties on the GATI'. GATT has many dimensions aside from agriculture like the intellectual property rights and trade-related investment measures. Of course, these dimensions cannot be separated since GATT is a single document, and one must either agree or disagree with all of its provisions. However, even if one has made a stand, it does not mean that he/she cannot free himself/herself from such stand when a debate is going on. The test of a trlae scholar, after all, is when one can suspend his own judgment to hear others. What seems to be happening is that neither side really wants to explain to the people who are going to be affected by the GATT provisions. It is really difficult to sell the idea of liberalizing a lot of agricultural commodities, especially to small farmers. However, it was pointed out that most exports are produced by big farmers and, thus, agriculture should not only be equated with small farmers. In the case of the sugar industry which

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ESSAYS IN SOCIAL SCIENCE AND DEVEL_)PMENT

is one of tile most pollutive industries because of its by-products, it can intensely lobby for its protection since the industry can muster a lot of resources.

There are conflicting ideas, and it really depends on what one believes in. The contending parties to the GATT have the same background, but sometimes they differ in opinion. Therefore, one must not take the views personally. Discussion such as this should be seen as a way of getting the message across so that in the process, the public will better understand and be benefitted by the discussions. In effect, the controversy lies in the communication between two parties -- the pro-GATT and the anti-GATT. Public support and awareness of GATT is essentially a function of communication. And since GATT is one of the most important issues in the country today, scholars must take this opportunity to objectively communicate the pros and cons of GATT. The identification and determination of the pool of resources to provide some "safety nets" for certain sectors dislocated or adversely affected by the GATT as well as the introduction of technologies are critical in the implementation of GATT. One has to look at this issue, though, in terms of cost to the country. The paper's commentator believes that the cost for a country is greater if it does not ratify the GATT. Once a country accedes to GATT, then it would be in a better position to negotiate since it can have an alliance with those countries who have also acceded to GATT. So, what's next? Ira country liberalizes unilaterally, does this mean that it is repudiating the GATT? The Philippines is certainly not the most liberal in terms of its agricultural policies, but other developing countries may be in a worse position. In agreeing to the GATT and instituting adjustment measures, their agricultural sector might ironically become more overprotected. A comment was made that one can always lower excessive trade protection on the agricultural sector if the country feels.that this sector is becoming more protected. But then again, it may be more difficult to institute the country's own reforms if it has. ratified the GATT for it is a binding document.

TARGETING TRANSFERS TO THE POOR: THE CASE OF FOOD SUBSIDIES

ARSENIO M. BALISACAN

INTRODUCTION

ROVIDING SAFETYNETS to the poor is a popular calleven in development policy discussions. The provision is viewed tO be more critical for developing countries pursuing structural and macroeconomic adjustment reforms aimed at bringing an economy to a stable and sustainable growth path. Such reforms often accompany changes which have disruptive effects on the poor's welfare such as sharp increases in the prices of goods and basic services. For instance, when an exchange rate realignment in the form of devaluation is resorted to in an effort to alter the pattern of domestic spending and restore the competitiveness of the country's exports, food subsidies are the common safety nets suggested to minimize the short-run effects of the adjustment on the poor. A tight budgetary constraint, however, does not permit a generous amount for food subsidies. Two issues stand out: How much of the limited budget should be allocated for food subsidies? Given this amount, how can food subsidies be designed in such a way that a maximum reduction in aggregate poverty is achieved? Put differently, what is the optimal pattern

This paper draws largely from a report prepared by the author for the Agribusiness System Assistance Program (ASAP) supported by the United States Agency for International Development (USAID). The opinions expressed herein are those of the author and do not necessarily reflect the views of USAID or ASAP,

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

of food subsidies when the objective is poverty minimization? If the poor can be identified costlessly, "leakages" of subsidies to the nonpoor are minimal, and hence poverty alleviation is achieved at least cost. In practice, tile identification of the poor is not cheap: the administrative costs involved in periodically getting information from hundreds of thousands, if not millions, of households are potentially enormous. This paper shows how these costs and other considerations affect the optimal pattern and design of poverty-focused food subsidies. Food subsidy programs may have other objectives apart from directly providing income transfers to the poor. Such objectives may include food price stabilization in the context of a sharp fluctuation in international prices and domestic supply shocks, tile provision of benefits to politically vocal interest groups (e.g., the urban working class), and an improvement in the nutritional status of the population. An evaluation of the relative efficiency of alternative policy instruments in achieving these multiple objectives is desirable, but this necessarily makes the analysis much more complex than the one being pursued here. It bears noting, however, that food price subsidy programs in the Philippines have been justified primarily in terms of poverty alleviation objectives, at least as gleaned from official policy statements (Balisacan et al. 1993). Moreover, since the recent policy discussion regarding macroeeonomic adjustment reforms, including exchange rate realignment, recognized the need to cushion the short-term impact of these policies on the poor, especially on their food consumption, the design of a food subsidy program is certainly worth (re)examining. DEFINING

AND QUANTIFYING

POVERTY

Assessing tile impact of income transfers on poverty requires tile proper identification of the poor as well as the aggregation of data on the poor into a single measure of poverty. These requirements have been widely discussed in the literature; no attempt is made to repeat the discussion here. I

I. For an excellent introduction to poverty and measurement, see Ravallion (1992).

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181

For our purposes, we use the current consumption of the household, adjusted for differences in household size and composition, as an indicator of the welfare levels of households. From hereon, we simply refer to the adjusted household consumption as per capita consumption. A household is deemed poor if its per capita consumption is less than the preddtermined poverty line. There are many ways of arriving at such a line, but for our purposes, we employ the set of nutrition-based poverty lines estimated by the National Statistical Coordination Board's Technical Working Group (NSCB-TWG) on Poverty Determination (TWG 1993). Most poverty studies in the Philippines have focused on the familiar head-count index as an overall measure of aggregate poverty. This is simply the proportionate number of the population deemed to be poor. This index has serious shortcomings. First, it is insensitive to the depth of poverty. A poor person may become poorer but measured poverty will remain the same. Second, it is also insensitive to transfers. An income transfer from a poor person to one who is less poor does not change measured poverty. However, its advantage is that it is easily understood and communicated. Another familiar measure of aggregate poverty is the poverty gap, which is measured as the arithmetic mean of the income shortfall (expressed in proportion to the poverty line) over the whole population. This measure is sensitive to both the number of the poor and the degree of their poverty. One objection to its use, however, is that it is insensitive to the redistribution of income within the poor group owing to the equal weights attached to the various poverty deficits. Sen (1976, 1981) contends that an aggregate poverty index must convincingly capture differences in the severity of poverty. This concern is captured by the distribution-sensitive index proposed by Foster ¢t al. (1984). The index, hereafter referred to simply as the distribution-sensitive measure, is calculated in the same way as the poverty gap index except that the 2 weights are simply the squared income shortfalls. Measured poverty using 2. This measure has been popular in recent empirical work owing to its appealing properties. See, tbr example, Greet and Thorbecke (1986), Ravallion and van de Walle (1991), and Besley (1990).

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

tills index decreases whenever a transfer of income takes place from a pool household to a poorer one, thereby overcoming the limitation of the poverty gap index. Its drawback is that it is not as easy to interpret as the head-count and poverty-gap indices. Nonetheless, the key point to bear is that a ranking of dates, socioeconomic groups, or policies in terms of the distributionsensitive index should reflect well their ranking in terms of the severity of poverty. It is not the precise number per se that makes the measure useful, but rather its ability to order distributions in a better way than the alternative measures, The three foregoing indices are employed in this paper. Depending on the objective of public policy, each one is useful in the design of a food subsidy program. THE TARGETING

PROBt,

Where income can be observed correctly and costlessly, and where no incentive effects prevent the government from closing the income gap of the poor (e.g., individuals are prevented from claiming to have incomes below the poverty line in order to exact a subsidy), then the ideal solution to the policy objective of eliminating poverty is to provide each poor individual an amount equal to Iris income shortfall. This solution is depicted in Figure 1. The total budget required to eliminate poverty is the area OAZ Clearly, this solution gives the least-cost method of reducing poverty. In reality, however, information about the poor is not perfect and is costly to acquire, and incentive effects are hardly zero. Since it is extremely costly to periodically screen the poor from the nonpoor -- especially ifth is involves hundreds of thousands, if not millions, of households -- a generalized (universal) subsidy might be a preferable scheme to alleviate poverty. In such a case, everybody in the population, regardless of income, receives a subsidy. This scheme is also depicted in Figure 1. A universal subsidy of OZ for each person in the population "guarantees" the elimination of poverty. Note, however, that the budgetary outlay will be much higher than that corresponding to the ideal solution. This outlay is simply

FIGURE 1

Universal Transfer and Ideal Solution to the Targeting Problem

Cumulative Proportion of Population

N o -.t

1oo%-

z ---t

o .--I .-I-

rn 0

/" Z

I=. Income

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

the population size times the poverty line. In imposing a balanced budget, the higher outlay suggests that the tax rate of the nonpoor under this scheme will be greater than that under the ideal solution. Universal subsidy is thus a costly scheme precisely because of the leakage of subsidies to the nonpoor as well as the excess in the amounts required to alleviate if not eliminate the income shortfalls of the not-so-poor. Acquiring information about the potential beneficiaries' eligibility to subsidies reduces the leakage and, hence, the required outlay. But as more information is acquired to improve the fineness of targeting (i.e., to further reduce leakage), the administrative cost of targeting is likely to rise. For example, the administrative cost of targeting subsidies by area of residence may be relatively low, but leakages of the benefits to the nonpoor in the targeted area may still be considerable. The acquisition of other household welfare indicators (e.g., level and sources of income of household members) will reduce the leakage but on ly at the expense of rising administrative costs. This suggests that an optimal solution to the targeting problem is likely somewhere between the ideal solution and the universal scheme. The targeting problem is illustrated in Figure 2. The line E traces the combination of the number of targeting indicators employed in identifying the potential beneficiaries and the remaining external (or social) cost of poverty, given the poverty alleviation budget. Its vertical intercept B is the remaining social cost if the budget is allocated universally, i.e., no targeting indicator is employed. The cost falls as the number of targeting indicators, m, increases, possibly reaching zero as m becomes very large. If poverty is measured in terms of the poverty gap index, then E is simply the sum of the income shortfalls of the poor. The line A, on the other hand, is the administrative cost of targeting; this cost rises with the number of targeting indicators employed. The problem is liow to choose m so that the sum of A and E, given by the line C, is minimized. Clearly, the optimal solution is hi*, determined by the equality of the (absolute) slopes oftheA and E lines. This solution also suggests that it is never optimal t° completely eliminate poverty through targeting considering the administrative costs involved.

FIGURE 2 Optimal Targeting

Cost Ill .-{

"-1 Z m

B _,

C "-I '1" rn

E -m*

•

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

TARGETING BASED

ON EASILY

SUBSIDIES

OBSERVABLE

CHARACTERISTICS

Given limited information about individual incomes and responses, food subsidies can be given using categorical targeting, meaning subsidies are targeted based on easily observable household characteristics, such as place of residence or age of household head. One such scheme uses ration shops for food, whereby a certain amount of food is made available to a certain location at a below-market price. If resale cannot be prevented, then all purchasers of this shop, in effect, receive a lump-sum income transfer equal to the ration quantity times the difference between the market price and the ration price. Thus, if the patrons of ration shops are, on average, the socially deserving ones, the scheme serves as a targeted transfer program. The benefits of the program are maximized if ration shops are located in areas or regions where the incidence of poverty is greatest. In contrast to transfer programs that depend on information such as the applicants' incomes and expenditures, the administrative cost under this scheme need not be high. Kanbur (1987) discusses a targeting rule for a case where the policy instrument is a set of lump-sum transfers differentiated by certain easily observable characteristics. The problem is to target these transfers to (mutually exclusive) population groups so as to minimize aggregate expected poverty, as measured by a suitable index (in this case, the class of poverty measures discussed in the second section, p. 180). It turns out that the budgetary rule is fairly simple: if the objective of public policy is to minimize the distribution-sensitive measure, more of the transfers should be directed towards groups for which the average poverty gap is greater. 3 On the other hand, if the objective is to minimize the poverty gap, the head-count index is the appropriate indicator for budget allocation, with maximum benefit directed to the group with the highest head-count index. 3. 'l'horbccke and Berrian (1992) provide a generalization of the Kanbur budgetary rule by allowing both direct and indirect effects of an exogenously supplied budget on aggregate poverty. The inlbrmation required to implement the general rule is, however, much more complex than the Kanbur rule,

BALISACAN: TARGETINGTRANSFERS TOTHE POOR

187

TABLE 1 Priority Provinces for Poverty Alleviation

Head-count

Poverty gap

EGCDP

Incidence

Rank

Incidence

Rank

Priority provinces

Abra

91,66

43.60

Romblon

89.74

43.79

Ifugao

88,25

47.26

Davao Oriental

83.62

37.10

Camiguin

81.77

35,93

Zamboanga del Norte

80.63

35.91

Misamis Occidental

80.07

38.32

Agusan del Sur Bohol

79.70 78.26

8 9

36,99 33.77

7 10

Quirino

78.09

31..33

Masbate

77.66

37.64

Capiz North Cotabato

77.49 77.40

12 13

29.57 32,14

16 11

Palawan

77.02

29.27

Marinduque

76.30

27.36

Province

Sorsogon

75.12

26,17

Antique Northern Samar

74.23 73.66

17 18

31.64 22.89

12 41

Oriental Mindoro

73.47

29.14

Samar (Western)

73.26

26.94

Bukidnon

72.46

3161

Albay

72.39

28.12

Basilan

71.06

23.57

Sulu

70.74

21.49

Surigao del Norte

70.05

24.91

Kalinga Apayao

70.04

25.88

188

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT TABLE 1 (continued) Head-count

Province

Poverty gap

EGCDP

Priority Rank ,pr°vinces

Incidence

Rank

Incidence

Surigao del Sur

68,56

25:34

Negros Oriental Lanao del Norte

68,40 65.67

29 35

27,82 25.95

20 25

Agusan del Norte

64.51

27,60

Siquijor Aurora

64.49 60.23

38 44

29.68 i 9.81

15 49

Eastern Samar

59.16

24.66

Mt. Province

56.67

17.81

Southern Leyte

55.68

14,68

Benguet Batanes

52,79 40,86

60 67

15.02 11.16

63 66

Tawi-tawia Biliran Guimaras

* * * * *

"Estimates not reported due to data discrepancy. Source: National Statistics Office, Family Income and Expenditures Survey,1991.

BALISACAN:TARGETING TRANSFERS TO THE POOR

189

Table 1 shows the top 25 "most depressed" provinces (out of 76) based on the poverty gap and head-count indices. The resulting lists of most depressed provinces are not identical for the two rankings. Four of the 25 "most depressed" provinces based on the poverty gap index are not classified as such under the head-count index. Moreover, the ranking of the provinces varies substantially for the two indices. Abra, for example, is the most depressed province if the ranking is based on the head-count index, but lfugao acquires this label if such ranking is based on the poverty gap index. Put differently, Abra gets the highest priority for the poverty alleviation budget if the objective of public policy isto obtain from the (limited) budget the highest reduction of the aggregate poverty gap index. If the objective is to minimize the distribution-sensitive measure, then Ifugao gets the highest priority. The last column of Table 1 lists the 19 provinces recently identified by the Ramos administration as priority areas under the Employment Generation Through Countryside Development Program (EGCDP). This program is a pump-priming activity aimed at stimulating employment, increasing production, and generating domestic capital and consumption. It is set to run for three years and estimated to cost approximately P23 billion. Out of •the 19 provinces, only eight belong to the top 25 most depressed provinces identified using the two poverty-based ranking approaches. Even more noteworthy is that five of the provinces (excluding Tawi-Tawi) included in EGCDP are among those with the lowest poverty in the country. it is useful to have a monetary measure of the gains from categorical targeting. For this purpose, we specify the gains in terms of the additional budgetary outlay required under a universal (untargeted) transfer scheme to obtain the4same aggregate poverty reduction as that achieved by categorical targeting. We assume that the objective of public policy is to minimize the distribution-sensitive poverty index. Figure 3 shows the monetary gains for the case of regional targeting, i.e., the only household characteristic used in identifying the potential

4. For this purpose, we follow Ravallion's (1993) extension of the Kanbur approach.

FIGURE 3 Monetary Gains of Targeting (In billion pesos)

_o o

Gain 160 140 120

Gain rn co

100

r_ co O

_. co C)

I 0

15 TRANSFER

z O m <

r-m O '10 rrl z -I

BALISACAN:TARGETING TRANSFERS TO THE POOR

191

beneficiaries of the subsidy is the region of residence. For the data used, the gains from regional targeting are very large. For example, a budget of P2 billion, if properly targeted, will achieve the same poverty reduction as that of P18 billion of untargeted transfers, or P 16 billion of gain. Note that the gains increase with the size of the budget but at a decreasing rate. One can take further steps in improving the gains from categorical targeting. For example, in addition to region of residence, information on province of residence of the household can be employed to refine the targeting scheme. The addition of this information increases the monetary gains from targeting since, as shown in Table 1, substantial variation in provincial poverty levels exists. This additional variable should shit_ upward the targeting gain curve in Figure 3. Measuring this shift is an interesting exercise, but is not pursued here. Even though the only information employed is the household's region of residence, estimates of the gains from targeting are relatively large. ADMINISTRATIVE

COSTS

OF FOOD SUBSIDY

PROGRAMS

The administrative costs of a food subsidy program depend on the implementing agency's administrative capability as well as on the type of administrative scheme employed in providing the subsidy. One widely employed scheme requires the use of program personnel to screen each potential beneficiary on the basis of various criteria, such as household income or nutritional status. This is referred to as means testing (alternatively referred to in this paper as income testing). Another scheme relies upon individual decision, leaving the choice to participate or not to the potential applicant. In principle, the program is available to all, but is designed in such a way that the nonpoor are discouraged from availing themselves of the subsidy. The time involved in acquiring the subsidy, the low quality of the food subsidized, or the stigma attached to being dependent on a food subsidy program, are some of the devices used to encourage this so-called self-targeting. In between the two schemes are various types of categorical targeting mechanisms, such as the one discussed in the fourth section (p. 186). The central

192

ESSAYS'IN SOCIALSCIENCE AND DEVELOPMENT

feature of these schemes is that eligibility is granted to groups of potential beneficiaries who share some easily identifiable characteristics. Available estimates of the administrative costs of food subsidy programs are scanty. In the Philippines, the only careful analysis of these costs that we are aware of is that on the Pilot Food Discount Program implemented by the National Nutrition Council of the Department of Agriculture in the early 1980s. This program covered three villages in each of the three selected provinces (Abra, Antique, and Cotabato). Only villages where 25 percent of preschoolers had moderate or severe malnutrition, based on weight for age, were included. All bonafide residents of the selected villages were automatically eligible for a ration (discount) card which guaranteed a monthly quota of rice and cooking oil at a subsidized price of 32 and 50 percent of the market price, respectively. The subsidized commodities were delivered through existing retailers in program areas; in return for the burden of seeking for reimbursement of discount value from participating rural banks, retailers received an incentive of 3 percent of the gross sale of the subsidized commodities. The administrative overhead costs of this program covered part of the salaries of the extension workers (who devoted 50 percent of their time to the program), travel costs for monitoring officers, salaries for central office project administration, printing costs for the discount cards, and the cost of supplies. These costs amounted to 9.4 percent of the program cost; retailers' incentives accounted for another 7.2 percent (Garcia and Pinstrup-Andersen 1987: 71). Note that these estimates pertain to a pilot program. It is likely that in a national program, several layers of supervisory infrastructure, from the central office to the region, province, and villages, would be necessary, thereby raising further the administrative costs. Comparative cost estimates based on the experiences of other countries could provide some indications of the relative administrative cost advantage of a targeted subsidy program. Moreover, intercountry comparison of experiences, while not exhaustive, provides an international perspective on the administrative cost of food-subsidy targeting in the Philippines. The comparison is, of course, a potentially hazardous exercise since different

BALISACAN:TARGETING TRANSFERS TO THE POOR

193

countries have different administrative capacities, political and social institutions, and objectives in providing assistance to certain population groups. Nonetheless, in the absence of administrative cost estimates of delivering food assistance to the poor in the Philippines apart from the aforementioned pilot program, the comparison provides a better informed basis for the estimation of the likely gains from targeting food subsidy to certain population groups. In Latin American countries, for programs making use of individual assessment (including income testing), total administrative cost as a proportion of total program cost ranged from 0.4 to 29 percent (Grosh .1993). In the case of geographic targeting, the range was from 4 to 16 percent. For self-targeting mechanisms, the range was from 3 to 10 percent. The median for these countries was 9 percent for individual assessment schemes, 7 percent for geographic targeting, and 6 percent for self-targeted schemes. The Mexican milk subsidy, program aimedat the urban poor was means-tested. Using complex administrative procedures. Targeting indicators were income and the presence of children under twelve years old or of pregnant women in the household. The program had an administrative cost of 26 percent of total program cost (Kennedy 1988: 150). Entitlement to the Sri Lankan food stamp program in the 1980s was means-tested. Stamps were issued to households based on income and number of children. Prior to this, Sri Lanka had a universal rice, wheat and sugar subsidy. The administrative costs of the food stamp program were estimated to be only 2 percent of the program cost (Cornia and Stewart 1993). A major factor that contributed to the low cost was the implementing agencies' high administrative competence partly made possible by the country's relatively long experience with food subsidy programs. The means-tested Jamaican food stamp program in the 1980s had an administrative cost of about 4 percent of total costs (Cornia and Stewart 1993). Another estimate put the administrative cost at around 10 percent of program cost (Grosh 1993). In seven UK programs, administrative cost was about 3.5 percent of program cost for universal programs, but between 5 percent and 15 percent

194

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

for means-tested programs. In the US, administrative cost represented about 2.5 percent for universal programs and 12 percent for means-tested programs (Comia and Stewart 1993). In one extreme case, a targeted US veterans' program had an administrative cost amounting to 95 percent of the benefits transferred (World Bank 1988). Based on this (limited) evidence, the administrative cost of a targeted food subsidy program is greater than that of a universal (general) program. It also appears that the administrative cost of the pilot food subsidy program in the Philippines was high by international standards, but not so much higher. A similar program implemented nationwide is, however, likely to require much higher administrative costs. Based on other countries' experiences, it. is reasonable to assume that a national poverty-focused food subsidy program employing categorical targeting schemes would have an administrative cost of anywhere from 10 to 30 percent of total program costs, It would require extremely large administrative costs to outweigh the monetary gains from categorical targeting ofinfra-marginal income transfer programs, at least in the case of the Philippines. Take, for instance, the upper limit of the range of administrative costs given earlier, i.e., 30 percent of total program costs (administrative plus transfer costs). This translates to about 43 percent of the total amount of budgetary transfer. This cost schedule is depicted as 1AC1 in Figure 4 which also shows the incremental monetary gain of a regional targeting scheme. Clearly, in this case, the incremental gains of regional targeting are exceeded by increases in administrative costs only if the total amount of budgetary transfers exceeds P48 billion. The optimal budgetary transfer corresponds to about 6 percent of pretransfer total expenditures. Doubling the administrative cost of a targeted transfer program -- depicted by/AC2 -- reduces but not eliminates the net gains from regionally differentiated transfers. In this case, the optimal budgetary transfer is P43 billion. This amount is huge, representing about 19 percent of the national government budget in 1991. Other considerations, left unspecified so far, are likely to work against a generous poverty alleviation budget (seventh section, p. 204).

FIGURE 4

r"lR

Incremental Gain and Administrative

Cost of Targeting

(In billion pesos)

_> z

16-14

_-t -rl m -'1

O m

IAC1

2 0

IAC2 I

IG - IncrementalGain IAC -IncrementalAdministrativeC0st

25 30 TRANSFER

_o 01

196

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

THE CHOICE

OF COMMODITY

TO SUBSIDIZE

Thus far, the assumption has been that afixed quantity of food is provided at below-market prices.!fresale of rations cannot be prevented, the subsidy is, therefore, equivalent to an income transfer to all those eligible for the program. In many instances, however, food subsidy has been provided through a reduction in the market price for every unit that is purchased. The National Food Authority's rice stock management-cum-monopoly of rice trade has the effect of reducing the market price vis-fi-vis the world price. In this case, the size of the income transfer to each person (or household) depends on the quantity purchased. Thus, if the commodity is a normal good (i.e., the household's demand for it rises with household income), the subsidies received by the rich are greater than those received by the poor in absolute terms. On the other hand, if the subsidized commodity is an inferior good (i.e., household's demand for it falls with household income), more of the benefits would accrue to the poor. Kanbur and Besley (1988) have provided budgetary rules for the choice of commodities to subsidize. For the simple case where the objective of policy is to minimize poverty at the national level, the appropriate indicator is simply the ratio of the quantity consumed by the poor to the total consumption of the population. Food commodities that are ranked highest in the list based on this indicator should be prime candidates for price subsidy. We will employ this indicator in examining the likely distributional incidence of food price subsidies. For our purposes, we characterize the poor according to the severity of their poverty. Denote the food threshold and the poverty threshold set by NSCB-TWG on Poverty Determination as zl and z3, respectively. Also, denotethe average of zl and z3 as z2. On this basis, the "ultra poor" are defined as those whose per capita expenditures fall short ofzl. The "near ultra poor" are those whose per capita expenditures are less than z2 but greater than zl. The "marginal poor" are those having expenditures less than the z3 but greater than z2. Finally, the "nonpoor" are those with a standard of living greater than z3. Based on the 1991 FIES consumption

BALISACAN:TARGETING TRANSFERS TO THE POOR

197

data, for the whole country, 32 percent of the population are ultra poor, 13 percent near ultra poor, ! 1percent marginally poor, and 44 percent nonpoor. The rice price subsidy has been justified on the ground of alleviating poverty, but clearly, political economy considerations have likewise been a factor. The price of rice, the main staple of the bulk of the population, has become a politically sensitive issue. Table 2 shows the respective shares of the four population groups in total rice consumption. The consumption of the ultra poor represents barely one-fourth of the national total, while that of the nonpoor comprises about one-half (about two-thirds of which are by the urban nonpoor). The consumption shares of the near ultra poor and the marginal poor correspond to about the same percentages as their respective shares in the total population. Thus, if the objective is to reduce national poverty, then the rice price subsidy is unlikely to do a good job because of the potentially high leakage of the benefits to the nonpoor. Table 3 shows similar calculations for corn, a staple food for a segment of the population in the Visayas and Mindanao. Unlike in rice, the corn consumption of the ultra poor---mostly from rural areas -represents 62 percent of the national consumption. The consumption of the near ultra poor comprise 11 percent. The nonpoor's consumption represents only one-fifth of total consumption. Thus, on this basis, corn appears to be a good candidate for price subsidy. However, corn price subsidy as a vehicle for poverty alleviation may not receive enough political support since corn is not a staple food for most of the population. There are limitations in using the "consumption by the poor" ratios given in Tables 2 and 3 to assess the impact of a food price subsidy. First, the assessment has to take account of possible changes in the commodity mix of consumption as a result of relative price changes induced by the subsidy. There are ample evidences showing that the poor are responsive to changes in the relative food prices, even much more so than the nonpoor (Alderman 1986). Second, as shown by Besley and Kanbur (1988), the "consumption by the poor" ratios are strictly valid only if the poverty

•198

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT TABLE 2 Shares of the Poor in National Rice Consumption Near

Mar-

Region

Ultra poor

ultra poor

ginal poor

Nonpoor

Total

Philippines

23.46

12.62

10.87

53,04

100.00

Urban

9.48

5.41

5,43

32,04

52,35 i

Metro Manila

0.56

1.12

1,55

12.39

15,62

IlocosRegion

1.18

0.27

0.19

0.69

2.34

CagayanValley

0,22

0.09

0.06

0.64

1.01

CentralLuzon

0.64

0.92

3.87

6.36

SouthernTagalog BicolRegion

1.46 1.05

0.89 0.17

0.94 0.16

4.20 0,54

7.49 1.92

WesternVisayas CentralVisayas

1.29 0.28

0.26 0.19

0.22 0.18

2.52 1,81

4.31 2.46

EasternVisayas

0.32

0.09

0,06

1.13

1.59

WesternMindanao

0.23

0.16

0.17

0.75

1.30

NorthernMindanao

0.50

0.48

0.36

1,08

2.43

SouthernMindanao

0.63

0.40

0.30

1.62

2.95

CentralMindanao CordilleraAutonomous Region

034

0.29

0.22

0.46

1.81

0.28

0.07

0.09

0.33

0.76

BALISACAN: TARGETING TRANSFERS TOTHE POOR

199

TABLE 2 (continued)

Region

Ultra poor

Near ultra poor

Marginal poor

Nonpoor

Total

Rural

13.98

7.22

5.45

21.01

47.65

IlocosRegion

1.08

0.86

0.34

1,60

3.88

CagayanValley Central Luzon

0,68 0.56

0.20 0.76

0.26 0.59

1.66 3.12

2.79 5.03

SouthernTagalog

1.77

1.07

0.88

3.60

7.31

BicolRegion

2.08

0.47

0.43

1.75

4.74

WesternVisayas

1.84

1.32

0.77

2.30

6.22

CentralVisayas

0.75

0,07

0.14

0.63

1.59

Eastern Visayas

0.89

0.61

0.48

1,53

3.51

WesternMindanao NorthernMindanao

0.53 1.05

0.39 0.51

0.23 0.43

1.15 0.69

2.30 2.68

SouthernMindanao

0.70

0.48

0.34

1.07

2.59

CentralMindanao CordilleraAutonomous Region

1.57

0.25

0.27

1.40

3.50

0,49

0.24

0.29

0.50

1.52

Source. National Statistics Office, Family Income and Expenditures Survey,1991

200

ESSAYSIN SOCIALSCIENCEAND DEVELOPMENT

TABLE 3 Share of the Poor in National Corn Consumption

Region

Ultra poor

Near ultra poor

Marginal poor

Nonpoor

Total

Philippines

61.74

11.26

6.96

20,03

100,00

Urban

17.36

4.21

2,59

6,18

30.34

MetroManila

0,04

0.12

0,11

1,21

1.48

IlocosRegion

0,05

0.01

0.07

0.14

CagayanValley CentralLuzon

0.10 0,03

0,01 0.06

0.01 0.04

0.07 0.46

0.19 0.59

SouthernTagalog

0.08

0,02

0,04

0.45

0.59

BicolRegion

1.46

0.00

0.01

1,48

WesternVisayas

0.24

0.01

0.00

0.21

0.47

CentralVisayas

5.00

1.68

1.21

2.60

10.48

EasternVisayas Western Mindanao

0.54 1,55

0.11 0.48

0.00 0.01

0.24 0.14

0.89 2.17

NorthernMindanao

3.01

0.71

0_99

0.10

4.81

SouthernMindanao

4.95

0,77

0.16

0.55

6.43

Central Mindanao CordilleraAutonomous Region

0.31

0.23

0.00

0,02

0.56

0.01

0.00

0.01

0.04

0.06

BAUSACAN: TARGETINGTRANSFERS TOTHE PGOR

201

TABLE 3 (continued)

Region

Ultra poor

Near ultra poor

Marginal poor

Nonpoor

Total

Rural

44.38

7.05

4.37

13.85

69.66

Iloces Region

0.07

0.03

0.17

0.30

CagayanValley CentralLuzon

1.84 0.08

0,18 0.13

0.02 0.03

0.46 0.37

2,50 0.61

SouthernTagalog

0.32

0.10

0.17

0.39

0.98

Bicol Region

0.96

0.41

0,03

0.42

1.82

WesternVisayas

1.83

1.10

0.88

1.13

4.94

Central Visayas

14.66

1.16

1.05

3.99

20.85

Eastern Visayas WesternMindanao

1.64 5.34

0.19 0.61

0.40 0.43

0.66 1.84

2.89 8.21

NorthernMindanao

6.62

1,46

0.44

0.79

9.32

SouthernMindanao

6.49

1.46

0.80

2.09

10.83

Central Mindanao CordilleraAutonomous Region

4.48

0.19

0.09

1.53

6.28

0.06

0.03

0.02

0.12

Source: NationalStatisticsOffice,Family Income and Expenditures Sumey,1991

202

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

alleviation objective is the minimization of aggregate poverty gap, and the Engel curves for food show a significant nonlinearity. In this paper, we employ a simple, yet flexible, model of consumer demand system to further assess the probable impact of food price changes on household welfare. The varied responses of the various income groups of urban and rural households to price changes-based on estimates of Balisacan (1994b) -are incorporated in the model. 5 For our purposes, we have classified expenditures into five groups: rice, corn, other cereals, other foods, and nonfood. Two simulations are performed: one for a 20 percent decrease in the price of rice, and another for a similar decrease in the price of corn. The changes in real income owing to the price change are aggregated at the national level, and then the shares of the four population groups in the total change are calculated. The results are summarized in Table 4. In the case of the rice price subsidy, the share of the ultra poor in the national increase in equivalent incomes is only about 20 percent, while that of the nonpoor is about 60 percent. The 40 percent share of all the poor combined is even lower than that indicated in Table 2. About two-fitths of the increase in aggregate income is captured by the urban nonpoor. Clearly, a rice price subsidy has substantial leakage to the nonpoor. Note, however, that while the share of the ultra poor in the total increase in aggregate income is much smaller than their share in population, the average percentage increase in their income level is higher than for the rest of the population, as clearly indicated by the figures in parentheses in Table 4. This arises from the greater expenditure share of rice for the ultra poor and from their greater responsiveness to rice price changes. The extent of benefit leakage is less for the corn price subsidy. About three-fourths of the aggregate increase in equivalent income accrues to the poor, with the ultra poor benefiting the most. The rural ultra poor who comprise about 39 percent of the rural population, capture 38 percent of the increase. Note also that, as in the rice price subsidy, the proportionate changes in incomes are higher for the poor than for the nonpoor in both urban and rural areas. 5. See Balisacan (1994b) for details of the estimation.

BALISACAN: TARGETINGTRANSFERS TOTHE POOR

203

TABLE 4 Share of the Poor in Total Change of National Consumption

Ultra poor II

iii i

Near ultra poor

Marginal poor

Nonpoor

Total

20% Rice P#ce Subsidy Philippines

18.17

10.67

10.16

61.00

100.00

Urban

(4.90) 9;25

(4.10) 5.62

(3,52) 5.89

(1.24) 41.62

62.39

Rural

(4.64) 8.92

(3,47) 5,05

(2.97) 4.27

(0.99) 19.37

37.61

(5.19)

(5.13)

(4.73)

(2.65)

Philippines

51,98

11.98

8.30

27.75

100.00

Urban

(1,38) 20.05

(0.45) 5.57

(0.28) 3.76

(0.06) 11.19

40.58

Rural

(0.99) 31.92

(0.34) 6.40

(0.19) 4.54

(0.03) 16.55

59.42

(1.83)

(0.64)

(0.49)

(0.22)

20% Com P#ce Subsidy

• Note:Values in parenthesesare average percentagechangein household expenditure. Source: NationalStatisticsOffice,Family Income and Expenditures Survej_1991,

204

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

OTHER CONSIDERATIONS IN ASSESSING THE BENEFITS AND COSTS OF TARGETED FOOD SUBSIDY PROGRAMS There are other consideratiofls that may weaken the conclusion reached so far about the monetary benefits of categorically targeted subsidy programs. First, there is the possibility that, with the presence of the food subsidy, recipients may not work so hard to earn income (wage), i.e., they may reduce their labor supply. Under the standard theory of household uti lity maximization over leisure and commodities, a change in exogenous income or in the prices of commodities affects the demand for leisure (i.e., labor allocation) as well as the Choice of commodities. If there is a high marginal propensity to demand leisure, work effort will fall with an increase in household income. Thus, if the reduction in work effort is significant, the net impact of a targeted food subsidy program on income-based poverty estimates may be quite different from that given earlier. The disincentive effects are likely to be greater for subsidy programs which impose a "benefit-reduction rate" on the level of work performed, i.e., the benefit decreases when the income of the recipient increases. No study has yet been made of how food-related income transfers have affected the labor supply in the Philippines, and the same is true with other developing countries. The only empirical analysis in this area is that by Sahn and Alderman (1993) for Sri Lanka. They found out that men receiving a rice ration worked 2.4 and 2 fewer days per month in urban and rural areas, respectively, while the comparable figures for women were 3 and 0.8. This •reduction in the level of work effort corresponded to about 50 percent of the value of the subsidy for males, and around 40 percent for females. The reduction in net benefit of the subsidy program owing to the disincentive effects on labor supply is not necessarily a loss in social welfare. The available evidence in developing countries also indicates that higher calorie intakes result in greater productivity (Gertler and Rahman 1993). Thus, to the extent that the food subsidy increase s calorie intake, the program has a positive productivity effect. Moreover, the reduction in work effort may increase the time available for home production activities,

BALISACAN:TARGETING TRANSFERS TO THE POOR

205

possibly raising home-produced consumption. Finally, to the extent that the household's utility rises with the reduction in work effort, the reduction represents, in a strict welfare sense, an increase in household welfare. Nonwelfarist advocates of food subsidy programs are, of course, more concerned with the attainment of a certain level of food consumption (e.g., to achieve nutritional goals) than with utility per se. Another consideration in designing a food subsidy program is its funding. It is unrealistic to assume that huge fiscal resources are available for direct poverty intervention programs, especially during a period of maeroeconomie adjustment. Program costs may worsen the government budget deficit, which may have been partly the raison d'etre for an adjustment program. The foregoing estimates of the monetary gains from povertyfocused targeting schemes do not take into account the effects of the program costs on macroeconomic aggregates, including exchange rate, price level, and interest rate. These effects are difficult to ignore once the program costs eat up a sizeable chunk of the government budget. The social cost of a food subsidy program depends partly on the way the program is financed. If the program's budgetary requirement is relatively small, there may be no need to raise additional revenue; the required budget may be obtained from existing (untargeted) budgetary allocation. A targeted rice subsidy program of P2 billion, for example, may be funded from the budget allocated to the National Food Authority for its various programs. This agency which is vested with too many functions, has not been effective in stabilizing food prices, providing income transfers to palay and corn farmers, and conferring rice price subsidies to poor consumers (Balisacan et al. 1993). Therefore, channeling this amount for food subsidy to the Department of Social Welfare and Development which has the administrative capability for identifying deserving beneficiaries, can considerably improve the poverty alleviation impact of the government's food subsidy program. As the budgetary requirements of a food subsidy program rise, additional revenues will have to be generated. In a developing country with poor administrative capacity'for the collection of real property and business

206

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

income taxes, trade-based taxes as well as commodity taxes are significant revenue-raising devices. However, the incremental welfare costs of raising additional revenues from trade-based taxes, such as tariffs, are large and rapidly rising. Assuming an initial tariff rate on import substitutes of 30 percent (roughly the average rate prevailing in recent years), Clarete and Whalley (1987) estimated these costs to be close to P6 per peso of additional revenues raised. Thus, a food subsidy program funded by such tax devices is likely to be extremely costly to society. Finally, one also has to be concerned about the possible displacement of private transfers by public transfers. If private and public transfers are close substitutes, an increase in public transfers could induce a reduction in private transfers, thereby diluting the effectiveness of the public transfer program. For example, if the coverage &rural works programs is expanded, remittances of relatives residing in urban areas may be reduced, so that the well-being of rural households is hardly affected by the transfer program meant for them. Evidence on the Philippines indicates that private transfers are large and responsive to household characteristics that can be affected by government policy (Cox and Jimenez 1993). The evidence further indicates that, while crowding-out of interhousehold transfers by public transfers is not complete, simple analyses that do not account for privatetransfer responses to public transfer programs could exaggerate the effectiveness of these programs in alleviating poverty. CONCLUDING

REMARKS

Food price increases that may arise from a macroeconomic adjustment program are especially inimical to the poor. Food subsidies are commonly suggested safety nets intended to minimize the impact of the program on the poor. Tight fiscal constraint does not, however, permit a generous budget for food subsidies. There is, therefore, a need to design food subsidy programs that maximize, for a given budget, the reduction in aggregate poverty.

BALISACAN:TARGETING TRANSFERS TO THE POOR

207

In reducing aggregate poverty to acertain level, a universal (untargeted) food subsidy program has substantially higher fiscal costs than a targeted food subsidy program employing readily observable information about potential beneficiaries. The information pertains to household characteristics or categories, such as area of residence and educational attainment, that are correlated with the person's (or household's) standard of living. Resorting to income testing as a means of screening the poor from the nonpoor raises the administrative cost of food subsidy programs. The simple exercise in this paper has shown that, even when the only information employed in identifying potential beneficiaries is their area of residence, an area-differentiated income transfer program amounting to P2 billion is capable of achieving the same reduction in aggregate poverty as a universal program (i.e., each person in the population receiving the same amount regardless of his or her area of residence) amounting to P I8 billion. The net gain per capita represents about 2 percent of average pretransfer expenditure. The gains are less if other considerations are taken into account (e.g., administrative costs, reduction in work effort by the beneficiaries of income transfers, and social costs of raising tax-related revenues for the subsidy program), but they are not likely to eliminate the case for targeting. A general food price subsidy to effect poverty alleviation, such as the one commonly employed by the National Food Authority (NFA), is not a cost-effective scheme. NFA's rice price subsidy has a substantially high leakage of benefits to the nonpoor whose consumption represents about one-half of the total rice consumption. Subsidizing the price of corn has a greater potential for poverty alleviation. The leakage of the subsidy to the nonpoor and the not-so-poor is minimal in corn since corn consumption of the ultra poor represents about 62 percent of the national consumption while the nonpoor's consumption comprises only 20 percent. In contrast, the share of the nonpoor in total rice consumption is 53 percent, while that of the ultra poor is 23 percent. The disadvantage of corn over rice as a target for price subsidy is that the former is a production input in the feeds/livestock industry. Leakages of the subsidized corn to this industry may end up benefiting the nonpoor

208

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

more than the poor since the share of meat and meat products in the household budget is higher for the nonpoor than for the poor, and the nonpoor are as responsive to price changes of meat and meat products as the poor (Balisacan 1994b). Nutritional considerations also weigh somewhat against corn. It is inferior in nutritional quality compared to rice which has a higher protein content and a decidedly better amino acid content. Moreover, political economy considerations constrain the choice of the commodity to be subsidized. Since rice is consumed as a staple food by the large majority of the population, rice price subsidy during an adjustment period is a politically attractive proposition, especially when labor unions can exert considerable political influence in policymaking. To maximize the benefits of the rice subsidy to the poor and to minimize the burdensome impact of the program on the government budget (and on the nonpoor), the subsidy has to be properly targeted and the amount involved must be relatively small. The use of categorical targeting reduces substantially the administrative cost of income transfer as well as the budget needed to achieve a given reduction in aggregate poverty. The efficiency of categorical targeting is further enhanced if the design also provides incentives for the poor to avail themselves of the program's benefits and for the nonpoor not to preempt these benefits. Locating ration shops in areas where the poor live, or tying up the food subsidy to participation in rural work programs (e.g., food-forwork programs), reduces the leakage of the benefits to unintended groups. Further investigations into the design of food subsidy programs are called for. It is, for example, useful to empirically examine the costs (including administrative and rent-seeking costs) and benefits of alternative •poverty-targeted programs (e.g., ration shops, food stamps, on-site feeding, school feeding). The analysis has to move beyond simply describing the static consequences of food subsidy programs to include as well the dynamic responses to these programs. It is not known, for example, how labor supply and private transfers respond to various types of food subsidy schemes.

BALISACAN:TARGETING TRANSFERS TO THE POOR

209

An assessment of the effectiveness of food policy in reducing poverty is incomplete without also looking at other policy options to achieve poverty alleviation objectives. Is a targeted food price subsidy program, for example, superior to public works programs, schooling subsidy, or investment in public health? Finally, an analysis of the public provision of social safety nets has to go beyond the economic environment and include as well the political landscape. Past efforts to design, institutionalize, and implement povertyfocused programs have failed partly because of the failure to explicitly consider political economy issues. How do the various food subsidy programs, for example, affect the goals and behavior of various government agencies, rent-seeking by public- and private-sector agents, and opportunities for coalition by program supporters (as well as by opponents)? To what extent does the outward appearance of policies matter? If it matters a great deal, political support for in-kind transfer programs (e.g., food stamps and public works programs) is likely broader than for pure cash transfers to households. Only aider political economy issues such as tliese have been adequately understood can one be confident in the effectiveness of the poverty-alleviation planning effort.

APPENDIX TABLE 1 Population Distribution by Poverty Type and Region, 1991

Near Ultra

ultra

Region

Population

Population share

poor

Poor

Nonpoor

Total

Philippines

63,135,953

32.24

12.85

10.68

44.23

100

Urban

31,619,220

50.08

24.68

11.76

10.64

52.92

1O0

Metro Manila

8,824,076

27.91

5.98

10.94

11.47

71.61

100

.-<

Ilocos Region

1,422,872

4.50

43.78

10.74

7.21

38.27

100

Cagayan Valley Central Luzon

600,139 3,696,913

1.90 11.69

30.47 15.67,

18.28 16.05

10.84 16.14

40.41 52.15

100 100

Southern Tagalog

4,335,606

13.71

22.54

11.07

10.26

56.14

100

o_rO

Bicol Region

1,358,006

4.29

56.83

9.72

7.49

25.96

100

Western Visayas

2,209,088

6.99

36.43

5.80

6.64

51.13

100

o m > Z (D

113

< 133 TO

"10 Ilt Z

APPENDIX TABLE 1 (continued) Near

Region

Population

Population share

Ultra poor

ultra poor

Poor

Nonpoor

Total

Central Visayas

2,018,956

6.39

35.21

9.04

7.75

48.00

100

Eastern Visayas Western

1,007,099

3.19

36.33

10.15

8.90

44.62

100

Mindanao Northern

1,013,977

3.21

30.80

12.33

12.19

44.68

100

Mindanao Southern

1,694,613

5.36

35.58

17.37

11.37

35.68

100

zco _n co

Mindanao

2,070,503

6.55

34.59

13.79

8.78

42.84

100

o .-(

Central Mindanao CordilleraAutono-

982,992

3.11

54.61

13.63

8.41

23.36

100

mous Region

384,381

1.22

24.26

8.66

1.7.38

49.70

100

Rural

31,516,733

49.92

39.82

13.95

10.73

35.50

100

llocos Region

2,121,535

6.73

29.98

18.38

12.02

39.62

100

Cagayan Valley

1,803,850

5.72

38.09

10.87

11.15

39.88

100

Central Luzon

2,686,596

8.52

12.23

15.32

13.66

58.78

100

> z >

c_ m _z c_

"3-

rn -o o o

APPENDIX TABLE 1 (continued) Near Population

Uttra

ultra

Region

Population

poor

Poor

Nonpoor

Total

•Southern Tagalog

4,074,346

12.93

29.70

15.51

12.60

42.t9

100

Bicol Region

3,140,036

996

54.27

9.39

6.37

29.97

100

Western Visayas

3,495,397

11.09

32.69

20.12

15.59

31.60

100-

• Central Visayas

2,483,875

7.88

68.36

4.67

3.16

23.81

100

Eastern Visayas

2,319,255

7.36

40.53

15.67

13.23

30.57

100 m

Western Mindanao

2,212,116

-. 7.02

' 46.70

9.01

7.57

36.72

100

Northern M indanao

2,029,941

6.44

47.77

17.03

9.44

25.76

100

Southern Mindanao

2,349,674

7.46

38.40

18.63

11.96

31.01

100

-< Co -_ Co o

CO C)

Central Mindanao

1,949,188

6.18

50.07

7.19

6.41

36.34

100

_z CI m

Cordillera Autonomous Region

z 850,924

2.70

38.t 0

19.58

17.47

24.85

100

_ m

m r-

Source: National Statistics Office, Family Income and Expendi{ures Survey, 1991.

O -_ m z .-f

BALISACAN:TARGETING TRANSFERS TO THE POOR

213

BIBLIOGRAPHY

Alderman, Harold. The Effect of Food Price and Income Changes on the Acquisition of Food by Low-Income Households. Washington, D.C.: International Food Policy Research Institute, 1986. Atkinson, A.B. "On the Measurement of Poverty." Econometrica 55 (1987): 749-64. Balisacan, Arsenio M. "Demand for Food in the Philippines: Responses to Price and Income Changes." Paper presented at the Third Workshop on Projections and Policy Implications of Medium and Long Term Rice Supply and Demand, Bangl_ok, Thailand, 24-26 January 1994a. . "Design of a Poverty-Targeted Food Subsidy Program in the Philippines." Quezon City: University of the Philippines, School of Economics, 1994b. Balisacan, Arsenio, Ramon Clarete, and Angelita Cortez. "The Food Problem in the Philippines." Final report prepared for the International Food Policy Research Institute, Washington, D.C., 1993. Besley, Timothy. "Means Testing Versus Universal Provision in Poverty Alleviation Programmes." Economica 57 (1990): 119-29. Besley, Timothy and Ravi Kanbur. "Food Subsidies and Poverty Alleviation." Economic Journal 98 (1988): 701- 19. Besley, Timothy and Ravi Kanbur. "The Principles of Targ6ting." In V.N. Balasubramanyam and Sanjaya Lall (eds.) Current Issues in Development Economics. London: Macmillan, 1991. Clarete, Ramon and John Whalley. "Comparing the Marginal Welfare Costs of Commodity and Trade Taxes." Journal of Public Economics 33 (1987): 357-62. Cornia, Giovanni Andrea and Frances Stewart. "Two Errors of Targeting." Washington, D.C.: World Bank, 1993. Cox, Donald and Emmanuel Jimenez. "Private Transfers and the Effectiveness of Public Income Redistribution in the Philippines." Washington, D.C.: World Bank, 1993.

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Deaton, Angus and John Muellbauer. "An Almost Ideal Demand System." American Economic Review 73 (1980): 312-26. Foster, James E., Joel Greer, and Erik Thorbeeke. "A Class of Decomposable Poverty Measures." Econometrica 52 (1984): 761- 66. Garcia, Marito and Per Pinstrup-Andersen. The Pilot Food Price Subsidy in the Philippines: ks impact on Income, Food Consumption, and Nutritional Status'. Research Report 61. Washington, D.C.: International Food Policy Research Institute, 1987. Gertler, Paul J. and Omar Rahman. "Social Infrastructure and Urban Poverty in Asia." Paper presented at the Asian Development Bank Conference on Critical Issues and Policy Measures to Address Urban Poverty, Manila, 1993. Greer, J. and E. Thorbecke. "A Methodology for Measuring Food Poverty Applied to Kenya." journal of Development Economics 24 (1986): 59-74. Grosh, Margaret E. "Administrative Costs and Incidence in Targeted Programs in Latin America: Towards Quantifying the Trade-off." Washington, D.C.: World Bank, 1993. Kanbur, S.M. Ravi. "Measurement and Alleviation of Poverty: With an Application to the Effects of Macroeconomic Adjustment." IMF Staff Papers 34. international Monetary Fund, 1987. Kennedy, Eileen T. "Alternatives to Consumer-Oriented Food Subsidies for Achieving Nutritional Objectives." In Per Pinstrup-Andersen (ed.) Food Subsidies in Developing Countries: Costs, Benefits, and Policy Options. Baltimore: Johns Hopkins University Press, 1988. King, Mervyn A. "Welthre Analysis of Tax Reforms Using Household Data." Journal of Public Economics 21 (1983): 183- 214. Ravallion, Martin. "Poverty Comparisons: A Guide to Concepts and Methods." Living Standards Measurement Study Working Paper No. 88. Washington, D.C.: World Bank, 1992.

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Ravallion, Martin. "Poverty Alleviation through Regional Targeting: A Case Study for Indonesia." In Karla Hoff, Avishay Braverman, and Joseph E. Stiglitz (eds.) The Economics OfRural Organization: Theory, Practice, and Policy. Oxford: Oxford University Press for the World Bank, 1993. Ravallion, Martin and Dominique van de Waile. "The Impact on Poverty of Food Pricing Reforms: A Welfare Analysis for Indonesia." Journal of Policy Modelling 13 (1991): 281-99. Sahn, David E. and Harold Alderman. "The Effect of Food Subsidies on Labor Supply in Sri Lanka." Washington, D.C.: World Bank, 1993. Sen, Amartya. "Poverty: An Ordinal Approach to Measurement." Econometrica 22 (1976): 219-3 I. Thorbecke, Erik and David Berrian. "Budgetary Rules to Minimize Societal Poverty in a General Equilibrium Context." Journal of Development Economics 39 (1992): 189-205. TWG [Technical Working Group on Poverty Determination]. "A Monograph for the Estimation of Poverty and Subsistence Thresholds and Incidences." Makati: National Statistical Coordination Board, 1993. World Bank. Targeted Programs for the Poor During Structural Adjustment. Washington, D.C.: World Bank, 1988.

Mahar K. Mangahas

COMMENTS

Certain propositions in the paper are quite acceptable. Given a simple budget-allocation problem, it is indeed more efficient to target funds for the poor than not to do any targeting at all. Yes, targeting the poor will be more accurate if funds are spent on food rather than on non-food items, if spent on inferior foods than on superior foods, and if spent in places with a high concentration of the poor than in other places. At the same time, however, one has to realize that the economicallocation problem is not that simple. One can see that the list of the government's priority provinces in its poverty-reduction program does not quite coincide with the list of the poorest provinces based on the income , criterion. The fact that many of the provinces in the list have a relatively high density of cultural minorities is a sign that the poverty-reduction program is actually one of the government's means of responding to the grievances of the minorities and of solving problems of rebellion and of peace and order. In short, poverty-minimization is not the sole objective. Portions of the study are too concerned with issues that may be important in other countries but are not critical in the Philippines. One is the concern that a poverty-reduction program will foster laziness among the poor. Another is the concern that such a program will crowd out private transfers, i.e., better-off Filipinos will no longer make gifts and donations to the poor, thinking that there is already a government program which takes care of them. These are concerns more appropriate in countries where welfare programs are quite old and have already become over-sized, but not

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in the Philippines where the very concept of programs of direct assistance to the poor is only now being seriously considered. In the Philippines, a much more important issue for any subsidy program is the trustworthiness of the agency that will be tasked to implement the program. The Social Weather Station (SWS) opinion polls regularly find that most citizens are dissatisfied with government efforts to fight graft and corruption. Thus, the design of a system of targeting a poverty-reduction program would not be as controversial as the reputation of the agency (for example, will it be the Department of Social Welfare and Development or the National Food Authority?) in charge of the program.

Highlights of Discussion

TARGETING TRANSFERS TO THE POOR: THE CASE OF FOOD SUBSIDIES

The choice of the National Food Authority (NFA) subsidy program as the subject of the study was a result of the attempts by the government to use the P2 billion NFA stabilization fund for more significant poverty reduction programs similar to those being pursued by the Department of Social Welfare and Development (DSWD), e.g., Mt. Pinatubo Resettlement Program. Government programs are multifaceted and indeed, a public opinion survey may be used to gauge their acceptability. A discussion of their specifies as in ease studies would likewise be useful in understanding and evaluating their usefulness. A study which will look into the impact of NFA on the public, especially the farmers, would be interesting. How many buy or sell from the NFA? The findings might show that the interface of NFA with the small farmers is very small. A public opinion on the honesty and efficiency of NFA may also be obtained. There may be a need to appeal to the media to report the results, whether good or bad, for the NFA. Two reasons were cited why the NFA was not abolished earlier. First, the government did not know what to do with the NFA warehouses and offices as well as its personnel. And second, the NFA is the frontline agency of the Department of Agriculture (DA) in the field. Thus, without NFA, there must be some solid suggestions to be offered as alternative. The Grains Production Enhancement Program of the DA, meanwhile, seems to be encountering problems with the farmers.

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The best instrument perhaps for the DA is the provision of new technologies. The true meaning of technological change must be fully understood by proponents and beneficiaries. Agriculture personnel should not just respond to what farmers enumerate during seminars/workshops as their needs, e.g., roads, irrigation, etc. but must also actively push for real technological changes. The difficulty, meanwhile, of identifying the target beneficiaries was pointed out. Dr. Gelia Castillo, for instance, said that the best food subsidy she encountered was in the slums of Mexico where the poor have to line up for free tortillas' because surely, the rich will not line up for tortillas. Another significant poverty program is in Bangladesh where the choice of "food for work" or a "food for subsidy" scheme is employed. For the former, one has to render work for food while for the latter, food is given for free. More people prefer the "food for work" scheme because they are able to make demands while the "food for subsidy" scheme is highly politicized. Individual experiences with a food subsidy program run by a private group were also related. As a result of this scheme, beneficiaries are worse off than before since the subsidy given was in kind and the food provided was not acceptable. On the other hand, credit programs coursed through the NGOs and credit unions seem to be doing well. Thereis anecdotal evidence that beneficiaries were able to improve their level of well-being. Finally, a caution against farmer dealers posing as farmer-leaders was raised since some take advantage of the farmers for their own interest. A suggestion was made to have a joint research among the PIDS, the University of the Philippines-School of Economics (UPSE) and the Social Weather Station (SWS) to answer the queries and issues on NFA and poverty programs.

POLICY-BASED LENDING PROGRAMS IN THE PHILIPPINES "

III

.M/IRIO B. LAMBERTE

INTRODUCTION

ALTHOUGH THEGOVERNMENT has been gradually deregulating the finanZ-]k, cial markets with moves such as the liberalization of bank entry and branching and, more _'ecently, the liberalization of the entry and scope of operations of foreign banks, it continues to directly intervene in the credit markets by maintaining several special credit programs. In fact, the list of _cial credit programs for agriculture and small and medium industries remains long (Table I). Interestingly, a significant number of them were introduced during the last six years when the government was supposed to pursue its stated policy of rationalizing and consolidating various government-initiated special credit programs. The features of the existing special programs are considerably different from those of previous programs. For one, the Central Bank is no longer involved in managing special credit programs. This responsibility has been transferred to the relevant government financial institutions, i.e., agricultural credit programs to the Land Bank of the Philippines (LBP) and industrial credit programs to the Development Bank of the Philippines (DBP). For another, lending conduits are now more varied than before, and they include almost all rural financial institutions and nonfinancial institutions, specifically nongovernmental organizations (NGOs). Lastly, the lending rates to conduits and the relending rates charged by conduits to end-users are now freely determined by the market.

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ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT TABLE 1 Profiles of Credit, Guarantee and Insurance Programs

LAND BANK OF THE PHILIPPINES (LBP) • Integrated Rural Financing (IRF) Program • Agricultural Loan Fund (ALF) Project o. Countryside.Loan Fund (CLF) • The Small and Medium Industry Loan Program: A Land Bank-SSS Partnership (SMILP) • Financial Incentives for Economic Livelihood Development Scheme for Small Coconut Farmers' Organizations (FIELDS-SCFO): A PCA-LBP Tie-Up • Agrarian Livelihood Program • Integrated Cotton Financing Program (ICFP) • Irrigation Pump Acquisition Program (IPAP) • IndustrialForest Plantations(Sector) Projects • Fisheries Sector Program (FSP)

DEVELOPMENT BANK OF THE PHILIPPINES (DBP) • • • • • • • •

Small-Scale Irrigation Systems for Rice Farmers Special-Agriculture, Small and Medium Industries Lending (A- SMILE) Industrial Guarantee and Loan Fund (IGLF) Program .Cattle Financing Program Overseas Economic Cooperation Fund - ASEAN-Japan Development Fund (OECF-AJDF) Industrial Investment Credit Project (IICP) Industrial Restructuring Project (IRP) Cottage Enterprise Finance Project (CEFP) Asian Development Bank III Development Bank of the Philippines Project (ADB III DBP)

DEPARTMENT OF AGRICULTURE (DA) • • • • •

Livelihood Enhancement for Agricultural Development_LEAD) Program BAI: Multi-Livestock Dispersal Loan Program CDLF-BANGKOOP: CRB Capital Infusion Program CDLF-BANGKOOP-SANDUGUAN: Rice Seed Production Project CDA: Cooperative Development Loan Fund

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TABLE 1 (continued) • CDA: Cooperative Marketing Project • CDA: Samahang Nayon Support Project • Development Assistance Program for Cooperatives and People's Organizations (DAPCOPO) 4.

TECHNOLOGY AND LIVELIHOOD RESOURCE CENTER (TLRC) •

Agro-lndustrial Technology Transfer Program (AMP) - Export Industry Modernization Project II • Bagong Pagkain ng Bayan - Guarantee Fund for Local Government Units (BPnB-CALF) 5.

PALAWAN INTEGRATED AREA DEVELOPMENT PROJECT OFFICE (PIADPO) •

Palawan Integrated Area Development Project

AGRO-PROCESSING AND MARKETING PROJECT OFFICE/NATIONAL FOOD AUTHORITY (AMPO-NFA) • PrivateSector ModernizationProgram • ThresherAmortizationProgram

DEPARTMENT OF TRADE AND INDUSTRY-BUREAU OF SMALL AND MEDIUM BUSINESS DEVELOPMENT (DTI-BSMBD) • Tulong sa Tao Program(Firstand SecondNGO MicrocreditProject)

PHILIPPINE COCONUT AUTHORITY/UNITED COCONUT PLANTERS BANK (PCA-UCPB) •

Countryside Economic Development Program

NATIONAL LIVELIHOOD SUPPORT FUND/OFFICE OF THE PRESIDENT • •

NLSF-Wholesale Lending Program Bagong Kilusang Kabuhayan at Kaunlaran-Expanded Conduited Guaranty and Lending Program: Kabuhayan sa Nayon

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TABLE 1 (continued) • BagongKilusangKabuhayanat Kaunlaran-ExpandedConduited Guarantyand LendingProgram:Balikatansa Kabuhayan 10. PHILIPPINE FISHERIES DEVELOPMENTAUTHORITY (PFDA) •

NorthernPalawan FisheriesDevelopmentProject

11. QUEDAN GUARANTEE FUND BOARD (QGFB) • QGFB-ComprehensiveAgriculturalLoan Fund (QGFB-CALF) GuaranteeProgram/QuedanFinancingfor AlliedProducts • Quedan Financingfor GrainsBusinessman • QuedanFinancingfor FoodMarket Retailers • QuedanFinancingfor Farmers'Groups • QuedanFinancingfor Foodand AgriculturalMarketingEnterprises 12. GUARANTEE FUND FOR SMALL AND MEDIUM ENTERPRISES (GFSME) •. GFSME-ComprehensiveAgriculturalLoanFund (GFSME-CALF) GuaranteeProgram • The Guarantee Fundfor Small and MediumEnterprises • Lease-PurchaseGuaranteeFacilityformerlythe Farm Machinery Dealer DiscountLine FacilityProgram • Livecor-GFSMEGuaranteeFacility • Guaranteefor AgriculturalInvestments(GAIN) • CooperativeCredit GuaranteeSystem(CCGS) 13. CROP INSURANCE CORPORATION (PCIC). •

PCIC-ComprehensiveAgriculturalLoanFund (PCIC-CALF) Guarantee Program • PCIC-Riceand Corn InsuranceProgram • PCIC-Special RevolvingTrust Fund Sources:AgriculturalCreditPolicyCouncil,DevelopmentBankof the Philippines and LandBank of the Philippines.

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The change in credit policy over the last decade was, of course, part of the general effort to restructure the economy. To ease the pain associated with the restructuring, the government secured financial assistance from multilateral institutions, specifically the World Bank and the Asian Development Bank (ADB). Part of the assistance are relending programs and policy conditionalities that bind the government to pursue the programs and projects it decides to institute. These are the Agricultural Loan Fund (ALF) and its successor, the Countryside Loan Fund (CLF), Industrial Guarantee Loan Fund (IGLF); Industrial Investment Credit Project (IICP) and its successor, the Industrial Restructuring Project (IRP), Tulong sa Tao SelfEmployment Loan Assistance (TST-SELA) and its successors, the First and Second NGO Microcredit Projects, and the Fisheries Sector Program (FSP). This subset of credit programs is referred to as policy-based lending programs. This paper reviews and examines the special features of policy-based lending programs and policy conditionalities, as well as their impacts on the various players in the credit markets. EMERGENCE

OF POLICY-BASED

LENDING

PROGRAMS

Special credit programs emerged from the government's concern that the formal credit markets had left out certain sectors of society such as small farmers and enterprises and even key industries that have been deemed vital to the development of the country. The banks' aversion to lending to small borrowers is not without a basis. First, the transaction cost of lending to small borrowers is a disproportionately high percentage of the amount lent. Second, in the event of loan default, foreclosure cost can easily exceed the amount to be retrieved from small borrowers. And lastly, small borrowers usually have very limited tangible and marketable assets, and in the event of external shocks that affect the viability of their projects, they are likely to default on their loans. Therefore, given their limited supply of loanable funds, banks prefer to lend to large, well-established borrowers.

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The absence of a capital market is also another reason for government's intervention in the credit market. The financial system has long been dominated by a banking system that concentrated more on short-term loans, losing sight of the fact that medium- and long-term funds are very much needed by industries to expand and improve their productive capacity. The banks' aversion to granting medium- and long-term loans is, of course, not surprising. The Philippine economy had frequently been subjected to crises and wide swings in inflation rates. The uncertainties which these created increased the risk of granting medium- and long-term loans. And this was compounded by the inability of banks to attract enough long-term deposits, for the same reason that depositors regarded long-term deposits as risky financial instruments. Given all this, therefore, it would be very difficult for banks to undertake term transformation if the economy is highly unstable. Direct intervention in the credit market is only one of the instruments being used by the government to promote certain sectors of the economy. Fiscal incentives such as tax and tariff exemption, accelerated depreciation, etc., have long been offered to highly favored sectors. Some of these incentives are embodied in the Investment Codes, while others are in special charters attempting to address the concerns of specific sectors such as cooperatives, small enterprises, rural banks, etc. The expenditure policy of the government has also been used as one of the intervention instruments. The kinds and location of infrastructure projects define the sectors that should be favored. For instance, farm-to-market roads, and irrigation and postharvest facilities are intended to improve the profitability of farm enterprises. While fiscal incentives and expenditure policy can improve the profitability of a business enterprise, they do not address the liquidity constraint confronting many who would like to start or expand their business. Under this situation, the fiscal incentives and expenditure policy can even worsen income distribution because those who have the necessary financial resources can readily exploit the opportunities accorded by fiscal incentives. Even large enterprises will miss a lot of income opportunities by foregoing expansion plans due to the lack of long-term funds.

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The perceived market failure has prompted the government to intervene in the credit market to relax the liquidity constraint of certain sectors who are supposed to benefit from the fiscal incentives and expenditure policy. • However, over the years this aspect had been overshadowed by political considerations. Politicians had found in credit a way of distributing political patronage without spending their own money for it. Thus, many concessional credit programs sprouted, catering to a narrow group of beneficiaries such as tobacco farmers in northern Luzon and corn farmers in southern Mindanao. Special credit to cottage industries and small enterprises which comprise a large segment of the population can also be included here. The establishment of a credit program with a particular constituency was a way of delivering a message to credit beneficiaries that political leaders were looking after their •needs. In the process, the importance of a good expenditure policy was forgotten. What is worse is that credit programs came to be regarded as substitutes for structural deficiencies such as inadequate infrastructure, lack of competition in the banking system, or as instruments to neutralize the negative impacts of certain policies, e.g., price controls imposed on certain commodities and a tariff structure that penalized certain sectors. The demand for special credit programs seemed to have overshadowed the need to deal squarely with structural deficiencies and to abolish policies that reduce the profitability of certain economic activities. The failure of previous special credit programs -- in the sense that they had very high default rates and did not reach the targeted beneficiaries had been criticized by various sectors including donor agencies (Lamberte and Lim 1987). This came at a time when structural adjustment came into vogue, increasingly exerting pressures on agricultural and industrial sectors to become competitive. It was felt that the financial sector also needed restructuring. The primary objective of the financial sector restructuring in the 1980s was to make the sector efficient in mobilizing and allocating funds to the most productive enterprises. This required, among others, the removal of interest rate ceilings and concessional lending. However, it was felt that in the process of reorienting the financial sector, a large segment of borrowers

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who could not meet the stringent criteria of banks would still be left unserved by the banking system. The 1983-84 economic crisis further complicated the matter because it led to substantial disintermediation. Thus, under this condition, credit programs were felt by the government to be even more important to augment the funds of the domestic financial system and make the economy going again. The design of recently implemented credit programs took into account the objective of financial sector restructuring and the lessons of past credit programs. They are now based on assumptions different from those applied in previous credit programs. First, it is now widely accepted that the end-users' main concern is access to credit, not the price of credit. In other words, end-users are willing to pay the market rate of interest on loans. Second, financial institutions would lend to a diverse set of borrowers including those previously left out if they had enough financial incentives. In other words, the spread which they could realize from lending should be commensurate to the cost and risk of lending. This implies that any credit program should not fix the spread that lending conduits may realize. Third, government financial institutions do not have to compete with private financial institutions in reaching out to end-borrowers. This means that they should find a niche in the financial markets that would be complementary to the functions of private financial institutions (PFIs). And lastly, some features of the informal credit markets could now be incorporated in the design of credit programs to ensure their success. Multilateral institutions, specifically the World Bank and the Asian Development Bank (ADB), are the main sources of funds for the credit programs. These institutions have an unqualified agreement with the government to see to it that the credit programs do not in any way, introduce distortions but rather strengthen the government's resolve to introduce market-oriented reforms. The involvement of multilateral institutions in designing credit programs is crucial. Policy reforms which the government has always wanted to institute have been incorporated in externally funded credit programs. Since releases of funds by multilateral agencies have been contingent upon

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compliance with the required policy reforms, policy reversal in the future becomes a remote possibility. This benefits policymakers whose long-term interest is to see their policy decisions preserved and given enough time to yield positive results. OBJECTIVES

OF POLICY-BASED

LENDING

PROGRAMS

Policy-based lending programs have varying specific objectives -- promote the expansion of cottage, small and medium enterprises, support the growth of the agricultural sector, diversify the sources of income of target beneficiaries, etc. In general, policy-based lending programs have two underlying major objectives: one is to make credit available to target beneficiaries, and the other is to institute much needed reforms. Although policy-based lending programs can still be considered directed credit programs in the sense that they define certain target beneficiaries, they now target a much broader set of beneficiaries. This contrasts with other special credit programs with sharply targeted beneficiaries. For instance, the Agricultural Loan Fund (ALF) was made available to the entire agricultural sector without bias to specific commodities, firm/farm size and the location of borrowers. The industrial Guarantee and Loan Fund (IGLF) did the same for the nonagricultural sector, except for a limit on firm size, i.e., it caters only to small and medium enterprises. The First NGO Microcredit Project, meanwhile, had a broader set of beneficiaries for it took care of the credit needs of much smaller enterprises, i.e., cottage industries and mieroenterprises. The Industrial Investment Credit Project (IICP) is the counterpart of IGLF but focused on large enterprises. The sequels to some of the programs have an even broader set of target beneficiaries. In the ease of the Countryside Loan Fund (CLF), the successor of the ALF, the facility has been made available not only to the agricultural sector but to all sectors in rural areas. It now overlaps with some of the target beneficiaries of the IGLF and the Industrial Restructuring Project (IRP). In the same manner, the target beneficiaries of the Second NGO Microeredit Project have been broadened to include those engaged in agricultural

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production, whereas the First NGO Microcredit Project limited itself only to nonagricultural activities. As far as target beneficiariesare concerned, therefore, the policy-based lending programs can be considered general rather than specialized credit programs. An exception perhaps to this is the Fisheries Sector Program (FSP), which has more focused target beneficiaries. What appears to be the binding constraint to the implementing agency, LBP, is the inclusion in the credit program of areas where LBP does not have extension offices or where its Integrated Rural Financing (IRF) program is not operating. This problem was overcome when LBP was allowed to accommodate potential FSP beneficiaries in areas not included in the priority regions. Thus, even with sharply focused credit programs like the FSP, a certain flexibility in defining target beneficiaries was introduced in the course of implementing the project. The policy reform objective components of the credit programs may be classified into two types: credit-related and macro policy-oriented. Creditrelated policy reform objectives of credit programs include those that lead to changes in the features of the programs such as broadening the target beneficiaries, expanding the set of lending conduits, and giving more responsibility and financial incentives to lending conduits. On the other hand, the macro policy reform objectives of the credit programs include support for the market-oriented interest rate policy, facilitation of the conversion of government financial institutions into wholesale credit institutions, promotion of the regional dispersal of industries, restructuring of the industrial sector, and environmental protection. Donor agencies which are now concerned with the environmental impacts of the projects they support, injected into the program/project loans a method of sensitizing financial institutions to environmental concerns by requiring subprojects to comply with applicable laws and regulations of the country environmental protection agency. This requirement is applied more tightly to large-scale subprojects than to small-scale subprojects. Two projects incorporated policy objectives in a subtle manner. The IICP excluded subprojects in subsectors that received a high level of

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protection through quantitative restrictions. Its successor, the IRP, further expanded the exclusion list, i.e., by excluding also subprojects in subsectors that have excessive effective protection of 80 percent or over. The effect here is to penalize heavily protected industries by not making a credit facility available to them. This sharply contrasts with the previous policy of providing concessional loans to heavily protected, import-substituting industries. In a somewhat complicated manner, the FSP tries to support the government's policy on environmental protection by encouraging fisherfolk in environmentally degraded areas to embark on nonfisheries related projects so that these areas can be given enough time for resource regeneration. The implementation of policy-based lending programs has indeed become a complicated matter for implementing agencies because their performance is evaluated on the basis of two criteria, i.e., reaching the target beneficiaries with a high repayment rate and compliance with policy eonditionalities. They have very little control over the latter but profoundly affect the former. For instance, DBP thought that it would encounter great difficulty in disbursing the funds under the IRP since many potentially creditworthy borrowers were still highly protected. 1 The tariff reform effected in 1991 drastically changed the situation, but this change was not motivated by the conditionality of the project. Rather, political leaders thought that it was the right time to seriously liberalize trade and expose domestic industries to international competition.

1. The original conditionality of the World Bank was that DBP should not lend anymore to highly protected industries. The government objected to this because it would sharply reduce the lending operations of DBP considering that there were only a few subsectors that were not highly protected during the loan negotiation. The compromise arrived at was for DBP not to use the IRP funds for on-lending to highly protected sectors.

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CHOICE

OF IMPLEMENTING

INSTITUTIONS

Many of the special credit programs_that existed in the past were implemented by various government institutions. Many of these institutions were not financial entities but line agencies and bureaus or subsidiaries of line agencies taking on credit functions such as loan approval and collection. As mentioned earlier, many of them are still around. But enmeshed as they are in bureaucratic red tape and saddled by heavy administrative cost and the lack of skills in managing credit programs, special credit programs have not been up to par in performance. Unlike other special credit programs, policy-based lending programs are being implemented by government-owned financial institutions (GFIs), such as LBP and DBP. One of the objectives of these lending programs is to support the government policy of converting the GFIs into wholesale banking institutions that would later on play a big role in mobilizing long-term funds and in giving term loans. One previously important function of the Central Bank (i.e., the management of special credit programs.':, has been transferred to the GFIs. The government decided in 1987 that all externally funded credit programs should be implemented and managed by the GFIs. There are advantages to having GFIs implement and manage lending programs. First, the programs can benefit from scale and scope economies since these institutions are in the business of lending. Second, lending programs are being managed by professional bankers who know the credit markets better than bureaucrats. Third, the credit programs are less subject to political interference because transactions of GFIs are more transparent than those of regular government agencies. Moreover, GFIs are now evaluated on the basis of their balance sheets and income statements. 2And lastly, 2. During the dictatorial regime of Mareos, DBP gave many loans to highly favored corporations upon the intercession of top politiea leaders. Many of these so-called "behest loans" turned out to be nonperforming, eventually causing the collapse of DBP. The bank has since been rehabilitated and some provisions in its charter were amendedto protect it from any political interference. The Aquino administration respected the independence of DBP. and the t_resent administration of President Ramos will likely continue this policy.

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GFIs are more flexible than regular government agencies and can readily respond to a changing environment. There are some improvements in the way the .programs are being implemented by the GFIs. The GFIs have applied certain criteria in accrediting participating financial institutions (PFIs). 3 Their criteria focused on the financial soundness and quality of management of financial institutions. Accordingly, this encouraged interested financial institutions to shape up in order to qualify for the credit facility. This is necessary because PFls are given more responsibility in evaluating and approving individual subloans. Ceilings on subloans have been greatly simplified since the GFIs are subject to the regulation on single borrower's limit.4 More importantly, the move toward wholesaling of loans by GFIs has considerably improved their financial performance. They can now achieve economies of scale and reduce costs in monitoring subloans since they deal only with a few PFIs. Also, their risk exposure is now limited to those subloans which they provide to PFIs. In the past, concentrating on retail lending exacted heavy costs on GFIs. The use of lending conduits also appears to be advantageous to endborrowers. The availability of several branches of PFIs in rural areas has considerably reduced the transaction cost to borrowers. By implementing and managing credit programs, GFIs have substantially increased their capacity to respond to varying credit demands because they now manage a diversified portfolio of credit programs that can be made available to different types of borrowers. More specifically, both DBP and LBP now have lending facilities for small, medium and large borrowers.

3. PFls initially resisted the accreditation procedure followed by GFIs and the idea of refinancing a loan under a specific credit program with GFIs because these would put them in a less competitive position with GFIs and because of the possibility that GFIs would draw to their side PFIs' good clients. These fears were allayed when it became clear to PFIs that GFIs would move away from retail lending and concentrate instead on wholesale lending especially when it came to externally funded credit programs. 4. There is a law prohibiting any financial institution from lending to any single borrower more than 15 percent of their unimpaired capital.

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The only dividing line between DBP and LBP is that the former services the nonagricultural sector while the latter services the agricultural sector. But recent developments suggest that such a dividing line is blurring since both are now practically servicing the agricultural and nonagricultural sectors, albeit in varying degrees. An exception to the general observation cited is the NGO Microeredit Program which is directly managed by the Department of Trade and Industry (DTI). The creation of the Provincial and Regional Fund Management Committees with corresponding loan approval authorities has greatly simplified the loan appraisal and approval process. Nonetheless, DTI had to hire several financial analysts to process loans in all provinces of the country. Because of the salary structure for government employees embodied in the 1989 Salary Standardization Law, DTI encountered difficulties in recruiting capable financial analysts. As expected, those who accepted the job were relatively inexperienced. The problem of hiring inexperienced financial analysts was compounded by the lack of banking experience of their direct supervisors who were bureaucrats. The main reason for having DTI manage the NGO Microcredit Program is that GFIs do not possess yet the necessary expertise to grant small loans to small borrowers through informal channels, e.g., NGOs. This may no longer be true now since LBP has been managing the IRF since 1989. Under the IRF, LBP has been lending to small rural borrowers through formal and informal channels. In fact, the FSP is riding on the coattails of this approach to deliver credit to theprogram's target beneficiaries. The increasing involvement of LBP in nonagricultural projects fits well into the requirements of the NGO Microcredit Program which is supposed to cater to the credit needs of cottage industries and small enterprises. Of course, DBP is another candidate. It is gaining more experience in lending to small- and mediumscale industries since management fo the IGLF was transferred to it.

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CHOICE

OF LENDING

235

CONDUITS

As mentioned, the implementing agencies only serve as wholesalers of credit using conduits to reach the ultimate target beneficiaries. Each credit program has its own criteria for accrediting lending conduits (also called participating financial institutions). In general, however, the major criteria, i.e., those that pertain to the financial soundness of conduits, seem to be the same for all policy-based lending programs. Some programs have added accreditation criteria that would make it difficult for some financial institutions to become eligible conduits even if they are financially sound. For instance, the IICP and its sequel, the IRP, require that participating financial institutions have a track record in term lending because these credit facilities were meant to meet the long-term capital requirements of end-users. Admittedly, only a few banks and nonbank financial institutions in the country have that track record. The required minimum subloan size of these credit facilities also discriminates against small lending conduits. The NGO Microcredit Program stands out differently from the rest of the lending programs in terms of choice of conduits. It is being implemented by a nonfinancial institution, the DTI, and uses only nonfinancial institutions, i.e., NGOs, as lending conduits. The accreditation criteria seek to distinguish institutionally and financially strong NGOs from weak ones to ensure the viability of the program. Experience in lending and a good repayment record were other important accreditation criteria because the program was meant to reinforce the existing lending programs of NGOs and not to entice NGOs that are not engaged in lending to venture into it. This criterion reduces the exposure of the project to moral hazards and protects it from the so-called "instant" NGOs, i.e., NGOs created mainly to tap the credit facility. The FSP, on the other hand, utilizes both formal institutions (i.e., banks) and informal institutions (i.e., NGOs) as lending conduits. 5 However, the 5. Note that NGOs including cooperatives, though formally registered, are classified as informal lending institutions because they are not subjected to more rigid rules and regulations applied to banks and nonbank financial institutions.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

active involvement of their branches and extension offices in retailing loans under the FSP facility has put lending conduits in a less competitive position. Clearly, the retailing function of GFIs conflicts with their wholesaling function at the expense of PFIs. LBP is now trying to change its approach as far as the FSP is concerned to avoid competing with lending conduits. Except for the NGO Microeredit Project, financial institutions may participate in all of the projects discussed in the previous section provided they satisfy the accreditation criteria for each project. Several PFIs have in fact opted to participate in only a few projects even if they satisfied the criteria because they thought that they did not have a sufficient number of qualified clients for the projects concerned. Donor agencies and the government do not play a direct role in selecting lending conduits. If ever particular financial institutions are identified in the project document, they appear merely as part of an illustrative list. However, they do approve the accreditation criteria to be used by implementing agencies. In the case of the First NGO Microcredit Project, ADB required the implementing agency to apply accreditation criteria that were more rigid than those used by the TST-SELA Project, but later consented to relax them under the Second Mierocredit Project to accommodate more NGOs in remote areas. The number of lending conduits for the various projects has been changing over time. Some projects have experienced a steady increase in the number of lending conduits, while others have experienced a decline. The reasons why some lending conduits dropped out of the lending programs are varied. Some voluntarily stopped their lending under the credit programs due to the insufficient number of clients. Others were terminated by the implementing agencies because of their deteriorating financial position. Most of those who belonged to the first group were commercial and thrift banks, while most of those who belonged to the second group were rural banks. The number of rural banks decreased significantly from more than one thousand in 1985 to about eight hundred in 1991 due to bank

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237

failures. Among the remaining rural banks, only about three hundred are in good financial condition. The rest have to undergo a rehabilitation program. TERMS

OF THE LOANS

TO END-USERS

The policy-based lending programs finance only a certain proportion of the total cost of subprojects, with the rest being shared by PFIs and end-users. Thus, PFIs do not just serve as lending conduits but also lend their own funds as their contribution to the total cost ofsubprojects. On the other hand, the contribution of end-users may be in cash or in kind such as land, building equipment or any tangible assets useful for the subprojects. The required financing mix varies among policy-based lending programs.Their share in the total cost of a subproject (which is represented by implementing agencies) ranges from 60 to 90 percent and varies inversely with the total cost of the subproject. The loan proceeds may be used to finance production, working capital, and fixed asset acquisition (usually with the exception of land). Term loans are available in these credit programs. The selection ofsubborrowers is entirely left to PFIs or lending conduits provided subborrowers belong to the target beneficiaries defined by the lending programs. Requiring loan collateral is also lef_ to the discretion of PFIs. It has been observed that PFIs have invariably required collateral on subloans. This is common to all policy-based lending programs including the FSP and the NGO Microcredit Project since PFIs and conduit NGOs bear the credit risk for subloans. There are ceilings on individual subloans that vary among programs. The IICP and the IRP have higher ceilings because they cater to large enterprises, whereas other programs have much lower ceilings because they are supposed to address the needs of cottage, small and medium enterprises. Aside from the stipulated ceilings, the single borrower's limit on PFIs also applies. For larger credit programs such as the IRP, loan syndication between two or more PFIs is allowed whenever the amount of the loan requested by a single borrower exceeds the single borrower limit.

238

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

There are limits on the amounts which PFIs can freely grant as loans to subborrowers. Beyond these limits, loans need independent appraisal by implementing agencies or donor agencies, depending on the amount of subloan being requested. In the IRP, for example, subloan requests of between US$8 million and US$15 million need an independent appraisal from DBP. Beyond this, World Bank independent appraisal is required. The policy-based lending programs make available to subborrowers short-, medium- and long-term loans. However, the determination of the tenor of the subloans is left entirely to lending conduits. For the IICP and the IRP, only medium- and long-term subloans are available because these programswere designed primarily for term loans. Loan repayment could be lump sum in the case of short-term loans, or staggered in the case of medium- and long-term loans. For other programs such as the FSP and NGO Microcredit Program, lending conduits still prefer to extend short-term loans due to the risk involved in lending to small borrowers with very little track record in borrowing from formal institutions. Lending conduits are free to charge whatever is the prevailing market interest rate for a particular loan. This is consistent with the policy reforms supported by these lending programs. What is interesting in these programs is that subborrowers have the option to pay fixed or floating interest rates on their subloans. The introduction of the floating rate on loans started with the ALF, and this was carried out subsequently by externally funded projects. This is perhaps one of the most important accomplishments of the policy-based lending programs. Other special credit programs directly funded by the government also carry this feature. MONITORING

Fairly developed monitoring systems are usually included in the design of policy-based lending programs. The implementing agency usually sets up an office and/or mechanism to carry out the monitoring system. In all cases, the multilateral donor agencies involve themselves in monitoring the pro-

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239

gress of the projects. Aside from receiving reports from implementing agencies, they also conduct random field visits as part of the verification process. But their monitoring does not in any way duplicate the regular monitoring being done by implementing agencies. The transfer to GFIs of the credit programs and, hence, the monitoring units made possible the exploitation of economies of scale and scope. Thus, GFIs now employ fewer personnel solely dedicated to a particular project ',, than the old practice of lodging monitoring units in various government agencies. The monitoring system basically addresses two issues: (1) whether the credit program follows the procedures and fulfills the policy conditionalities outlined in the project document, and (2) whether the project has reached the target beneficiaries. Unlike previously directed credit programs, the procedural aspects of the policy-based lending programs are now much simpler. For one, most of the responsibilities associated with the project have been downloaded to the PFIs or lending conduits which are given much wider discretion in the selection of their borrowers. Further, interest rates on the loans of policy-based lending programs are no longer fixed. From the administrative point of view, therefore, there are fewer indicators to be monitored. In the previous credit programs, considerable efforts were exerted by implementing agencies in determining whether lending conduits did not charge interest rates beyond the prescribed ones. There are basically three instruments used in verifying whether the .loans reach the intended beneficiaries. One is the periodic report of endusers submitted by lending conduits and PFIs to the concerned implementing agency. The second is the one used during requests for reimbursement or release of funds to lending conduits or PFIs. In this case, the implementing agency reviews the loan applications recommended by lending conduits for funding to determine whether the borrowers are the intended beneficiaries. It bears noting that the implementing agency does not duplicate the loan approval process conducted by lending conduits and that the donor agency periodically reviews the use of the loan proceeds through reports submitted by the implementing agency.

240

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

The third instrument is the end-user verification survey. This is not much of a problem for credit programs such as the IRP that are earmarked for large industries because there are only a few borrowers. But for credit programs that are made available to a large number of small and medium borrowers (e.g., NGO Microcredit Program), the end-user survey is admittedly a tedious process. Some credit programs require periodic surveys, while others need to be monitored only once or twice during the implementation period. Aside from the end-user survey , the implementing.agency also does random ocular inspection on a more frequent basis of some projects as part of the end-user verification process. The implementing agencies noted that the target beneficiaries could be more effectively reached under the policy-based lending programs than in the previous special credit programs because of their broader set of target beneficiaries and the greater leeway for lending conduits to select their borrowers and determine the loan contracts. All this effectively make it easier for the implementing agency to monitor policy-based lending programs. IMPACTS OF POLICY-BASED LENDING PROGRAMS On the Government Policy-based lending programs were put in place to support policy reforms. Resistance to policy change from various quarters such as politicians, lending conduits and end-users was felt by the government especially with the very first program, the ALF, which introduced wide-ranging policy reforms. Despite this, the programs seemed to have succeeded in implementing the desired policy reforms. This could be attributed to three factors. First, the policy reforms were tied up with the loan program, and releases of funds by the donor agency to the government were made contingent upon compliance with the loan covenant. The lack of credit supply, in general, and of foreign exchange, in particular, compelled the government to be very diligent in implementing the policy reforms. Many have opined that the government could have easily reversed its policies upon meeting strong

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241

pressure from various quarters were it not for the loan covenant. Second, the implementation period of the policy-based lending programs was sufficiently long to allow all players to adjust to the new environment. For instance, many potential borrowers shied away from the ALF during its initial phase because of the floating rate feature of the loan. Eventually, borrowers learned to adapt to the new way of pricing credit. Third, the number of constituents for the new policy regime seemed to have been underestimated. Those who were adversely affected by the new policy regime were few but very articulate in voicing out their concern. However, some of them were not necessarily inflexible as they themselves later on became subscribers to the credit programs either as lending conduits or end-users. Under the policy-based lending programs, the government directly or indirectly (through government-owned financial institutions) obtained loans denominated in foreign currencies from donor agencies, relent them to end-users through lending conduits in domestic currency, and repaid donor agencies in foreign currencies. 6 Invariably, the government shouldered the exchange risk of these foreign loans. _ The experience with the ALF provided an important lesson to the government in handling exchange risk. The ALF program had a 100 percent repayment _rate, yet the government (represented here by the Central Bank) incurred huge foreign exchange losses because the passed-on rate or the interest rate charged by it did not properly incorporate the exchange risk. This experience led the government to revise the formula for determining the exchange risk premium. The formula presently used in all policy-based lending programs allows the exchange risk premium to vary positively with the weighted average interest rate (WAIR) on time deposits, i.e., the exchange risk premium increases if WAIR increases. The Department of Finance sees to 6. Note that some of the credit programs make available to end- users foreign exchange for the importation of equipment. However, end-users pay the loans in local currency. 7, Some earlier programs that passed on the exchange risk to the end*users did not flourish, especially since the economy was subjected to a series of discreet currency depreciations in the 1980s.

242

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

it that all loan Covenants with multilateral donor institutions adhere to this formula. On Implementing Agencies As already mentioned, externally funded lending programs are now being implemented by the GFIs, specifically DBP and LBP, with the exception of the NGO Microcredit Program. Since the GFIs have just started mobilizing deposits on a competitive basis, 8 the transfer to them of externally funded projects has considerably improved their financial position and facilitated their transformation from retailers to wholesalers of loans. Given the diversity of credit programs that they now manage, the GFIs can practically offer credit facilities to borrowers of any size and projects through PFIs. Since they are lending on a wholesale basis, they can exploit economies of scale and at the same time reduce their exposure to credit risk through the system of accreditation of lending conduits. GFIs' (or DTI's in the case of the NGO Microeredit Program) lending rates to lending conduits allow them to realize a comfortable gross margin of two to three percentage points, which is more than enough to cover their administrative cost. This margin is invariantto the changes in the WAIR on deposits. On Lending

Conduits

or PFIs

Lending conduits bear the credit risk of any loan they give to end-users under all the policy-based lending programs. Since lending conduits are given the freedom to apply their own criteria in approving loan applications over and above the criteria set by the individual programs, they have been able to reduce their risk exposure. All, except the NGO Microcredit Program, have high repayment rates. In addition, the absence of a cap on the re-lending rate has allowed them to charge a rate on loans that is reflective

8. GFIs were from the very start dependent on government deposits. In 1987, the government changed its policy toward GFIs, urging them to accelerate their mobilization of private savings_ At present, GFIs offer very competitive rates on deposit instruments.

LAMBERTE: POLICY-BASED LENDING PROGRAMS

243

of their risk exposure and the administrative cost in handling the loan accounts of target beneficiaries. There is considerable variation in the gross margin realized by lending conduits across types of policy-based lending programs. Under the IICP and the IRP, this margin ranges between three and six percentage points; under the ALF and the IGLF, between five and eight percentage points; and under the NGO Microcredit Program, it stands at around 11 percentage points. Clearly, gross margins vary inversely with the size of borrowers being addressed by the lending programs (Figure 1). This may be due to the higher risk and administrative cost involved in lending to small borrowers as opposed to large borrowers. Certainly, these spreads give lending conduits a reasonable net profit from these lending programs. 9 On End-Users Perhaps the most important impacts of policy-based lending programs on end-users have to do with access and the cost of credit. However, information on this issue is quite limited because, among the policy-based lending programs reviewed, only the ALF and the First NGO Microcredit Program have so far conducted end-user verification surveys. For other programs, case studies and impressions of officers of implementing agencies are the main sources of information. According to DTI's report, the end-users of the NGO Microeredit Program belong to the so-called "nonbankable" types with practically very •limited assets that could be used for collateral and very low household income. The interest rates they pay, though pegged to the prevailing commercial rate in the area, is much lower than those prevailing in the informal credit markets. In contrast, the end-users of the ALF, the IGLF and the IICP belong to the "bankable" types with sufficiently mortgage.able assets. In other words, most of them already have access to bank credit. In fact, most of their loans were used for the expansion of existing projects. One might hasten to 9. FSPistheexception tothisstatement since LBPonlybreaks eveninitsoperations.

244

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

FIGURE Gross

Spread

by Size of Borrowers

Spread 12-

10-

% 6-

4 I

2 m

I Cottage

I SME Size ofBorrowers

I Large

LAMBERTE: POLICY-BASEDLENDING PROGRAMS

245

conclude here that the credit programs are not necessary in that most of the borrowers already have access to bank credit. However, one should take a closer look at the kinds of loans obtained by borrowers from special credit programs. Many of those with access to bank credit sought medium- and long-term loans to expand their existing business. However, banks could only provide them with short-term commercial credit, l° Thus, end-users resorted to borrowing from the special credit facilities since they provided medium- and long-term loans that could be used to finance the acquisition of fLxedassets and permanent working capital. In many cases, end- users learned of the special credit facilities from their bank. The market rate of interest on special credit programs does not seem to be a hindrance to end-users. In fact, most of these facilities run out of funds way ahead of their scheduled completion, necessitating the creation of successor credit programs. The option to pay fixed or floating rate also made these credit programs attractive to end-users. On the General Credit Policy Environment There is no doubt that policy-based lending programs have made their greatest impact on the general credit policy environment in the country. Although there still exist several special credit programs, only a few of them carryconcessional rates. These are small credit programs that hardly created a distortion in the credit market. The charging of the market rate of interest on special credit programs is a practice now widely accepted. The policy-based lending programs have also facilitated the transformation of GFIs into wholesalers of loans. In the past, GFIs retailed loans and competed with private financial institutions in tapping funds from

I 0. At present, banks are constrained from granting medium- and long-term loans because most of their funds have shorter maturities. As of December 1991, time deposits comprised only 32 percent of the total volume of deposits. The rest were demand and savings deposits. Of the total volume of time deposits, only 29 percent have maturities of more than two years. Given the experience in the 1980s when many depositors preterminated their time deposits in times of crisis, banks are now averse towards term transformation. They are now merely matching the maturities of their assets and liabilities.

246

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

special credit programs and in relending them to end-users. Now, they have found their niche in the credit market, complementing the functions of private financial institutions. Admittedly, GFIs still engage in the retailing of loans, but the share of such loans in their total loan portfolio has been on the rapid decline in the last four years. On the Effectiveness of Monetary Policy In the past, the Central Bank managed special credit programs, most of which had rediscounting privileges. Because these loans carried very concessional rates, banks relied greatly on them as sources of funds. The Central Bank could not easily change the rediscount rates or tighten the rediscount window during times of excess liquidity due to strong political pressures. In fact, money supply and, hence inflation, grew very rapidly in the late 1970s and early 1980s when the number of special credit programs rose sharply. Thus, the Central Bank was virtually ineffective in conducting monetary policy. Prudential regulation was also one of the casualties of having numerous special credit programs managed by the Central Bank. In an effort to reach a large number of beneficiaries targeted by a specific credit program, the Central Bank pushed credit through a large number of banks. And when many end-borrowers could not repay their loans, most conduit banks refused to pay their loans with the Central Bank on the ground that they were merely responding to CB's request to distribute the loans. This gave rise to the concern that closure of a large number of errant banks could lead to a more unstable situation. Thus, the Central Bank opted to rehabilitate them. In the last 15 years alone, the rural banking system has undergone four major rehabilitation programs, none of which seemed to have succeeded in improving the financial stability of the rural banking system. The transfer of special credit programs to GFIs proved to be a big relief to the Central Bank because it can now concentrate fully on stabilizing the financial system. In the past five years, the Central Bank had been constantly changing its rediscount rate to reflect market conditions, at times tightening the rediscount window when it wanted to slow down the growth of money

LAMBERTE: POLICY-BASED LENDING PROGRAMS

247

supply. This brings up the issue of whether the availability of credit from policy-based lending programs now being managed by GFIs has weakened the effectiveness of monetary policy. This weakening will occur if the Central Bank's efforts to contain the growth of credit in general and, hence, money supply through the rediscounting window or open market operations are neutralized by the unabated flow of credit from special credit programs. As pointed out earlier, almost all special credit programs including policybased lending programs now carry market rates of interest. Therefore, a tight monetary policy leading to a rising interest rate could affect the cost of credit including that of special credit programs and could induce some potential borrowers to postpone their investment or business expansion plans. It bears noting though that there is now better coordination between monetary and fiscal policies after interagency committees have been created to monitor monetary aggregates and the performance of the fiscal sector.ll As the fiscal agent of the national government and as a manager of international reserves, the Central Bank is the depository of all foreign loans negotiated by the government with donor agencies. During times when the Central Bank finds the need to stem the growth of credit so as not to exceed a certain ceiling in the growth of money supply, it postpones the transfer of funds to the accounts of GFIs with the approval, of course, of the national , government. GFIs have cited delays in the receipt of funds for certain credit programs, especially during times when the Central Bank wanted to reduce liquidity in the system.

I I. The National Economic and Development Authority, the Department of Finance and the Department of Budget and Management are represented in the Open Market Committee. The Central Bank is represented in the Development Budget Coordination Committee (DBCC) and the Cash Programming and Monitoring Committee (CPMC). The DBCC ensures the conformity and harmony of the Philippine annual budget with the country's overall development plan. On the other hand, the CPMC makes possible closer coordination among various government departments in the release of funds based on the short-term calculation of cash availability. One of its tasks is to ensure that the deficit target of the fiscal sector is not exceeded.

248

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

The most recent rehabilitation program for rural banks is now being managed by LBP. The Central Bank that used to handle the program now concentrates on the more substantive aspects of prudential regulations in order to improve the stability of the financial system. On Sustainable

Development

With the increasing concern about sustainable development, policy-based lending programs have incorporated features that would sensitize both lending conduits and end-users to the environmental impacts of the projects being proposed for funding. In particular, proponents of large projects are being required to secure first an environmental clearance certificate (ECC) from the Department of Environment and Natural Resources (DENR) before their loan requests could be approved. Environmental impact assessment study has now become part of the feasibility study conducted by loan applicants. This has made it necessary for PFIs and DENR to expand their capacity to assist end-users in making or evaluate environmental impact assessment studies. This has, of course, increased the cost of doing business for end-users as well as PFIs, but over the long run, this will contribute to sustainable development from which they will benefit. REMAINING

ISSUES

Despite positive developments brought about by policy-based lending programs, some remaining issues should be addressed by policy or closely examined in future research. First, since policy-based lending programs are externally funded, they should have increased the aggregate supply of institutional credit in the country, especially since the large programs are coursed through the PFIs. This does not seem to be the case, however, since the share of the loan portfolio of banks in total assets during the period 1986-1990 was generally lower than in previous years (Table 2). Highyielding Treasury Bills became a very attractive investment instrument during this period, prompting banks to shift a substantial portion of their resources to such instrument. Thus, it is highly probable that the funds drawn

,m TABLE 2

Loan Portfolio of the Banking System t980

198t

1982

1983

1984

1985

1988

{n m

1987

1988

1989

1990

o rm z

Total Assets (million pesos)

_o 188,824 218,966 257,128 338,901 391,757 395,139 304,085 330,305 392,054 479,010 608,906

Loan Portfolio (as % ,-, ,_ Total v. ',-,,,vAss==*°_58% _nvestment

57%

56%

59%

50%

44%

41%

44%

42%

41%

42%

14%

13%

11°/0

12%

11%

13%

12%

14%

13%

(as % u,_'Total Assets)

12°/o

Source: Central Bank of the Philippines

4_ qD

250

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

from special credit programs substituted for the banks' own funds that should have been used to service the credit needs of their clients. In effect, therefore, the externally funded policy-based lending programs helped finance the fiscal deficit. Of course, one can argue that the situation could have been worse, i.e., a smaller amount of Credit would have flowed to the economy at higher rates of interest, were it not for the additional funds coming from the externally funded credit programs. Second, the funds of policy-based lending programs have been coursed through lending conduits that have been operating in a less competitive environment. They have therefore extracted some rents from such credit programs. Lamberte (1992) has shown that the banks' spread, i.e., the difference between the lending and deposit rates adjusted for intermediation taxes such as the reserve requirement and the gross receipts tax, increased during the period 1981-1990, and this can be largely explained by the increasing banking concentration. The implication here is that the passed-on rate, i.e., the interest rate charged by GFIs to lending conduits that is keyed to the weighted average interest rate on time deposits has been lower and that the interest rate paid by end-users has been higher than what they should have been under a competitive environment. The policy-based lending programs could have also included reforms in competition policy. Third, some credit programs especially those that target cottage and small enterprises and are considered "nonbarrkable," made a conscious effort to use alternative lending conduits, specifically NGOs, that can efficiently deliver credit to such 'beneficiaries. However, the spread they realized from such programs proved to be very high, leading one to question the alleged comparative advantage of these institutions in delivering credit to the so-called "nonbankable" ones. Although there is a need to continuously look for alternative, nonconventional mechanisms for delivering credit to the so-called "nonbankable" ones, the promotion and nourishing of inefficient credit delivery systems must be avoided. It may be worthwhile for the economy to use the same resources in improving the profitability of the projects of"nonbankable" entitiesthrough infrastructure development, and trade and industrial policy that encourage competition, and through

LAMBERTE:POLICY-BASED LENDING PROGRAMS

251

further reforms in the banking system such as more liberal bank entry and the strengthening prudential regulations to make the services of the banking system readily available to more clients on a more competitive basis. Moreover, NGOs, except well-established credit unions, either have very little capability or are incapable of mobilizing deposits_making the sustainability of their lending services to target beneficiaries entirely dependent upon the continuation of special credit programs.12 And lastly, the availability of special credit programs musthave relaxed the credit constraint facing the sectors being targeted, thereby, facilitating their growth. The availability of credit is only one of the factors that determine the growth of the sectors in question.There are other factors such as the general price and trade policies for the sector, the overall stability of the economy, infrastructure support, etc., that could affect the performance of a particular sector. There is also a problem to be engendered in discerning the contribution of the policy-based lending programs to the performance of the targeted sector because these programs have become general rather than specialized insofar as target beneficiaries are concerned. The funds, therefore, have been widely dispersed to a number of subsectors.13 Among the programs reviewed above, only the ALF and IGLF have been put in place for some time; therefore, their contribution to the targeted sector can already be determined. However, the economic crisis that struck in 1983-1985 could have blurred the relationship between the availability of credit from these lending programs and the growth of the targeted sector. As shown in Table 3, the agriculturalsector grew at an average rate of 2.1 percent for the period 1985-1990,higher than the average growth rate 12. The first NGO Microcredit Program tried to incorporate a savings and mobilization component but failed miserably. The Second NGO Microcredit Program imposed a stricter procedure by withholding a certain portion of subloans as deposits of subborrowers. This unnecessarily increased the cost of funds to borrowers. Moreover, deposits with NGOs are not covered by the deposit insurance system, thus, making deposits in these institutions very risky. This has made it difficult for NGOs to mobilize voluntary deposits. 13. Thiswas easier to do under the previous special credit programs because they had wider target beneficiaries such as the textile, hog and poultry industry, etc.

TABLE 3 Growth Rate, Loans Outstanding and ALF Loans Outstanding of the Agricultural Sector, 1980-1990 . • •

Loans Outstanding

ALF Outstanding (billion pesos)

% of GVA Growth Rate %

I%)

% of Total

Nominal

Real

% of Total

Agriculture

9.1

15.9

23.1

7.2

12.8

18.7

Nominal

Agri Loans

1980

4.7

12.7

1981

3.6

11.6

1982 1983

0.8 -3.4

13.4 16.3

7.9 8.8

13.0 13.7

20.1 22.8

1984

-0.9

11.3

3.9

8.8

9.7

1985

-1.9

11.1

3.2

11.3

8.4

0.109

O _o

1986

3.7

14.9

4.1

15.7

10.9

0.291

rO_

1987 1988

3.2 3.2

13.8 16.8

3.7 4.2

12.6 12.2

9.2 9.8

0.372 0.881

2.7 5.2

1989 1990

2.6 1.9

16.0 18.9

3.6 3.8

8.9 8.8

8.2 8.4

2.312 2.397

14.4 12.7

> o_

_> ('3 Z

o m

z> O m

< m Sources:

CentralBank, Statistical Bulletin,variousyears SGVNirata & Associates,"Impact Evaluationof the Rural Financial Services Project," 1991 NationalStatisticalCoordinationBoard,"National Income Accounts," various years IGLF Annual Reports, various year._

LAMBERTE: POLICY-BASEDLENDING PROGRAMS

253

of 0.96 percent attained in 1980-1984. The sector grew despite a sharp drop in the real volume of loans going to the agricultural sector that averaged only P3.8 billion during the period 1985-1990, compared to the average for the previous period at P7.4 billion. Consequently, the ratio of agricultural loans to the gross value added of the agricultural sector dropped significantly in the later period. Interestingly, the ALF loans outstanding and their share in the total agricultural loans outstanding of the banking system consistently increased over the years, with 1989 and 1990 witnessing a sharp rise despite deceleration in the agricultural growth rate. Thus, one cannot derive a strong correlation between the agricultural sector's performance and the availability of agricultural credit coming from the ALF. However, one can raise a counter-argument pointing out that the sector could have experienced a worse performance without the ALF considering the increasing share of ALF loans in total agricultural loans. Table 4 depicts the case for the manufacturing sector. Unlike the agricultural sector, the manufacturing sector seemed to have been favored by credit. Loans outstanding of the manufacturing sector both in real terms and as a percentage of the gross value added for the sector tended.to recover after the 1983-1985 economic crisis. The sector's share in the total loans outstanding of the banking system rose to about 40 percent in the last three years. The IGLF loans outstanding generally increased during the period 1980-1990. Their share in the total loans outstanding of the manufacturing sector increased until 1985 but fluctuated thereafter. Again, the relationship between IGLF loans and the performance of the manufacturing sector cannot be discerned from the available data. One cannot draw a definite conclusion from the findings discussed above. As already pointed out, there were several intervening factors that could have weakened the contribution of policy-based lending programs to the performance of targeted sectors. However, a micro level analysis might give a different picture. For instance, the case studies done for some of the IGLF beneficiaries clearly demonstrate the usefulness of the program to those wanting to expand their business. Likewise, the end-user survey of

TABLE 4 Growth Rate, Loans Outstanding and ALF Loans Outstanding of_he Manufacturing Sector, 1980-1990

Loans Outstanding

IGLF Outstanding (billion pesos)

% of GVA Growth Rate % 1980

% of Total

Nominal

Real

% of Total

Manufacturing

Nominal

Mfgr. Loans

27.6

19.9

34.6

44.1

0.25

1981

2.0

26.8

17.1

29.4

40.9

0.42

1.6

m 03

1982

1.6

30.6

17.7

29.5

38.4

0.52

1.7

1983

(0.3)

36.7

19.3

29.9

0.65

1.8

1984

(10.0)

33.5

11.7

26.3

25.9

1.04

3.1

1985 1986

(7.9) 1.8

23.3 23.4

6.6 6.6

23.7 24.7

16.2 15.6

1.46 1.05

6.3 4.5

1987 1988

5.6 8.5

42.3 56.1

11.5 14

38.8 40.7

24.9 27.1

0.77 N.A.

1.8 N.A.

t 989

6.4

75.4

41.9

32.3

2.8

5.0

1990

2.0

88.3

17.7

5.43

6.1

O 1-

cn O m rn° > z o 131 < 13"1 r--

Sources:

Central Bank, StatisticalBulletin,variousyears:

National StatisticalCoordinationBoard,"National IncomeAccounts",variousyears; IGLF AnnualReports,variousyears.

_, "_

LAMBERTE:POLICY-BASEDLENDING PROGRAMS

255

the First NGO Microcredit Program shows rising incomes experienced by beneficiaries. The IICP and IRP have provided large term loans to only a few sectors.14 However, their impact on the performance of these sectors cannot be determined at this point since these programs have just started. This may be a good subject for future research.

BIBLIOGRAPHY

Agricultural Credit Policy Council. Fisheries Sector Program Credit Component. 1992. Asian Development Bank. Brief, Second NGO Microcredit Project in the Philippines. 1991. . Project Completion Report of the NGO Microcredit Project in the Philippines (Loan No. 940-PHI [SF]). June 1992. . Appraisal of the NGO-Microcredit Project in the Philippines. November 1988. .

Appraisal of the Second NGO Microcredit Project in the Philippines. October 1991. • Report and Recommendations of the President to the Board of Directors on a Proposed Loan to the Republic of the Philippines for the Fisheries Sector Program• September 1989. Biggs, Tyler S., Donald R. Snodgrass and Pradeep Srivastava. "On Minimalist Credit Programs." Savings and Development Quarterly Review 1: (1991). Italy: Finafrica.

14. The largest recipients are beverage manufacturing, metal industry, transportation, storage and communication, and food and food products.

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ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

Lamberte, Mario B. "MCSME Promotion Policy and Legislative Agenda: Focus on Monetary Policy, Finance and Credit Programs." Working Paper Series No. 90-20. Makati: Philippine Institute/'or Development Studies, July 1990. . "Assessment of the Financial Market Reforms in the Philippines, 1980-1992." Paper presented during the Third Convention of the East Asian Economic Association held in Seoul, Korea on 20-21 August 1992. Lamberte, Mario B. and Joseph Lim. "Rural Financial Markets: A Review of Literature." StaffPaper Series No.87-02. Makati: Philippine Institute for Development Studies, April 1987. Sycip, Gorres and Velayo Consulting and C. Virata and Associates. Impact Evaluation of the Rural Financial Services Project. March 1991. Work Bank. Philippine Industrial Investment Credit Project Staff Appraisal Report. 1989. . Performance Audit Report: Philippines Agricultural Credit Project (Loan 2570-PH). July 1990. __. Philippines Proposed Rural Finance Project. Manila, November 15, 1990.

Highlights of Discussion

POLICY-BASED LENDING PROGRAMS IN THE PHILIPPINES

The oligopolistic structure in the credit markets occurs from the presence of only a few banks vis-/t-vis a greater number of end-users. In this situation, the lending conduits can dictate the price. The market rate in essence is the rate which results due to the presence of restrictions in the entry to the market. The high level of interest rate in the Philippines was noted as a deterrent to the modernization of the agricultural sector. Dr. Lamberte, however, said that the more crucial issue is the stability of rates rather than the level. Rural borrowers are concerned also with lack of access to credit rather than the level of interest rate. Results of various studies on the rural credit markets have been consistent on this observation. International agencies are putting conditionalities on credit programs, considering that there is a free market system, because the conditionalities support the reforms towards free market and they want to ensure that the reforms will not be reversed. But sometimes even if the conditionalities have been liRed, government still continues to use donor agencies to push for some policies. Regarding gender issues in the credit markets, Dr. Lamberte stated that these are being addressed in some credit programs especially those involving the NGOs (e.g., Grameen). However, this is not a binding concern.

OLD IMAGES AND NEW CHALLENGES: RETHINKING THE MISSION OF AGRICULTURAL

SUPPORT

SYSTEMS

IN ASIA

BRUCEKOPPEL*

INTRODUCTION

GRICULTURAL SUPPORT include institutional and policy ments that provide theSYSTEMS technical, educational, economic, and arrangemarketing supports for agriculture. Contemporary government-financed agricultural support systems in South and Southeast Asia evolved principally to strengthen productivity growth for basic food and agricultural commodities. During the last three decades, they have been the cornerstones of both rural development strategies (through their focus on bringing. technology, credit, and marketing services to selected agricultural producers) and urban food policies (through their focus on stock and price management for basic cereal grains). Today, even as scientists at the International Rice Research Institute talk of a second green revolution for irrigated rice-farming, A-sia's agricultural support systems stand at a crossroads between old images of agriculture and rural life and new challenges of rural diversification and transformation. The choices that the systems make for mission and direction will have enormous consequences for rural welfare, agricultural dynamism, and the viability of national food systems throughout Asia. *Vice-Presidentfor ResearchandEducationof theEast-WestCenterin Honolulu,Hawaii. As a graduate studentin rural sociologyat Cornell,he participatedin the UP-Cornell GraduateEducationProgramduringthe period 1969-1971in Los Baflos.That was the beginningof hisassociationwithDr.Castillo,fromwhichDr.Koppelhas learnedfarmore thanhehasgiven!

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

During the 1960s and 1970s, many of the agricultural support systems in South and Southeast Asia were mobilized as never before as part of strategies to support the diffusion and adoption of "green revolution" technologies and techniques for rice and wheat production. The focus was strong on lowland, irrigated farmlands and the households cultivating those lands. In the 1980s, the support systems were expected to continue fulfilling this mission while facing declining financial support from government, falling participation by farmers in national rice and wheat production programs, and, in many instances, competition for technological advance from domestic and transnational proprietary agricultural research (Evenson and Pray 1991). In the 1990s, it is apparent that agricultural support systems in Asia's developing countries face two additional challenges beyond the traditional mission they have pursued for thirty years. These challenges are the issues of sustainable development and poverty alleviation. These challenges do not simply impinge on the systems' capacities to address their traditional productivity mission -- they require , in fact, a redefinition of the support systems' fundamental mission. This is true because both issues require the support system to shift its attention from a commodity focus to an ecological and systemic focus and from an endowed area concentration to a marginal •area concentration. The issue of sustainable resource development has acquired wide recognition and has become commonplace as an objective of national resource management plans, but what it actually means for the mission and management of agricultural research and extension is still less clear. Experience with farming systems research and integrated pest management, for example, often involved more intensive cultivation and higher utilization of chemicals. The issue of poverty alleviation is not new, and indeed is the subject of an enormous literature, but it is still not clear that the full implications of this issue have been faced by contemporary agricultural support systems in Asia. This is illustrated by the problems of the systems in dealing with farm households in less well-endowed areas and with landless laborer households generally. What is clear is that, together, both

KOPPEL:OLD IMAGES AND NEW CHALLENGES

261

challenges may mandate a significant rethinking of the mission of the agricultural support system. To speak of rethinking the mission of the agricultural support system is no small task nor is it a task that can usefully occur in a vacuum. Agricultural research and extension exist and have already played crucial roles in Asia's recent agricultural development. Any reassessment of the roles of agricultural research and extension should not do anything to weaken this system, but rather should emphasize directions in which the system can realistically and effectively move (of. Echeverrta 1990; Antholt 1994). This paper is designed to contribute to this objective by indicating one way of determining what the challenges of sustainable development and poverty alleviation might mean for the mission of agricultural research and extension. To do this, the paper will briefly review some of the most important factors influencing the future of agriculture in Asia, examine the concept of sustainability as a criterion for judging resource management, and comment on the status of Asia's agricultural support systems. With these points as a background, the paper will focus on limited-resource farmers, the group that may be most germane if agricultural research and extension are going to effectively increase their concern for both sustainable resource development and the alleviation of rural poverty. The discussion will focus on a crucial distinction: between agricultural support as a transfer process and agricultural support as a transformational process. THE FUTURE

OF AGRICULTURE

Since the early 1960s, overall production of major food grains in Asia has increased dramatically. For example, rice produetivity increased from 1,500 kilograms per hectare in 1965 to over 2,500 in 1985 in South Asia and from close to 1,600 kilograms per hectare in 1965 to almost 3,000 in 1985 in Southeast Asia. This growth is a result primarily of technological innovation represented by higher-yielding varieties and increased utilization of fertilizer, infrastructure improvement represented by signifieant investments in roads and irrigation, and more intensive cultivation represented by double

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

and triple-cropping on newly-irrigated fields and the opening of new agricultural areas. At the same time, in parts of South and Southeast Asia, per- capita food production has grown only marginally and, in some places, grain yields since the mid-1980s have shown evidence of leveling. This is a troubling prospect given the complacency that appears to have set in about agricultural development in Asia. A variety of factors, ranging from environmental degradation and urban expansion to economic mismanagement, civil disorder, and political interference have been associated with declines in prime agricultural areas actually harvested with food crops. For example, food policy -- the effort, in principle, to strike a balance between low consumer prices (consistent with reducing inflationary pressures on wages) and high producer prices (consistent with ensuring incentives for adequate domestic production and possibly reducing incentives for rural-urban migration) has had a mixed record and, in many cases, may be suppressing both agricultural incomes and productivity without noticeably improving overall nutrition levels (Mann and Huddleston 1986). Additional factors, including rural unemployment and population growth, have been associated with increases in marginal areas being utilized for food production. The combined result can be lower average productivity. At least five additional reasons for existing or prospective problems in maintaining grain yields can be noted. 1. In some cases, changes in agricultural production are statistical artifacts. In many countries, statistical systems for estimating crop production have generally undersampled more remote farmers. As the systems improve their coverage, reports of "declining" yield can be expected. For example, for many years rice productivity estimates in Indonesia and the Philippines were based heavily on samples drawn from farmers participating in the governments' rice support programs. This tended to overestimate average yields across agroecosystems. Today, as more differentiated data become available, it appears that productivity growth has slowed down

KOPPEL: OLD IMAGES AND NEW CHALLENGES

significantly and that average productivity levels are lower than what were previously projected. 2. There are growing problems of pest resurgence. Extensive use of commercial pesticides by farmers who could afford them helped cheek pest damage on rice and wheat during the late 1970s and early 1980s. However, insect pests evolve and adapt very quickly to environmental changes. There has been evidence for the last decade that the evolution of pests affecting Asia's major food crops is outpacing the evolution of chemicals to control them. Pest problems are becoming more serious and there are no simple answers available in terms of "off-the-shelf" chemicals. Attention is turning to other strategies -- ranging from breeding varietal resistance to altering planting and cropping schedules -- that might be more compatible with the realities of pest evolution and also more accessible by a wider range of farmers. But in the interim, vulnerability to serious pest problems is increasing. 3. There is a continuing trend of agricultural land conversion and deterioration. This is a result of expanding human settlement patterns. A principal consequence of these processes is the removal of prime agricultural land from agricultural use, especially within the catchment areas of major urban centers. At the same time, continuing population pressure on more marginal land resources, especially in sloping and upland areas and on marginal soils (e.g., coastal wetlands), is weakening the already limited productivity potential of these land resources. 4. There is a continuing problem of irrigation deterioration. Investment in irrigation is one of the major chapters in the "green revolution" story for rice and wheat. However, while the projected need for new irrigation facilities -- especially in South Asia m amounts to several billion dollars, maintenance of existing irrigation facilities in South and Southeast Asia has proven less than

263

264

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

satisfactory in many instances. Inadequate maintenance of irrigation facilities can seriously undermine productivity. For example, poor maintenance is frequently associated with poor drainage. Eventually this leads to water-logged soils. Improper canal maintenance can impede water flow, reducing the reliable irrigation service area. In the last decade, more attention has been given to irrigation management (e.g., through support of the International Irrigation Management Institute in Sri Lanka and much greater recognition of the roles of water user associations), but solving the problem of effective irrigation services will take considerable time and commitment. In the interim, productivity within many irrigation systems will continue to be less than what is possible and will show signs of decline. 5. There is a transformation of rural labor markets in Asia which reflects increasing levels of work and income diversification. In some cases, this process is a result of stagnant or declining agricultural productivity. Households are exportinglabor (usually women and children) into nonagricultural labor markets in an effort to maintain their welfare levels. Unfortunately, however, the withdrawal of labor from agriculture can lead to a downward spiral in productivity. In other cases, rural labor diversification is associated with rising agricultural labor productivity. In these circumstances, off-farm work becomes feasible as a welfare augmenting strategy. However, here too, if the withdrawal of labor and investment from agriculture is too aggressive, the viability of the household's agriculture base can be weakened. In both cases, labor diversification represents a significant challenge to an agricultural support strategy which assumes that all household members are full-time farmers (iKoppel, Hawkins and James 1994). •Consequently, despite the successful agricultural production picture that can be seen in the aggregate for Asia since the mid-1960s, there are many warning signals to suggest that the foundation for maintaining this

KOPPEL: OLD IMAGESAND NEW CHALLENGES

265

success is not impregnable. At the least, the aggregate picture masks considerable variability. THE STATUS OF AGRICULTURAL SUPPORT SERVICES In the face of this variability, attention is again turning to the roles of agricultural support services. The institutions comprising the support system have served as mechanisms for bringing goods and services to and from rural areas in ways that have influenced the allocation of land, labor and capital within rural resource systems. The net effects of this system have been widely acclaimed as very positive (e.g., Evenson et al. 1979; PinstrupAndersen 1983; Ruttan 1978). However, it is important to acknowledge that these same institutions also function as policy arenas which permit social, economic and political interests both within and outside the institutions to operate in the allocation of scarce administrative resources in support of agriculture (Burmeister 1984; Chambers 1983; Haas 1979; lnayatullah 1979; Koppei and Oasa 1987; Korten and Alfonso 1983; Lea and Chaudhri 1983). In recognition of this point expanded (de Janvry 1985; Lipton 1985), uneasiness grew -that the institutions of the agricultural support system do not always permit market forces to operate and worse, that these institutions might be promoting interests that are inefficient. Today, this feeling is expressed against a background of increased attention to policy reform, especially with regard to relationships between "government intervention" and market-determined price-formation processes. A fundamental generalization is repeatedly advocated in development policy discussions: Successful economic development in rural areas is the outcome of policy reforms that reduce government intervention in rural commodity markets. However, asked much less often is: What parts of the political and administrative system would be referred to by the call for reduced participation in the economy? What, for example, does the call for policy reform mean for the status of publicly-financed agricultural support services? Answers to these questions are not straightforward. After all, the state's

266

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

relationships with rural society throughout Asia are multidimensional, employing policies, institutions, and technologies as instruments. Rather than criticizing government's role in agricultural development per se, it may be more worthwhile to first understand the nature and impacts of specific patterns of involvement.

For example, while there are equivalents of the Department of Agriculture in every country, in almost all cases, governments' relationships with agriculture are only partially exercised by or through these departments. Moreover, the case can be made that the role of these departments in the overall food and agricultural policy formation and implementation picture is declining while the roles of other agencies, some only nominally connected to agriculture (such as Departments of Finance or Trade), are increasing. Strategies such as vertical integration and risk shifting through alliances between market power and state action have become important dimensions of change in the organization of rural commodity systems, as the Philippines under Marcos demonstrated. Control of virtually all major agricultural and food commodities -- including coconut, sugar, rice, corn, and wheat--was assumed by a variety of "authorities" outside the normal agricultural support system. Since 1986, many of these parastatal entities have been abolished or their roles have been modified, but issues of intervention and administered markets remain important nevertheless. The Philippine case is not unique. Similar patterns can be seen in Bangladesh, India, Indonesia, and Thailand. The acceleration of state intervention to control rural commodity systems, purportedly to stabilize domestic prices and production in the face of volatile international markets, was a pervasive phenomenon throughout Asia during the 1960s and 1970s (Canlas et al. 1983; Clarete and Roumasset 1983; Dell 1983; De Leon 1982; Harriss 1984; Kruegger 1974; Sathyamurthy 1985). It was precisely against this background that parastatal organizations appeared. These.are quasistate corporations that have been delegated government powers to regulate, allocate, and tax, but are not routinely accountable to "normal" government staffing, financial management, and reporting conventions. Parastatals have

KOPPEL:OLD IMAGESAND NEW CHALLENGES

267

acquired important roles as exclusive agents of the state for commodity trading in many countries of the region. These kinds of changes can have significant implications for the organization and performance of affected rural commodity markets and can be closely associated with the emergence (and state endorsement) of monopsony power in rural marketing systems. An often-forgotten point is that what we usually think of as agricultural extension functions in this complex and frequently unfriendly environment. Other developments that are already existing or on the horizon can present additional problems for the support and mission of public agricultural research and extension. For example, a technology transformation that is in progress may have more far-reaching effects than the technological change that characterized the "green revolution." Science and technology are holding out the enticing prospect of substantially increased and less variable production but are in the framework of production systems that may be very different from those common today. Biotechnology already shows a significant potential not simply to modify (or in some cases enhance) existing technological bases of agricultural production, food processing and animal husbandry, but also to be very compatible with a restructuring of the economic, institutional and political foundations of Asia's agriculture (Brady 1982; Buttel 1983; Koppel 1985; Randolph 1984; Swaminathan 1982). For example, what will the hybridization of basic food crop seeds mean for Asia's small farmers, the vast majority of whom do not buy seeds? Will many farmers be motivated by expected economic benefits to buy seed or will income inequalities within agrarian Asia be exacerbated, with the better endowed farmers and millers capturing most of the benefits of technological developments such as hybridization? The broad changes associated with biotechnology have fundamental implications for the roles of public agricultural research and extension and for types and consequences of privatization that may occur in Asian agriculture. Who will be the agents and the benefactors of the more proprietary technology dissemination systems? What will the increasing privatization of germplasm-based research mean for the "publicly" supported agricultural support system? For international

268

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

cooperation in technological improvements for Asia's agriculture? For the management of the specific natural systems where these germplasm materials currently exist in the wild? Biotechnology is only one example of technology transformation. Other examples include the growing importance of processed foods in many Asian diets, the introduction of new preservation technologies that permit longer-term storage of perishable foods, and the effects of transportation technologies on the marketing areas of various products. These are among the signs that postproduction dimensions of Asia's food and agricultural systems are becoming more important. These are areas where extension has generally not been active. As the importance of these postproduction dimensions increases, especially in terms of income and employment generation, will there be pressure on agricultural support services to extend assistance? Will competition for public financing of agriculturalsupport services become more intense? Clearly, these and other transitions have enormous implications for an agricultural development strategy that has strongly emphasized and encouraged public investment in agricultural support facilities. THE CHALLENGE OF SUSTAINABLE DEVELOPMENT There is considerable discussion these days about sustainable development. The extent of discussion could lead one to believe that there was consensus on what sustainable development is all about and that whatever it was, it was certainly a "good" thing to support. However, the consensus is largely accidental. At best, it represents endorsement. More commonly it represents acquiescence. For the most part, it does not represent commitment. The good news is that there is a broad idea about development strategy and objectives that people support. The bad news is that the idea is not clear. What are the implications of supporting this idea? What sacrifices may be required if the idea is put to practice? Who will have to make these sacrifices?

KOPPEL: OLDIMAGES ANDNEWCHALLENGES

269

As a result, agricultural support systems throughout developing Asia do not yet find themselves in a strong position to support purposeful action based on the idea of sustainable development. What exists is an accidental consensus, an indication of apparently growing global opinion. What do not yet exist, however, are sufficient indications of a shared and authentic commitment. These are required to yield an effective foundation for action. What is needed is an intentional consensus, one built up from explicit and open dialogue, premised on a transparent exchange of information and ideas, consenting to multiculturalism, and accepted and supported by compatible social relations and political institutions. Understanding the Problem: The Accidental Consensus What is sustainable development? At first glance, the answer seems to be simple. Sustainable development is a rate and form of development that can be continued given specific natural and man-made assets. Factors which constrain continuance (e.g., absolute depletion of critical resources, high population growth relative to available resources, loss of access to critical resources, environmental degradation) have to be confronted. Better management of existing systems and alternative technologies and socioeconomic arrangements are often advocated as solutions. That much appears obvious and is certainly worthwhile. However, what happens if we ask, "Beyond notions of dependence and limits, what does sustainability actually mean?" There are many answers. While many of the answers are offered with high degrees of self-assurance, on closer inspection many of the answers are inconsistent with each other. For example, neoclassical economic notions of sustainability focus on efficiency, market-determined growth in resources, and (predictable) equilibrium solutions to the allocation of resources. These notions are inconsistent at many points with sustainability as seen by ecology (Batie 1991; Lele 1991), where issues of instability, unpredictability, irreversibility, and the problems of absolute scarcity get strong emphasis. Yet, as shown by relationships between poverty and environmental degradation in the third world and industrialization and environmental degradation in the first

270

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

world, the security of economic growth and the integrity of ecosystem development are strongly linked. But how? The confusion about sustainable development is not limited to arguments about the relevance of disciplinary theories. Sustainable development is considered rightly to be a challenge for policy. As a policy problem, the sustainable development discussion is characterized by a split. Some see sustainable development as fundamentally a "technical" problem susceptible to technical solutions. Others see sustainable development as a sociopolitical problem requiring sociopolitical solutions. The language of this debate is often one that presents an ideology of neutrality on one side and an ideology of imputed intent on the other side (Koppel 1987). This is important because it reveals that many of the arguments about sustainable development are not actually hypotheses about empirical issues, but rather demonstrations of ideological expectations. As a result, there are few systematic empirical referents for sustainability. Indeed, and this may be surprising to some. We do not now have any agreed satisfactory ways of measuring sustainable development -- in natural or managed biophysical systems (ADB 1991; Carpenter 1990). Many governments now enunciate policies in terms of sustainable development. Yet, these do not differ from what has just been stated. The issue is how to assess both intentions and capabilities. There is a significant amount of new window-dressing in the development business, but we should not fool ourselves: the mannequins are often still the same and the clothes they wear are not necessarily new or different. For example, how many forest policies are now stated in the "new" idiom of sustainable development even as the rationalization of practices from the older idiom of open cutting and the forced relocation of indigenous populations continue? As both a political and ethical problem, we have to recognize that the calls for attention to sustainable development are also (some would say primarily) calls for (re)distributions of the costs and benefits of development. These (re)distributions reflect both instrumental and expressive purposes. The question is whose values are being expressed andpromoted?

KOPPEL: OLD IMAGES AND NEW CHALLENGES

271

What is sustainable development an instrument for? And what power is being exercised over whom to achieve these values? When people demonstrate in Tokyo or New York to save the Brazilian rainforest, who are they really saving it for and who, in fact, are they saving it from? When sustainable development is translated as conservation, protection, and carefitlly regulated use of upland areas, for example, who actually benefits and who actually loses? We know that the answers depend significantly on who is exercising regulatory power and for what purposes and that these purposes are not necessarily derived from concerns about ecological sustainability (Contreras 1991; Ferguson 1990). Is it a scientific generalization or only a coincidence, for example, that sustainable development is more often a rationale for creating parks and preserves than it is for undertaking agrarian reform? Finally, it is important to recognize the complex context in which the sustainable development issue rests. The sustainable development issue is in a cross-current of several quite different discourses. There is an international discourse, a local discourse, and an interactive discourse. At the international level, the contours of many of the sustainable development discussions reproduce patterns identified by the North-South debates. Sustainable development is an agenda frequently advocated by affluent countries to developing countries. Industrialized countries are telling other countries in earlier stages of indt.strialization to reduce air pollution, protect forests, conserve energy, etc. At the local level, there are undeniably authentic local rural protests against resource destruction and resistance to attempts by urban middle classes to impose their own sustainable development agenda on rural peasant classes. An example is peasant resistance to logging in Thailand. While these two discourses are well-established, a third discourse is emerging. It is about the interrelation of international action and local action. Peasant resistance may not be simply to other local parties, but may be directed at transnational actors. This is the case, for example, in the forest areas of Kalimautan and the tree plantations of Mindanao. The sustainable

272

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

development discussion is part of and, in different ways, is representative of each of these three discourses. Implications for Agricultural Support The key to sustainable development is the recognition of interdependence-temporally, spatially, and functionally. We need to understand the linkages in development actions between the short term and the long term. This is where ideas about incrementalism, irreversibility, and risk come into play. We need to recognize the linkages of development actions across space and, often, the irrelevance of administrative and political boundaries as quarantines particularly for environmental problems. And we need to accept that development actions in one sector have consequences that are rarely restricted to that sector. We may have recently "discovered" energy- environment and poverty-environment linkages, but those linkages have a long history. This multidimensional interdependence is not absolute nor uniform. Of particular interest is interdependence among three areas of concern. The first two concerns are widely recognized: economic security (which can cover issues from growth to poverty amelioration) and environmental security (which can cover issues from conservation to exploitation). The third concern is democratic security (which can cover issues from accountability to participation). The choice of democratic security as the third concern requires some additional explanation since it is especially important for understanding the implications of sustainable development for agricultural research and extension. Political security might have been chosen on the argument that the stability of political arrangements is a necessary correlate of (stable) sustainable development. 1would agree that there is an empirical association in many cases of stable political arrangements with economic and environmental security: However, that association should be viewed as a problem rather than as a desirable property. In a fimdamental sense, sustairlability is the continual making and remaking of a social contract. This is a contract about the nexus of risks and benefits from the intersections of the economy, J

KOPPEL: OLD IMAGESAND NEW CHALLENGES

273

the environment, and the polity. Both the contract and the processes of contracting define and reflect ideas about justice and equity in how those risks and benefits are allocated. It follows that what is crucial is not the stability of the state or the durability of any particular regime but rather that the contract and the processes of contracting represent and are accountable to the broadest range of social interests. After all, sustainable development is not a technically determined or ideologically prescribed end-state of relationships among economic, environmental, and political security. Sustainable development refers to characteristics of processes for making . choices about the interdependence of economic, environmental, and political security -- across different temporal, spatial, and functional scales. These processes are profoundly social and political. They are social because the issues of economic, environmental, and political security are fundamentally issues about social relations, and about how individuals and groups relate to each other through the sharing of risks and benefits from specific development paths. They are political because these are ultimately issues about the exercise, consequences, and accountability of power. From this perspective, then, the issue of sustainable development is about the interdependence of economic security, environmental security, and democratic security and the capability of.societies to grasp and confront this interdependence. More than these, however, is the issue of how choices are identified and made when it may well be impossible to simultaneously maximize the properties and goals associated with each individual area of security (Charoenwatana and Rambo 1988). THE CHALLENGE

OF LIMITED-RESOURCE

FARMERS

IfAsia's agricultural support systems are going to make significant progress in addressing issues of sustainable development and poverty alleviation and continue their traditional emphasis on agricultural productivity growth, the task will most likely be through redefining their mission in relation to limited-resource farmers. These consist of farmers who traditionally lack access to agricultural support systems because of limited resource endow-

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ment, or because the support system is simply not available to them. They include approximately one-half of Asia's rice-farmers who cultivate rainfed upland and lowland rice, for which relatively little technological support is available. They also include farmers who cultivate irrigated lowland rice, which has received intensive technological support, but who are too remote or poor to attract sustained attention from national agricultural support systems. Finally, these also include many farmers in the semi-arid tropics who have to depend on highly variable rainfall to grow their crops. The task will not be easy. A large portion of what has been learned in the course of Asia's agricultural development experience during the last two decades has come from Contact with a large group of farmers who are, relatively speaking, among the more well-endowed, more accessible, more literate, and more cominercially-oriented members of the agrarian community. By comparison, limited-resource farmers will expect their farming operations to directly support a broader range of household's food and energy needs. They may not be incorporated into anything other than purely local commodity markets. They may be relatively less connected with the agricultural support systems that have driven much of Asia's agricultural development during the last two decades. They may rely more on their own agricultural experience and orally transmitted local agricultural knowledge thaii on research station science, formal extension, and printed bulletins. They may live in communities with relatively less comlnercial and marketing infrastructure or government services, fewer opportunities for off-farm employment, and possibly higher average incidence of unemployment, underemployment, episodic niahmtrition, and disease: They are unlikely to be anything other than marginal users of manufactured agricultural chem icals. And the chemicals that they do use are inost likely fertilizers. Limited-resource farmers are often referred to, in some short- handed way, as "traditional." But, in facL what would this mean? Are the farmers traditional (in some cultural or psychological sense, for example) or are the technologies they use traditional (relative to some standards of "modernity," for example)? Does the term "traditional" convey the belief that such farmers are, in some fundamental way, different from other "nontradi-

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tionai" farmers? If so, what is the basis of this fundamental difference? For example, are the differences based on the processes which yield decisions and behaviors about resource allocation and utilization or on the outcomes of these processes? More generally, are the green revolution farmers and limited- resource farmers simply two points on the same agricultural development curve, differing only in degree, or are they points on distinct agricultural development paths, differing in kind? Are the differences between these two types of farmers virtually inherent (and practically immutable) or predominantly acquired (and possibly transitory)? Do the differences reside in the structure of certain relationships, the operation of specific resource management processes, or in the fundamental roots and "rules" of resource allocation and utilization? These are difficult issues. If the differences are inherent, then the challenge represented by agricultural development may be quite substantial (Koppel 1981). It means, for example, that much of what is known about one group would not necessarily apply to the other. If, on the other hand, the differences are acquired -- for instance, as a consequence of significant spatial remoteness -- then in principle, it is only necessary to overcome or compensate for such an external "distortion," and more familiar strategies can proceed. Inherent or transitory, it is necessary to understand why the differences occur and why they may be less tractable in some cases than others. One way to begin is to ask what is known about technology adoption and, more specifically, what might apply to limited-resource farmers? Then we can ask what the answers to these questions mean for agricultural extension.

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TECHNOLOGY

ADOPTION

AMONG LIMITED-RESOURCE FARMERS Technology adoption to any kind of farmers can be reduced to some deceptively simple questions. I. 2. 3. 4.

What is being adopted? Who does the adopting? Why does adoption occur, and implicitly, why does adoption not occur? What happens after adoption has occurred?

A good deal of information about technology adoption by farmers in Asia has been learned within the context of sponsored programs of technology diffusion, usually among farmers who do not share most of the characteristics described earlier as being those of limited-resource farmers. This is not to suggest that such programs have not reached limited-resource farmers. They have. However, there are some generalizations that need to be qualified or even reconsidered when limited-resource farmers are defined as a primary group of adopters. What is Being Adopted? Adoption research has worked best by identifying a specific material item (such as a seed or a cultivation instrument) that is either adopted or not adopted. In the last two decades what we have seen, however, is not the diffusion of specific material items alone, but rather an increase in deliberate efforts to encourage the adoption of packages of technologies, technology management practices, and, in many instances, financial and marketing practices as well. The agricultural support systems may have been very clear about how all these different parts tied together that they might have considered the packages to be really just one item for adoption. Certainly the descriptions of numerous "integrated" projects that were and are the vehicles for these efforts communicate the image of a merged package.

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The lesson, however, is that the farmer's view of this package is not always the same as the support system's view. Some parts will appear attractive. Other parts will elicit less interest and enthusiasm. In fact, the farmer may not be seeing a package at all, but a collection of individual items. The reverse has also been true. A support system may belie_,e it is recommending a specific, discrete item for the farmer's consideration. What the farmer may see, however, is not a discrete item but rather a solicitation to make commitments on time, land, or labor that go beyond what the support system believes it is asking. The question is: Is enough information understood about the limited-resource farmer and the limited-resource farm enterprise to know what is actually being recommended?. For example, consider botanical pest control strategy (Ahmed 1984; Ketkar 1976; Schmutterer 1983). This is a strategy that employs plants with useful pest repellent properties such as Neem (Azadirachta indica), that farmers could grow on their own fields to control pest problems. We recognize that evaluating this strategy may require rethinking some traditional research station criteria for assessing pest control performance. We also recognize, however, that we do not clearly understand what botanical pest control might mean to the farmer or what criteria the farmer might use to assess such a strategy. Is it a once-and-for-all practice? Is it a series of repeated or episodic practices? Do other aspects of farm management and household resource allocation have to be modified? If so, how much and in what ways? Can botanical pest control simply be compared to chemical pest control (the preference of the agricultural research system) or do the two strategies have other attributes that reduce their comparability? For instance, to what extent does a specific botanical pest control strategy have a role that exceeds the single function of pest management? What assumptions are made about resource requirements, management demands, andthe matching of costs and benefits? How do these assumptions compare to the way any specific botanical pest control strategy will relate to the land and labor management practices of limited- resource farmers? If we understand not only what we expect botanical pest control to do (i.e., address pest management problems) but also what botanical pest control is within the

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context of the limited-resource farmer's relationship to specific parts of the natural environment, we may find ourselves with a better perspective on the question: what is the farmer being asked to adopt? For example, in parts of India and Pakistan, farmers have been using plant materials (especially neem leaves) to protect grains in storage for generations (Ahmed and Koppel 1987) i with virtually no encouragement from any agricultural extension system. Farmers should better understand the benefits (perceived and "real") of these practices as well as factors that help to explain why some farmers employ the practices and others do not. Who Does the Adopting? Many generalizations found in the literature on technology adoption during Asia's green revolution assume that the adopter is a farmer, usually a male household head. If we saw the decision to adopt as a one-time decision, it was not unreasonable to focus on the individual we thought could represent the farm enterprise and, in some visible way, could be identified with the decision. Supporting this was a strong preference, if not an actual bias, by agricultural economists and extension agents to look for and find individual male household heads who were predefined both empirically (often through sampling frameworks which instructed them to contact male household heads) and theoretically (usually through theoretical frameworks that assumed the farm enterprise consisted of a single male manager who had family labor available for allocation). All this now seems to be changing. One important example is interest in considering farm households as collective decision-making entities (Fortmann 1984; Roumasset 1978; Smith and Gascon 1980). Another example is interest in the role of indigenous farmers' organizations in technology adoption and utilization. Certainly, recognizing technology adoption as the outcome of a collective decision-making process is not novel. In fact, in some places, efforts to make the diffusion-adoption process an explicitly collective one were, and still are, visible in the context of sponsored technology-adoption programs. In the 1970s, for example, local organizations were certainly recognized by many national agricultural development programs, but the organizations

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recognized were most often the cooperatives organized by government, usually for purposes of improving the efficiency (that is, agent/client ratios and numbers of farmers contacted) of extension and credit services. Until recently, the idea that effective collective decision-making influencing agricultural resource management might be operating outside of government-sponsored cooperative programs was not widely shared. Today, ideas in this area are changing, in part because even among the green revolution farmers, the performance record for sponsored cooperatives was perplexingly uneven (Castillo 1983). Consequently, many practitioners now resist the temptation to state authoritatively "this mode of organization and decision-making always leads to this pattern of technology adoption, risk distribution and resource management while this other mode always leads to another pattern." Interest in indigenous farmer organizations, particularly in relation to irrigation and common property resource management, is increasing, but there is relatively little research to build on. Therefore, it is doubtful that agricultural support systems will be able to rely completely on lessons from their earlier experiences with more well-endowed agricultural communities to guide their work with limited-resource farm communities. Instead, it is entirely possible that different starting points will be needed (Coward, Koppel and Siy 1983). More careful dist_ction between technology adoption that follows from a single adoption decision and from a number of adoption decisions (Koppel 1976, 1978) is needed. If the latter is the case, as it can be for any collection of tasks or technologies that have recurrent costs, it may be necessary to acknowledge the existence of different decision processes, different adoption curves, and even different decisionmakers for various aspects of adoption commitments. In such circumstances many decisions are often decisions of degree m not simply "accept-reject" -- that can be changed over time. If, indeed, a series of decisions are operating, what is the relationship between prior decisions and subsequent choices? How is this relationship organized socially? How is this relationship influenced by what is being adopted at any given point in time as well as who the effective decisionmakers are at different points in time? An important point about

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adoption decisions follows. Seen from the perspective of the technology generating and disseminating system, the process may be characterized as adoption. Seen from the perspective of the farmer, however, the process may be better characterized as adaptation, incorporating and modifying something into fuller compatibility with the •farmer's specific situation (Rambo, Dixon and Wu 1984; Ruddle 1974). In the context of a discussion about what is being adopted, it is quite • natural also to be concerned with the corollary questions: from whom and from •where is the technology adopted? Most discussions of agricultural development strategies associated with the successes of the 1970s can be located in reference t0these corollary questions. However, if the discussion is about what technological strategy is being adapted, then attention shifts quite naturally to other corollary questions: by whom and to what is the technology being adapted? Why Does Adoption Occur? Adoption research offers two broad types of evidence for answering this question: motivations and attributes. Research on individual motivations for adopting new technology has been extensive and has concentrated on answering two questions: Are farmers price (or benefit) -responsive? Are farmers risk-averse? The research says repeatedly that farmers are price responsive which can be translatedto mean that technologies which reduce marginal costs or increase average returns will be favorably viewed, all other things being equal. The research on risk offers the general insight that farmers, operating as they do in an auraof some uncertainty, determine and apply what amount to risk premiums when they evaluate new technologies. • Ecologists and anthropologists have also examined motivations for technological change among farmers and have pointed to some additional factors. Research on stability and uncertainty emphasizes that household subsistence and security are intimately tied to the agricultural enterprise. Consequently, farm households are visualized as trying to minimize episodes of variability (primarily in output) that can ultimately threaten the integrity of the family unit. Research on social, cultural, and religious values

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that can influence perceptions about the generation and disposition of surpluses, the allocation of family labor, land-use intensity, financing production costs, etc., emphasizes that choice of agricultural technology is deeply embedded in a sociocultural context. Work on price responsiveness and risk aversion has tended to coneenIrate on the more surplus-oriented farmers. The "who" in this research has been predominantly the individual farm household head, although in recent years this kind of work has been extended totime and labor allocation within the farm household. Work on stability, uncertainty and values has tended to concentrate on the more subsistence-oriented farmers. The "who" in this case has tended to be the farm household (not necessarily defined in nuclear terms), with broader kinship relationships and village affiliations often considered as well. Research on motivational aspects of technology adoption has been considerably better at explaining the adoption of specific technological artifacts (seeds, fertilizers, tractors)than it has at explaining the adaptation patterns for these artifacts or the adoption and adaptation of associated practices (for example, through patterns of complementary private investment in land infrastructure or reallocations of family, community and hired labor). Forprobably similar reasons, motivational research has not provided too many useful generalizations about the dis- adoption or abandonment of previously accepted technology. A special example is technology succession, the replacement of one technology by another. A well-known illustration is the rapid turnaround in seed variety choice demonstrated by large numbers of Asia's rice farmers, a turnaround that may say more about extension's effectiveness in getting seed materials to farmers than it does about farmers' reasons for replacing one variety with another. What are the dynamics of technology succession among limited-resource farmers, especially among farmers who are not currently well-linked to the agricultural support system? Motivational studies of adoption inthe context of technological succession should be cautious in assuming how an old technology and a new technology differ and why this difference would lead a farmer to replace

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one with the other. When is succession best understood as technologies replacing other technologies or as a cumulative and incremental process, occurring along a continuum of decisions, practices and investments? For example, much research labeled as agricultural mechanization actually focuses on the narrower issue of tractorization. However, among Asia's farmers, is mechanization most usefully seen as the adoption of a particular piece of equipment that is essentially discontinuous with prior tools, or as the cumulative enhancement of labor productivity by a progression of tools and skills? Most motivational research about technology adoption maintains a strong tendency to view adoption as a dichotomous (accept-reject) and a one-time decision. Adoption research implemented to focus on attributes rather than motivations can be seen, in part, as an attempt to ask: under what circumstances are generalizations about motivations likely to hold? This research asks: are attributes or characteristics of early adopters different in some systematic way from late adopters and from those who do not adopt? For example, if early adopters of new agricultural technologies are, as a group, more literate and educated than late adopters, then attention sbould be directed to understanding the relationships, between education, literacy and the adoption, decision. Indeed, there is considerable research wbich correlates technology adoption with factors such as land size, land tenure, family size, land quality, market access, farm operator's age, average income, socioeconomic status, level of living, etc. However, the research is more persuasive in providing descriptions of adoption than it is in accounting for delayed adoption, nonadoption, or dis-adoption. While the need to look beyond attributes of the individual to attributes of the individual's physical, social and economic environment has been recognized, the focus of that recognition has been understandably restricted. The question that has received most attention is: what are the relatignships between characteristics and adoption behaviors of individuals and the levels of infrastructure (especially support services) which are available and to which they have access, etc.?

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However, much work remains to be done ,if the question turns to relationships between individual characteristics, adoption behaviors, and attributes of the social organizational environment. For example, if higher literacy in an individual is associated with earlier adoption, what difference, if any, does it make if, in one case, a highly literate individual lives where the distribution of education is highly skewed to the low end or the high end? Income, land size, or land tenure can be substituted for education in the example. If adoption decisions are purely and entirely individual or household decisions, then the answer may be: "no difference." To the extent, however, that decisions are not that autonomous, then there may well be differences. In fact, research still only provides largely idiosyncratic examples of how and why social context, individual behavior, and technology adoption have configured in the ways they have. Experience during the last few decades suggests that Asia's agricultural support systems know where technology adoption is more likely and rapid. This is knowledge accumulated through successful participation in the diffusion of green revolution technologies. However, most of this experience is based on technologies and associated development strategies that assumed essentially homogeneous end-users: specialized, relatively wellendowed, and commercially-oriented lowland irrigated wheat and rice farmers. Much less is understood about technology adoption by farmers who have not been the primary focus of agricultural development efforts in recent years. Moreover, and this is perhaps the most troubling, it is not certain what can be generalized from experience with the first group to efforts with the second. In the face of this, it follows that applied development efforts may need to rely less on generalized knowledge about technology adoption, opting instead to bemore carefully informed by site-specific technology adoption research. This is, of course, part of what appears to be farming systems research. It may also be the most promising course for any efforts that will focus on limited-resource farmers.

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What Happens After Adoption Has Occurred? Research traditionally has not concerned itself with what happens at_er adoption, at least not as an empirical matter separate from attempts to explain why adoption occurs. An alternative view, however, has developed. Sometimes called "technology assessment," this view is that adoption research should not be restrictedto the questions: Will it be adopted? Who will adopt it? When will they adopt it? Why will they adopt it? Two additional questions also need to be asked: How will the technology work? What happens if the technology is adopted (Kopp¢l 1979)? The question of how a technology works encompasses the question of whether a technology works, but it is also more than that. Awareness has broadened in the last decade, demonstrating that the working of an agricultural technology in the carefully controlled environment of the experiment station does not really indicate whether the technology will work in other environments, nor, what is even more important, does it indicate what kinds of variability can be associated with the performance of the technology when it is inserted into different agro-eeological and farm management environments. As a result, on-farm research is becoming an accepted element of the agricultural research process. However, agricultural support systems still attempt to understand how to make experimental sense out of the enormous variability in the off-station environment. An example is the division of labor between on-farm and on-station research. For example, a review of existing research practices leads to the hypothesis that technologies or practices that are likely to be used in a relatively uniform way m which will be essentially independent of variabilities in other farm operations, and which will be applied under agro-ecological conditions similar to those on the research station -- can be usefully assessed by basic testing on-station and verification on-farm. However, for technologies and practices that may not be applied with much uniformity such as those which are specifically dependent on other farm operations, larger shares oftbe technology development and verification processes may need to occur on-farm.

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The real issue is not where the research is physically taking place, but rather on what terms of reference the research is being conducted and evaluated. Using experiment station methods on-farm really proves very little unless the methods used on-station arc also close to farmer methods m for the farmers thought to be the end-users of the technology under development. As agricultural research moves towards greater immersion in on-farm research, it therefore needs to become more deliberate about what kinds of farms and farmers it chooses to work with. This is particularly important as agricultural research goes further than it has previously to develop technologies for specific types of farms and farmers, in some cases types with which it is not too familiar. The adoption issue surfaces before the technology research, when we ask: for what types of farms are we working? m not after the technology research, when we are implicitly in the position of asking: for what types of farms were we working? Closely related is another question that, in one sense, is commonly asked and, in another sense, is very infrequently asked: What if the technology is adopted?. This question is commonly asked through assumptions and expectations about benefits and costs that will accompany adoption. Increases in income, employment and output, or reductions in pests and weeds arc already discussed. Other aspects of the question are not commonly considered. For example, environmental impacts of adopted technologies are often not given serious attention. This is partly a result of focusing on individual farmers and farm households as adopters and neglecting to aggregate and ask what the cumulative environmental impacts might be if concentrated adoption occurs in contiguous areas. It is also a result, in some cases, of inadequate knowledge about what kinds of environmental impacts may even be likely. In this context, it is possible to admit that predictive ecology is an infant science, but does it follow that longer-run environmental consequences should not be part of adoption research? Sometimes the focus is more on who one hopes will adopt the technologies than on who might actually be adopting. Identification of the latter group requires clarity about what kinds ofrcsources (human, material, land, capital) will be required to make effective use of the technology; how the

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extension and diffusion systems are operating or are likely to operate in diffusing the technology and what all this may mean for (1) farmers who have early access; (2) farmers who will be most assured of getting supervision or assistance for early problems of acquiring and using the technology; and (3) how patterns of adoption by one group or type of farmers may influence the feasibility, rate, patterns, and costs of adoption by other groups and types of farmers. What if the technology is adopted? -- is not really the question. Rather, it is --what if the technology is utilized?. The issue is not the accept-reject decision, but the graduated decisions involved in adapting the technology to the existing farming enterprise and resource endowment. It is important to improve not only the concern of how well the agricultural support system answers the utilization question for itself, but also that of how well the agricultural support system understands how different types of farmers might answer that question. Such an effort might illuminate some benefits not considered, some possible consequences not anticipated. In either case, there are implications for technology development, verification and dissemination processes. Attention to probable forms of utilization can also highlight another key issue: what kinds of variability are probable on the farm and what are the likely major consequences of this variability in terms of the technology's performance and the farmer's welfare? For example, experience with chemical pest control shows that, under certain circumstances, farmers may misuse this technology. They may mishandle or improperly mix chemical materials, application may be done incorrectly or at the wrong times, and so on. Such farmers have adopted chemical pest control technology in the sense that they have acquired some of the material artifacts associated with the technology, but practice or utilization is not as hoped. In some cases, the result is uneconomical, a consequence the farmer may also see, resulting in substantial reduction or even termination of use, i.e., dis-adoption. In other cases, the result may have adverse health consequences, except that the farmer may not knowthis until it is too late. i

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Experiences like these illustrate the challenge of considering variability in utilization: What kinds of variability are probable? What are the probable causes of this variability? What are the likely consequences of the variability? In the illustration just discussed, we can hypothesize that sometimes there are basic incompatibilities between the support system's understanding and the farmers' understanding of plant-pest relationships and/or the roles of chemical pesticides to manage these relationships. In the same vein, what assumptions are now being made about the current utilization of botanical pest control strategies? For different kinds of farmers (and for different kinds of scientists), what will be "new" or "subtle" in the strategies presented by the extension services that may be subject to different interpretations or practices? Are there any forms of variability that should be worried about, such as variability leading to forms of environmental damage, or contaminated food, etc.? Are particular levels of utilization likely to influence and be influenced by variability in other parts of the farm enterprise, variability which may be an important part of the farmer's ongoing adaptation to changing environmental and ecological relationships, market conditions, labor opportunities, etc.? Variability can be discussed in strictly biophysical terms, variability that is related to climate, soil properties, hydrological factors, etc. That kind of variability is already routinely considered in the technology development process. However, another kind of variability, less routinely considered, comes from differences in farmer resource endowments and orientations. The very interest in limited-resource farmers, the desire to developtechnologies that are, in the words of former International Rice Research Institute (IRRI) Director General Dr. M.S. Swaminathan, "resource- neutral," potentially signals two important shifts that may be under way in understanding variability being employed by agricultural support systems. One is a shift to consider a set of highly variable agro-ecological environments that were not formerly given sustained attention. The second is a shift to consider more deliberately the variabilities associated with farmer resource endowments. The latter shift, however subtle, represents a shift in focus from the farm as an essentially biophysical entity to a focus on the

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relationship between variabilities of the biophysical entity and variabilities associated with the farm household -- a social, cultural and economic entity. Issues of utilization are strongly behavioral issues. They underlie the importance of understanding the farmer and the farm enterprise from the farmer's perspective. This does not mean that everything needs to be understood nor does it mean that component technological research has to be integrated for, and conducted on, a farm-by-farm basis. It does mean, however, that it is necessary to understand those relationships within the farmers' systems which most strongly influence how new technologies and practices will interact with the farm enterprise already in place. IMPLICATIONS FOR AGRICULTURAL RESEARCH AND EXTENSION Several strategies are available for translating the ideas and questions raised thus far into some operational procedures for learning about adoption, adaptation and utilization. However, such procedures cannot be considered independently of the institutional and programmatic context in which they will function. This means understanding how the research system, in particular, and the agricultural support system, more generally, visualize their relationships to farmers and what this visualization implies for the probable types of learning. ._ Figure 1 offers a schema for visualizing the relationships between agricultural support systems and farmers and methodological strategies for learning about farmers. The figure asks two questions about assumptions: 1. What is the agricultural support system's relationship to the linkage between what it does (its output) and the effects of what it does (i.e., adoption, adaptation, and utilization by farmers). The question is not posed in administrative terms but rather in terms of the assumptions or "models" which guide what kinds of administrative relationships, communication flows and problem identifica-

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FIGURE 1 How A Support System Learns About Farmers

ASSUMPTIONS

A SupportSystem'sRelationshipto the Linkage BetweenWhat It Does and the EffectsofWhat It Does Active

Passive

THE FARMER

Adapts Utilizes Chooses Transforms

Adopts Accepts Follows

THE SUPPORT SYSTEM

Supports Learns

Sells Monitors Transfers

The Role of the Farmers in the Technology

:!_::_::_::_:::_``_:_:_:::_:::_:::_._:_'`_'_:`'_::_:_.__ :;:::::::::::::::::::::::::::: .: .:::::!:::_::_::.,_::: . _: ::::;:::::::::::,_,_" i_i_,;,_i/_i_;_ !__i_i_i___

Generationand

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WHAT fitspredefinedcategory

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WHO capableof defining own interestsand needs

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Interactive-Based Understanstanding Participation Experiential Systemic Analytic

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..:::.:':..:..%_._"::.:::_::!:._:_,.

METHODS

Indicator-Based Understanding Confirmation Reconnaissance Systematic Hypothetical

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tion processes are probable. Two stylized possibilities are indicated. "Active" means the support system is involved interactively with farmers. "Passive" means that the support system's involvement is more unilateral. The fashionable phrases "bottom-up" and "top- down" are expressions of a similar distinction, but the hierarchical imagery of the phrases actually freezes us in the very way of thinking how the phrases hope to counter. Active and Passive can be hierarchical; they can also be collateral. The emphasis is on content, not necessarily position. 2. The rows in Figure 1ask: What is the significance of farmers in the assumptions or "model" that the support system has of its relationship to farmers. Do farmers exist as a "who," representing possibly complex and unique systems, that should be understood from within those systems? Or do farmers exist as a "what," known by the support system according to variables selected and defined by the support system itself?. The stylized "methods" noted in the box are types of understanding which follow from the intersections of the two row and column questions. Essentially what Figure 1 attempts to convey is that the choice of method is a decision derived from the type of understanding of the adoption process a support system believes it needs. Basically, there are two kinds of choices. Utilization. An agricultural support system firm ly oriented to utilization and adaptation objectives will be inclined to need an understanding of the farmer's context, in some sense, on the farmer's own terms of reference. This plus the tendency for utilization and adaptation objectives to establish requirements for recurrent support means that the support system will need to place itself in some interactive mode with the farmer. For example, the redefinitions of relationships between on-station research, agricultural extension, and on-farm research that characterize the institutional innovations of farming sy stem s research can be seen as illustration s of efforts to improve the form of communication between farmer and scientist.

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Acceptance. If the,support system's orientation is more towards acceptance of objectives, then it will be inclined to need profiles of farmers and farms to facilitate monitoring and evaluation of acceptance rates, usually in terms of correlations with specific indicators of farmer characteristics. Many innovations and improvements in program monitoring systems are illustrations of efforts to increase the availability and accuracy of such indicators for program management purposes. They are examples of acceptance. If interactive research proceeds from the assumption that it is the difference in farming systems which mandates an intensive understanding of specific systems, then indicator research proceeds from the assumption that it is the common characteristics of farmers and farms which mandate an extensive understanding of numerous systems. It is important to note that agro-ecological and socioeconomic theory, in one form or another, is important for both types of research. For interactive research, theory is needed to provide some map for identifying a system and the key relationships in that system. For indicator research, theory is needed to identify variables and relationships and to attribute credibility to specific empirical indicators. Both approaches can fall victim to any of two fallacies: (1) they underemploy theory, become extremely empiricist, collect and possibly are overwhelmed by too much data, and avoid any clear conclusions; or (2) theory's presence is so pronounced that data illustrate more the theory than provide understanding about farmers. Both types of research generate and support understanding about adoption, but they generate two different kinds of understanding. Interactive research does better at understanding what is happening and why it happens in specific situations. It provides what can be called contextual knowledge. It is less useful for providing generalizations which can be applied to numerous other situations. This can be a problem for national agricultural support systems that are not characterized by capacities for regional variation in research trials and extension strategies or are otherwise accustomed to implementing standardized and uniform national recommendations. Indicator research does better at explaining what might happen in a large

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number of situations and what can be called generalizable knowledge, but it may be less adept at providing much insight about any specific situation. This can present a problem to more regionalized or decentralized national agricultural support systems, particularly if regional parts of the system are expected to develop adoption understanding that can directly support the formulation of national programs as well as the development of their own more area-focused programs. These two "types" of understanding, interactive-based and indicatorbased, are not prescriptive or mutually exclusive, but rather are stylized characterizations of what is most likely. By inference, it is considered unlikely that a technology generation, verification and dissemination program oriented heavily to acceptance rates would go to the trouble of interactive adoption research. Similarly, it is considered unlikely that a program heavily committed to technology utilization would be satisfied with indicator based information about farmers. Most programs, of course, will be somewhere in- between, varying with the stage the programs are in, the possibilities represented by staffing and resource constraints, and the policy guidelines influencing the focus, level, and pace of research. Each agricultural support system should ask where its programs belong and where they are heading in terms of the types of questions raised by Figure 1. SOME

GUIDELINES

FOR A MINIMUM

BEGINNING

Assuming that an agricultural support system knows where it is on Figure 1and that it is candid about what skills, resources and time may be available for any baseline research efforts related to technology adoption, adaptation, and utilization by limited-resource farmers, what can and should be done? It would be possible to identify a minimal and even common information base for a national program focused on limited-resource farmers. In fact. the focus should first and primarily be on the kinds of understanding needed. Consequently, it is essential that information-gathering methodologies should be seen as the means, not the ends. That is because what is needed most is not a minimum base of compatible information, but more funda-

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mentally a minimum base of useful understanding. A baseline understanding needs to be developed of(l) who are the limited-resource farmers; (2) what characterizes their farming enterprises; (3) what are their existing problems; and (4) what strategies they currently choose to address these problems. In Appendix A, each of these categories of understanding is illustrated through a list of questions. The questions are not items for inclusion in a survey questionnaire, but rather examples of substantive areas of understanding that would need to be developed. Minimum baseline understanding can be obtained through several channels, depending on specific situations and orientations. Probably the most important methodological guideline that can be offered is this: the more contact there is between farmer, farm, and scientist the better is the chance that the scientist will work from a vision of limited-resource farmers beyond stereotypes and statistics. This contact can be obtained through participant observation, process documentation, rapid rural appraisal, group meetings in the field, or the like. In these cases, it is important to get away from the road, to talk to more than the male household head, to actually stand in farm fields, and to go beyond the obligatory ceremonial events and visits by research station scientists. If surveys are to be conducted, they will be more useful when they are combined with some type ofprior experiential strategy that provides at least an overview of the field situation. Experiential information can guide the development of both the sampling frame and the actual survey instrument. For efforts beyond the minimum understanding base, the issue is not the complexity of information but the communication patterns that will be established and used between farmer and scientist during the course of the technology generation, verification, and dissemination processes. This goes back to the discussion around Figure 1 and the questions asked them: to what extent are agricultural support systems proposing to work for the limited- resource farmer and to what extent are they proposing to work with the limited-resource farmer? This question has already led to a very substantial concern with farmer associations as an important component of contemporary agricultural ex-

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tension strategies. However, here we believe it is important not to confuse means and ends. While interactive understanding can readily imply the utility of farmer organizations as the intermediary between individual farmers and the formal extension system, the presence of farmer associations does not necessarily endow extension arrangements with interactive attributes. We believe this point needs emphasis because it is unlikely that improvement of agricultural extension can be built on fads and fixes. What is needed instead are arrangements that are products of solid understanding of specific situations. For this reason, we want to briefly raise a few questions about the roles of rural ,organization in agricultural extension. THE ROLES

OF A RURAL

IN AGRICULTURAL

ORGANIZATION EXTENSION

From the Philippines' Zanjera to Nepal's Moeya to Bali's Subak, indigenous irrigation associations which are primary examples of locally organized resource management are being "discovered" (Cernea 1985; Coward 1980; Dani and Campbell 1986; Esman 1982; Siy | 982; Uphoff 1982). This is the most recent phase of a tradition pioneered by the Corn illa project (and innumerable others) advocating the role of farmer organizations as intermediate arrangements between individual farmers and the support system. At least two important issues have arisen during the course of this diverse experience. It is important to recognize and learn from these issues to ensure that innovations in agricultural extension are actually steps forward. The first issue is the question: who governs (Bagadion and Korten 1980; Illo and Chiong-Javier 1983; Korten and Klauss 1984)? This question becomes important to the extent that enhancing the roles of local organizations represents challenges to interests which pursue and maintain their own governance claims through manipulation of the policy management and institutional support sYstem. The challenges do not always materialize. During the 1950s and 1960s, community development in South and parts of Southeast Asia "gave" rural communities a chance to provide certain amenities for themselves, but in most cases, there was no intent that rural

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communities (individually or as a group) were empowered to alter (favorably) any fundamental characteristics of their relationships with the state. Community organization strategies have attracted considerable new interest in recent years, but these strategies still appear to be unfolding within terms of reference that do not represent significant departures from basic relationships between the state and the rural periphery (Castillo 1983; Goodell 1983; Oommen, 1984). Illustrative are the moves towards decentralization in Bangladesh and Nepal promulgated at about the same time as decisions which strengthen the state' s role in economic and political development and the co-evolution in Korea of a "New-Community" program with growing state participation in managing the economy. This leads to a second issue, namely, what is the status of local organizational resources as rural resources? This issue is really the question: what is governed?. "Old" rural organizational resources (such as the social organization of labor reciprocity, the household as a foundation of the division of labor, culturally or ethnically-based property management regimes) may be replaced by "new" ones (such as tenant or farm worker unions, local chapters of national political groupings, the privatization of natural resource management). Complex relationships between old and new organizational resources and other rural resources can result. What are the implications for the meanings of "local participation" and °°local leadership?" What are the consequences for the viability of local governance strategies? For example, considerable interest is being shown by rural development specialists in common property resource management systems. These are indigenous systems for managing and using natural resources involving the regulation of individual resource utilization patterns by collective norms and procedures. For instance, some communities in Nepal are reported to have established rules for cutting firewood and fodder and for harvesting fruits, timber and other products. These rules specify both individual and group rights to use the same piece of land. What is attractive about these systems is that they may represent indigenously organized (rather than externally imposed) cases of sustainable natural resource management.

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However, recognizing that such systems exist has led to an idealization of the strategies, an idealization that might be very inappropriate. In many cases, common property resource management systems are being advocated as the "answer" to problems of maintaining sustainable productivity in degradable environments. However, social forestry and other common property resource management arrangements should be assessed in the context of the types of demographic, social, economic and ecologic pressures operating in Asia's more "fragile" rural environments. Common property management cannot always be best understood primarily as a strategy for maintaining (or achieving) important stewardship relationships between Asian rural households and their natural environments. There will be times when common property resource management is better understood as a strategy to ration access to some natural resources, not necessarily in the interests of environmental welfare, but as a tactic for consolidating the state's role in more marginal areas. In the political economy of rural Asia, limiting access to selected natural resources can be a strategy for linking state power to the "rent-seeking" behavior of rural (and often urban) elites. There are also reasons to suspect that the viability of common property management regimes will be quite sensitive to a variety of local factors such as population pressure, employment opportunities, and food security status (Blaikie 1985; Khaleque 1985; Putterman 1985; Russell and Nieholson 1981). Consequently, whatever common property management and other "organizational fix" strategies for rural environmental management there may be in theory, in practice, they may vary in food deficit areas like Northeastern Thailand and Nepal's Terai or diversifying areas such as Northern Pakistan or Eastern Luzon in the Philippines. Since it not well understood how these systems actually function, there is reason to ask: what happens when such strategies are imported by the agricultural support system into existing customary land management systems? Where does "control" over natural resources effectively (if inadvertently) pass?

KOPPEL: OLD IMAGES AND NEW CHALLENGES

CONCLUSION

This paper has attempted to outline some of the challenges agricultural support systems face as they confront the problems of sustainable development and poverty alleviation. The paper argues that in practical terms the pressure to address these issues will come from the increasing contact that support systems have or will have with limited-resource farmers. In that context, the challenges of sustainable development and poverty alleviation will take the form initially of understanding how limited-resource farmers differ from the farmers better known by the agricultural support system. In this process of reassessment that is already unfolding, an important distinction may emerge between the functions of the support system as fundamentally a transfer process and as a transformational process (Cernea, Coulter and Russell 1985). For example, we often think of extension as the vehicle for transferring technology and knowledge from the agricultural research system to the farmers. Farming systems research has introduced new forms of complexity and interaction to the agricultural research system, but here too we are still frequently speaking of a (enhanced) technology transfer process. However, the discussion of technology adoption among limited-resource farmers strongly suggests that many of the assumptions that permit a transfer emphasis to proceed may not be valid. The botanical pest control example suggests that we may be functioning in an area where continual learning and adaptation must be occurring -- by both farmers and the support system. For example, extension as education has long been recognized, but the notion of continual joint learning as an element of this education has some interesting implications for how we might think about the central emphasis of agricultural extension. Thinking about agricultural support not strictly as a transfer of knowledge and skills process but more broadly as a transformation of learning process (Hawkins 1988) is a potentially important distinction for at least two reasons.

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1. The distinction invites a more active emphasis on the learning that is actually occurring among farmers and support system personnel to complement a more traditional emphasis on the provision of inputs (technology and advice to farmers, funds and facilities to extension agents) that are assumed to support learning. 2. The distinction accommodates recognition that the learning associated with transitions in a farmer's commitment to productivity and an extension agent's commitment to more interactive-based understanding may not be strictly "vocational," but may also be a matter of orientation to new learning processes. The paper has strongly suggested that much of what is known about technology adoption by farmers in Asia is not based on experience with limited-resource farmers. That may be a problem for developing both research hypotheses and practical expectations about technology adoption among limited-resource farmers. The word "may" is emphasized because we really don't know. Ultimately, what each agricultural support system must decide is: how well do the support systems now "know" limitedresource farmers? How well do the support systems need to know limitedresource farmers in order to properly evaluate the adoption, adaptation and utilization prospects of any agricultural development strategy? Once these questions have been answered, the systems can better determine how they need to be organized, managed, staffed, and evaluated. In the course of this process, the support system is most likely as well to confront the challenges of sustainable development and poverty alleviation. A final point. Over the last decade, agricultural support systems in Asia have been pulled in another direction -- increased emphasis on support for agribusiness. In one sense, this is simply another interpretation of an older interest in improving agricultural incomes. As such, it is not inherently in conflict with emphases on sustainable development and rural poverty issues. However, an emphasis on agribusiness also reflects ajudgment about where public funds in support &agriculture can be most usefully allocated.

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What is clearly problematic is that this judgment often carries an explicit insistence that the issues discussed in this paper should be ignored. In reality, as the agricultural economy diversifies -- and throughout Asia it clearly does -- the agricultural support systems also must diversify their missions if they are to remain relevant and justifiable. However, the matter is not simple. ContemporAry agricultural support systems face limited budgetary resources, competition from the rise of commercial support systems, and the continuing demands to be more than simply a technology transfer mechanism i demands which are implicit in the broader social development roles of rural, agricultural, and food policies. It follows that the diversification of the rural economy also requires agricultural support systems to be clearer about priorities -- in terms of farm households, commodities, and regions. Making these choices can be difficult, not least because of the politics and perceptions influencing rural development policy in particular (cf. Castillo 1979; lto et al. 1989). And here it is important to recognize that the argument over the mission of agricultural support is not only about the realities of diversification, but also about the consequences of stylized understanding. To illustrate this point, consider a full page advertisement in the Manila Chronicle several years ago from a major agricultural chemical firm. A shadowy picture of a Filipino farmer plowing a field with a carabao fills the page. Across the picture are the following words in bold type: "The Filipino Farmer: You may never see him but he is there." The Filipino farmer -- both he and she -- is definitely there. The challenge for agricultural support is to break through old images of a backward peasantry and construct a mission that reaches the farmers that is relevant for them.

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APPENDIX A Guidelines for aMinimum

Beginning

1. Who are the limited-resource rice farmers? • Where are the farmers who are no longer part of the green-revolution complex? • How are these households distributed in terms of major agro-economie farm types? * What are the major demographic, economic, and social characteristics of the households? What are the characteristics of household composition, organization and division of labor; of the levels, importance, variability, and seasonality of off-farm and nonfarm income sources and employment histories; of health, mortality and education; and of agricultural experience? * What are the households' food and energy consumption patterns, particularly intrahousehold food consumption levels? What are the variabilities in consumption? What are the effects of variabilities in food and energy consumPtion on health, savings and the maintenance of household integrity and welfare? How and from what sources are consumption demands supplied and what are the main variabilities in these Supply systems? What, if anything_ are households doing to smooth supply and consumption variabilities? . What are tl_echaracteristics of the communities where limited-i-esouree farm households live, in terms of. infrastructure andadministrative services; ethnic, occupational, and income diversity; demographic change (in particular, levels of in-migration, dependency ratios, and household formation rates)?

KOPPEL: OLD IMAGESAND NEW CHALLENGES

2. What are the characteristics of farm enterprises? • What characterizes the household's security of access to land it cultivates? How was access acquired? How is access for children and heirs provided? • What are the production levels, variabilities and disposition patterns for crops and animals raised? • What is the current status of resource management practices including community, reciprocal, hired and family labor allocation, land-use patterns and intensity, and crop and variety choices? Have these practices changed in recent years? If so, how and why? • What is the current status of environmental and ecological characteristics of lands utilized for agriculture? Are there problems? If so, what are-the problems, and what measures are being taken to manage and control the problems? Have the number, identity, or seriousness of problems changed in recent years? If so, how and why? If measures to manage and control environmental and ecological problems have changed in recent years, how and why? • What are the charac__t_existics of farm infrastructure such as equipment, tools, erosion control and water impoundment structures, and on-farm storage facilities? • What characterizes patterns of accessibility to, and availability of, agricultural support services, such as markets; mills, storage, and processing facilities; and input supplies, technical services, and credit? • What forms of local area coordination in resource management exist? How and when do these function? What are their effects? How, when, to what degree and with what costs and benefits does any particular household participate in such arrangements?

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3. What are existing problems? • What is the frequency of problems in relation to important agricultural and family life cycles? In relation to community resource management practices? • What are the locations of problems in relation to crop growth and utilization patterns, land management practices, soil and land forms, and proximity to houselots? • How can problems be characterized in terms of levels and variations? ,, What are the primary explanations for the levels, variabilities, frequency, duration, and location of problems? 4. What strategies are chosen to confront these problems ? • What are the major types of responses to problems? How do these relate to resource management practices? What, if any, extraordinary demands do any of these responses make on land-use, family or community labor, etc.? • How are the typesand levels of responses phased? When are responses initiated? What are the durations? How are responses related to other resource management functions? • How were different resource management strategies learned? From whom? When? Where? Are other practices known and not currently used? If so, why not? If other methods were previously used and discontinued, why?

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BIBLIOGRAPHY Asian Development Bank. Economic Policies for Sustainable Development. Manila: ADB, 1991. Ahmed, S. Use of Indigenous Plant Materials for Pest Control. Conference report. Honolulu: East-West Center Resource Systems Institute, 1984. Ahmed, S. and Bruce Koppel. "Use of Neem and Other Botanical Materials for Pest Control by Farmers in India: Summary of Findings." In H. Schmutterer and K.R.S. Ascher (eds.) Pesticides from the Neem Tree and Other Tropical Plants. Eschborn: Deutsche Gesellschaft fur Technische Zusammenarbeit, 1987. Antholt, Charles H. Getting Ready for the Twenty-First Century: Technical Change and Institutional Modernization In Agriculture. World Bank Technical Paper 0253-7494. Washington, D.C.: World Bank, 1994. Bagadion, Benjamin and Frances F. Korten. "Developing Viable Irrigators Associations: Lessons From Small Scale Irrigation in the Philippines." AgriculturalAdministration 7 (1980): 273- 87. Batie, Sandra S. "Sustainable Development: Concepts and Strategies." Paper presented to the international Conference of Agricultural Economists, Tokyo, August 22-29, 1991. Blaikie, Piers. The Political Economy of Soil Erosion in Developing Countries. New York: Longman, 1985. Bady, N.C. "Chemistry and World Food Supplies." Science 218 (1982): 847-53. Burmeister, Larry. "State, Society and Agricultural Research Policy: The Case of South Korea." Ph.D. Dissertation. Ithaca, New York: Cornell University, Department of Rural Sociology, 1984. Buttel, F. et al. From Green Revolution to Biorevolution: Some Observations on the Changing Technological Bases of Economic Transformation in the Third World. Bulletin Number 132. Ithaca, New York: Cornell University Department of Rural Sociology, 1983. Canlas, Dante et al. An Analysis of the Philippine Economic Crisis. Quezon City: University of the Philippines School of Economics, 1984.

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Carpenter, Richard. "Biophysical Measurement of Sustainable Development." The Environmental Professional 12 (1990): 356-59. Castillo, Gelia T. Beyond Manila: Philippine Rural Problems in Perspective. Ottawa: International Development Research Centre, 1979. Castillo, Gelia T. How Participatory is Participatory Development? A Review of the Philippine Experience. Makati: Philippine Institute for Development Studies, 1983. Cernea, Michael (ed.).Putting People First. Sociological Factors in Rural Development. London: Oxford University Press, 1985. Cernea, Michael, John K. Coulter, and John F.A. Russell (eds.). ResearchExtension-Farmer: A Two-Way Continuum for Agricultural Development. Washington, D.C.: World Bank, 1985. Chambers, Robert. Rural Development: Putting The Last First. London: Longman, 1983. Charoenwatana, Terd and A. Terry Rambo (eds.).Sustainable Rural Development inAsia. Khon Kaen, Thailand: Khon Kaen University, 1988. Clarete, Ramon and James Roumasset. An Analysis of the Economic Policies Affecting the Philippine Coconut Industry. Makati: Philippine Institute for Development Studies, 1983. Contrefas, Antonio. "Power and Discourse: From the World System to the Philippine Uplands." Ph.D. Dissertation. Hawaii: University of Hawaii, Department of Political Science, 1991. Coward, Jr. and E. Walter (eds.). Irrigation and Agricultural Development in Asia: Perspectives from the Social Sciences. Ithaca, New York: Cornell University Press, 1980. Coward, E. Walter, Bruce Koppel, and Robert Siy, Jr. A Conference Report: Organization as a Strategic Resource in Irrigation Development. Honolulu: East-West Center Resource Systems Institute, 1983. Dani, Anis A. and J. Gabriel Campbell. Sustaining Upland Resources: People's Participation in Watershed Management. ICIMOD Occasional Paper No. 3. Kathmandu, Nepal: International Centre for Integrated Mountain Development., 1986.

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De Janvry, Alain. Technological Innovation in Agriculture: The Political Economy of its Rate and Bias. Consultative Group on International Agricultural Research Study Paper Number 1. Washington, D.C.: The World Bank, 1985. De Leon, Manuel S.J. "Intersectoral Capital Flows and Price Intervention Policies in Philippine Agriculture." Ph.D. Dissertation. Los Bafios: University of the Philippines at Los Bafios, 1982. Dell, Sidney. "Stabilization: The Political Economy of Overkill." In J. Williamson (ed.) IMF Conditionality. Washington, D.C.: Institute for International Economics, 1983. Echeverrfa, Ruben G. Methods for Diagnosing Research System Constraints dnd Assessing the Impact of Agricultural Research. The Hague: International Service for National Agricultural Research, 1990. Esman, Milton J. Local Organization and Rural Development: The State of the Art. Ithaca, New York: Cornell University Center for International Studies, 1982. Evenson, Robert E. et al. "Economic Benefits from Research: An Example from Agriculture." Science 205 (1979): 1101-07. Evenson, Robert E. and C. E. Pray, et al. Research and Productivity inAsian Agriculture. Ithaca, New York: Corneil University Press, 1991. Ferguson, James. The Anti-Politics Machine: "Development, "Depoliticization and Bureaucratic Power in Lesotho. Cambridge: Cambridge University Press, 1990. Fortmann, Louise. "Economic Status and Women's Participation in Agriculture: A Botswana Case Study." Rural Sociology 49 (1984): 452-64. Goodell, Grace. "What Life After Land Reform?" Policy Review 24 (1983): 121-48. Haas, David. Interaction in the Thai Bureaucracy: Structure, Culture and Social Exchange. Boulder, Colorado: Westview Press, 1979. Harris, Barbara. State and Market. New Delhi: Concept Publishing, 1984. Hawkins, John. "The Transformation of Education for Rural Development in the People's Republic of China+" Comparative Education Review 31 (1988): 266-81.

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Illo, Jeanne Frances and Maria Elena Chiong-Javier. Organizing Farmers for Irrigation Management: The Buhi-Lalo Experience. Naga City: Ateneo de Naga Research and Service Center, 1983. Inayatullah. Approaches to Rural Development: Some Asian Experiences• Kuala Lumpur: Asian and Pacific Development Administration Centre, 1979. lto, Shoichi E., Wesley F. Peterson, and Warren R. Grant. "Rice in Asia: Is It Becoming an Inferior Good?" American Journal of Agricultural Economics 71 (1989): 32-42. Ketkar, C.M. Utilization of Neem (Azadirachta lndica A. Juss) and its By-Products. Pune, India: Directorate of Non-Edible Oils and Soap Industry, Khadi and Village Industries Commission, 1976. Khaleque, Kibriaul. Insecurity of Land Tenure and Forest Management: A Case Study from Bangladesh. Dhaka: Department of Sociology, University of Dhaka, 1985. Koppel, B. "Sustaining the Green Revolution in the Philippines: How Many Diffusion Curves?" Asian Survey 16 (1976): 355-64. . "Private Investment in Agricultural Inputs and Sustaining the Green Revolution: Some Evidence from the Philippines." Indian Journal of Agricultural Economics 23 (1978): 1-20• . "The Changing Functions of Research Management•" AgriculturalAdministration 6 (1979): 123-39. • "Food Policy Options for Secondary Regions: A Framework for Applied Research." Food Policy 6 (1981): 33-46. . "Themes on Genes: Comments on Bi0_echnology, Agricultural Research and Rural Sociology." Rural Sociologist 5 (1985): 79-88. , and Edmund Oasa. "Induced Innovation Theory and Asia's Green Revolution: A Case Study of an Ideology of Neutrality." Development and Change 18 (1987): 29-67. __, John Hawkins, and William James• Development or Deterioration: Work in Rural Asia. Boulder, Colorado: Lynne Rienner, 1994. Korten, David C. and Felipe B. Alfonso• Bureaucracy and the Poor: Closing the Gap• West Hartford, Connecticut: Kumarian Press, 1983.

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Korten, David C. and Rudi Klauss (eds.). People-Centered Development. West Hartford, Connecticut: Kumarian Press, 1984. Kruegger, Anne. "The Political Economy of the Rent-Seeking Society." The American Economic Review 64 (1974): 291-303. Lea, David A.M. and D.P. Chaudhri. Rural Development and the State: Contradictions and Dilemmas in Developing Countries. New York: Methuen, 1983. Lele, Sharachchandram M. "Sustainable Development: A Critical Review." WorM Development 19 (1991): 607-21. Lipton, Michael. Modern Varieties, International Agricultural Research and the Poor. Study Paper Number 2. Consultative Group on International Agricultural Research. Washington, D.C.: The World Bank, 1985. Mann, Charles K. and Barbara Huddleston (eds.). Food Policy: Frame° works for Analysis andAction. Bloomington: Indiana University Press, 1986. Oommen, T.K. Social Transformation in Rural India: Mobilization and State Intervention. New Delhi: Vikas Publishing House, 1984. Pinstrup-Andersen, Per. Agricultural Research and Technology in Economic Development. New York: Longman House, 1982. Putterman, Louis. "Theoretical Considerations Regarding the Demise of Team Farming in China." Providence, Rhode Island: Brown University, Department of Economics, 1985. Typescript. Rambo, Terry A., John A. Dixon, and Wu Tseehin. Ecosystem Models for Development. Honolulu: East-West Center Environment and Policy Institute, 1984. Randolph, Robert H. et al. A Technology Assessment of BiolegicalNitrogen Fixation in U.S. Maize and Rice Production. Honolulu: East-West Center Resource Systems Institute, 1984. Roumasset, James A. The New Institutional Economics and Agricultural Organization. Honolulu: University of Hawaii Department of Economics, 1978.

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Ruddle, Kenneth. The Yukpa Cultivation System: A Study of Shifting Cultivation in Colombia and Venezuela. Berkeley: University of California Press, 1974. Russell, Clifford S. and Norman K. Nicholson. Public Choice and Rural Development. Washington, D.C.: Resources for the Future, 1981. Ruttan, Vernon. "The International Agricultural Research Institute as a Source of Agricultural Development." Agricultural Administration 5 (1978): 293-308. Sathyamurthy, T.V. Centre-State Relations: The Case of Kerala, lndia Since Independence: Studies in the Development of the Power of the State Vol. 1. Delhi: Ajanta Publications, 1985. Schmutterer, H. (ed.). Proceedings. Second International Neem Conference. Federal Republic of Germany: University of Giessen, 1983. Siy, Jr., Robert Y. Community Resource Management. Lessons from the Zanjera. Quezon City: University of the Philippines Press, 1982. Smith, Joytee and Fe Gascon. "The Effect of the New Rice Technology on Family Labor Utilization in Laguna." Paper presented to the Joint Workshop of the Agroeconomic Survey and the International Rice Research Institute on Village Econofny and Institutions. College, Laguna: IRRI, 1980. Swaminathan, M.S. "Biotechnology Research and Third World Agriculture." Science 218 (1982): 967-72. Uphoff, Norman T. Rural Development and Local Organization in Asia. Delhi: Macmillan, 1982. Wade, Robert. "Common Property Management in South Indian Villages." Paper prepared for Conference on The Management of Common Property Resources in the Third World. Washington, D.C.: National Research Council, 1985.

HUMAN CAPITAL: Issues and Monitoring Concerns

SOCIAL SCIENCE RESEARCH ON REPRODUCTIVE HEALTH IN THE PHILIPPINES il!!lIIIiIll

IIIIII

MERCEDE$ B. CONCEPCION

INTRODUCTION HEWORLD has witnessed an unparalleled rise in human numbers during the past four decades. Most of this increment (2.8 billion between 1950 and 1990) took place in the Third World, where rapid declines in mortality accompanied the modest improvements in living standards during the 1950s and 1960s. In much of the developing world, the crude death rate was reduced by half, nearly equalling the levels of the more developed countries. Crude birth rates also fell, albeit more slowly, but in some cases remained at levels three or four times the developed country rates. The populations of many developing countries continue to grow rapidly in the absence of prominent fertility declines and with greater survival of children. Consequently, the world is adding about 93 million persons to its population annually. If present trends are maintained, the yearly increment will be 94 million in 1995-2000. In the next century, growth is projected to continue at a slower rate before reaching equilibrium at an estimated 11 billion people. Most of this increase will occur among the world's poor, 94 percent of it in the Third World. The accelerated increase in world population has resulted in a vast rise in the number of people living in want, with women and children bearing the greatest burden. By the end of the century, almost one-half of the world's inhabitants will be aged twenty-five years or less. The growing multitude of children will strain the capability of families and societies as a whole to supply the basic necessities of food, clothing and shelter, much less provide

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education and health care. Entrants to the labor market will be hard put to find jobs. The next thirty to eighty years may witness serious difficulties in balancing population growth and available resources. Tile last twenty years have seen an increase in women's movements and a focus in society as a whole on reducing disparities and discrimination and on promoting the consideration of ethics and human rights. This concern for the quality of life has influenced the study of reproductive health and population by emphasizing the unfairness of centering on numbers of births and deaths without paying the same attention to people's welfare. By the eighties, a deeper understanding of the complexities of reproductive decision making and its consequences for the whole family had altered the framework within which population policies were discussed. Contraceptive research and family planning service delivery were also influenced so that nowl increasing attention is being paid to such issues as how to provide medically and culturally appropriate contraceptive methods, along with adequate information to allow for a free and informed choice, as opposed to concentrating on numbers of new acceptors. New contraceptive methods are being developed that better meet women's needs. The development of methods for males is also receiving added attention. There is a growing realization that research must be attuned not merely to the biomedical aspects but also to the social, cultural, economic and political factors influencing reproductive health. This paper which is not comprehensive in scope begins with a definition of reproductive health, then goes on to summarize the findings of some local social science research works on reproductive health and their implications for policy formulation and program management.

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REPRODUCTIVE HEALTH Reproductive health, as defined by Fathalla (1988), means that m !. people have the ability to reproduce as well as to regulate their fertility; 2. women are able to go through pregnancy and childbirth safely; 3. the outcome of pregnancy is successful in terms of maternal and infant survival and well-being; and 4. couples are able to have sexual relationships free of the fear of unwanted pregnancy and of contracting any disease. Corollary to the above is that couples should have access to a wide choice of methods to regulate their fertility and to services that can provide contraception in culturally sensitive ways (WHO 1993). Social science research on reproductive health as undertaken by the World Health Organization's Special Programme of Research, Development and Research Training in Human Reproduction (HRP) is built on the goal of ensuring the individual's ability to safeguard her or his health and to enhance people's opportunities to exercise choice on all the events that surround or affect human reproduction, including service access and utilization. Accordingly, social science research on reproductive health covers two main areas: 1. behavioral and social determinants of fertility regulation which include• contraceptive choice and use; • gender roles and fertility regulation; • male contraception and fertility; • acceptability of new contraceptives; and • costs and benefits of contraception.

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components of reproductive health such as-* causes of induced abortion; * sexual behavior and reproductive health; • social dimensions of maternal health; and • breast-feeding and birth spacing.

The sections that follow will describe selected social science research studies on reproductive health in this country following the above classification. The research had been based on national fertility and contraceptive prevalence surveys, operations research and special studies. For the sake of brevity, the findings and implications of only one or two examples for each subtopic are included. SELECTED

SOCIAL

SCIENCE

ON REPRODUCTIVE

RESEARCH

HEALTH

Behavioral and Social Determinants of Fertility Regulation Contraceptive choice and use. Included herein are studies dealing with the mechanisms of contraceptive adoption, continuation, use-effectiveness, discontinuation and/or switching of methods. The findings reported below are based on the various rounds of the quinquennial National Demographic Survey (NDS) starting from 1968 to 1993, the 1978 Republic of the Philippines Fertility Survey (RPFS), the 1972 and 1974 National Acceptor Surveys (NAS), Community Outreach Surveys (COS), the 1986 Contraceptive Prevalence Survey (CPS), a special study of NFP centers in Metro Manila, and an operations research study of clinic performance in four selected sites throughout the country. While knowledge about the different mcthods of contraception is almost universal, the proportion of currently married women aged 15-44 years using a family planning method increased steadily from 15 percent in 1968 to 40 percent twenty-five years later (Cabigon 1985a; Perez and Cabigon 1985; Casterline 1991; NSO 1994).

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The use of modern methods rose from some 3 percent in 1968to 25 percent in 1993. Of these methods, the most popular in 1993 was female sterilization (12 percent), followed by the pill (9 percent). The observation of Casterline (1991) that the increased reliance on sterilization was perhaps the most significant change in method-mix during the period 1968-88 seems to have been upheld by the 1993 NDS. It is not known, however, to what degree disruptions in supplies of pills, IUDs and condoms contributed to this outcome. Education proved to be the most important source of difference in contraceptive use. Differentials by residence, income, work status and occupational index were smaller but the differences portrayed the expected configuration (Cabigon 1985b; NSO 1994). Contraceptive effectiveness is measured by a weighted average of method-specific use effectiveness scores which assume that sterilization provides 100 percent protection; IUD and injectables, 95 percent; the pill 90 percent; rhythm, 70 percent; condom, withdrawal and other methods, 60 percent. The resulting mean use-effectiveness indices rose from a level of 76 percent during the period 1973-77 to 79 percent ten years later. The use-effectiveness index for 1987 was 78 percent (Casterline 1991). Based on the 1983 NDS round, Cabigon (1985c)calculated twelvemonth continuation rates for pills to be 55 percent; for IUD, 85 percent; for condom, 37 percent; and for other methods, 59 percent. A special study of three natural family planning (NFP) centers in Metro Manila conducted in 1985 by de Guzman (1986) revealed the twelve-month continuation rates for calendar rhythm to be 63 percent and that for cervical mucus to be 46 percent. These NFP continuation rates were influenced by the women's work status, education, previous family planning use, SES indexed by housing materials, and by their husbands' involvement in sharing responsibilities for contraceptive practice (de Guzman 1986; Zablan 1986). Choe and Zablan (1991), using data from the 1986 Contraceptive Prevalence Survey, found that the discontinuation rates for the pill, IUD and condom were highest among those switching to another method, followed by method failure. Substantial proportions of pill and condom users discontinued their practice because they wanted more children or because they

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perceived no need to resort to family planning. Dissatisfaction with the method and medical problems were pronounced reasons for discontinuing use of the IUD and condom. The most frequent reason for stopping cited by Users of the withdrawal or rhythm method solely or in combination with other methods was Unintentional pregnancy, followed by the switching to another method. Eight out of ten pill users were new acceptors of the method. Another reason given for dropping out is the pill's side effects which, for the most part, were more imagined than real. Roberto's (1991) study of acceptors of sample clinics in Metro Manila, Tarlae, Iloilo and Davao showed that switching took place from the pill to less effective methods such as condom and rhythm. Implications of the findings: 1. Closing the gap between knowledge and practice requires a combination of well-trained motivational workers, efficient clinic workers and mobile clinics to cater to the underserved clientele in the hinterland. 2. Widespread fear by clients of the side effects of contraception can be allayed by an effective information, education and communication (IEC) program that also cites the advantages, disadvantages and contraindications of each method. 3. Continued contraceptive practice, particularly by the pill user, can be ensured by a thorough education and Counselling of the client that includes "inoculation" against the fear of side effects, whether real or imagined. 4. Bringing a new acceptor into contraceptive practice via the pill is very risky in the light of the reasons given for dropping out of pill usage. From the point of early dropout incidence, the risk is greatly reduced if the entry is made either through use of the condom or through the practice of rhythm. Once into the contraceptive practice, the "trading up", i.e., the persuasion and motiva-

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tion to move up to the more modem pill or IUD, can start,with droppingout of eitheroftbese two methodsbecominglesslikely. 5. An analysisof thereasonswhy somewomencontinueusing thesamemethod,switchto other methodsor stopusingcontraceptives altogether should provide a guide for program managers in reorienting the program towards increased participation of prospective users and drop-outs. Gender roles andfertil#y regulation. Projects included under this topic are those investigating family planning-seeking behavior, gender differences in the awareness of reproductive health risks, and the role of Filipino males in fertility decision making. The findings and implications of a couple of the most recent studies are given below. In an effort to understand the factors and the process of family planning decision making among married couples of reproductive age (MCRAs), Ventura et al. (1992) interviewed a sample of wives and husbands in one urban area and one rural area each in Bulacan, Davao and lloilo from August to October 1991. To supplement data from these indepth interviews, focused group discussions (FGDs) were held. Service providers were also interviewed, and a profile of their clinics was drawn. The study highlighted the following: 1. Married couples of reproductive age (MCRAs) go through a rational process of decision making about family planning. The process starts with some discussion about family planning, usually initiated by the wife. Most couples (both ever-users and never-users) acknowledged that their contraceptive practice was basically their own decision. 2. Major push factors to contraceptive practice derive from economic difficulties, concern for a better future and the wish to attain a desired family size. Decisions not to resort to contraception were based on the fear of side effects, rumors of problems associ-

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ated with family planning practice and the lack of children or nonachievement of the desired family size. 3. Although husbands did not pose any problem in initiating contraceptive practice, they relegated the responsibility of family planning to the women. 4. In general, many couples knew of the presence of family planning clinics in their area. A significant number of current users seemed to depend on these clinics and their service providers for information and resupply. Many ever-users mentioned that they would prefer to consult service providers should they decide to resume their contraceptive practice in the future. 5. Service providers play a crucial role in providing factual information about the range of family planning methods, given the conflicting messages that MCRAs obtain from other sources such as relatives, friends and neighbors. 6. Service providers underscored the need to improve houseto-house visits, IEC materials, and logistics, and to give greater • priority to family planning work as against administrative matters. implications of the findings: 1. Men must be encouraged to recognize their responsibilities toward the health of the family and to respect their partners' concerns, if they are to act as equal partners of women. 2. Motivational materials should tackle such issues as men's role in family planning, particularly the various ways in which they can be supportive of their wives or partners; the •continuance of family planning practice; the side effects of contraceptives, and additional information support on the correct use of specific methods.

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3. Basic as well as more specialized training on the various family planning methods should be offered for service providers. In addition, short refresher courses to update their knowledge should be planned on a regular basis. 4. Training for service providers must include motivation/persuasion techniques and pointers on how to deal with difficult clients and how to counter opposition. 5. Giving more emphasis to men implies the deployment of male service providers since the present work force consists mainly of women who are more likely to approach other women with whom they can emphatize and feel comfortable. A study of reproductive health risks and fertility decision making was undertaken by Casterline, Perez and associates involving 300 couples from five urban barangays of Metro Manila and 480 couples from eight rural barangays in Mufioz, Nueva Ecija. Currently married women aged 25-44 and their husbands whose ages ranged from less than 25 to over 44 were randomly selected in these 13 barangays. Information was obtained separately from both the husband and the wife on their perceptions of women's reproductive health issues. Before the field work, focus group discussions (FGDs) took place. Content analysis of these discussions revealed the following: 1. Economic considerations were cited as the primary reason for a smaller family size, particularly since times were hard. The importance of education was also underscored as the only legacy which parents can leave their children. Although couples realized that children today cost more to raise than in the past, they nonetheless had higher aspirations for them. 2. The majority of FGD female participants from rural areas (unlike urban women) did not single out the expanding role of

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women in society, in particular women's entry into the labor market, as a major reason for the downward change in fertility. 3. The physical and emotional stress associated with childbearing and childrearing can be significant factors in spacing or limiting pregnancies as many participants cited the difficulty of looking after children and raising them nowadays. 4. Married participants were unanimous in stating that couples do discuss what method to use either to avoid or delay pregnancy. However, when disagreements arose the males believed that their view should prevail since they were the family heads. The females, on the other hand, believed that their decision should get the upper hand inasmuch as it isthey who undergo the hardships of pregnancy, parturition and childrearing. 5. All FGD participants Showed high levels of knowledge of contraceptive methods and of family planning service sources. But while most were aware of the effective methods, apprehension was expressed concerning their side effects. Hence, a significant number practised either rhythm or withdrawal. 6. Myths and misinformation regarding the side effects of modern contraceptive methods were widespread, particularly among the younger, unmarried Metro Manila participants, often hindering family planning acceptance and practice. 7. Participants believed that for health reasons, a woman should start having children in her early twenties and stop having them by age 35 or a few years beYond. However, a more important reason for stopping at 40 years and over was the social stigma encountered by women who bore children at such advanced ages. 8. Spacing of births was pinpointed by the FGD participants as a way of enabling mothers to regain their strength and energy and ensuring that children already born were well cared for. Although

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the level of awareness of reproductive health risks was high, this seemed to exert little influence on fertility decisions. 9. The overall preference of these participants was for fewer children. When pressed for a definition, fewer children meant four to most of them. Perez (1994) investigated the differences between women and men in their perceptions of selected age-related health risks of childbearing to women and the variations across subgroups of women and men differentiated by education and residence. The individual responses of 1,200 women and 780 men included in the above-cited Metro Manila and Nueva Eeija study to the questions listed below were analyzed. "Considering the health risks of childbearing, at what age do you think a woman should start and stop childbearing?" "Considering the health risks of childbearing, after how many months from the preceding childbirth should a woman get pregnant again?" The differences and similarities in perception by age, education and residence of these women and men were as follows: 1. The majority of both women and men reported 15to 19years as the ideal age group to start childbearing. However, at comparable age groups, greater proportions of women than of men reported the age range 15-19 as ideal. For examples, at ages 35-39, more than half of the women respondents thought it safe to start bearing children at ages 15-19 but only 39 percent of the men were of a similar opinion. 2. The perceived ideal age to start childbearing varied directly with the educational attainment of women and men. But when it came to place of residence, whether city- or village-based, women thought bearing children in their late teens was not hazardous to their health. In contrast, more men in the towns and cities than in the villages stated that 20-24 was abetter age range to start a family.

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3. In general, men preferred a shorter birth interval than women (13-25 months as against 25-36 months) probably because the latter are the ones exposed to childbearing risks. The older the men, the greater was the proportion that thought that a shorter birth interval was ideal for women's health. No pronounced age (or educational) differences were noted for women. Greater proportions of rural rather than urban women and men favored the modal birth intervals. 4. The modal age group to end childbearing according to both female and male respondents was 35-39 years. The proportions of women tended to drop with increasing age but the pattern was not as clear for their male counterparts. The fractions of both women and men preferring 35-39 years rose with education but declined with distance from urban centers. The data indicate that urban residents are generally more aware of the health risks associated with pregnancies and births during the later years of women's reproductive lives. 5. Overall, the data on perceptions of age-graded health risks of childbearing suggest that both women and men appreciate the risks accompanying births that are either too early or too late. However, the distinctive gender difference that stands out is in the best birth interval length that promotes healthy childbearing. Implications of the findings: 1. The provision of factual information regarding the proper use, advantages and disadvantages, and possible side effects of each family planning method is crucial to countering the myths, rumors and misinformation prevailing among married and unmarried persons of childbearing age. 2. IEC materials should capitalize on the importance given by couples to providing education to all their children as an important reason for a smaller family size.

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3. Service providers, supported by the appropriate IEC materials, should spread the advantages of properly spacing births for the health not just of the mother but of her future children as well. 4. Innovative ways to alter the prevailing notion of fewer children from four to three or less have to be devised and propagated. 5. Maternal health services must be expanded to include education on safe motherhood, breastfeeding education and support services which can simultaneously contribute to birth spacing, better maternal and child health and higher child survival. Programs to engage men's support for maternal health and safe motherhood should be developed. 6. The differences between the sexes in their perceptions of appropriate birth interval lengths imply that in cases of disagreement on the timing of first and subsequent pregnancies, the power relations between husbands and wives largely determine the desirability of births or the incidence of "mistimed" births. Components of Reproductive Health • Causes of induced abortion. Studies on the determinants and consequences of induced abortion with emphasis on contexts where the practice is illegal are included under this topic. An umbrella project on Abortion and Reproductive Health Among Filipino Women was undertaken starting in 1992 in four selected areas, namely, Metro Manila, Davao City, Cebu and Tuguegarao. In each area, an academic institution and a hospital collaborated in a study which sought to (1) improve the knowledge base on abortion among Filipino women particularly on the level of practice and the various abortion-level services available to women, the circumstances leading to abortion and the abortion sequelae; (2) improve data recording of abortion cases in participating hospitals; (3) improve legislation, policy and program formulation in the

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areas of abortion, family planning, women and health through the provision of scientifically-based information on abortion; and (4) promote national and subnational awareness and expertise and foster local collaboration in both research and program areas on women and reproductive health. Preliminary results based on the study of the prevalence of abortion among 1,169 women aged 25-44 interviewed in April-May 1994 in Metro Manila have been released by Cabigon (1994). 1. Two out of every five respondents said they were currently using contraceptives while four out of five stated that they had never used a contraceptive. 2. Among current users, nearly half (48 percent) were using modern methods while a third were practicing withdrawal. Only 3 percent were using natural family planning while 16 percent favored the rhythm method. 3. One in six women respondents (or 194 in all) reported having had an abortion. The reasons cited for resorting to abortion were economic difficulties, problems with the husband/partner, youngest child was still too young, too many children, not yet ready for the responsibility of bearing a child, and departing for abroad. 4. The majority, 77 percent, were Roman Catholics. 5. Some 4 percent of the women surveyed became pregnant with fetal losses (either induced or spontaneous) while practicing contraception. 6. Of the 1,169 women, some 8 percent used a family planning method after such fetal losses. 7. The 1993Safe Motherhood' Survey for the nation as a whole revealed an abortion prevalence rate of 7 percent compared with the 16.6 percent reported for this Metro Manila abortion study. Comparable data for previous periods are not available.

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Implications of the findings: l. To prevent the occurrence of a significant number of unsafe abortions and to forestall the loss of lives or permanent injury due to complications arising from such practices, particular efforts should be exerted to obtain objective and reliable information on the incidence and consequences of abortion. 2. To prevent unwanted pregnancies, national policies should be based on a better understanding of the need for responsible human sexuality and the realities of current sexual behavior. Support should be given to integral sexual education and services which should begin within the family, in the community and in the schools. Such educational efforts should reach adults, particularly men, through nonformal education and a variety of communitybased efforts. 3. Reproductive health care should include family planning counselling, IEC and services as well as the prevention of abortion aqd the management of the consequences of abortion. 4, Greater community participation in reproductive health care should be promoted by decentralizing the management of public health programs and by forming partnerships in cooperation with all types of NGOs (local women's groups, trade unions, cooperatives, youth programs and religious groups) and private health care providers. Social dimensions of maternal health. Improving reproductive health requires th_ provision of quality services, particularly family planning services. Included under this topic are studies that look into the quality of care, the relations between clients and health-care providers, staffattitudes and the opportunities that women have to make an informed choice about the most suitable contraceptive.

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An operations research approach was taken by Roberto (1991) in determining the correlates of high and low family planning clinic performance. The objectives of his study were to determine the (1) level of clinic i performance by measuring it with four indicators "goal effectiveness", 'potency effectiveness, realized efficiency, and "capacity efficiency"; (2) program managers' perception of the icauses of high and low clinic performance; (3) indicators used by program managers and service providers for service quality; and (4) expectationls, actual sources of satisfaction .I and quality perceptions of acceptors relating to service personnel, service outlet, and service performance at the clinic: level. i The respondents consisted of clinic managers (doctors or nurses), clinic support staff (nurse, midwife and family planning volunteer worker) and He clinic's current and former family planning acceptors in 25 clinics per °

[

study site located m Metro Manila, Tarlac,! Ilollo and Davao. The findings for the third and fourth objectives which are = relevant to the social dimensions of maternal health are given below. ' 1. The-clinic managers and support staff define quality family planning service as one that could keep continuing-users returning for supplies and service, attract new acceptors, satisfy acceptors and ultimately impact on fertility rate reduction. These dimensions make up the "effect" aspects of quality service. J

2. Quality service depends on supply availability and on the cordiality and approachability of clinic staff. 3. Quality service outlets and facilities are described in terms of the basic minimum requirements of a functioning service outlet. 4. Acceptors expected service providers to be accommodating and attentive to their problems, i.e., skillful in human relations. Acceptors also expected the clinics to be clean and structurally sound and to be fully equipped with instruments and other necessities. For this last, acceptors wanted them to be "complete and

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accurate." As for the clinic facilities, aceeptors were satisfied with the basic minimum. 5. With regard to service processing, aeeeptors merely expected provision of service, not quality service at all. Implications of the findings: 1. Clinic personnel must be trained in human relations skills to satisfy relationship-based acceptor expectations. The family planning training of clinic personnel must start including such skills as an integral part of the training program's skill-building objectives. 2. The pressure exerted by acceptors on the cleanliness of the clinic location, structure, appearance and interior suggests a great need to improve substandard clinic conditions and facilities. 3. The expectations of acceptors about service performance or processing for mere service provision implies that the present service has to be vastly improved before quality service can be attained. 4. Clinic location was identified as the strongest determinant of acceptor satisfaction. However, the three areas least satisfactory to acceptors and which required amelioration and upgrading proved to be (1) clinic equipment and instruments, (2) clinic interiors, and (3) outside structure and appearance. Raymundo et al. (I 991 ) looked into the interaction between grassroots family planning (FP) workers and clients in the Philippines focusing on its possible program impacts. This project formed part of a cross-country study under the sponsorship of the United Nations Economic and Social Commission for Asia and the Pacific (UN/ESCAP). The study had the following specific objectives: (1) to assess the quantity and quality of client-worker interaction; (2) to identify areas where client-worker interaction could be improved and remove barriers to effective interaction; and (3) to generate

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Philippine-specific recommendations to improve the client-worker interaction process for enhanced program performance. The study sampled three high performing regions in terms of FP service delivery and practice (Tarlac, Misamis Oriental and Davao del Norte) and two low performing regions (lloilo and Metro Manila) covering a total of 18 municipalities. Each province was represented by one urban and three rural municipalities except for Metro Manila where all the municipalities were classified as urban. For each municipality, a ramdom sample was drawn consisting of 80 clients and 7 workers, composed of 4 motivational workers (MW), 2 clinic workers (CW) and I district hospital worker. To the extent possible, the clinics were divided equally between government and nongovernmental organizations. Immediately following the survey in May-July 1990, indepth interviews of current users (CUs) were conducted and client-worker interactions were observed to provide a more thorough account of the interaction process. The findings concerning the quality and quantity of interaction are highlighted below. 1. On average, CUs met their FP workers almost monthly. However, the number of interactions remained less than ideal with past users (PUs) and never users (NUs), who were at the tail end of the FP workers' preference list. 2. There were imbalances in the client-worker ratio particularly among PUs and NUs who expressed the desire to practice FP in the future but who reported receiving only infrequent attention from their FP workers. 3. Clients rated their FP workers favorably for their friendliness and attentiveness to their needs (personal or otherwise), and for their abilityto provide thorough and easy-to-comprehend FP information. On the other hand, FP workers described their clients as friendly, attentive to their questions, respectful, generous with their

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time and able to express themselves in simple language. The favorable interaction process between clients and FP workers manifested an incremental effect on the client's FP knowledge, attitude and practice, particularly among the CUs. 4. The low level of FP training of workers, poor logistical support and supply impinged on the interaction process. 5. Both MWs and CWs ranked motivation and counselling as very important among their activities. Yet, in terms of the time spent to inform and motivate clients, the CWs devoted more than half of their work hours to this activity as compared to just over a quarter for the MWs. implications of the findings: 1. The program's budgetary requirements must be met adequately. Most of the problems identified in relation to the interaction process revolved around the issue of budgetary constraints. 2. Mobile FP clinics should be reactivated to service the "motivated underserved," particularly in those regions which have established a clinic-based approach at the expense of motivated clients living in far-flung areas. 3. To enable each FP worker and outlet to deliver consistent, reliable and quality FP services, there should be greater focus on retooling both the motivational and clinic workers. Contraceptive drawbacks should be fully explained so that they can be better handled by both worker and accepter. 4. Service delivery should be prioritized taking into account the health considerations and fertility preferences of the clients.

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CONCLUSIONS

The findings from the selected social science research studies on reproductive health as described above merely echo and support previous research findings. Despite the almost universal knowledge of contraception and the favorable attitude towards it, contraceptive prevalence levels remain relatively modest. The implications of each of the studies included in this brief overview reinforce each other and point to the importance of a well-planned information, education, communication and motivation campaign geared toward allaying the fears of clients and correcting the myths and misinformation concerning modern family planning methods prevalent among the population. The human relations skills of workers in the family planning sector (both those assigned to clinics and those in the field) are prime requisites for enhanced client-worker interaction. The low expectations of clients for quality service imply that the substandard conditions and location of service outlets are accepted for what they are. If the family planning program is to achieve its goal of delivering consistent, reliable and quality family planning services, the training program for all levels of workers must be revitalized and the incentive system upgraded. Moreover, efficient program management and operations require the overcoming of the difficulties posed by the scarcity of human resources to meet the growing demand and by severe financial constraints. Unwanted pregnancies should be prevented through sexual health education and through expanded and improved family planning services, including proper counselling, to reduce the rate of abortion. The above findings and their implications provide a firm basis for action. All that is lacking is the political will and the determination to moderate the still high rate of population growth.

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BIBLIOGRAPHY Balthazar, Joy. "Contraceptive Attitude and Behavior and Awareness of Health Risks: Findings from FGDs in Nueva Ecija and Metro Manila." Draft Report. Quezon City: University of the Philippines Population Institute, 1993. Cabigon, J.V. "Fertility and Contraception in the Regions." Philippine Population Journal (1985a): 30-66. . "Current Contraceptive Practice: Philippines and its 13 Regions." 1983 National Demographic Survey Paper No. lb. Manila: University of the Philippines Population Institute, 1985b. . "Continuation of Contraceptive Use: Levels and Trends and Differentials." 1983 National Demographic Survey Paper No. lb. Manila: University of the Philippines Population Institute, 1985c. . "Preliminary Findings on the Study of Abortion Prevalence in Metro Manila." Quezon City: University of the Philippines Population Institute, 1994. Casterline, J.E. "Integrating Health Risk Considerations and Fertility Preferences in Assessing the Demand for Family Planning in the Philippines." Technical Annex prepared for the New Directions in the Philippines Family Planning Program Report. Population and Human Resources Division, Asia Region, World Bank, 1991. Choe, M.K. and Z.C. Zablan. "Contraceptive Use Discontinuation and Failure Rates in the Philippines: Estimates from the 1986 Contraceptive Prevalence Survey." In Measuring the Dynamics of Contraceptive Use. United Nations, 1991. de Guzman, E.A. "Natural Family Planning Practice in Three NFP Centers in Metro Manila: Analysis of MIS and Survey Data." Manila: University of the Philippines Population Institute, 1986. National Statistics Office (NSO) and Macro International Inc. (MI). National Demographic Survey 1993. Calverton, Maryland: NSO and MI, 1994.

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Perez, A.E. and J.V. Cabigon. "Contraceptive Practice in the Philippines: A Synthesis." Philippine Population Journal I (1985): 36-57. i. "An Analysis of the Age-graded Health Risks of Pregnancies from a Two-sex SurVey in the Philippines." Quezon City: university of the Philipines Population Institute, 1994. Raymundo, C.M., G.T: Cruz, R.A. Gealogo, and C.R. Lusterio. "Interaction Between Client and Grassroot FP Workers: Implications for Program Performance." Quezon City: University of the Philippines Population Institute, 1991. Roberto, E.L. "An Operations Research Study of Clinic Performance in the Philippine Family Planning Program." Quezon City: University of the Philippines Population Institute, 1991. Ventura, E.R., C.C. Jimenez, R.A. de la Dana, M.M.B. Asis, and E.A. de Guzman. "Family Planning Seeking Behavior." Quezon City: University of the Philippines Population Institute, 1992. World Health Organization. Report of the Unit on Social Science Research on Reproductive Health (HRP/STAG)I Geneva, Switzerland: WHO, 1993. Zablan, Z.C. "Qualitative Aspects of NFP Practice in Luzon." In the Report on the 1984 Periodic Abstinence Survey Vol. 1. New York: Population Council, Inc., 1986.

Corazon M. Raymundo

COMMENTS

I have been asked the impossible task to react to Dr. Concepcion's paper. The task is impossible because the presentor of the paper is someone whom i regard as my mentor and professional mother. The task is made more difficult because this symposium is in honor of one of the more important social scientists in the Philippines. Dr. Concepcion pointed to the centrality of reproductive health in women's lives and in development issues in more ways than one. We can make several observations on the more recent studies she mentioned by looking at the centrality of women's issues and reproductive health in what might be a quest for improving women's lives and women's contribution to development. In the studies cited in Dr. Concepcion's paper, we had an indication of the kind of social science research that has been relevant to reproductive health. Using the framework of the WHO-HRP, i would like to advance three additional conclusions to the ones that Dr. Concepcion made: First, there had been an overemphasis on the contraceptive aspect of f_rtility regulation or of reproductive health. My view is that reproductive health is broader and fertility regulation is a subset. As a subset of fertility regulation, there is contraception or family planning. Dr. Concepcion showed studies that are particularly high on the effectiveness of various methods. Also mentioned were pioneeing or initial studies on decisionmaking and other gender considerations in contraceptive practice.

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Second, the breadth of reproductive health has not yet been explored by social science in significant ways. There are still a lot of areas in reproductive health that should be examined, not for academic purposes but from the social science point of view. In finding ways to improve programs, they must be designed to help women. Third, a woman-centered approach and a gender-fair approach in studying reproductive health is indicated if research studies are to be more policy-relevant and closer to pinpointing information gaps for the improvement of programs and policies. I will attempt to answer the question: "Why/How could social science research be important to furthering reproductive health?" Dr. Concepcion's paper presented the WHO-HRP framework for reproductive health. There could be a supplement to that framework if we look at social science perspectives and other dimensions of reproductive health. The definition of reproductive health m in addition to the one quoted by Dr. Conception as put together by Dr. Tapalia, basically derived from the point of view of WHO and was reiterated and amplified in the 1994 ICPD Cairo Conference --is a state of complete physical, mental and social well-being and not merely the absence,of disease or infirmity in all matters relating to the reproductive system and to its functions and processes. It therefore implies that people are able to have a satisfying and safe sex life and that they have the capability to reproduce and the freedom to decide when and how often to do so. Almost invariably, the concept of reproductive health acknowledges, as a basic tenet, the importance of reproductive choice as a universal human right. Thus, if reproductive health is to mean anything as a practice, these rights rest on the basic right of all couples and individuals to decide freely and responsibly the number, spacing and timing of their children, and to have the information and means to do so, and to have the right to attain the highest standard of sexual and reproductive health. By definition alone, reproductive health cannot be treated as mere mechanics or as isolated biological events of conception .and birth; rather,

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it must be treated as a lifelong process that is inextricably linked to the status of women in their homes and societies, and properly contextualized in a world that is demographically complex and culturally diverse. I would argue therefore that a women-centered approach and reproductive rights highlight the need for social science research in tandem with medical advances in the promotion of reproductive well-being. Three basic principles in women-centered approach and in reproductive health have been identified, each having implications on how social science can assist in making these approaches effective for reproductive health. First, a women's approach to reproductive health is about trusting women and giving them autonomy to make decisions on reproduction and the ability to make those decisions based on access to complete information and services. Self-respect, dignity and control are important conditions of improved health. Second, a women-centered approach means understanding and addressing reproductive health in a way that women experience it as an integral part of their everyday life. This includes not only service aspects butother quality of care issues that come from public health intervention programs, or even care from their own homes and communities. Relationships and how one feels about an event are part of the behavioral responses of people to stimuli. Reproductive health in this context involves stimuli and responses and, to a large extent, involves adaptation and socialization which are major factors in interaction. Women interact with many kinds of people: husbands, children, health providers, etc. The adaptation of women and socialization in these various interactions are important. Third, the different levels in which policies and programs are developed and implemented -- global, national and local -- should be interconnected. At the national level, this is found in the dynamics of stakeholders from policy formulation to implementation. I emphasize that women should be regarded as the major stakeholders in this regard. Non-acceptance or noncompliance of target beneficiaries can sabotage what can be at the government and concerned elite groups, a logical and well-designed policy. Refusal of ordinary (often powerless) and poor people to surrender their

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reproductive rights can render ineffectivewhat can be a grand design of a reproductive health care program. Thus, social science research and reproductive health can look at issues of women's autonomy in making decisions in their day-to-day experiences related to reproductive health. It will involve life events during their entire life cycle where most events are related to reproductive well-being. This life-cycle view of clients or women should make it easier to view them and their changing needs over time (we should also consider that there could be overlapping needs over time). In developing countries where individual women are intended beneficiaries of public intervention programs, how adequately and appropriately addressed their reproductive aspirations and goals are will make much difference in the success of programs. The Philippine maternal health program and the Philippine family planning program, unfortunately, are not yet anchored oll a reproductive health framework and, thus, leave much to be desired. In the same manner, social science research in family planning and maternal and child health abound, but there is no significant and conscious effort to look at these from a comprehensive reproductive health perspective. Operations research, some mentioned in Dr. Concepcion's paper, have concentrated on specific implementation details and have been designed to make the same program work better. As a result, the program indicators are quite narrow in scope, and most of the time are concentrated on cold statistics regarding program performance such as contraceptive prevalence rate, contraceptive prevalence rate by method, number of trained health personnel on IUD, and so on. Only lately were client-seeking behavior studies and joint husband/wife or male/female studies conducted. They deal with issues other than family planning and direct maternal issues such as pregnancy and child birth. We need more studies on satisfaction over services and methods, and we need to broaden our program indicators or program statistics to look into qualitativemeasures of program performance and thesatisfaction of women from these programs. Dr. C0ncepcion's paper cited some studies on clientprovider interaction, reasons for seeking a type of service, etc., all of which are, in a sense, pioneering studies on family planning. This undertaking

RAYMUNDO: COMMENTS

337

could be broadened to include reproductive health. While there is a slow broadening of issues toward reproductive health, more systematic studies on comprehensive reproductive health should be our direction. The framework on reproductive health and women's health, from the point of view of both programs and research, has not been adequately formulated. The perspective of the Development Alternatives with Women for a New Era (DAWN) can be used as an initial framework for program formulation or for social science or biomedical study on reproductive health. The perspective is-"Control over reproduction (reproductive rights) is a basic need and a basic right for all women. Linked as it is to women's health and social status, as well as the powerful social structures of religion, state control and administrative inertia and private profit, it is from the perspective of the poor women that this right can be understood and affirmed. Women know that childbearing is a social and not a personal phenomenon; nor do we deny that world population trends are likely to exert considerable pressure on resources and institutions by the end of this century. But women's bodies have become a pawn in the struggles among states, religions, male heads of households, and private corporations. Programs that do not take the interest of women into account are unlikely to succeed." There is a large information gap, mostly social science in nature, on how reproductive health of women could be improved and how development could be pushed forward through the empowerment of women in reproductive health.

Highlights of Discussion_

REPRODUCTIVE

HEALTH

Early studies and demographic surveys in population were concerned mainly with measuring knowledge, attitude and practice toward family planning. The cold statistics of the past related to fertility because the goal then was to reduce birth and thus control population growth. The equation has since added the dimension of women's health being the subject and object of many population programs. Women's welfare has taken centerstage in many population issues and debates. In recent times, women's participation in decisionmaking processes is being sought for obvious reasons. The 1994 Cairo Conference in Population, for example, has shown commitment to women's reproductive health. Given the broad scope of what reproductive health and sexuality embody, as spelled by both the Cairo Conference and the World Health Organization (WHO), it augurs well for future approaches to population to be much more pertinent to women's perspectives and welfare. One touchy issue discussed at the Cairo Conference is the access of women to abortion as a means of birth control. Many women perceive contraceptives as bad, partly because some groups, including the church, perpetuate the idea that contraception is bad and leads to abortion. Yet, contraception may represent the exact opposite of this notion. Contraception does not lead to abortion; rather, it diminishes abortion because it provides better options to birth control than the risky method of abortion. The problem is that information about contraception is inadequate and fragmented, and users are not warned on their side effects and contraindieations.

340

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

In the Philippines, a study done in four major areas, namely, Metro Manila, Davao, Cebu and Tuguegarao, looked into the incidence of abortion from a combination of community and hospital units of observation. For Metro Manila, the incidence was 16.6 percent drawn from community data based on a random sample of single and married women. There are indications though that this rate, when' compared to other metropolitan areas, especially Metro Davao, may still be lower. For instance, in one major hospital in Davao, data show that abortion has been one of the top three reasons for hospital admission in the past few years. And while the figures for Metro Cebu and Tuguegarao have yet to be evaluated, it seems that abortion is prevalentin the Philippines. It is a reality to many women from all walks of life. It has therefore become a major public health concern. The responsibility of both men and women are not only in marriage but •also in family _lanning. Thus, couples should share the decision of whether or not to use contraceptives.

POPULATION, HEALTH AND WOMEN

ALF_JA_ORO N. H_IcpJ_

INTRODUCTION

HERE ARESEVERAL ISSUESregarding women's health, women's reproductive behavior, the fertility impact of reproductive health programs, and the effect of gender roles and expectations on all of these. First, there is a recurring theme in discussions about women's health that women have a poorer health status than men because they are not getting the health care that they need as a result of gender bias. Second, there are those who argue that the current emphasis on maternal health, including fertility regulation, only serves to deflect attention to the real concern of improving women's health as individuals (with the right to health) and not solely as mothers (Mason 1994). Third, it has also been argued that population programs should move away from their emphasis on fertility reduction (through family planning) to individual health and reproductive choice, that is, the objeetives of family planning programs should be to assist individuals to achieve their reproductive goals in a healthful way rather than to reduce fertility (Germain and Faunders 1994). In response, the question has been raised whether a population program that thus shifts its emphasis will be effective in lowering fertility, if fertility reduction is also a national objective. This paper attempts to put together recently available information in the Philippines that could help sort out these interlocking issues. The analysis of available national data reveals several interesting findings as the subsequent sections of this paper will show. First, women's health problems manifest themselves in different ways. However, there does not appear, from the data examined, evidence of gender bias in the

342

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

utilization of health care services. Second, women's health can be improved by addressing high risk fertility behavior. 'Thus, the emphasis on family planning and maternal care will not deflect efforts to improve women's health; rather, it will enhance such efforts. Third, women's reproductive health can have significant fertility impacts. Thus, meeting the needs of women for safe motherhood would not only improve the health of women and their children, but also contribute toward the achievement of replacement fertility, if such a goal is indeed desired. Finally, eliminating gender bias which results in the expansion of women's range of choices with respect to reproduction, contraceptive use, and health care utilization will have a permanent impact on health, not just for women, but for everyone. This paper is organized as follows. The second section (p. 342) describes a simple framework for discussing the determinants of women's health and fertility, taking into account both proximate and socioeconomic factors and the effect of gender expectations and roles on these determina0ts. The third section (p. 346) describes the status of women's health based on recently available national data. The fourth section (p. 367) examines the impact of reproductive behavior on the health of women and their children, while the fitth section (p. 376) examines the impact of reproductive health on fertility. The last section (p. 380) concludes the paper. FRAMEWORK: DETERMINANTS

OF WOMEN'S

HEALTH

AND FERTILITY

A simple framework for analyzing the determinants of women's health is presented in Figure 1. The basic components of this framework are the health outcomes and fertility, the proximate determinants, and socioeconomic and cultural factors. Underlying these factors are gender roles and expectations. Health outcomes are represented by measurable indicators of mortality, morbidity, nutritional status and disability. The proximate (the most direct) determinants of both health and fertility are grouped into five interacting factors: health care, which includes preventive (e.g., immunization), promotive (e.g., exercise) and curative care; infection and environmental

FIGURE 1 Determinants of Women's Health and Fertility

m -r ;o "o

O "o c

Gender-influenced(*) Socioeconomic and

Proximate Determinants

Health and Fertility

z -l-

Cultural Factors

Health careutilizaEon: generaland sex-specific preventive,promotiveand curative care

Mortal#y: general and sex-specificcauses

' -_ _

tndividuak

Age Education* Occupation* Household." Incomelweatth*

Morbidity."general Infection and environmental contamination:

and sex-specificcauses

Sexual and reproductive behavior, age at birth,parity, birth intervals

NutnUonatstatus."growth failure; micronutrient deficiency

Social networks*

Dietary_utrient and substance in-

Community:

take: calodes;micronutdents;afcohol, drugs,smoking

Prices Culture*

z z_ 0

Disability: general and from sex-specificcauses

Injury:birth injury and physical injury; acoident_; intentional

Fertility

344

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

contamination; sexual and reproductive behavior; dietary, nutrient and substance intake; and injury. Socioeconomic and cultural factors are classified into individual factors (e.g., age, education); household factors (e.g., income and wealth, social networks); and community factors (prices of goods and services, culture). Women's health (as indicated by the four different outcomes) and fertility are directly determined by the proximate determinants acting singly or in combination. Socioeconomic and cultural factors affect women's health and fertility only through their impact on the proximate determinants. Proximate Determinants Health care. Many deaths due to infectious diseases can either be prevented (e.g., through immunization) or treated successfully with curative services. Female-specific diseases such as cancer of the breast and uterus, micronutrient deficiency during pregnancy and lactation, and ailments associated with the Use of contraceptives, require special care. Untreated cataracts can lead to blindness. (There are more elderly women who are • blind than men.) Infection and environmental contamination. In general, the infection rate and its severity that could result in death is influenced by exposure to communicable pathogen, the susceptibility of the host (partly determined by nutritional Status), and by health care. Specific infection such as mycoplasma infection of the genital-urinary tract among pregnant women is one cause of low birth weight and high infant mortality (Chen 1983). Sexual and reproductive behavior. An active sex life increases the risk of contracting sexually transmitted diseases (STDs), which could lead to infertility and cervical cancer. Reproductive factors such as age at birth of child and birth intervals increase the risk of maternal malnutrition, morbidity and mortality, as well as the risk of infant and child mortality. Dietary, nutrient and substance intake, inadequate dietary and nutrient intake leads to poor nutritional status in general. Inadequate micronutrient intake during pregnancy could lead to maternal malnutrition and to low birth weight or increased risk of fetal loss. Drug abuse and alcohol and cigarette

HERRIN: POPULATION,HEALTH AND WOMEN

345

smoking could seriously affect the fetus and birth outcomes. Injury. This includes birth injury and physical injury. Birth injuries can be caused by incorrect delivery procedures and inadequate handling of complicated cases. Accidental injuries are influenced by various hazards in the workplace and in the home. Women may be subjected to injury from violence from men in or out of the home. Socioeconomic and Cultural Determinants Individual factors. Health risks and the sources of those risks vary over the life cycle of the individual. Education affects knowledge about health care, infeetion and environmental risks, nutrition, sexual and reproductive behavior and risks to injury. The education of women is likely to have the most significant impact on health and fertility. To the extent that gender bias prevents women from having the same opportunities for education as men, the health of women and their children will suffer. HousehoMfactors. The higher the income of women and their households, the greater is their capacity to obtain the needed health care and to buy nutritious food for themselves and their families. This also gives them greater access to goods and services that reduce environmental risks of infection and health hazards at home that could lead to injuries. The ability of women to control income or wealth further enhances their power to make the above health-related decisions, thereby promoting better health for themselves and their families. Societal bias against women having control over household income and resources could militate against the provision of critical health inputs. The constraint posed by limited income can partly be compensated for by assistance from social networks especially in times. of emergency health care. Community factors. The prevailing costs of health care, nutrients, environmental sanitation facilities, contraceptive methods and other healthpromoting goods and services affect the consumption or use of health inputs and the practice of contraception. Cultural factors affect health care use, sexual behavior, norms regarding family size and contraception, and attitudes toward violence against women.

346

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Gender Roles and Expectations Underlying the above factors are the traditional gender roles and expectations which affect women's (1) access to educational opportunities, especially higher education, andtheir choice of occupation; (2) control over their income and other household resources; (3) capacity to form alliances and social networks; and (4) preferences with respect to family size and contraceptive methods. Gender bias could also stigmatize women who have certain diseases (e.g., STDs) more than men and place the burden of contraception more on their shoulders. THE STATUS

OF WOMEN'S

HEALTH

AND FERTILITY

Health and Fertility Outcomes Mortality decline slowed down considerably in the 1980s, perhaps reflecting the effects of the economic crisis in the mid- 1980s andthe slow recovery thereafter. Women had lower mortality than men, as shown by life table values for survivors, life expectancy and infant mortality (Figures 2-4). However, differences in the mortality of women varied widely among regions and provinces. Thus, the main problem was probably less between men and women, and more among women of different socioeconomic characteristics. Women, however, have special needs arising from biological and reproductive factors. These are reflected in data on causes of death (Tables 1-3). Women die from diseases and hazards unique to women: cancer of the breast, uterus and cervix (Table 2) and complications from pregnancy (Table 3). Women also suffer from micronutrient deficiencies (iodine and iron) much more than men (Table 4). The greater risk of micronutrient deficiencies among women is associated with menstruation, pregnancy and lactation. The mortality rate from anemia is higher for women than men during the reproductive ages 15-49 (Figure 5). Data on the nutritional status of children reveal a higher prevalence of those who are underweight and stunted among females than males (Figures 6a-6d). It is not clear whether this difference is due to gender bias in

FIGURE 2 Survivors at Exact Age (Ix), 1990

O c

,ooooo iiii!iii i 90000 80000

70000

60000 40000 30000

m z

20000 10000

I 1_2b 2_ 3b3_464_5b 5_6_6_ 76 7_ 8_8_ 9b 9_ Age [-m-Female-_-Male

Source: Flieger,W. and J. Cabigofi(1994)

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HERRIN: POPULATION, HEALTHAND WOMEN

_=_ u. o

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350

ESSAYSINSOCIALSCIENCEANDDEVELOPMENT TABLE 1

Mortality by Major Cause of Death (17 cause groups) and by Sex, 1990 (Rate per 100,000 population) Total, both sexes

Rate Male

Female

Rate

Cause group

Percent of total deaths

Total deaths from all causes Infectiveand parasiticdiseases Neoplasms Endocrine, nutritional and metabolic diseases Diseases of blood and blood forming organs Mental disorder Diseases of the nervous system and nervous organs Diseases of the circulatory system

595.8 90.0 43.5

415.0 58.6 39.5

505.8 74.4 41.5

100.0 14,7 8.2

13.8 4.6

11.8 4.5

12.8 4.5

2,5 0.9

0.9

0.3

0.6

0.1

8.4 146.8

6.4 110.9

7.4 128.9

1.5 25.5

Diseases of the respiratory system

101.9

83.9

93.0

18.4

Diseases of the digestive system Diseases of genit0-urinary system Complication of pregnancy and the puerperium Diseases of the skin and subcutaneous tissues Diseases of musculoskeletal system and connective tissue Congenital anomalies Certain causes of perinatal morbidity and mortality Symptoms and ill-defined conditions Accidents, poisoning and violence (external causes)

29.9 12.5

11.8 8_8

20.9 10.6

4.1 2,1

0.0

4.2

2.1

0.4

0.5

0.1

0.9 5.1

0.6 3.7

0.8 4.4

0.2 0.9

29.3 33.9

20.9 32.3

25.1 33.1

5.0 6.5

73.9

16.3

45.2

8.9

Sources: DOH, 1993; Philippine Health Statistics,1990

HERRIN: POPULATION, HEALTH AND WOMEN

351

TABLE 2 Mortality from Neoplasms by Sex, 1990 (Number and rate per 100,000 population)

Number Cause

Rate

Male

Female

Male

Female

Lip, oral cavity and pharynx Esophagus

682 199

523 115

2,2 0.6

1.7 0.4

Stomach Small intestine including duodenum Colon Rectum, rectosigmoid junction and anus Larynx

822 26 164 267 119

573 27 156 198 48

2.6 0.1 0.5 0.9 0.4

1.9 0.1 0.5 0.6 0.2

Trachea, bronchus, lung and peura Bone and articular cartilage Skin Female breast Cervix uteri Uterus Other female genital organs Prostate Other and unspecified sites Lymphatic tissue Leukemia Benign neoplasms carcinoma in situ, neoplasms of uncertain behavior and of unspecified nature

2533 563 45 0 0 0 0 324 5380 716 43

963 390 52 1631 384 909 360 0 3138 778 51

8.1 1.8 0.1 0.0 0,0 0.0 0.0 1.0 17.3 2,3 0.1

3.1 1.3 0.2 5.3 1.2 2.9 1,2 0.0 10,2 2.5 0.2

1669

1890

5.4

6,1

Total

13552

12186

43,5

39.5

Malignant neoplasms of:

Sources; DOH, 1993; Philippine Health Statistics,1990

352

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

intrahousehold dietary allocation. In interpreting the data, it should be recalled that male children have a higher mortality than female children. Thus, it is possible that the risk of mortality of malnourished male children is higher than that of malnourished female children. If so, the nutrition data reflect the larger number of survivors among females than among males. Data on disability obtained from the 1990 Census of Population and Housing revealed that males had higher rates of disability, irrespective of the type of disability, except for mental illness among older women (Figures 7a-7d). It is not clear what factors might explain the higher rate of mental illness among women after the reproductive ages compared to men. Fertility rates have been on a slow decline since 1973. In 1973, the Total Fertility Rate (TFR) was 6 children per woman. This declined to 5.1 in 1983 and further to 4.1 in 1993. Nevertheless, the fertility of Filipino women remains among the highest in Southeast Asia. In contrast, Thailand and Indonesia have already attained much lower fertility rates of 2.4 and 3.3, respectively (NSO and Macro International, Inc. 1994). Proximate and Socioeconomic Determinants Maternal and child care Many of the health risks sp,ecific to women are those associated with pregnancy and birth deliveries, while those of infants and young children of either sex are associated with timely preventive and basic curative care. We describe below various aspects of maternal and child care. Prenatalcare. Data from the 1993 National Demographic Survey show that 83 percent of births in the five years preceding the survey were to mothers who received prenatal care from medical personnel: 38 percent saw a doctor and 45 percent saw a trained nurse or midwife. Only 9 percent saw a traditional birth attendant (Table 5). The prevalence of prenatal care is higher in urban than in rural areas, and among mothers with a higher level of education. In the urban areas, 54 percent saw a doctor and 34 percent saw a trained nurse or midwife. In contrast, in the rural areas, 55 percent saw a trained nurse or midwife, while only 24 percent saw a doctor. These data imply that, while the need to raise

FIGURE 5 Mortality from Anemia, 1990

;o ;o "o o .--I

6 a

.................................................................

..................................................

_ 121

ti,, .....

I'_ ......................................

I <1

J 1-4

- ............................

1 5_

r I I I I I I I 10:t4 _-lB 20:2425-2930;3435-,3940-44 _

I i _ 50-54 55-F__L_-64

sources: UOH, 1993; Philippine Health Statistics,1990 r_ tjt

354

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT TABLE 3 Mortality from Complication of Pregnancy and the Puerperium, 1990 (Number and rate per 100,000 population) Number Cause

Rate

Male

Female

Male

Female

Pregnancy with abortiveoutcome Hemorrhagesrelated to pregnancy

0 0

103 104

0.0 0.0

0.3 0.3

Hypertension complicating pregnancy, childbirthand puerperium

341

0.0

1,1

Postpartum hemorrhage

414

0.0

1.3

Normal delivery and other complications related to pregnancy, occurring in the course of labor, delivery and puerperium

345

0.0

1.1

Sources: DOH, 1993; Philippine Health Statistics,1990

the prevalence

rate of prenatal

placed on reaching tion.

care remains,

additional

more rural women, especially

focus needs to be

those with lower educa-

Data on the tetanus toxoid injections show that 64 percent of live births in the five years preceding

the survey were associated

with mothers

received

during

The difference

tetanus

injections

their pregnancies.

who in

prevalence rates between urban and rural areas was small, as was the difference among women with some education. The prevalence rate among women with no education, however, was only 27 percent (Table 5). Data from the 1987 National those obtainable it is possible

Health

Survey are not comparable

from the 1993 National

Demographic

that there was a significant

increase

Survey.

with

However,

in the percentage

pregnant women who received tetanus toxoid injections between the periods

HERRIN:POPULATION, HEALTHANDWOMEN

355

TABLE 4 Micronutrient Deficiencies by Type of Nutrient, 1987 (Percent of population group)

Nutrient and Group A. VitaminA deficiency • Night blindness 6 months- 6 years 7 years- 14 years 15 years- 19 years • Bitot'sspot 6 months- 6 years

Both sexes

Male

0.7 0.9 1.0 0,2

B. iodinedeficiency(with goiter) 7 -14 years 15-20 years 21 years and over Pregnantwomen (21-49 years) Lactatingwomen(21-49 years) C, Iron deficiency(withanemia) 6 -11 months 1 - 6 years 7 - 12 years 13 -19 years 20 - 59 years 60 yearsand over Pregnantwomen Lactatingwomen

Female

6,4 6.2 7.1 12.4 10.7

0.8 0.2 0.7

36.9 38.9

26.3 21.3

70.4 38,7 41.2

46,9 45.3 50.6

Source:FNRI, NationalNutritionSurvey,1987 as reportedin Herrin el al. (1993).

356

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

FIGURE 6A Underweight

Children Aged 0-6 Years, 1989-1990

25 "

lilMale

•

Female

--Phil_ ........ NC

" - VI VII

Source: FNRI as reported in Florentino

VIII - IX

et al. (1991)

FIGURE 6B Underweight

Children Aged 7-10 Yeam, 1989-1990

12 10 8

4 =

2 0 m Phil,

Source: FNRI as reported in Florentino et al. (1991)

111 ¸ Xl

XII

HERRIN:POPULATION, HEALTHANDWOMEN

357

FIGURE 6C Stunted Children Aged 0-6 Years, 1989-1990 r r

[m.o,o mm 15

_)io Q.

Source: FNRI as reportedin Florentinoet al. (1991) FIGURE 6D Stunted Children Aged 7-10 Years, 1989-1990

Phil.

Source: FNRI as rel_:)ded in Floren_no et al. (1991)

358

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

,FIGURE Blindness

by Age and Sex, 1990

25j 20.

lS.

I-m- Male

-_- Female 1

_a. 10

O-

Sources

7_79

of basic data: 1990 Census of Population

FIGURE Mental

Illness

---

Female_

preliminary unpublished

tables

by Age and Sex, 1990

2 •.

_l=- Male .........

.A-

.j_.

_,_.5 ...........................

/+--_-

•

......... Under 1

•

./-........_'___._... .................

..... 0.5

, __

2:,

_'_-_: - .........

5-9

i ..... r 45-49 25L29

35L3¢J r- 45-49

55_59 '1-65L69

Sources of basic data: 1990 Census of Population preliminary

75L79

unpublished tables

HERRIN: POPULATION,

HEALTH AND WOMEN

359

FIGURE 7C Orthopedic Handicap by Age and Sex, 1990 12 m

10 ..............................................

"..........................

: JIlts

_, ................................... ;;;_" ..... ::

_ -D--'I--'ll----ir -_IB __.,:C_..._./-'_'_ 2 ..... _._+__.= =+_==_g:___ -:_.___=:+_............ ".............. 0

iW:_++_ . i

Sourcesof basicdata: 1990 Census of Populationpreliminaryunpublishedtables FIGURE 7D Persons with Any Disability by Age and Sex, 1990

120 T-

" --

lOO-.

Male

-_. Female

80 .....................................................

]

II. 0

60-

" 40

.......................................................

_°-t.................................. 0

--:_? ...........

I.--.-----"" ,--, --"-" _

Un,"Jer 1

5-9

T _

' 15-19 ' 25-2_)_5-39

_ _

_,,_.49

g-,_59_69

' 7_79

Sourcesof basicdata: 1990 Censusof Population preliminaryunpublished tables

TABLE 5 Prenatal care: Percent Distribution of Live Births in the Five Years Preceding the Survey by Source of Prenatal Care During Pregnancy, and Percent with Tetanus Toxoid injections Given to the Mother During Pregnancy, 1993

Prenatal care provider*

Characteristics

Residence Urban Rural Mother's education No education Elementary High school College or higher

_ o

Percent with tetanus toxoid

Number

Trained nurse/

Traditional birth

No one/

Doctor

midwife

attendant

missing

Total

injection

of births

53.9 23.5

34.4 54.7

5.7 12.4

6.1 9.5

100.0 100.0

63.1 65.6

4269 4533

10.7 19.5 42.7 72.0

22.8 54.6 46.5 25.4

41.3 14.5 5.1 0.8

25.1 11.4 5.7 1.8

100.0 100.0 100.0 100.0

26.6 60.4 71.3 65.7

244 3637 3114 1808

38.3

44.8

9.1

7.8

100.0

64.4

8803

m _) Co _n O __ rCO C)

All births

m C) m

*If the respondent mentioned more than one provider, only the most qualified provider is considered, Sources: NSO and Macro International, Inc., 1994; National Demographic Survey 1993.

z > o m

< m f-

O '10 I11 Z

HERRIN: POPULATION, HEALTHAND WOMEN

361

198i -87 and 1988-93: 64 percent versus 38 percent (see Herrin et al. 1994). However, there is still a long way to go insofar as the provision of injections to all pregnant women to reduce the risk of neonatal tetanus is concerned. Birth delivery. Only a little over half of all births during the preceding five years were delivered with the assistance of medical personnel, such as doctors, trained nurses or midwives (Table 6). This means that a large percentage of births still take place with the assistance of traditional birth attendants -- 45 percent of all births during the preceding five years. The percentage is higher in the rural areas than in the urban areas: 61 percent versus 28 percent. The percentage of birth deliveries assisted by medical personnel, especially doctors, increases with mothers' higher education. Child immunization. Table 7 shows the overall vaccination coverage for children aged 12-23 months. Overall, 72 percent of these children received all of the necessary vaccines. There does not seem to be any bias against female children with respect to immunization. The coverage rate is highest for BCG and the first doses of DPT and polio (91 percent each), it should be noted that the high rates of child immunization reflect the effects of the Oplan Alis Disease of the DOH, a massive nationwide immunization campaign held on April 21 and May 19, 1993. The data for the 1993 National Demographic Survey were collected from April to June 1993. With respect to background characteristics, higher coverages are observable in urban than in rural areas, and among children of women with higher education than among those with lower education. Prevalence and treatment of acute respiratory infection. Table 8 shows that 9 percent of children under five years of age experienced coughing accompanied by rapid breathing during the two weeks prior to the survey. Of these children, 51 percent were taken to a health facility or provider. The prevalence of acute respiratory infection was generally higher in rural areas than in urban areas, and among children of less educated mothers than of more educated mothers. Moreover, the percentage of children who were taken to a health facility or provider was higher in urban areas and among children of more educated mothers. There appears to be no clear bias against female children with respect to being taken to a facility or provider.

TABLE 6 Birth Deliveries: Percent Distribution of Live Births in the Five Years Preceding the Survey by Type of Assistance During Delivery and by Place of Delivery, 1993

Attendant assisting during delivery

Characteristics

Residence Urban Rural Mother's education No education Elementary High school CoElege or higher Total

Doctor

Trained nurse/

Traditional birth

Others/ unknown/

midwife

attendant

missing

Place of delivery

Health Total

facility

Number At home

of births

¢n 39.6 13.1

30.8 23.0

28.4 61.2

1.3 2.7

100.0 100.0

43.5 13.8

56.2 86.0

4269 4533

2.6

6.7

76.9

13.9

100.0

3.9

96.t

244

10.6 26.7 58.8

23.9 32.8 25.2

63.0 39.4 15.4

2.5 1.1 0.7

100.0 100.0 I00.0

12.3 29.3 61.7

87.5 70.5 37.9

3637 3114 1808

26.0

26.8

45.3

1.7

100.0

28.2

71.5

8803

--%

o_ ca O o ro_ _ m z o

m Z E3

Sources: NSO and Macro International, Inc., 1994; National Demographic Survey 1993

m < m tO "1o m z --I

TABLE 7 Vaccinations by Background Characteristics: Percentage of Children 12-23 Months

-r _o

Who Had Received Specific Vaccines by the Time of the Survey, 1993 "10

O C_

Percentage ofchildrenwhoreceived: DPT Characteristics

BCG

Polio

Number of

Measles

All*

None

Children

Z -r m > r'-

Sex Male Female Residence Urban Rural Mother's education No education Elementary High school College or higher

91.5 90.8

90.9 91.4

87.7 88.1

79.9 79.9

91.0 90.8

86,3 86.1

77.9 78.4

81.4 81.5

71.0 72.1

6.4 7,1

899 843

93.0 89.4

90.0 85,9

81,4 78.5

92.9 89.0

89.0 83.4

81.2 75.2

83.7 79.2

73.2 69,9

4.9 8.6

860 883

51.2 88.4 93.6 97.4

51.2 88.7 93.2 97.3

48.0 83.8 91.0 95.4

46.1 75.0 81.3 90.8

51.2 88.4 93.0 97.0

48.0 82.5 88.1 94.6

46,1 73,7 78.6 89.7

48.2 76.9 85.0 88.2

43.0 67.6 72.1 81.5

46.8 8.5 4.6 2.0

47 696 625 374

All children

91.2

91.1

87.9

79.9

90.9

86.2

78.2

81.4

71.5

6.8

1742

--r >z o_ zm

*Children who are fully vaccinated (i,e,, those who have received BCG, measles and three doses of DPT and polio) Sources: NSO and Macro International, inc,, 1994; National Demographic Survey 1993,

(4 CF_

364

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

TABLE 8 Prevalence and Treatment of Acute Respiratory Infection: Percentage of Children Under Five Years Who Had a Cough Accompanied by Rapid Breathing During the Two Weeks Preceding the Survey, and the Percentage of III Children Who Were Taken to a Health Facility or Provider, 1993

Characteristics

Percentage of children with cough and rapid breathing

Percentage taken to a health facility or provider*

Number of children

7.4 10.7 11.0 9.3 7.1 6.6

(56.5) 56.0 55.0 49.6 47.2 (44.8)

751 905 1,742 1,752 1,712 1,596

8.7 8.7

51.9 50.6

4,359 4,099

Child's age 0 < 6 months .6 - 11 months 12 - 23 months 24 _ 35 months 36 - 47 months 48 - 59 months Sex Male Female Residence Urban Rural Mother's education No education Elementary High school College or higher

7.4 9.9

55.8 48.0

4,135 4,323

9.8 9.9 8.5 6.5

*** 47.1 54.9 60.5

215 3,456 3,027 1,760

All children**

8.7

51.3

8,458

Note:

Figures are for children born in the period 1-59 months preceding the survey. *Includes health post, health center, hospital and private doctor. **Includes 7 children who were given an injection ***Less than 50 cases.

Sources: NSO and Macro international, Inc., 1994; National Demographic Survey,1993

HERRIN: POPULATION, HEALTH ANDWOMEN

365

Prevalence and treatment of diarrhea. Table 9 shows that about 10 percent of children under five years of age had diarrhea in the two weeks preceding the survey. Of these, 34 percent were taken to a health facility or a provider. Compared to children of more educated mothers, a relatively higher proportion of children of less educated mothers had diarrhea but only a smaller proportion of them were taken to a heal_ facility or provider. For example, 11 percent of children of mothers with elementary education had diarrhea during the two weeks preceding the survey, of which 30 percent were taken to a health facility or provider. In contrast, only 9 percent of children of mothers with college education or higher had diarrhea during the same period, but 46 percent of them were taken to a facility or provider. There appears to be no clear bias against female children with respect to being taken to a facility or provider. Summary. The brief description above of the extent to which women and their children received appropriate care reveals at least two important observations. First, while significant progress was achieved in providing appropriate maternal and child care, much work still remains to be done to reach all those with high health risks. These include women and children in rural areas, and women with low education. Second, it appears that the education of the woman is a major factor in health care utilization. Increasing the education of women and their knowledge of health care would go a long way toward improving women's (and their children's) health. But higher education does not only imply improved knowledge; more importantly, it reflects a higher status of women and the associated ability to make informed decisions regarding health care and other matters. Finally, with respect to child care, there appears to be no clear bias against female children. Contraceptive behavior We now describe recent data on contraceptive behavior as affected by socioeconomic factors, in particular by residence and education of women, and by source of contraceptive supplies or service. Contraceptive use. The slow decline in fertility noted earlier is proximately determined by the slow increase in contraceptive prevalence rate.

366

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT

TABLE 9 Prevalenceand Treatmentof Diarrhea: Percentageof ChildrenUnder Five YearsWho Had Diarrheain the Two Weeks Precedingthe Survey and PercentageWho Were Taken for Treatment to a Health Facilityor Provider,19931

Characteristics

Percentage with diarrhea

Child'sage 0 < 6 months 6- 11 months 12 - 23 months 24 - 35 months 36 - 47 months 48 - 59 months Sex Male Female Residence Urban Rural Mother'seducation No education Elementary Highschool Collegeor higher All children** Note:

Percentage taken to a health facility or provider*

Number of children with diarrhea

Number of children

9.3 17.0 15.6 9.6 6.6 4.9

*** 41.1 33.4 33.0 31.5 ***

70 154 272 169 112 78

751 905 1,742 1,752 1,712 1,596

10.2 10.0

32.0 35.9

445 410

4,359 4,099

9.7 10.5

36.2 31.8

403 452

4,135 4,323

10.0 11.4 9.6 8.6

*** 29.6 33.2 45.7

22 393 289 151

215 3,456 3,027 1,760

10.1

33.9

855

8,458

Figuresare for childrenbornin the period1-59 monthsprecedingthe survey. *Includeshealthpost,healthcenter,hospital,and privatedoctor, **Includes5 childrenwho were givenan injectionand 9 children with missinginformationon treatment. ***Less than 50 cases. Sources:_NSOand Macro International,Inc, 1994, NationalDemographicSurvey, 1993.

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367

Data in Table 10 show a slow increase in contraceptive prevalence rate from 1983 to 1993 after a sharp increase from the early years of the National Family Planning Program from 1973 to 1978. The rate for both modern and traditional methods rose from 32 percent in 1983 t036 percent in 1988 and to 40 percent in 1993. The contraceptive prevalence rate for the Philippines in 1993 is much lower than that experienced by neighboring countries in earlier years, notably Indonesia (50 percent in 1991) and Thailand (66 percent in 1987) (NSO and Macro International, Inc. 1994.) The popular methods of contraception include female sterilization, pill, natural family planning and withdrawal (Table 11). The pattern is similar among couples of different background characteristics such as urban-rural residence, level of mother's education and number of children. The data, however, show that contraceptive prevalence is higher in urban than in rural areas among mothers with a higher level of education, and among couples with larger numbers of children. Table 12 shows that a large majority (71 percent) of current users of modem contraceptive methods obtained their supplies or service from the public sector, mainly from government hospitals and Barangay Health Stations. Private hospitals and clinics were the main private sources of supplies and services, providing 16 percent of the total to current users.

THE

IMPACT

OF REPRODUCTIVE

Direct Health Risks Associated

BEHAVIOR

ON HEALTH

With the Use

of Specific Contraceptive Methods While current contraceptive methods are generally safe, they do not meet all the requirements of all users. Certain types of contraceptive methods pose increased health risk among women with different characteristics (e.g., age, prior history of high blood pressure, heart disease, etc.) and women who smoke. Evidence on this comes primarily from the developed world (Ross and Frankenberg 1993). The only clue we have about potential health

368

ESSAYSIN SOCIALSCIENCEANDDEMELOPMENT

TABLE 10 Trends in Contraceptive Use: •Percentage of Currently Married Women Aged 15-49 Using Modern Contraceptive Methods and Traditional Methods, 1968-1993 Modern Traditional methods methods

Survey

Total

1968 NationalDemographicSurvey

2.9

11.5

15,4

1973 NationalDemographicSurvey

10,7

6,7

17,4

1978 Republicofthe PhilippinesFertility Survey

17,2

21.3

38,5

1983 NationalDemographicSurvey

18,9

13,1

32,0

1988 NationalDemographicSurvey

21.6

14,5

36.1

1993 NationalDemographicSurvey

24.9

15,1

40,0

Sources:NSO and Macro International,Inc.,1994; NationalDemographicSurvey, 1993.

risks comes from the responses of discontinuing users and nonusers regarding the side effects of contraceptives. We present recent data below. Data on reasons different planning

for discontinuing

the use of contraception

methods have specific health risks (Table and traditional •methods such as withdrawal

suggest that

13). Natural family are associated with

method failure and, therefore, with increased risk of unplanned pregnancy (with theassociated health risks to mothers and children). On the other hand, modem methods such as the pill and IUD are associated with side effects and health risks at least as perceived by women users. Clearly, the promotion of women's health will be served bythe development of more effective and safer methods of contraception. Table 14 shows the reasons for not using contraception among currently married women. The desire for more children was the main reason for not using contraceptive methods for 20 percent of women. Another 19 percent said that they did not need to practice contraception on account of such

TABLE 11 Current Use of Contraception: Percent Distribution of Currently Married Women by Contraceptive Method Currently Used, 1993

Residence

Method

Total

Urban

Rural

Mother's edlJcaUon

Number of childre_'t

Elmnen-

HZgh

College

tary

schoot

hi_er

43.0

36.8

10.8

27.6 9.0 2.9 0.1 _0.0 1.3 13.9 0.4

21.9 8.0 3.2 0.1 0.0 0.6 9.6 0.3

15.4 7.8 7.3 0.2

Notcurrentlyusing Total Numberof women

57.0 100.0 4638

None

(_ "0 r-

educatlc,l

Any method 40.0 Modern methods Any modernmethod 24.9 Pill 8.5 IUD 3.0 Injection 0.1 Diaphragm/foarn/]elly 0.0 Condom 1.0 Female stedlization 11.9 Male sterilization 0.4 Traditionalmethods Any traditionalmethod 15.1 Naturalfamilyplanning 7.3 Withdrawal 7.4 Other methods 0.4 60.0 100.0 8961

z _o _.R .z

43.8

47.t

1.9

26.7

44.0

51.5

43.4

7.2 1.6 1.4 0.0 0.0 0.0 3.8 0.4

34.5 _ 21.5 7.0 2.6 0_0 0.0 0.4 11.1 0.4

27.6 10.1 3.5 0.1 0.0 1.2 12.3 0.4

28.5 9.4 3.3 0.1 0.0 1.9 13.5 0.2

0.6 0.6 0.0 0.0 O.0 " 0.0 0.0 0.0

13.9 9.7 2.5 0.0 0.0 1.0 0.7 0.1

25.4 13.1 4.3 0.1 0.1 1.4 6.3 0.2

35.5 t0.1 4.0 0.0 0.1 1.2 t9.5 0.6

27.4 6.3 2.7 0.1 0.0 0.9 16.9 0.5

14.9 6.8 7.5 0.5

3.6 2.1 1.1 0.3

13.0 5.2 7.3 0.4

16.1 7.6 8.1 0.5

18.6 11.1 7.4 0.t

1.3 0.7 0.6 0.0

12.7 5.9 6.5 0.4

18.5 9.9 8.0 0.6

16.1 7.7 8.0 0.4

16.0 7.5 8.2 0.3

63.2 100.0 4323

89.2 100.0 239

65.5 I00.0 3564

56.2 100.0 3072

52.9 100.0 2085

98.1 100.0 558

73.3 100.0 1319

56.0 100.0 1745

48.5 100.0 1657

56.6 100.0 3682

._ -r z> .,, ¢: m z

Sources: NSO andMacroInternational,Inc.,1994;NationalDemographicSurvey, 1993. o_ _o

370

ESSAYSINSOCIALSCIENCE.AND DEVELOPMENT

TABLE 12 Source of Supply for Modern Contraceptive Methods: Percent Distribution of Current Users of Modern Contraceptive Methods by Most Recent Source of Supply, 1993

Source

Female steriliAll zation methods*

Pill

IUD

Condom

Public sector 73.4 Governmenthospital 2.7 Barangayhealthstation53.9 Barangay supplyoffice 2.6 Puericulture center 14.'2

78.7 17,7 30.7 2,4 28.0

55.6 4.0 34.9 2,2 14.5

70,4 59.2 3.3 0.4 7.5

71.4 32.6 25.0 1.5 12,4

Medical private Private hospital/clinic Pharmacy Private doctor

23.4 3,6 17.4 2.4

19.5 12.8 0,0 6.7

40.6 3,8 36.0 0.8

28.5 26.8 0.0 1.7

26.3 16.4 7,3 2.6

Other private Store Church Friends/relatives Other Don'tknow Missing

2.2 0.2 0.0 2.0 0.4 0.0 0.7

0,6 0.0 0.0 0.6 0.7 0,0 0,4

2.7 1.9 0.0 0.8 0.0 0.0 1,1

0.8 0,0 0.8 0.0 0.3 0.0 0.0

1.4 0,2 0.5 0.8 0.4 0.1 0.4

100.0 764

100.0 273

100.0 90

100,0 1104

100.0 2272

Total percent Number of women

*Includes34 •casesof malesterilization Sources:NSO and Macro International.Inc.,1994;NationalDemographic Survey, 1993.

TABLE 13

"-r m

Reasonsfor Discontinuationof Contraception: Percent Distribution of Discontinuation of Contraceptive Methods in the Five Years Preceding the Survey by Main Reason for Discontinuation According to Specific Methods, 1993

-o 0 "o ¢.-

Method discontinued

Reason for discontinuation

Pifl

IUD

Condom

Natural family planning

Becamepregnant To become pregnant Side effects Healthconcerns

t4.5 20,9 24,3 6.3

9.0 17,3 24,5 7.5

26,1 16.7 2.9 2,8

47.5 21.0 1,6 1,4

52,6 14.1 44 1,2

40.6 t 1.0 6.0 1.9

34,0 18,1 11.9 3_5

Husbanddisapproved Otherreasons Missing

2,1 16.4 15_5

2.4 19.3 20.0

11,6 29.4 10.5

3.4 12.0 13.1

4.8 10,0 12.9

0.0 21.1 19.4

3.6 14.5 14.4

Total percent Numberof women*

100.0 1196

100.0 153

100.0 169

100.0 708

100.0 1036

100.0 53

100_0 3354

Withdrawal

Other

Total*

z _ -t-

> z

_: m z

_lnc_uoesuserso; mje_on, vaginalmethods,femalesterilizationand malesterilization Note:Other reasonsincludeaccess/availability, inconvenientto use, cost,infrequentsex, menopauseandmaritaldissolution. Source,sNSO and Macro International,Inc., 1994; NationalDemographicSurvey,1993.

372

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT

TABLE 14 Reasons for Not Using Contraception: Percent Distribution of Currently Married Women Who Are Not Using a Contraceptive Method by Reason for Not Using, 1993 Age Reason

15-29

30-49

Total

Wants children

32.2

15.6

20.1

Opposed to family planning

3.0

3.3

3.2

Religion Lack of knowledge Costs too much

5.6 9.4 016

4.5 4.7 0.4

4.8 6.0 0.4

Hard to get methods Side effects

0.4 27.4

0.4 19.5

0.4 21.6

Health concerns

11.3

9,5

10.0

Inconvenient

2.2

2.1

Not likely to get pregnant* Others

5.4 1.9

23.5 16.0

18.6 12.3

Don't know/missing

0.6

0.5

Total

100.0

100,0

Number of women

929

2505

3433

*Old/difficult to get pregnant/infrequent sex/husband away/menopausal/had hysterectomy Sources: NSO and Macro International, Inc.,1994; National Demographic Survey, 1993 varied reasons as being too old, finding it difficult to get pregnant, sexual activity, or having husbands have had hysterectomy.

Opposition

do not appear to be major reasons

infrequent

who are away most of the time or who to family planning and religious reasons for nonuse as only 8 percent

of women

HERRIN: POPULATION, HEALTH AND WOMEN

373

mentioned these as reasons for nonuse. Moreover, access-related factors (costs, hard to learn, hard-to-get supplies) were mentioned by only 7 percent of all nonusers; hence, these too did not constitute major factors for nonuse. On the other hand, the major reasons for nonuse appear to be related to health concerns (side effects and health concern) cited by 32 percent of women. Thus, whether the health concern was real or imagined, it only underscored the great need to improve the quality of information and service given to contraceptors to protect them from unnecessary health risks. Impact on Infant and Child Mortality It is well known that births to women below 20 years and over 35 years, parity 4 and over, and birth spacing at less than 24 months are associated with increased risk of infant and child mortality (Ross and Frankenberg 1993). Table 15 shows the distribution of women and children according to these categories of increased risk of infant and child mortality as a result of the fertility behavior of the mother. The table also presents the risk ratio, which is the proportion dead of births in a specific risk category to the proportion dead of births not in any risk category. Thus, the risk ratio measures the risk of mortality of children in any risk category relative to children who are not in any risk category. The data reveal that 62 percent of the total number of children born in the five years preceding the 1993 National Demographic Survey is in one or more high risk categories. Short birth intervals and high birth order are the two most common high-risk factors. Fourteen percent of the births in the last five years occurred after an interval of less than 24 months and 19 percent were of birth orders greater than three. Multiple risk categories combine the different single risk categories. Correspondingly, 9 percent of mothers bore children at short intervals while 12 percent of mothers bore children of higher birth order. The most common multiple risk categories were high birth order and women more than 34 years of age (11 percent) and short birth interval and high birth order (also 11 percent). Correspondingly, 26 percent of mothers bore children of higher birth order and when they were more than 34 years

374

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

TABLE 15 High Risk Fertility Behavior: Percent Distribution of Children Born in the Five Years Preceding the Survey Who Are at Elevated Risk of Mortality, and the Percent Distribution of Currently Married Women at Risk of Conceiving a Child with an Elevated Risk of Mortality by Category of Increased Risk, 1993

Birth in last 5 years preceding the survey

Percentage of

Risk ratio

currently married women*

37.6

1.0

31.1"*

2.3

1.7

0.2

Mother's age > 34

1.7

1.2

7.5

Birth interval < 24

13.5

1.3

9.3

Birth order > 3

19.0

1.5

12.1

Subtotal

36.5

1.4

29.1

Age < 18 and birth interval < 24*** Age > 34 and birth interval < 24

0.2 0.4

.... ....

0:1 0.5

Age > 34 and birth order > 3

11.2

2.2

26.4

Age > 34 and birth interval birth order > 3

3.2

3.5

4.1

10,9

2,5

8.8

25,9

2.4

39.8

Risk category

Percentage of births

Not in any risk category

Single risk category Mother's age < 18

Multiple risk categories

Birth interval Subtotal

< 24

< 24 and birth order > 3

HERRIN:POPULATION, HEALTHANDWOMEN

375

TABLE 15 (continued) Birth in last 5 years preceding the survey

Percentage of

Percentage of births

Risk ratio

currently married women*

In any riskcategory

62.4

1.9

68.9

Total

100.0

Number

8803

8961

Risk category

Note:

Risk ratio is the proportiondead of birthsin a specificrisk categorytothe proportiondead of births not in any riskcategory. *Women were assignedto riskcategoriesaccordingto the status theywould haveat the birthof a child,if the childwere conceived at the time ofthe Survey:age lessthan 17 years and 3 months, age olderthan 34 yearsand 2 months,latestbirth lessthan 15 months ago, and latestbirth orderof 3 or higher. **Includessterilizedwomen ***Includesthe combinedcategoriesage < 18 and birthorder > 3 .... Fewer than 200 cases

Sources: NSO and Macro International, Inc.,1994; National Demographic Survey, 1993

of age, while 9 percent of mothers short intervals. The risk ratio for mothers

bore children of high birth orders and at

less than 18 years is 1.7, meaning

that the

proportion dead of children born to these women was 1.7 times the proportion dead of children born to women who were not in any risk category. Children in multiple risk categories have higher risk ratios than those in single risk categories. Thus, children born to mothers aged 35 and over, at intervals less than 24 months and of birth orders greater than 3 had a risk ratio of 3.5, meaning that the proportion dead of children born to these women was 3.5 times the

376

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

children born to women who were not in any risk category. Thus, fertility in the high risk categories is associated with higher infant and child mortality. A study conducted by Casterline (1991) using data from the 1988 National Demographic Survey concluded that if all women in the high risk categories were protected by contraception, the result would be large and positive health benefits. The study estimated that if births to women in four health risk categories (aged 35 and over, aged less than 20, parity 4 and over, and spacing births at less than 24 months) could be averted, the infant mortality rate would decline by •roughly one-quarter (from 50 deaths per 1,000 births to 38 deaths per 1,000 births) and the early childhood mortality rate by roughly one-fifth (from 30 per 1,000 to 24 per 1,000). These findings imply that a significant reduction in infant and child mortality can be achieved by changing the reproductive behavior of married couples in a way that reduces the health risks of childbearing to mothers. THE IMPACT

OF REPRODUCTIVE

HEALTH

ON FERTILITY

Would improving women's health alone through family planning lower fertility to levels approaching the demographic objective of replacement • fertility? The 1993 National Demographic Survey provides some data that bear on this question. Table 16shows the "unmet need" for family planning. Women with unmet need include those who are not using any method of contraception but want to delay their next birth for two or more years and those who want to stop childbearing. The data show that 12 percent of women need contraception to space births and that another 14 percent need it to limit births. Altogether, 26 percent of all women have an unmet need for family planning. Satisfying this need for family planning could increase the contraceptive prevalence to 69 percent. Table 17 shows the distribution of births according to whether the particular pregnancy was planned, unplanned but wanted at a later time, or not wanted at all. The data show that 56 percent were wanted at the time of conception. However, 28 percent were wanted but at a later time and 16

HERRIN: POPULATION, HEALTHAND WOMEN

377

TABLE 16 Need for Family Planning Services: Percent of Currently Married Women with Unmet Need for Family Planning, 1993

Unmet need for family planning Characteristics

For spacing

For limiting

Total

Age 15-19 20-24 25-29 30-34 35-39 40-44 45-49 Residence Urban Rural Education No education Elementary High school College or higher Total

27,1 28.2

4,4 7.0

31.5 35.2

19,7 12,2 6.4 2.6 0,5

12.6 15,6 17,1 19,5 8.9

32.3 27.9 23.6 22.2 9.5

11.4 13,6

12.1 15.6

23.5 29.1

18.4 11,6 13.5 11.5 12.4

15,2 18.1 12.1 8_8 13.8

33,6 29.8 25.6 20.3 26,2

Note from source:Unmet need forspacingincludespregnantwomenwhosepregnancywas /

mistimed,amenorrheicwomenwhose lastbirthwas mistimed,andwomen who are neither pregnant nor amenorrheicand who are not using any method of family planningand say they want to wait two or more years for their next birth. Also includedin unmet needfor spacingar_women who are unsurewhethertheywant anotherchildorwhowantanotherchildbutareunsurewhento havethe birth.Unmet need for limitingrefers to pregnantwomen whose pregnancywas unwanted, amenorrheicwomen whose last child was unwantedand womenwho ere neither pregnantnoramenorrheicand who are notusinganymethodoffamilyplanningand who wantno morechildren.

Sources: ,%1SO and Macro International,Inc., 1994; NationalDemographicSurvey, 1993.

378

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

TABLE 17 Fertility Planning Status: Percent of Births in the Five Years Preceding the Survey by Fertility Planning Status, According to Birth Order and Mother's Age, 1993

Planning status of birth Wanted then

Wanted later

Wanted no more

Missing

Total

Number of births

Birth order 1

79.1

18.4

2.3

0.3

100.0

2,190

58.7

35.9

5.1

0.3

100.0

1,961

54.9

32.7

11,9

0.6

100.0

1,605

41.9

27.6

30.0

0.5

100.0

4,061

Age at birth < 20

67.3

29.5

3.3

0.0

100.0

783

20-24

62.6

31.0

5.8

0.6

100.0

2,651

25-29

57.0

30.2

12.4

0.4

100.0

2,758

30-44

50.8

27.2

21.6

0.4

100.0

1,985

35-39

45.1

21.4

32.8

0.6

100.0

1,188

40-44

34.9

16.6

48.3

0.2

100.0

420

100.0

9,817

45-49

Total

........

55.7

Note:

28.0

15.9

0.4

Birth order includes current pregnancy ** Less than 50 cases Sources: NSO and Macro International, Inc., 1994; National Demographic Survey, 1993.

HERRIN:POPULATION, HEALTHANDWOMEN

379

percent were unwanted. The percentage of unwanted births increased birth order and with the age of the woman at the time of birth. Defining

wanted

fertility

births were prevented

as that which

and comparing

with

would ensue if all unwanted

this with the actual fertility rate, it was

found that only 2.9 births of the total 4.1 births per woman

represented

wanted fertility (Table 18). What this implies is that if women bear only the number

of births that are wanted given the current

level of fertility prefe-

rences, then the total fertility rate will decline to 2.9 births per woman. is more than the replacement it. If the long-term

level of 2 but is a significant

demographic

goal is to further

movement

reduce

fertility

This

toward to the

TABLE 18 Wanted Fertility Rates; Total Wanted Fertility and Total Fertility Rates for the Three Years Preceding the Survey, 1993 Total wanted fertility rate

Total fertility rate !

Residence Urban

2.6

3.5

Rural

3.3

4.8

No education

4.0

4.9

Elementary

3.7

5.5

Highschool

2.9

3.9

Collegeor higher

2.4

2.8

2.9

4.1

Mother'seducation

Total Note:

Rates are based on birthsto womenaged 15-49 inthe period1-36 monthsprecedingthe survey. Sources: NSO and Macro International,Inc.,1994; National Demographic Survey, 1993.

380

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

replacement level, then fertility preferences (i.e., the number of children wanted and the spacing of births) should be changed in addition to satisfying currently unmet needs for family planning. Casterline (1991), using the 1988 National Demographic Survey, showed that satisfying the unmet need for contraception would reduce the total fertility rate to 2.8 births per woman. If women could eliminate high risk fertility through effective contraception, the total fertility rate (TFR) would be reduced to 2.4 births per woman. Finally, if unmet needs (based on current preference) are satisfied and high risk births are eliminated, TFR will be reduced to 2.1 births, which is the replacement level. Casterline emphasized that the assessment of the impact on fertility of satisfying the need (both preference-based and health-risk based) for family planning must be regarded as hypothetical and illustrative of the extent of change that might result from a successful family planning program. In summary, meeting the needs of women for safe motherhood would not only improve women's health and those of their children, but would also contribute to the achievement of replacement fertility if such a goal is indeed desired. Underlying this capacity to meet the health needs of women is their greater capacity to make choices regarding the number and spacing of children and family planning methods. CONCLUSIONS

Analysis of available national data reveals that women's health problems manifest themselves in different ways. Although women generally have lower mortality than men, there are health risks specific to women that deserve special attention. These include health risks associated with reproduction, nutritional risks associated with pregnancy and lactation, and health risks associated with the use of certain contraceptive methods. From the data examined, there does not appear to be any evidence of gender bias in the utilization of health care services. However, it is possible that gender bias indirectly affects women's health by maintaining traditional expectations and roles regarding (1) women's reproductive role (where they

HERRIN: POPULATION, HEALTH AND WOMEN

381

may be pressured by society to bear children far greater than the desired number); (2) women's responsibility for contraception relative to men (as a consequence of which they face more risks than men); and (3) choices with respect to education and control of wealth which affect women's ability to use various health inputs when needed. Women's health can be improved by addressing high risk fertility behavior. It is well known that births to women under 20 years and over 35 years, parity 4 and over, and birth spacing at less than 24 months are associated with increased risk of infant and child mortality. Recent analysis shows that a significant reduction in infant and child mortality can be achieved by changing the reproductive behavior of married couples in ways that reduce the health risk of childbearing to mothers. If this is the case, then the emphasis on family planning and maternal care will not deflect efforts to improve women's health but rather enhance them. Women's reproductive health can have significant fertility impacts. Recent data and analysis suggest that if all unwanted births (births to women who do not want any more children under current circumstances) could be prevented, the Total Fertility Rate (TFR) would decline from 4.1 births to 2.9 births per woman. Other estimates show that if both high risk fertility and unwanted births could be prevented through safe and effective contraception, the TFR would decline to replacement levels. While the results are merely indicative of the extent of fertility change that might result from successful reproductive health programs, they suggest that meeting the needs of women for safe motherhood would not only improve women's health and those of their children but also contribute toward the achievement of replacement fertility, if such a goal is indeed desired. Eliminating gender bias which results inthe expansion of women's range of choices with respect to reproduction, contraceptive use, and health care utilization will have a permanent impact on health not just for women but for all.

382

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

BIBLIOGRAPHY

Casterline, J. B. "Integrating Health Risk Considerations and Fertility Preferences in Assessing the Demand for Family Planning in the Philippines." Paper prepared for the World Bank (prelim inary), 1991. Chen, L. C. "Child Survival: Levels, Trends and Determinants." In R.A. Bulatao and R.D. Lee (eds.) Determinants of Fertility in Developing Countries. Washington, D.C.: National Academy Press, 1983. Flieger, W. and J. Cabigon. Life Table Estimates: For the Philippines, lts Regions and Provinces, By Sex: 1970, 1980 and 1990. Health Finance Development Project Monograph No. 5. Manila: Department of Health and United States Agency for International Development, 1994. Germain, A. and A. Faunders. "Women's Perspectives on Reproductive Research." In Challenges in Reproductive Health Research. Geneva: World Health Organization, 1994. Herrin, A. N. et al. "Health Sector Review: Philippines 1993." Health Finance Development Project. Manila: Department of Health and United States Agency for International Development, 1994. Mason, K. O. "Do Population Programs Violate Women's Human Rights?" Asia Pacific Issues, Analysis from the East- West Center No. 15(August 1994). National Statistics Office (NSO) and Macro international, Inc.(MI). National Demographic Survey 1993. Calverton, Maryland: NSO and MI, 1994. Ross, J. A. and E. Frankenberg. Findings.#om Two Decades of Family Planning Research. New York: The Population Council, 1993. UNDP/UNFPA/WHO/World Bank Special Programme of Research, Development and Research Training in Human Reproduction. Challenges in Reproductive Health Research: Biennial Report 1992- 1993. Geneva: World Health Organization, 1994.

Highlights of Discussion

POPULATION,

HEALTH AND WOMEN

Behavior toward health utilization may vary. But one thing is obvious education changes the perception of people toward policies and programs including those on health care. So what do we do with those who have less education? Certainly, we cannot go back in time to give them more formal education. One way to compensate for lack of formal education then is through various information and education programs. To be effective, these programs must be focused properly to the people and provide answers to their individual needs. Provision of information, however, is not sufficient for households to make proper decisions. For instance, will adequate education or information guarantee that housewives are given ample rights to make household decisions (such as the proper size of the family, matters of education for the children, and so on)? Will these enable them to withstand maltreatment from their husbands? These are bigger issues that require a much larger intervention. It is not simply inviting information to help but perhaps changing how people or segments of the populace perceive other people, issues, and problems. Looking at society as a whole, how do we change the entire System? Do we start from the educational system or the home? On nutrition for example, it is a universal notion that women, especially pregnant women, need nutritious food. Yet, local surveys have shown that women are the last priority in household food consumption. Moreover, contraceptives with their attendant health risks, almost always target women

384

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

because male contraceptive methods do not quite figure with men's stature in the society. Inspite of the dominance of or the superior stature afforded to men, particularly in Philippine society, more women have outlived men. Many may find it perplexing but the data speak for themselves, in Europe, Africa, Asia or the United States, women are biologically superior to men. Again, when we go back to the issue of how data and other information can help catalyze changes for a better society, we find the usefulness of surveys, reports and studies. Data and other information have different implications, depending on how we interpret them. The ideal approach is two-pronged -- going back to basic research to assure that the data and theories make sense, and going down to the people to see how they are affected when data are translated into policies and programs. That is why the little stories -- anecdotes and anthropological accounts -- matter as much as the large, macro statistics.

BEYOND

SOCIOECONOMIC

SOME IMPLICATIONS HEALTH INTERVENTIONS l

STATUS:

FOR PLANNED AMONG THE POOR

Ill

EXALTACION E. LAMBERTE*

INTRODUCTION

WOESSENTIAL ISSUESemerge in the local literature dealing with the use of health services among the poor. First, studies have drawn different conclusions regarding the question of whether the poor make use of health services, and whether they benefit at all from the services extended to them particularly by public health agencies. The findings of Bautista (1988), Jimenez et al. (1986) and the DLSU Research Center (1983 and 1984) reveal that the poor avail themselves of health services, particularly those delivered by the public sector. Other studies, meanwhile, show that the poor consistently underutilize health services. Moreover, they claim that they do not receive the full benefits of the services to which they are entitled (Carifio et al. 1982; Joves 1979; Solon and Popkin 1986; Akin et al. 1985). Some of these studies further point out that, despite the government's efforts, it is often the middle class, if not the most privileged, who take precedence over those who are more in need.

*Associate Professor, Behavioral Sciences Department, De La Salle University, Manila.

386

, ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Second, the existing local literature also indicates, upon closer scrutiny, the insignificance of certain individual attributes in explaining the utilization of health care services among the poor (Akin et al. 1985; Ching 1986, 1989; Jimenez 1986; Lamberte 1990). If such is the case, then it is important at this point to raise the question: What are the factors that determine the use of health services among the poor? Do the poor avail themselves of health care services, particularly those provided by the public sector? This paper primarily aims to discuss the insights derived and the lessons learned from two research studies that were recently conducted among families in rural Leyte and the urban poor of Metro Manila. The first study, entitled "Determinants of Maternal Health Care Utilization Among Rural Women: The Case of Three Barangays in Leyte," was conducted from April 1989 to July 1990. The second, entitled "Health and Nutrition Status of and Health Seeking Behavior Among Families in High Risk Urban Communities," was undertaken from November 1991 to October 1992. The discussion is limited to the use of health care services among rural and urban poor families, specifically the use of public and private health facilities and the services of the health functionaries (namely, the doctors). OVERVIEW

OF THE TWO RESEARCH

STUDIES

Among their many objectives, the two research studies sought to identify the factors that determine and contribute to the use of health services and

facilities among poor families. The first study mainly aimed at ascertaining the determinants of the use of health care services. The second study, on the other hand, had a broader coverage than the first one, and was actually a baseline research meant to gather benchmark information about the health and nutrition status of families in high risk urban poor communities, specifically Kalookan, Tagig and Pasig (see Table 1 for an outline of the objective of the two studies). Apart from the focus by the two studies on the use of health facilities and doctors' services, both also made use of a combination of four basic research designs--namely,

survey method, document study, observation,

LAMBERTE:BEYONDSOCIOECONOMIC STATUS

387

TABLE 1 Research Objectives

Determinants of Maternal Health Care Among Rural Women

Health and Nutrition Status of and Health-Seeking Behavior Among Families in High Risk Urban Poor Communities Part I: EpidemiologicalStudy

I. General

The study generally aimed to determine the patterns of use of maternal health care services among women in a poverty stricken rural setting, and the factors accounting for the differential use of the services.

A. To determine the prevalent and widespread health risks affectingurban poor families; and B. To determine the health status of the families,

I1.Specific

II. Specific

It specifically addressed the following questions: A. What is the utilization pattern of maternal health care services among rural women in poverty stricken areas? B. What individual attributes of these rural women exert influence on the use of maternal health care? C. What organizational factors influence health care services? D. What structural characteristics of the community are related to the use of services?

A. To ascertain the prevalence of the following events within the past year: 1. death, including pregnancy wastage and/or unwanted pregnancies; 2. prevalence of tuberculosis; 3. prevalence of cardiovascular diseases; and 4. prevalence of drug abuse, smoking and the drinking of alcoholic beverages. B. To ascertain the socioeconomic and cultural factors influencing the decision to seek or not to seek medical help;

388

ESSAYSINSOCIALSCIENCEANDDEVELOPMENT

TABLE 1 (continued) C. To identify the.varying types of health services availed of by the families and the sources of these services; D. To determine the factors influencing the Useof healthfacilities among urban poor families; E. To provide information on the incidence of families" encounters with health service agents and the awareness of the families regarding health promotion campaign activities undertaken in the areas; F, To determine the pattern of response and dispositions of the urban poor toward initiatives on community-. based health activities which are anchored on community participation, Part I1:Health-Seeking and Health Service Utilization Behavior I, General To determine the health-seeking behavior and health maintenance practices among the urban poor families, II, Specific A, To identify the pattern and stages of health-seeking behavior among urban-poor families, specifically: 1, food allocation among family members; 2, growth monitoring for preschool children; 3. breastfeeding and weaning practices;

LAMBERTE:BEYONDSOCIOECONOMIC STATUS

389

TABLE 1 (continued) 4, adolescent pregnancies and maternal care practices; 5. care of preschool children; 6: value placed on sanitary toilet practices. B. To provide a demographic and economic profile of family members who experienced the above events; C. To inquire into the occurence and reasons for hospitalizations and medical consultations; D. To determine the prevalence of common infectious and communicable diseases in the selected high-dsk communities. Of specific interest are the prevalence of: 1. diarrheal diseases; 2. respiratory diseases; 3. tuberculosis, E. To determine the prevalence of malnutrition among preschoolers in these communities; F. To ascertain the environmental risksto healthamongthe urbanpoor; G. To provideinformationon the health impact of pollution and other communityproblemsin the areas.

390

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

and life histories. Further, they utilized similar methods of data collection-namely, face-to-face structured interviews, direct observation, unstructured in-depth interviews, and the use of secondary data. A description of the research methodologies of the two studies is provided in Table 2. RELEVANT

FINDINGS

OF THE TWO RESEARCH

STUDIES

Salient findings common to the two studies are worth noting. The overall results on visits to doctors indicate that more than the majority of the families visited and/or consulted doctors. In the case of rural Leyte, the most frequently visited of all the facilities was the rural health unit. In the case of the three municipalities in Metro Manila, the most frequently visited facilities were the barangay health centers and the public hospitals. Doctors extending services atthe barangay halls, as in the case of those who provided free consultation services, and at the mobile clinics roving around the areas were also consulted by the families. Given the accessibility of the latter, it is not surprising to discover that even the poorest families or those be longing to the lowest income quartile were able to consult doctors within the past six months. Only a small percentage of the families consulted doctors in private clinics and hospitals. Moreover, families availed themselves not only of the curative care services extended through the public health facilities, but also of preventive care services such as immunization, family planning, pre- and postnatal care, and medical advice. Thus, families went to health centers not only when someome was sick but also when they wanted to avail themselves of the preventive care services extended by the centers. In both studies, it was found out that the most frequent-visitors at the health centers were children aged six years and below and married women of varying ages. Most of the respondents reported satisfaction with the services extended by the public health facilities. In both studies, the sources of dissatisfaction cited by a few respondents were: (1) the lack of available medicine/drugs and vitamins at the centers/health units; (2) the long queus; (3) the absence

LAMBERTE: BEYONDSOCIOECONOMIC STATUS

391

TABLE 2 Research Methodology

Determinants of Maternal Health ,Care Among Rural Women

Health and Nutrition Status of and Health-Seeking Behavior Among Families in High Risk Urban Poor Communities

i. Method of Data Collection

I. Method of Data Collection

A. Face-to-face structured interviews B. Direct observation C. U_structured in-depth interviews D. Use of secondary data

A. Face-to-face structured interviews B. Direct observation C. Unstructured in-depth interviews D. Use of secondary data

II. Geographical Coverage and Subjects

A. Three barangays representing major types of rural-based economic activity and the level of organization of health care coming from three municipalities of Leyte.

A. Fifteen depressed barangays _representing various levels of access/deprivation of basic social as well as infrastructural services and locales (e.g., near esteros, near factory, resettlement ares, etc.), all from three municipalities of Metro Manila.

B. Three groups of respondents were covered: 1. 136 married women

B. Two groups of respondents were covered: 1.720 families represented by mothers and/or household heads 2. Unstructured interviews with 50 health personnel

2.15 years old and above 3. health district personnel 4. barangay health workers

392

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT

TABLE 2 (continued) C. The main respondents, the married women, were randomly selected,

C. Stratified random sampling was used in the choice of barangays while systematic random sampling was utilized in selecting the sample families.

II1.Method of Data Analysis

A. Used qualitative and quantitative type of data analysis,

A. Used qualitative and quantitarive type of data analysis.

B. Statistical tools used were: • 1. Description statistics, such as percentages, mean, median, mode and standard deviation; 2. Measures of association .were also used particularly for nominal and ordinal types of data, namely, gamma, Cramer's coefficients and chi-square; 3. Regression analysis specifically least squares and stepwise regression analysis;

13.Statistical tools used were:' 1. Descriptive statistics; such as percentages, mean_ median,. mode and standard deviation; 2. Measure of correlation and association, namely, Pearson r, Gamma coefficient, Cramer's coefficient, and chi-square;

C. Contextual analysis was also usedas a mode of anlysis for qualitative type of data.

C..Contextual analysis was also used as a mode of analysis for qualitative types of data.

LAMBERTE: BEYOND SOCIOECONOMIC STATUS

393

or physical inaccessibility of the doctor; and (4) the impersonal treatment of the patient by the doctor or by some other health personnel in the center. With regard to factors that contribute to the various reasons for visiting doctors in health centers/units, the two studies provide interesting findings. The study in rural Leyte showed that organizational and community factors serve as critical variables in the use of health services. Specifically, the visits to health facilities and health functionaries were not mainly attributable to the individual characteristics of the respondents, but more importantly, to the structural conditions of the community (its economic status) and the quality of interventions that health organizations have made in delivering services to the target beneficiaries. In particular, correlation results (Table 3) show that in a relatively economically developed barangay with an organized health care delivery system, individual characteristics of the respondents (such as need, represented by number of disability days, level of living, and education) were significantly related to the visits to rural health units. In addition, organization-related variables such as home visits conducted by health personnel, satisfaction withservices provided by RHUs, and extent of respondents' knowledge about primary health care were also revealed to be related to the frequency of respondents' visits to the rural health unit. in a relatively poor barangay with a less organized health care delivery system, meanwhile, individual predisposing characteristics such as age and family size were found to be related to the frequency of visits to the RHU. Interestingly, in the poorest barangay which coincidentally had a well-organ ized health care delivery and health personnel who exhibited a greater commitment to educating residents about health practices, individual characteristics and organizational related factors were found to be significantly related to frequency of visits to the RHU. Correlation results from all the barangays taken together indicate the importance of the level of economic development and the level of organization of health care in the community with regard to the visits to RHU. This is demonstrated by the dummmy variable from the community representing the relatively high level of economic development and the dummy

TABLE 3 Point Biserial Coefficients and Chi-square Values for Visits to RHU

Visit to rural health unit

Independent variables

Concepcion

Tagbibi

Punong

Total

Dummy for Concepcion

= 46,1163"*

Dummy for Punong

= 8,4299**

o_m

Home visits of personnel

X 2 = 6. 2030**

.<> 03

Age

rpbi =0.1189

rpbi =-0,4766**

rpbi =0.2142

rpbi =-0,0106

Family size

rpbi =-0.1782

rpbi =-0.4234**

rpbi = 0.1172

rpbi =-0,1674

= 8,3109"*

= 0.0041

-= 3.3t95"

X 2

-= 0.3234

0.0874

Employment status

X2 = 0.4485

Type of occupation

Extent of RHU services availed

rpbi = 0.0298

rpbi = 0,1135

rpbi = 0.0468

rpbi = 0.0098

Satisfaction of services received at RHU

Education

rpbi = 0.2421"

= 0.0645

= 5.4741"

= 0.0(?30

= 0.4742

rpbi = 0.1328

= 0.0566

= 0.4494

rpbi =-0.2170"

= 2.5321

rpbi = 0.0786

_0 _ zm O rn z> 113

< ill o

"13 133 Z -H

130

;0 --4

TABLE 3 (continued)

m 00

Visit to rural health unit

Independent variables

Concepcion

Tagbibi

Punong

m 0

Z E_

Total 0

o Level of living

rpbi =0.4287**

rpbi =-0.0923

rpbi =-0._819

rpbi =0.1953

Extent of knowledge about RHU services

rpbi = 0.1686

rpbi = -0.1680

rpbi = 0.1023

rpbi = 0.2708*

Affordability of physician's fee

X2 = 0.4813

X2 = 0.2652

X2 = 0.0008

X2 = 1.0737

_oc_

Extent of information about PHC

rpbi = 0.3198"

rpbi = 0.1478

rpbi = 0.4487**

rpbi = -0.2484*

Number of disability days due to illness

._, C co

rpbi= 0.2528*

rpbi = -0.0776

rpbi= 0.0634

rpbi = -0.0187

* Significant at 5% level ** Significant at 1% tevel

396

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

variable for the community representing the organizational characteristics of health care provision in the area. Aside from these, organizational factors such as home visits conducted by health personnel, extent of respondents" awareness about services extended by the RHU, and extent of information disseminated about primary health care were also significmltly correlated with frequency of visits to the RHU. In terms of visits to the RHU physician within and outside the RHU facility, results show that the percentage of respondents who visited the RHU physician is higher in the less economically developed barangay with a better organized health care delivery than in the barangay that is also considered to be poor but with a less organized health care delivery, and in the barangay which is economically developed. Findings from the regression analysis (Table 4) indicate that, taken together, the frequency of visits to the RHU doctor was mainly a function of the cluster of community factors represented by the dummy variables-organizational variables such as home visits conducted by health personnel and respondents' knowledge about RHU services, the need factors indicated by family size and the number of days of inactivity due to illness, and affordability of the physician's fee. There were significant differences in the frequency of visits to the RHU physicians with respect to the communities that have well-organized health care delivery systems and those that have less organized systems. It may be that it is not the community characterestics per se - such as social economic and cultureal attributes -which determine the number of visits, but rather the organizational features of health care provisions in these barangays. This inference becomes all the more plausible because of the significant effects of home visits of personnel. The extent of knowledge of primary health care, and the services provided by the RHU - variables which are clearly associated with the commitment of the health care givers and the organization of health care. The relative importance of the community and organizational factors in explaining the number of visits to the RHU physician can be clearly gleaned in the step-wise regression results of the study (Table 5). Results

22__d

TABLE 4 Regression Coefficients for Number of Visits to RHU Physician GO m ;o

Concepcion

Tagbibi

Punong

Total

m GO Ill -<

Independent variables

t-value

t- value

o Z O GO

Dummy for Concepcion

1,5702

1,9899"

O o

Dummy for Punon9 Home visits of personnel

2.8114

1.9735"

-0.7817

0.0203

-0.1658

0.9563

3.1795 1.7030

3.6977** 2.2901"

Age

0.1044

1.9709"

0.0911

1.8836

-0.0378

0,6245

-0.0077

0.2168

Family size

0.3187

1,2992

-0.2685

1.0677

0.4535

1.8539

0.2989

1.9553*

Employment status

-0.3471

0.2387

0.7267

0.6332

-0,2845

0.1265

-0.4339

0.5449

Type of occupation

-0.8589

0,6325

-0.6866

0.5019

-0.0541

0.0316

-0.1207

0.1449

Extent of services received at RHU

0.1154

0.5771

0,3377

1,1432

0,4328

1.0188

0.2471

1.6911

Satisfaction of services

0.6550

0.4837

-0.2535

0,4549

0.6896

0.7648

0..4661

1.2284

Education

0.3295

1,1336

-0,2t12

0.9391

0.2571

1.2438

0.2814

2.0925*

c_o_

¢1D

c_ co

TABLE 4 (continued) Concepcion

Independent variables

t-vatue

Tagbibi

t-value

Punong

Total

t-value

t- value

Level of living

-0.1041

0.3301

-0.0981

0.3347

0.3268

0.8798

-0.2339

1.4110

Affordability of physician's RHU services

0.4401

2,6525**

0.0012

0.000t

0.1120

0.4872

2.1607

2.3095*

Extent of knowledge on PHC

0.5374

0.6549

0.3763

2.6107"*

0.1648

0.6797

0.1573

1.2474

m Co

Number of disability days due to illness

0.0659

0.6626

0.0874

1.5329

0.2719

2.2235*

0,1158

2.5340**

-< Co

Extent of knowledge on RHU services

0.3535

1.3864

0.0893

0.3715

-0.7269

1.196__

0.8881

2.6404**

Co o C) CO C_

* Significant at 5% level ** Significant at 1% level

rn z o m _> Z

131 r--

"0 tn Z --I

LAMBERTE: BEYOND SOCIOECONOMIC STATUS

399

TABLE 5 Forward Step Wise Regression Results for Number of Visits to RHU Physician

Variables

Significant level

THREEBARANGAYS Dummy for Punong

0.1044

0,08

Affordability

0.0569

0.17

Home visits

0.0330

0.29

Education

0.0277

0.34

Age

0.2933

0,05

Family size

0.1857

0.08

of physician's fee

BO.CONCEPCION, HILONGOS

Affordability

0.0841

0.22

Occupation

of physician's fee

0.1318

0.36

Satisfaction with RHU services

0.0360

0,36

Satisfaction with services

0.5836

0.003

Level of living

0.0695

0.21

Knowledge on PHC

0.1370

0,05

Knowledge on RHU services

0.0707

0.10

Age Education

0.0284 0.0725

0.26 0.02

Occupation

0.0150

0.18

Need

0.6555

0.05

Extent of RHU services received

0.2825

0.03

Knowledge on PHC

0.0535

0.07

Level of living

0.0085

0.04

BO,TAGBIBI.HINDANG

BO, PUNONG,MATALOM

400

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

show that only the dummy variable representing the community conditions and the level of organization of health care delivery was found to be significant, accounting for 10 percent of the variations. Three other variables-namely, affordability of physician's fee, home visits, and education--were also included in the model. A look into the determinants of the frequency of visits to the RHU physician in each barangay provides further insights. In a barangay that is economically developed, the significant determinants are age and family size. In the poorest barangay with the least organized health service delivery system, three organizationally-related variables were found to have significant effects on the number of visits to the RHU physician--namely, satisfaction with the services, knowledge about primary health care, and knowledge about the RHU services. Education of the mothers was also a significant determinant. In a poor community with a well-organized health services delivery system, organization-related variables were also found to exert an influence on the number of visits to the RHU physician. These variables were the extent of services received from the RHU and the extent of the respondents' knowledge about primary health care. Level of living and need as measured by the number of days the respondent was inactive due to illness, were also revealed to be significant determinants of the frequency of visits to physician. In summary, the study in rural Leyte showed that the community's level of development and the organization of its health care delivery system significantly determined the number of visits to the physician. Poor residents from communities with better organized health service delivery systems visited physicians more frequently. The findings from the study among urban poor families in three municipalities of Metro Manila, meanwhile, also reinforced the interesting pattern of results in the Leyte study. It is important to note, however, that compared to the study conducted in Leyte, the mode of analysis of the data related to the utilization of health care services for Metro Manila was less rigorous. This is attributed to the fact that the objectives and scope of the

LAMBE'RTE:BEYOND SOCIOECONOMIC STATUS

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latter study were broader than those of the former. While the Leyte study aimed solely to ascertain what factors determine the use of health services among rural families, the goals set for the Metro Manila study were rather broad. As mentioned earlier in this paper, the general goals of the Metro Manila study were: (1) to provide comprehensive and detailed information about the socioeconomic conditions, health and nutrition status, and community characteristics of the high risk communities covered; and(2) to map out strategies for the planned Urban Health and Nutrition Project. The baseline datawere meant to serve as benchmark information for the planned Urban and Health Project to be implemented by the Department of Health with possible funding from the World Bank.Nevertheless, the Metro Manila study provide enlightening and instructive results on the health-seeking behavior of families in high risk urban poor communities. The overall results of the Metro Manila study indicate a pattern similar to that of the Leyte study. Correlation findings indicate that the number of visits to the barangay health physician made by urban poor families was significantly correlated with a cluster of mother-related individual characteristics and organizational variables (Table 6). Specifically, the number of visits was significantly correlated with the literacy of the mothers, the employment status of the mothers, the travel time required to reach the facility, home visits conducted by the health centers' personnel, the mothers' awareness of the services rendered at the health center, and the occurence of illness in the family. Results further showed thatthe number of visits to barangay healthcenters was again significantly correlated with a cluster of individual and organizational variables, among which are the ages of parents, the length of stay in Manila, the employment status of the mother, the mothers' awareness of the services extended by the barangay health centers, home visits of the barangay health personnel, and the health status of t_mily members (Table 7).

402

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT TABLE 6 Correlation Coefficients: Number of Visits to Doctor

Independent variables

Coefficients

Probability

• Age of mother

r = 0.0477

p = 0.2342

Place of origin

rpbi = 0.0199

p = 0.6196

Lengthof stay in Manila

r = 0.0186

p = 0.6427

Educationalattainmentof mother

r = 0.0050

p = 0.4716

Readnewspaper

rpbi = 0.2105"*

p = 0.0083

Householdsize

r = -0.0496

p = 0.2160

Age of father

r = -0.0050

p = 0.9028

Educationalattainmentof father Employmentstatus of father

r = 0.0317 rpbi = 0.0193

p = 0.4447 p = 0.6380

Employmentstatus of mother

rpbi = 0.1970"

p = 0.0534

Monthlyincomeof employed mother

r = 0.2389**

p = 0.0038

Family monthlyincome

r = 0.0145

p = 0.7772

Total monthlyfood expenses

r = 0.061

p = 0.6880

Minutesof travel to hospital

r = -0.2017"*

p = 0.0153

Home visits to health personnel

rpbi = 0.1935"

p = 0.0516

r = 0.0338

p = 0.3372

Awareness of servicesprovided by the barangay healthcenter

rpbi = 0.1945"

p = 0.0547

Oecurence of illnessin the family

rpbi= 0.3569**

p = 0.0001

Minutesof travelto barangayhealthcenter

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403

TABLE 7 Correlation Coefficients: Number of Visits to Barangay Health Center

independent variables Age of mother

Coefficients r = -0.24001"*

Probability p = 0.0006

Place oforigin

rpbi = 0.0501

p = 0.2617

Lengthof stay in Manila Educationalattainmentof mother

rpbi = -0.2500** r = -0.0071

p = 0.0007 p = 0.8728

Read newspaper Householdsize

rpbi = 0.0570 r = 0.0290

p = 0.1978 p = 0.4468

Age offather Educationalattainmentof father

r = -0.1932" r = 0.0128

p = 0.0388 p = 0.7523

Employmentstatusof father

rpbi = -0.0067

p = 0.8662

Employmentstatusof mother

rpbi = -0.2347**

p = 0.0001

Monthlyincome of employedmother

r = -0.0151

p = 0.8385

Familymonthly,income

r = 0.0119

p = 0.8082

Minutesof travelto publichospital

r = -0.0395

p = 0.3618

Minutesof travel to barangayhealthcenter

r = -0.0133

p = 0.7361

Awarenessof servicesprovided bythe barangayhealthcenter

r = 0.2542**

p = 0.0001

Home visitsto healthpersonnel

r = 0.2968**

p = 0.0004

Numberof sickmembersin the family

r = 0.1969"

p = 0.0514

* Significantat 5% level. ** Significantat 1% level,

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

LESSONS

LEARNED

Several important points therefore emerged from the findings of the two recent studies. First, the use of the health services among the poor could not be generalized using a linear or continuous model. For instance, an economically poor community with a relatively well-organized health care delivery system was found to have more beneficiaries of health services than its wealthier counterparts. This signifies, therefore, that when analyzing the level of use of health services among poor families, one must consider the level of economic development of the community and the level of organization of the health care delivery system in the community. Second, the insignificance of variables related to the socioeconomic characteristics of the families (e.g. family income, employment status and occupation of the father) indicates that the circumstances affecting the decision to avail of health services go beyond socioeconomic status characteristics of the household members. What emerged as crucial were those variables related to institutional arrangements and organizational strategies of health care delivery in the communities under study. This inference becomes all the more plausible due to the influence exerted by the variable representing (1) the level of organization of health care delivery in the community; (2) the mothers' awareness of health services provided by the health centers; (3) the range of services offered in the health centers; (4) respondents' knowledge about primary health care; and (5) home visits conducted by the health personnel. Third, in the poorest communities, the various reasons for availing of health services are accounted for mainly by the variables related to the organization of health care delivery. Reasons for satisfaction/dissatisfaction with health services, home visits conducted by health personnel and the level of mothers' awareness of services offered by the health centers which were found to influence the frequency of respondents' visits to the centers were organization-related variables. This seemed to demonstrate the importance not only of the level of the organization of health care but also of the commitment of health care providers. As aptly posited by several sociolo-

LAMBERTE: BEYOND SOCIOECONOMIC STATUS

405

gists, service agents indeed play a crucial role in promoting a wider use of services among the very poor. Fourth, some individual characteristics of the families also emerged as ,significant determinants. These, however, need further qualification. A closer look at the data would show that these variables refer more to the demographic variables associated with the need and health status of the family, such as age, family size, and age of children below six years. The individual characteristics of the mothers also appeared to be crucial, particularly the variables on literacy, educational attainment, and employment status. The data further indicate that employment status of the mothers is more closely associated with their availability or the time they can allot to visits to the centers, rather than their socioeconomic status. Furthermore, a closer examination of the data further indicates that employment status of the mothers is more highly correlated with travel time to the health facility than with her monthly income. The negative sign of the coefficients reinforces this observation in that unemployed mothers were observed to be frequent users of the services of physicians _nd health centers/units. THE IMPORTANCE OF INSTITUTIONAL ARRANGEMENTS The importance of organizational factors, as determined by the findings in these two studies, signifies the appropriateness of formulating intervention strategies at the organization level. Many studies have emphasized the importance of capital and financial resources in interventions among the poor. It is not enough, however, to talk of such resources. As demonstrated by these studies, it is important to pay attention as also to organizational factors. One must also understand that when talking about organizational matters, one actually refers to two basic elements of the phenomenon-namely, the individuals and the institutional arrangements and/or structures composing the organization. As can be gleaned from the two studies, in planning health interventions among the poor, there is a need to give utmost importance to health workers, particularly at the community level. This is because they embody and

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

symbolize the structure of the organization itself in the public mind. As these studies show, they facilitate the people's participation in health related-programs and projects. They also encourage people to avail themselves ofthe services rendered by the organization itself. As frontliners and principal service agents, therefore, health workers affect the reaction and responses of their target beneficiaries. Most of all, they reflect the image of the organization, which is crucial to the sustainability and success of organizational intervention. Documented cases of committed, hardworking health personnel in Leyte and in Metro Manila demonstrate this pattern. The findings of these studies show that, indeed, there are committed workers in the public service, as in the Department of Health, an observation similarly noted by Carifio (1992) in her study on the performance problems of the Philippine bureaucracy. The institutional, arrangements within the organization are also worth mentioning. Giddens, a noted sociologist, defined institutions as those modes of belief and behavior that occur and recur. They are patterns of social activity reproduced across time and space. They are also forms of social conduct that are reproduced across time spans and space. According to him, to speak of the reproduction of social conduct is to speak of the repetition of similar patterns of activity by actors separated from each other in time and space. The meaning of institution in this context is completely different in ordinary language, where it is a loose synonym for "group" or "collectivity," as when, say, a prison, school or hospital is referred to as an "institution." The importance of examining institutional arrangements in planned interventions among the poor is emphasized in current efforts in development work and poverty alleviation strategies. The development experience suggests that an increase in resources is not sufficient for sustainable growth and for the relief of poverty. In addition to capital resources, appropriate institutional structures and arrangements must be established. Such institutions are important, according to Holt (1990), to development and poverty alleviation programs for two main reasons. First, in the absence of institutional arrangements, the benefits of the projects tend to accrue to the elite

LAMBERTE: BEYONDSOCIOECONOMIC STATUS

407

and rarely reach the needy. Second, the institutions do not only help to distribute benefits more equitably, but also contribute to the sustainability of the projects and thus to sustainable growth. A closer look at the organization of health care delivery under the formerly centralized setup of health services indicates the existence of a number of established institutional arrangements that were instrumental in promoting a wider use of services among target beneficiaries. First, the well-defined thrust of the Department of Health on the preventive and • pr_mot]ve aspects of health care in various communities facilitated the implementation of standardized strategies among various health centers/rural health units in the country. It was noted in communities covered by the two studies that health personnel themselves became actively involved, as part of their organizational strategy, in a health information campaign among its target beneficiaries. In addition, educational classes and shortterm seminars were held in the health personnel's barangays and/or sitios, as were discussions with family members during home visits. Second, follow-ups of beneficiaries through home visits conducted by health personnel also helped promote the wider use of health services. Frequent visits within the assigned catchment area were made as part of the weekly activities in the community. This follow-up strategy enabled the field health workers to reach out to families that needed assistance. It also enabled the workers to keep track of patients that required additional medical attention. As shown by the two studies and by some previous studies, home visits are very effective methods of reaching out to the poorest sectors, particularly those in most need of services. Third, the promotion and implementation of primary health care also enhanced the participation of the target communities in health-related projects and activities such as neighborhood campaigns for immunization, environmental sanitation, and maintenance of cleanliness in the community. Participation in community health-related activities seemed to encourage the poor to avail themselves of health services more frequently. Fourth, the visibility and ready accessibility of the field health workers likewise encouraged target beneficiaries to avail themselves of health

408

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT .

services. Documented cases show that patients and beneficiaries bewailed the physical absence of doctors in the centers. The presence of patient, accommodating midwives and nurses, however, helped appease beneficiaries whenever doctors did not show up on scheduled consultation days. It must be pointed out that the Department of Health required all its field health personnel to reside in or near the communities they were assigned to. The oft-quoted institutional requirement "reside or resign" is wellknown to all DOH personnel. Lastly, target setting is another institutional arrangement that, in a way, also facilitated the promotion of health services among the most needy. This organizational activity enabled the staff to determine specific and priority groups that needed attention within a given time period, it also specified the resources and actions required to meet the targets defined by the center's staff. CONCLUSION

In conclusion, the two studies provided insights into the importance of organizational factors when working with the poor. They specifically illustrated the importance of individuals working within a health organization, and the specific institutional arangements that have been established to maintain and provide equitable and sustainable service to the people. A major lesson from these studies, therefore, is that planned health intervention must heed not only resource requirements, but, more importantly, the type of institutional strategies that should be developed to attain defined goals and objectives. Appropriate institutional arrangements are thus imperative for planned health interventions targeting economically poor communities.

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409

BIBLIOGRAPHY

Akin, J.S., D.K. Guilky, and B.M. Popkin. "The Demand for Child Health Services in the Philippines." Social Science and Medicine 15c ( 1985): 249-57. Bautista, Victoria. Assessing PHC as a Strategy in Health Services Delivery, Vols. landlI. Quezon City: University of the Philippines, College of Public Administration, 1984. Carifio, L.V. et al. "Concepts and Issues in Social Access to Basic Services." In J.F.X. Paiva and Ledivina V. Carifio (eds.) Increasing Social Access to Basic Services. Kuala Lumpur: UNICEF-APDC, 1983. . "Unrequited Love, Impossible Dreams, Unfulfilled Hopes: The Performance Problems of the Philippine Bureaucracy." The Philippine Economic Journal XXXI (1992). Ching, P. "Public Provision and Demand for Health Services: A Case Study of Bicol." Ph.D. dissertation. Quezon City: University of the Philippines School of Economics, 1986. . "Some Preliminary Results of Factors Affecting the Demand for Health Services in the Philippines." Paper presented during the International Health Policy Conference, Manila, July-August 1989. Giddens, Anthony. Sociology 2nd ed. London: Macmillan Education Ltd., 1986. Herrin, A.N. and Maricar G. Bautista. "Health and Development: Determinants and Consequences." Survey of Development Research 111. Makati: Philippine Institute for Development Studies, 1989. Holt, Sharon L. "The Role of Institutions in Poverty Reduction." Background Paper for the 1990 World Development Report. Washington D.C., 1990. Jimenez, P.R., E.C. Javier and J. Sevilla. "Health and Nutritional Problems and tile Utilization of Health Services." Manila: De l,a Salle University_ DLSU Research Center, 1986.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Joves, Ma. Lourdes S. "Accessibility of Government Health Services in Bicoi River Basin Area." Bicol Studies No. 10. Quezon City: University of the Philippines College of Public Administration, 1979. Lamberte, Exaltacion E. "Determinants of Maternal Health Care Utilization Among Rural Women: The Case of Three Barangays in Leyte." Ph.D. dissertation. Quezon City: University of the Philippines, Department of Sociology, 1990. . "Organizational Strategies Make A Difference: The Utilization of Maternal Health Care Services Among Rural Women in Leyte." Philippine Sociological Review 39 (1991 ). . "Health and Nutrition Status of and Health Seeking Behavior Among Families in High Risk Urban Communities." Manila: De La Salle University, Social Development Research Center, 1992. McKinlay, J.B. "Some Approaches and Problems in the Study of the Use of services: An Overview." Journal of Health and ,Social Behavior (1972). Osteria, T.S., P.R. Jimenez, O.C. Marifias, and J.Y. Okamura. "Community Participation in the Delivery of Basic Health Services." Manila: De La Salle University, Social Development Research Center, 1988. Popkin, B.M. and F.S. Solon. "Income, Time of the Working Mother and Child Nutrition." Journal of Tropical Pediatrics and Environmental Child Health 22 (1976): 156-66.

MARRIAGE IN RURAL PHILIPPINE HOUSEHOLDS

ROBeRt E. EVEgSON

INTRODUCTION

ARRIAGE DECISIONS are influenced by tradition and culture. But they also respond to economic factors. Delays in the age of marriage have been seen as a means of controlling family size. Thus, factors influencing the desired family size also influence age-at-marriage and the probability of marriage. Marriage is also related to investments in skills and occupation choices. There are at least three reasons for this relationship. First, skills and occupational achievement may influence the "quality" of a marriage (the qualities of the partner). Second, marriage may be competitive with skills achievement in terms of time and resources. And third, marriage may conflict with perceived "remittance" obligations to the family. These economic motives are interrelated. Both parents and children in households have a stake in the outcomes of marriages and, thus, they weigh in family decisions regarding them. When children are young, parents are the dominant decisionmakers. They anticipate and project marriage, location and occupational (and possibly fertility) outcomes for their children. As children grow older, they develop commitments and responsibilities congruent with parental projections -- including remittance income support to the family. At some point their "individuality" emerges and they take increasing responsibility for marriage and skills acquisition decisions. Both parents and children recognize differences in innate abilities, tastes, and attitudes toward risk, etc. In some cases, these differences produce conflict and alienation; but in most families, parental flexibility regarding their

412

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

expectations and their children's emerging expectations produces a harmonious transition to the next generation. Rural Philippine households are regarded to exhibit high degrees of parental support for schooling and training, high degrees of child responsibility regarding remittances and family support, and high degrees ofintergenerational harmony. These family structures are based on traditions, and community and religious values. In this paper, I propose to test the proposition that rural Philippine families are also responsive to economic conditions as choices are made regarding the schooling of children, marriage and age-at-marriage of children, and the location and occupation choices of children. I will utilize intergenerational survey data from a sample of rural households in Laguna Province in the Philippines to test this proposition. These households were originally surveyed in 1975, 1977, 1982, 1985, 1990 and 1992. The sample size was reduced over time as households aged. The 1992 survey sought data on marital status, age-at-marriage, location and occupational choice. By 1992, virtually all of the survey households had completed childbearing, a large proportion &the children had completed schooling and a substantial proportion had married and chosen occupation and location. The second section (p. 412) of this paper discusses the economic modelling of parental and child choices. The third part (p. 416) discusses data and empirical specifications. The fourth part (p. 419) presents estimates, which are subsequently summarized in the conclusion (p. 426). THE ECONOMIC

ARGUMENT

Families ultimately make decisions regarding contraception and family size, investment in schooling and related skills acquisition, location, occupation and marriage. Parents make their own contraception decisions and suppoa early schooling investments in their children. They make these decisions with certain projections and expectations in mind. Since children contribute income to their families, particularly as they get older, this contribution is quite important to families, since marriage typically indicates

EVENSON: MARRIAGE IN RURAL PHILIPPINE HOUSEHOLDS

413

the formation of a new family and the cessation of an income contribution to parents (except for contributions to parents when they become elderly). Thus, age-at-marriage decisions have important economic implications for the family. The "household" model setup for this problem would be as follows: The household utility function (1) would include child services Ci, child human capital Hi, leisure ttj, age-at-marriage, M/, and other household goods Z. /_

Uh(Z i_l

ci, Z

Hi, Z

tO, Z

i_l

/=1

Mi, Z)

.(I)

At age M_,or at a related age, the child leaves this family to form a new household. This does hot preclude remittances in later years, but it is assumed that remittances after one has completed schooling end with marriage. Note that the household has some optimal M/in mind. This may be determined by community norms. Similarly, the utility from./-//may be influenced by, community norms. The constraints for this problem are cited below: Ci = ci (Xci, tij, C, K)

(2)

Child services require child goods Xc (food, shelter), child care time tij, household capital K (which might include community capital as well) and contraceptive effort C. Hi--- H,( St, Ht )

(3)

Human capital is produced by schooling St, and health investments Hi. Sj = S, ( tw.x,,,,At )

(4)

Schooling is produced by time in school Tsi, schooling goods X.i, and child ability, Ai. fh = Ht( to.x,,. K )

(5)

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Health is produced by child care time to, health goods (medicine, etc.) and household capital K. Z=Z(Xz

tzj, K)

(6)

Other household goods are produced by market goods Xz, time tzj, and capital :K. Tj= tij + t,,j + tzj + twj + to

(7)

Each household member j, where j includes parents, faces a time constraint. Total time tj.is allocated to ehildcare time t0, time in school t_j, time in l_ome production t=j,time working twj, and leisure to.

v+y. twj(_M/)_.>.Y, (,%x_,+e_x,.i+Pj,Xh,)+p_z ,]

(8)

The budget constraint is that family income in a particular period, composed of nonlabor income V and labor income (the sum of time spent working byj members twjtimes wage Wj (adjusted for remittances associated with age-at-marriage) must be sufficient to pay for expenditures on child goods (Xci, Xsi, Xhi) and other purchased goods used to produce household goods Xz. The period over which the problem occurs is effectively the family life cycle from marriage until the last child effectively leaves the household. The relative weights of different family members in the household utility function can be considered to shift over the life cycle as children play larger roles. One way to visualize these weights is as being associated with "threat points" in a bargaining model (Fabella 1983). This setup is not intended to suggest that the children no longer care for their parents' welfare or that they may make remittances -- after they leave the household. The time constraint (7) can be _nserted into the budget constraint (8) to form the "full income" constraint in the standard way. The shadow prices or minimum costs of producing child services C_, human capital Hi and

EVENSON: MARRIAGE IN RURAL PHILIPPINE HOUSEHOLDS

415

household goods can be expressed in the standard way as weighted averages of goods and time prices where the weights are goods and time intensities.

Hci -- E

Wjtij/Ci

+ PcXci/Ci

J 11tfi =-llsi + Ilhi ll_i + Witsi/s_ + PA(JSi I/hi = _

Witij)'M_ + PhXhi/Mi

(9)

II_=_, t_jw/z + p_x_ J

lto= _ The family can then be seen to maximize (1) subject to the full income constraint taking these prices and its full income into account. Note that ability At, affects the shadow price of schooling II_ithrough a productivity effect. Higher ability allows the same St to be attained with less time tsj, and goods Xsi. Age-at-marriage MI affects both utility and income. Later ages-atmariage raise family income through remittances. For adult children, wages are related to their own human capital. This could be seen as a reduction in the shadow price of human capital (schooling), so age-at-marriage can be seen as having both income and price effects. This maximization problem yields the following "demand" relationships: 1. the demand for number of children n, i.e., for contraception, 2. the demand for human capital per child H_(Si, Hi), 3. the demand for other home goods Z, 4. the demand for purchased goods (Xci,Xsi, Xm, Xz) and 5. time allocation decisions by family members tij, tsj, tzj, twj,tO,

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

These behavioral relationships are, in principle, jointly determined by the "exogenous" variables of the problem: C, contraceptive services and knowledge K, household and community capital and infrastructure Ai, child ability endowments V, nonlabor income Pc, Ps, Ph, Pz, prices of market goods Wj, market wages EMPIRICAL

SPECIFICATION

OF MARRIAGE

DECISIONS

In this paper, no attempt will be made to provide estimates of the full set of relationships implied by the household model. The focus is on the marriage decisions. And given the timing of the marriage decision and the shift in utility weights between parents and children, a somewhat more restricted model than the one developed above is needed. The restricted model that I will use is a model in which the basic family decisions (1 to 5), i.e., the family size, investments in human capital, and the home goods, produced goods and time allocation decisions, are deemed to have been made in the first stage of the family life cycle. Marriage decisions are made in a second stage, and while these decisions were anticipated and projected in the first stage, the actual investments in human capital from the first stage can be taken as given in the second stage. This logic supports the inclusion of schooling as a "lagged endogenous" explanatory variable. In addition, the empirical specification of estimates of determinants of age-at-marriage must deal with a censoring problem. In the survey data, second generation children range in age from preschoolers to children in their 30s (in 1992). Some have not completed schooling and many who have completed schooling have not married. The subsample of married children is a censored sample, even if an age cut-off is used. That is, if we consider children over 21, we have a subsample that is not censored as regards the schooling decision since almost all children over 21 have completed schoo-

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ling. But many will not have married for reasons similar to the masons for marrying at different ages. Accordingly, in this paper, an age cut-off(over 21) is used to eliminate censoring from schooling decisions. A two-stage selection bias procedure (Heckman 1981) is used to correct for censoring bias in age-at-marriage estimates. In the first stage, a "probit" estimate of determinants of marriage is estimated. In the second, the determinants of age-at-marriage are estimated utilizing mills ratio terms from the first stage probit requirements to correct for censoring or selectivity bias (actually, the procedure utilized estimates in both stages jointly in a maximum likelihood procedure). Table i provides a short definition of the variables utilized in this analysis. The two key endogenous variables are the EVER MARRIED and AGE-AT-MARRIAGE variables. However, a secondary analysis of marriage and migration from the home community (barangay) to elsewhere in the Philippines or abroad is also conducted. The four variables, MARRIED/MIGRATED, NOT MARRIED/MIGRATED, MARRIED/NOT MIGRATED, NOT MARRIED/NOT MIGRATED, show the marriage-m igration pattern. Individual characteristics include SEX, AGE, and schooling (EDUC). The EDUC variable is treated as a lagged endogenous variable. Maternal characteristics include mother's schooling, MEDUC, and mother's age at marriage, MAGEMARR, as well as an indicator of early death of the mother, MDECEASED. These variables are intended to reflect home management skills as well as the socializing influences of the mother. Household characteristics include farm size and distance to the nearest market, DIST POB. Community characteristics include indexes of transactions costs, TRANS COST, transportation, TRANSPORTATION, and the mean agricultural wages for the 1977-90 period, COMMUNITY WAGE. These community characteristics influence migration and occupational choice (Evenson 1994 and King 1982). It is expected that the more remote barangays with high transportation costs will encourage family enterprises,

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ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT

TABLE 1 Variables and Definitions: Second Generation Respondents in Laguna

•.

Sample means

Endogenous dependent variables

So_s

Daughters

EVER MARRIED: Dummy = 1 if married AGE-AT-MARRIAGE: Age married = 1 if married MARRIED/MIGRATED: Dummy = 1 if married and migrated NOT MARRIED/MIGRATED: Dummy = 1 if not married and migrated MARRIED/NOT MIGRATED: Dummy = 1 if married and not migrated NOT MARRIED/NOT MIGRATED: Dummy = 1 if not married and not migrated

0,41 23.40 0.19

0.54 21.70 0.26

0,57

0.45

0,20

0.25

0.04

0,04

1.00 28.50 7.32

0.00 28.60 8.71

4_51 19_40 0.027

4.56 19.40 0.042

1.36

1.35

2.21 2.15 28.44

2.22 2,22 2858

Exogenous Variables Individual Characteristics SEX: Dummy = 1 if male AGE: Age of second generation respondent EDUC" Years schooling completed Mother's Characteristlcs MEDUC: Years of schooling completed by mother MAGEMARR: Mother's age-at-marriage MDECEASED: Dummy = 1 if mother deceased in 1992 Household Characteristics FARM SIZE: Farmed cropland (owned or rented) in hectares Community Characteristics TRANS COSTS: Transactions cost index TRANSPORTATION: Transportation index COMMUNITY WAGE: Average community agricultural daily wage (1977- 1990) in pesos

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less out-migration and earlier marriage. High agricultural wages are expected to have a similar effect. ESTIMATES I begin with simple probit regressions for marriage for second generation sons and daughters over 20 years of age. These estimates are reported in Table 2. I will discuss these results by dependent variable. The age variable has the expected sign and the expected coefficient differences for sons and daughters. Daughters marry earlier, and as age increases, the probability of marriage increases. Sons marry later, but then age has a higher impact on the probability of marriage. Education increases the probability of marriage. The effect is larger for sons (below I note that education also delays age of marriage for sons, but not for daughters). The education of the mother appears to have little effect on daughters, but it reduces the probability of marriage for sons (largely through causing a delay in age-at-marriage). Both sons and daughters with mothers who marry later have a lower probability-of marriage -- and again this appears to be through a delay effect. The early death of the respondent's mother appears to increase the probability of marriage. Farm size has little effect on the probability of marriage. The characteristics of the parents' community (barangay) have little impact on the probability of marriage of sons. They do appear to impact on the marriage probabilities for daughters. Daughters from communities with high local wages and high transactions costs are more likely to be married given their age and other characteristics. Table 3 presents estimates of the effect of dependent variables on both the probability of marriage for the over 20 second generation respondents and on their age-at-marriage, given that they have married. The estimation procedure is the Heckman-type correction model for selection and censoring. A probit equation for the probability of marriage and a regression

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ESSAYSIN SOCIALSCIENCEAND DEVELOPMENT TABLE 2 Probit Estimates: Probability of Marriage: Son and Daughter Second Generation Respondents in Laguna

Constant Individual Characteristics AGE EDUC Mother's Characteristics MEDUC MAGEMARR MDECEASED HouseholdCharacteristics FARMSIZE Community Characteristics TRANS COSTS Community WAGE

Observations Chi2 Prob > Chi2 Pseudo R 2

Sons

Daughters

-2.20

-3.95

(2.18)

(3.21)

0.101

0.088

(5,92) 0.146 (5.81)

(4.84) 0,055 (2.41)

-0,078 (2.17) -0.042 (1.56) 0.982 (1.71)

-0,033 (0.87) -0.075 (2.48) 0.607 (1,22)

0.033 (0.57)

0.055 (0.95)

-0.148 (1.18) -0.008 (0,46)

0.346 (2.51) 0,073 (3.19)

285.00 78.50 0_000 0.199

253,00 49,60 0.000 0.151

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TABLE 3 Selectivity Corrected Estimates: Probability of Marriage and Age-at-Marriage: Second Generation Respondents in Laguna

Problem of marriage Constant

Ageat-marriage

-4.32 (4.51)

25.73 (6.89)

0.819 (9.79) 0.130 (10.37) 0.049 (2.27)

-0.299 (0.07)

0.093 (2.92)

-0.483 (2.99)

MEDUC

0.033 (9.09)

-0.148 (0.89)

MEDUC (MALE)

-0,074 (1.45) -0.065 (2,20)

0.532 (2.36) 0.177 (0.95)

0,017 (0.45) 0.531

0,129 (0.76)

IndividualCharacteristics SEX (MALE) AGE EDUC EDUC (MALE)

0,272 (2.61)

Mother's Characteristics

MAGEMARR MAGEMARR (MALE) MDECEASED

(1.6o) Household Characteristics FARM SIZE

0.032 (0,66)

0.151 (0.76)

FARM SIZE (MALE)

-0.0002 (0.004)

-0.608 (1.91)

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

TABLE 3 (continued) Problem of marriage

Ageat-marriage

Community Characteristics TRANS COST TRANS COST (MALE) TRANSPORTATION TRANSPORTATION COMMUNITY

(MALE)

WAGE

NRHO

0,225

0,008

(1.84)

(0.02)

-0.343 (2.15) 0.337

0.176 (0.26) -1.62

(2.10)

(2.36)

-0.473 (2.29)

0.958 (1.09)

0.020

-0,089

(1.31)

(1.28) -5,41 (i .97)

Sigma

1.55 (23.04)

Observations

538,0

Chi 2

173,36

Ob > Chi 2

0.000

equation for age-at-marriage are jointly estimated using a maximum likelihood technique. The age-at-marriage estimates are thus corrected for the selectivity bias inherent in the marriage decisions. For this procedure, observations for sons and daughters are pooled. However, separate coefficients for sons and daughters are estimated for most of the important variables (the interactions with the sex = 1 if male dummy, mean that the coefficient for the uninteracted variable is the coefficient

for daughters.

The coefficient

for sons is the sum of the uninter-

EVENSON: MARRIAGE IN RURAL PHILIPPINE HOUSEHOLDS

423

acted variable and the interacted variable). It is expected that most variables affecting the probability of marriage will also affect age-at-marriage. Age of the respondent is the key variable used to identify the model as it does not appear in the age-at-marriage equation. (Strictly speaking, the model could be identified by the "functional form" of the probit -- but most economists argue for more identifying variables.) For the most part, the probit estimates for the probability of marriage are approximately as reported in the simple probits. By comparing the probit estimates with the age-at-marriage estimates, however, we can obtain more insights into the process. In some cases, we expect the higher probability of marriage to be achieved through lowering the age-at-marriage. For exampie, it was noted in the discussion of Table 2 that the education of both sons and daughters increased the probability of marriage. But for daughters, education increased age-at-marriage -- i.e., caused them to marry later while, for sons, education led to earlier age-at-marriage. Yet for both sons and daughters, education led to higher probabilities of marriage given the respondent's age and other characteristics. Interestingly, the education level of the mother has the opposite effect for sons. More educated mothers have little effect on the marriage patterns of their daughters. But they do induce their sons to marry later, and this produces a net reduction in the probability of marriage for this group. (It is likely, however, that marriage probabilities will go up as this group gets older. The same comment applies to daughters with higher schooling levels.) Mother's age-at-marriage does not appear to have an impact on the daughter's marriage pattern. There is some indication that sons marry later if their mothers married later. Early death of the mother leads to higher probabilities of marriage. The size of the farm operation apears to have little effect on the marriage probability but does appear to lead to earlier age-at-marriage for sons. The opportunity to farm appears to lead to lower out-migration and earlier marriage. (See next section for further discussion.) As noted in the caller discussion, high transaction costs in the home community lead to higher marriage probabilities for daughters, but this is

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'ESSAYS IN 'SOCIAL SCIENCE AND DEVELOPMENT ,

not achieved through an impact on age-at-marriage. Better transportation facilities in the home community als0 appear to lead to higher marriage probabilities for daughters, and these are achieved via earlier age-atmarriage. The effect of higher agricultural wages is similar. MARRIAGE

AND MIGRATION:

AN EXTENSION

Marriage is related to migration. As noted earlier, most of the second generation children who have not migrated from their home barangay (and associated town) have in fact married at a relatively young age. One can imagine a number of links between migration and marriage. Education is acquired to enhance earning Opportunities for children who do not plan to migrate. But for many families, educational investments are made to facilitate migration and to enhance earning opportunities after migration. The marriage decision is also related to this. Migration, on the one hand, expands the scope for finding marriage partners as does education. Marriage after migration is thus likely to occur at a later age than is marriage without migration. A simple probit procedure is not suited to analyzing the joint marriagemigration decision. The multinomial logit procedure does allow us, however, to assess the effects of the various independent variables in this analysis on multiple choices relative to a reference choice. Table 4 reports multinomial Iogit estimates for a three-choice model, where the choices are h i. Not migrating (the reference choice) 2. Migrating-married 3. Migrating-not married The determining variables are the same as those determining the probit choice of marrying or not marrying. Since most of the nonmigrating children have actually married, it is not possible to consider the not migrating-not married choice. The estimated coefficients thus tell us something about both the decision to migrate and the decision to marry, given that migration has taken place.

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TABLE 4 Multinomial Logit Regression Estimates: Probability of Marriage and Migration: Son and Daughter Second Generation Respondents in Laguna Sons

Constant IndividualCharacteristics AGE EDUC Mother'sCharacteristics MEDUC MAGEMARR MDECEASED HouseholdCharacteristics FARM SIZE CommunityCharacteristics TRANS COSTS CommunityWAGE

Daughters

Migrated married

Migrated not married

Migrated married

Migrated not married

-2.82 (1.46)

-5,34 (2.52)

-5,64 (2,31)

-9.15 (3.73)

0,175 (5,23) 0.190 (3.84)

0.175 (4.79) 0.333 (5.86)

1.56 (4.39) 0.064 (1.42)

0.156 (4.34) 0,116 (2.55)

-0.238 (3.21) -0.127 (2.33) 1.58 (1.53)

-0.017 (0.23) -0.035 (0,65) 1.49 (1.36)

-0.075 (0.97) -0.183 (2.98) 1.36 (1.56)

-0.016 (0.23) -0.064 (1.46) 0.162 (0.15)

0.159 (1.50)

-0.717 (1.15)

0.064 (0.52)

0.104 (0.97)

-0.184 (0.48) -0.010 (0.27)

-0.325 (1.26) -0.039 (0.96)

0.568 (2.10) 0.108 (2.35)

0.532 (2.01) 0.142 (3.12)

Observations

285.000

253.000

Chi2

107.400

62,200

Prob> Chi2

0.000

PseudoR2

0.177

0.113

428

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

First, consider the effects of age. It appears that age increases migration. Oider children are more likely to have migrated than the reference group. Age appears to have little differential effect on marriage. Education also affects migration and marriage. More educated children are more likely to have migrated. They are also more likely to migrate and not marry than the reference group. More educated mothers appear to stimulate their sons to migrate and marry. But this is not the case for their daughters. Mothers who marry later have lower migration probabilities and marriage probabilities for both sons and daughters. Early deaths of mothers tend to stimulate migration and marriage. Larger farm sizes do not have strong effects. Higher transaction costs and higher local wages stimulate migration of daughters, but have little impart on sons. SUMMARY

The data available for second generation sons and daughters allow us to draw some conclusions regarding the effect of several variables measuring individual, maternal, household and home community characteristics on marriage probabilities and age-at-marriage. Since this is an age truncated sample, i.e., not all sons and daughters have completed marriage decisions, the reader is cautioned regarding conclusions on probabilities of ever marrying. In cases where age-at-marriage is delayed, current probabilities of being married may be lower as a result, but this may not hold for probabilities of ever marrying. The reverse may be the case for factors accelerating age-at-marriage. The evidence on marriage based on moderate levels of statistical significance (t > 1.5) suggests the following conclusions. Higher levels of educational attainment by sons increase the marriage probability by accelerating age-at-marriage. For daughters, marriage probabilities are also increased, but age-at-marriage is delayed. For both sons

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427

and daughters, higher educational attainment is associated with higher marriage opportunities via migration from the home community. Higher levels of maternal educational attainment, on the other hand, appear to have little effect on the marriage outcomes of daughters, For sons, marriage is delayed and migration is increased by higher levels of maternal education. Early deaths of mothers stimulate higher levels of marriage. Availability of farm land (hence farming opportunities) has little effect on daughter's marriage outcomes. It encourages earlier marriages for sons and discourages migration. Home community characteristics have little effect on the marriage outcomes of sons. For daughters, high transactions costs stimulate higher marriage probabilities and migration. High agricultural wages have similar effects. Better transportation options also have similar effects. Most of these measured effects are predicted by the economic logic of the household model E although little modeling of marriage has actually been undertaken. If there is a surprise in these estimates, it is that marriage opportunities for daughters are apparently more circumscribed by community and household factors than are marriage opportunities for sons. Maternal characteristics have stronger effects on sons. And while farming opportunities hold sons in the local community and encourage early marriage, high transactions costs and employment opportunities do so for daughters.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

BIBLIOGRAPHY Behrman, J. R. "Interactions Among Human Resources and Poverty: What We Know and What We Do Not Know." The World Bank, 1990. Mimeo. Behrman, J. R. and A. Deolalikar. "Unobserved Household and Community Heterogeneity and the Labor Market Impact of Schooling." University of Pennsylvania, 1988. Mimeo. Behrman, J. R. and B. Wolfe. "The Socioeconomic Impact of Schooling in a Developing Country." Review of Economic and Statistics 66 (1984): 296-303. Boissiere, M., B. J. Knight, and R. H. Sabot. "Earnings, Schooling, and Ability, and Cognitive Skills." American Economic Review 75 ( 1985): 1016-34. Evenson, R. E. (ed.). "Symposium on Household Economics." The Philippine Economic Journal XVII (1978). Haddad, E. (ed.). "Understanding How Resources Are Allocated Within Households." IFPRI, 1991. King. E. M. "Investment in Schooling: An Analysis of Demand in Low-Income Households." Ph.D. dissertation. Yale University, 1982. White, B. F. M. (ed.). Rural HousehoMStudies in Asia. Singapore University Press, 1979.

ENGENDERING II

DEVELOPMENT*

II IIII SOL1TA COLI_$-MoNSOD

'T.ERE is CERTAINLY no aspect of life -- in the community, in the nation, .tin

the world m in which women do not have a role to play. It is true of

peace. It is true of development, and it is true of population." Rafael Salas was ahead of his time when he spoke these words at the World Conference of the UN Decade for Women in Copenhagen in 1980. He used the term "human development" and defined it in a holistic way. A decade later, the UNDP Development Report would echo Salas, defining human development as the broadening of choices that people can make: With respect to women, Salas said: "Development programs should focus on the rural and disadvantaged urban areas and communities. They should *This article touches on the role and contribution of women in the development process. It was originally presented by Professor Solita C. Monsod of the U.P. School of Economics at the 6th Rafael M. Salas Forum on November 25, 1994. It later appeared in a folio entitled Engendering Development, together with the comments and insights of the panelists during said forum. Meanwhile, in publishing a collection of essays on socioeconomic and development issues in honor of renowned social scientist, Gelia T. Castillo, the Philippine Institute for Development Studies (PIDS) feels that such a volume will not be complete without a paper looking into gender issues as incisively as Prof. Monsod does in this article. The topic is one of Dr, Castillo's greatest concerns. Professor Monsod was one of those invited to a symposium last year to honor Dr. Castillo. Unfortunately, much as she had wanted to, she could not attend at that time. In a way, this paper then serves as her personal tribute to Dr. Gelia Castillo. That this article was originally written for a lecture honoring a man of great vision and foresight says much about the parallelisms that may be drawn between Dr. Salas and Dr. Castillo in their capacity to view development from a holistic perspective. With the permission, therefore, of the author and the Rafael M. Salas Foundation, the PIDS is hereby reprinting and including said article in this Castillofestschrifl volume.

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ESSAYS IN SOCIAL SCIENCEAND DEVELOPMENT

enable women to broaden the choices in their personal lives and economic activities; and finally, they should provide them with increasing access to decisionmaking processes and resources." At the first population conference held in Bucharest in 1974 and then at the International Women's Conference in Mexico the following year, Salas highlighted the relationship between women, population and development. These conferences, he said, had a common goal: to integrate women fully in the development process. The goal remains elusive. We are still wrestling with the problems of poverty and how to bring women from the margins, to the mainstream, of development. All over the world, women remain at the fringes of the political, social and economic life of their countries. But there is a difference. Today the commitment of governments and the international community is seemingly at its strongest, spurred no doubt by unrelenting pressure from women's advocacy groups. The issue of women is on the front burner, as it were, of the international agenda, starting with the recently concluded UN International Conference on Population and Development held in Cairo in September 1993 and continuing with the World Summit for Social Development in Copenhagen and the Fourth World Conference on Women in Beijing in 1995. The Cairo Document (the Programme of Action) has an entire chapter devoted to "Gender Equality, Equity and Empowerment of Women." Chapter IV states at the outset: "The empowerment and autonomy of women and the improvement of their political, social, economic and health status is a highly important end in itself. In addition, it is essential for the achievement of sustainable development." And then again, at the end of the same paragraph: "Experience shows that population and development programmes are most effective when steps have simultaneously been taken to improve the status of women."

MONSOD: ENGENDERING DEVELOPMENT

431

The first section of this paper is a brief discussion of the productive and reproductive roles that Filipino women perform, assessing their contributions to human development. I shall then attempt to examine the reality of their marginalization from the country's social, economic and political life. The special problems of the poorest women are discussed in the third section. The final section presents suggestions on how the status of women could be improved by empowering them toward achieving gender equality and equity. BACKBONE OF THE ECONOMY What contributions do women make to the Philippine economy? They are enormous, if generally unrecognized or undervalued. Given the current controversy raging on the General Agreement on Tariffs and Trade-Uruguay Round (GATT-UR) Agreement, let us start with international trade. In the first semester of 1994, garments and electronics accounted for 37.5 percent of the total value of merchandise exports. These two industries, it should be noted, were also the linchpins of the industrialization and export diversification drives of the East Asian dragons and the ASEAN (Association of Southeast Asian Nations) wannabees. What is generally overlooked is that women comprise the overwhelming majority of the workforce in these two industries. Data from our 1988 Census of Establishments show that women outnumbered male workers by a ratio of four to one in garments manufacturing, and three to one in semi-conductors and microcircuits. This situation is not unique to the Philippines. A strikingly similar pattern has been observed in Malaysia and Singapore as well as in other developing countries where women predominate in the production of.manufactured exports. In a less chauvinistic world, the four Asian tigers and the three ASEAN cubs (Malaysia, Thailand and Indonesia) would have been more appropriately called the Seven Sisters -to recognize the role of women in fueling the export engine that led to their countries' phenomenal growth.

432

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

In terms of the export of labor, the situation is not much different. Remittances from overseas workers, which amounted to $1.5 billion for the first seven months of 1994, constitute a substantial portion Of Philippine foreign exchange inflows and help compensate for the country's large trade deficits. We cannot export our goods, so we export our labor. What role do women play here? In 1991, they constituted a larger proportion of our overseas workforce (41 percent) than that of our domestic labor force (36 percent). More recent statistics indicate that women now make up more than half (51 percent) of land-based workers leaving annually to work abroad. What is not commonly recognized is that female overseas workers send home a larger proportion of their wages than their male counterparts. Although 75 percent of women overseas are service workers -- domestic helpers and the like -- and therefore belong to the lowest end of the pay scale, their average remittances, according to the 1991 Survey of Overseas Workers, was 71 percent more thanwhat their male counterparts sent home. This seems to be a typical behavior, at least of low-income women. In India, for example, ifa low-income woman earns 100rupees, she spends 90 rupees for food, medicine and schoolbooks for her children. If her husband earns 100 rupees, only 40 are plowed back to the household. The most recent remittances further bear out the pattern: In the first seven months of 1994, land-based workers in HongKong, who are almost wholly women domestic helpers, remitted $99 million to the Philippines. In Singapore, where four out of five Filipino workers are women, remittances to the Philippines amounted to $60 million. On the other hand, in Saudi Arabia, Filipino workers outnumber their counterparts in HongKong and Singapore by factors of nearly five and nearly eight, respectively, and male workers constitute 75 percent of the Filipino workforce. Yet Saudi workers remitted only $77 million. While there are other possible explanation for this situation (such as differences in wages between countries or mistakenly attributing remittances to overseas workers), there can be no question that this propensity of women to spend money on their households is a major factor in explaining the relatively small differences in remittances

MONSOD: ENGENDERING DEVELOPMENT

433

between the higher-skilled (and more highly paid) male workers and the lower-skilled and lower paid women. UNDERPAID

AND OVERWORKED

In the domestic economy, women also play a central role. Women comprised two-thirds of those working in the wholesale and retail trade in 1992 m the buy-and-sell activities that characterize the informal economy. Two out of three women so engaged were self-employed -- a fact which will gain more significance later. Women also comprised slightly more than half (56 percent) of those employed in community services, and slightly less than half(46 percent) of those employed in manufacturing (although most of them .were employed in the top export industries). In agriculture, fishery and forestry, women comprised about one- fourth of those employed. These numbers are relatively small, maybe because their activities were substantially undercounted. First, it must be pointed out that the Integrated Survey of Households, which makes these estimates, does not allow for multiple employment, i.e., working at two or more jobs. If an individual is working at more than one activity, what is reported is only the job at which that person worked the greatest number of hours during the past week. Thus, the survey does not fully capture the activities of households, particularly those in the low-income category who, in their struggle to survive, are engaged in multiple activities. There may be a significant amount of undercounting. The 1992 SocioEconomic Survey of Special Groups of Families (e.g. the bottom 30 percent in income distribution) indicates that 75 percent of low-income families are engaged in up to four or more activities which include nonagricultural wage and entrepreneurial activities. The pivotal role of women in this constant struggle for survival is shown by the data: 63 percent of the lowest-income families living in rural areas are engaged in the retail/wholesale trade, where women, as we have seen, predominate. Other studies at the micro level also belie the seemingly small role of women in agriculture, fishery and forestry. A gender analysis of food

434

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

production systems done in Central Luzon documented that 75 percent of the steps in the process of rice production (including 100 percent of post-harvest activities) are done by women. When briefed about this study, the Secretary of Agriculture at the time remarked, "Perhaps we should start talking about the Filipino farmer and her husband." A World Bank paper cites evidence from diverse country settings, including the Philippines, which suggest that when the time spent on home production is valued and computed, women contribute between 40 to 60 percent of total household income. Even as she is engaged in productive work -- income-generating or livelihood-sustaining activities outside the home, as supplier of labor or entrepreneur -- the gender division of labor gives the Filipino woman almost total responsibility for the care and welfare of those within her household. She provides reproductive and social services --the care of husband, children and tile elderly. She is responsible for household food security and family planning. She is nurse, cook, teacher, even gatherer of wood and drawer of water. None of these activities are reflected in the country's national income and productaccounts which implies that these services do not provide any added value. The excuse has always been that the value of these tasks is too difficult to estimate, being nonmarket activities. It is lamentable that another non-market activity like growing livestock and poultry or vegetables for home comsumption is included in national income and product accounts, while the production and development of human capital is not. The UNDP Human Development Report in 1995 will start correcting this deficiency, a most timely move. KEY TO FAMILY

WELFARE

A woman's activities in the home exert a major influence on the health, education and survival of those around her, particularly the children who will comprise the labor force of the next generation. Her access to income, education and health opportunities in turn shape the quality of that influence.

MONSOD: ENGENDERING DEVELOPMENT

435

To give a few illustrations: Undernourished women are more likely to have spontaneous abortions, stillbirths, or babies with low birth weights whose chances of survival are reduced. A woman's health affects that of her children. Diarrhea, one of the ten leading causes of infant deaths, is more prevalent among children of mothers with less education, who are less likely to bring them to a health facility or provide for treatment: a woman's education affects the health of her children. Increased income of poor women is spent largely on the household and is associated with lower child mortality and better child health and nutrition: a woman's income affects the health of her children. A recent study estimated that if women in four high-risk categories (below the age of 20, above 35, birthspacing of less than 24 months, four or more children) avoid giving birth, infant mortality would decline by about one-fourth (from 50 to 38 deaths per 1000 births) and early childhood mortality would be reduced by one-fifth (from 30 to 24 per 1000 births). Another study showed that a mother's schooling was a significant determinant of her children's schooling. Studies in other countries make the point somewhat differently: a long-term study in a Bangladesh district found that while the death of a father increased child mortality by six deaths per 1000 children under five, regardless of the child's sex, a mother's death increased child mortality by 50 deaths per 1000 for boys and 144 per 1000 for girls. In brief then, women's access to education, health care and livelihood opportunities improve child survival, nutrition, and education opportunities in what could turn out to be a virtuous circle of human development. A recent joint International Labor Organization-UNDP report concludes"Improving women's educational and other opportunities, ineluding those for entry on equal terms into the labor force, is the key both to limiting the growth of population and to improving the welfare of coming generations. It is the single, most significant way to bring about general social advancement."

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

An equally recent World Bank paper states"Investing in women is critical for poverty reduction. It speeds economic development by raising productivity and promoting the more efficient use of resources. It produces significant social returns, improving child survival and reducing fertility. And it has considerable intergenerational payoffs." STILL

A MAN'S

WORLD

Sadly, if the productive and reproductive contributions women make to human development are recognized at all, it is more in the realm of rhetoric. The reality consists of gender discrimination in the economic, politico-legal and socio-cultural spheres. Women are excluded from or exploited in many aspects of social, economic and political life which constrains them from making an even greater contribution to human development. Some examples of gender discrimination in market participation in the Philippines: • Unemployment rates for women, without exception, have always been higher than those for men, • Average earnings of women for all occupations combined are onehalf that of men. Women earn an average income higher than that of men only in professional and clerical occupations. The disparity is largest among administrative, executive and managerial workers and production workers. The percentage of women who are unpaid family workers is twice that of men. • Women are outnumbered by men as managers and executives (except in community, social and personal services). Even in textiles and semi-conductors, where the employees are overwhelmingly women, there are more male managers and executives. For manufacturing as a whole, where employment is about evenly divided between men and women, there are twice as many male executives as there are those of female. Government service is no

MONSOD: ENGENDERING DEVELOPMENT

437

•exception. There, too, in the highest positions ofdecisionmaking (up to the undersecretary level), as well as in the Career Executive Service Officers, men dominate women by more than two to one. • In household-operated activities, women operators and entrepreneurs have less access to credit and financing. In sum, women in the labor force have a more difficult time getting a job (and are willing to travel great distances to find it, given rural-urban and international migration patterns). They earn much less when they do get one and are not as involved in decisionmaking as men. In entrepreneurial activities, they are hampered by lack of access to credit or financing. EXCLUDED AND EXPLOITED In the socio-cultural sphere, gender discrimination is reflected in the following: • The proportion of malnourished children is significantly larger for girls than for boys --9.8 percent for boys as compared to 17 percent for girls on the average. It appears that families give preference to boys in food allocation. There is also a significantly larger percentage of iodine deficiency among girls and women than among their male counterparts. • Gender bias against daughters in the allocation of resources for education does not seem to exist in the Filipino family. Any disparity, if at all, is in favor of females, particularly for the two most recent cohorts. The gender bias arises in the choice of fields of study at the post-secondary level. Gender streaming or tracking takes place, and women follow career paths which are essentially extensions of their roles at home -- nursing, teaching, social work, nutrition -- rather than architecture or engineering. In vocational courses, women take dressmaking or hair-styling, rather than, say, training to be electricians, welders or mechanics. One reason for this behavior may be the educational system itself, both formal and informal. Gender stereotyping occurs in instructional materials and curricula in

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

schools, media, advertising, entertainment industry, church, and within the family. • Within the home, women, aside from childbearing, are also expected to take almost full responsibility for the care of children and the elderly, health care, education and housing, food preparation, family planning and welfare. This is in addition to their income-generating and livelihood activities to supplement and, in some cases, be the sole provider of the family income. The drain on women's physical resources is considerable, with obvious health implications. A study of two rural agricultural areas in Surigao del Sur reveals that in a one- month period, wives worked almost 50 percent longer than their husbands while daughters worked about 25 percent longer than sons in market and nonmarket activities (321,215, 273 and 214 hours respectively for mothers, fathers, daughters and sons). • Women also have to contend with social discrimination, which has to do with persecution on the basis of their vulnerability, such as sexual harassment outside the home (usually in the workplace), violence in the home (child abuse, wife battering, incest), and being caught in situations of armed conflict. On the political side, women won less than ten percent of the seats in the House of Representatives in 1992, and only four out of 24 seats in the Senate. The proportion of women elected to local office, from governor down to municipal councilor, ranged from a low 3.3 percent (city mayor) to a high of 11.5 percent (Sangguniang Panlalawigan). Women jurists are outnumbered seven to one. Only two of the present Cabinet members are women. As pointed out earlier, men outnumber women in the third (career executive service) level of the bureaucracy by more than two to one. They also outnumber them in the first level (clerical). It is only at the second level (professional/technical) that women comprise almost 60 percent, largely because teachers are included in the category.

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THE POOREST

439

WOMEN

The problems of exclusion and exploitation are magnified for the poorest women. These are women who belong to the poorest 30 percent of Fiiipino families, earning less than 10percent of total family income. A brief profile of what women in this group have to deal with is as follows: • Seven out of 10 families live in the rural areas. They tend to have a larger family size (5.95 members) than the national average (5.25). As a result, there are more mouths to feed than there are hands to work -- 50 percent of those who comprise the lowest-income strata are less than 15 years old, compared to 40 percent for the nation as a whole. • Forty-four out of every 100 families have no access to sanitary toilet facilities (compared with the national average of 28 out of 100). Only five percent have access to safe drinking water (against the national average of 23 percent). The poorest women tend to enter the labor force earlier and to work longer: 48 percent of them, between 15-24 years of age, are in the labor force (the national average is 39 percent). The labor force participation rate for the other age groups are also much higher than those for Filipino women as a whole. But if women have higher unemployment rates than men, poor women endure even higher unemployment rates than the national average for women. That is to say, although a greater percentage of poor Filipino women are employed compared to the national average, a larger proportion of poor women are looking for work. Since the poorest women earn very little income, it must be assumed that they are working at jobs that pay less than those obtained by the average worker. Fifty-six percent of poor women work in agriculture, compared to 31 percent for the Philippines as a whole. This must also mean that these low-income women are under represented in the other occupations. For example, only one percent of them are in professional and technical jobs, compared to 11 percent for the national female population. And 37 percent

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are unpaid family workers, compared to the national female average of 23 percent. Having to participate in the labor force at an earlier age puts the poor at an educational disadvantage. This limits their income and employment opportunities, in turn limiting their children's access to education in a vicious cycle that perpetuates the unequal distribution of income across generations. The education gap is large: among the low-income families of working age, only 39 percent have some high school education or better (versus 59 percent for the national population); only 19percent had finished high school or better (versus the national average Of 41 percent) and only 14 of every 1000 had a college degree. It is clear that intervention is needed to break this vicious cycle. This is the subject to which we now turn. BREAKING

THE CHAIN

The actions recommended in Chapter IV of the Cairo Document in order to engender development can hardly be improved upon. All of them apply to the Philippines, except, thankfully, for the sections dealing with female genital mutilation, rape for ethnic cleansing, and prenatal sex selection. They constitute a checklist against which the government, having committed totaking these actions, can evaluate its performance_ Perhaps the Rafael Salas Foundation, the Population Commission and the National Commission on the Role of Filipino Women, together with nongovernment organizations (NGOs) working in the different areas, can cooperate in monitoring the progress along these lines. Whether government Can come across is another matter. There's the rub. Government has been actively attempting to engender development. Aside from the constitutional provisions which stipulate fundamental equality between women and men, recognize women's roles in nation-building, their productive and reproductive roles (not necessarily in that language), there is the New Family Code of the Philippines which eliminates many of the provisions discriminatory to women.

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Then there is the 1989 Philippine Development Plan for Women which seems to be going the way of other development plans. That document is the government's major reference on gender and development. The National Commission on the Role of Filipino Women, or its successor entity, is at present preparing a Philippine Plan for Gender-Responsive Development, 1995-2025 which builds on the previous plan. A landmark legislation was passed two years ago, the so-called Women in Nation-Building Act, whose implementing rules and regulations require all agencies of government to report to Congress every six months on their compliance with the law. In the annual budget exercise, the agency's budget request must include a statement of what proportion of total expenditures requested will be devoted to women's needs and concerns. But government's record in implementation is problematic. A survey of low-income families in 1992 indicates that with the possible exception of health care, government programs have not been effective in reaching the poor: • Education programs reach fewer of the poor than those in the higher income groups, thus tending to perpetuate income inequalities. • The poor have not significantly benefitted from the agrarian reform program. Of the farm area cultivated by them, 34 percent was still under tenancy in 1992, compared to 39 percent in 1985. • Only two percent of foresters, three of fishermen, and five to 12 percent of farmers in the group were visited by extension workers. • Only 0.2 percent were registered with Kalakalan 20. • Only 12 percent of families availed themselves of credit, and only five percent of the loans were from government financial institutions. Given that record, there is some room for doubting the government's ability to match its actions with its words. What is sure, however, is that by concentrating on women, the chances for success are greater. As the Cairo Document states: "As women are generally the poorest of the poor and at the same time key actors in the development process, eliminating

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social, cultural, political and economic discrimination against women is a prerequisite for eradicating poverty, promoting sustained economic growth in the context of sustainable development, ensuring quality family planning and reproductive health services, and achieving balance between population and available resources and sustainable patterns of consumption and production." PRIORITY

CONCERNS \

At the risk of incurring the displeasure of groups who are doing advocacy •work, I believe that there are three particular areas that should be given the highest priority by the government because their large spillover effects address other concerns as well. The first section area is in education. As we have seen, investment in women's education yields high private (income and employment opportunities) and social (better health for mother and child, higher probability of children going to school) returns. The fact that the mean years of schooling in the country is relatively high (7.6 years) relative to Thailand (3.9), Singapore (4.0) or Malaysia (5.6) should not be too much a cause for rejoicing because it probably implies a lower quality of education in our case. Equally important, the poorest of the poor, especially the women, are clearly not experiencing that education. The government must do whatever it takes to ensure quality universal education at the primary levels. There is not much point in free secondary schools and adding an additional year for high school if the poor have dropped out before then. The problems that prevent the poor from accessing the government's primary and secondary education programs should be isolated and addressed. it could be that the educational facility is just not there. One of four barangays in the country is without an elementary school. These are probably the poorest communities. Schools should be built right away -and with the proper facilities (48 percent of primary schools do not have water supply and 61 percent do not have electricity).

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Another problem is that the private costs of sending a child to school may not be affordable to the poor family -- not only the direct costs (clothing, shoes, baon, supplies) but the opportunity costs (the help that the child gives around the house). A system of school feeding and free uniforms or direct stipends and scholarships may have to be worked out. So would a flexible schedule of classes more appropriate for rural areas and arrived at after consultations with the parents in the local communities. The second priority area is health, where again, the return on investment is extremely high. While the government's current health programs have been effective in reaching the poor, they are hampered by lack of supplies and facilities, compounded by a disproportionate emphasis on curative rather than on preventive health care interventions at the community level. There also seems to be a blind spot in the health care system which must be addressed immediately if we are not to make a mockery of protecting the health of a mother and her unborn child. Given that there is a large unmet need for family planning, or that recommended family planning methods may have failed, and given that abortion is both morally and legally unacceptable, what help is available to the woman with the unwanted pregnancy, and equally important, to her unborn child? According to the Population Commission, unpublished statistics from the Philippine Obstetrical and Gynecological Society show that 24 percent of all maternal deaths reported by 78 hospitals can be attributed to induced abortions. The Davao Medical Center reports that abortion was the number one cause of hospital admissions in 1990. GETTING

RID OF STEREOTYPES

The third area involves the efforts not only of government but of practically all sectors of society -- schools, religious and social institutions, and especially media. This has to do with the elimination of stereotypes in all types of communication and educational materials that reinforce existing inequities between men and women; and the promotion of the men's active

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involvement in responsible parenthood and emphasis of their sharing in the responsibilities (and joys) of child rearing. Examples abound of these stereotypes and the structural messages they get across to readers, viewers, or listeners: male executive and his female secretary; man in the office, woman at home; males drinking together, served by females. There is the stereotypical Filipino macho who would be considered "under the saya" if he were caught changing his baby's diapers. These gender roles, shaped as they are over time by socio-cultural and economic factors, can be transformed by these same factors. Why not a picture of celebrity singer Gary Valenciano rocking his baby daughter to sleep, or of Vice-President Erap Estrada in the kitchen, although big names are not really needed. Shots of women doing welding work or operating a crane would send the message just as clearly. The payoffs to this effort, if successful, would be enormous: reduced gender streaming, greater income and employment opportunities with the diminution of gender-based discrimination and greater burden-sharing at home; less chances for violence in the home as the need to provide male superiority or female subordination disappears, improved health of women and the attendant health of their children; closer family ties as a result of the stronger bonding between father and children resulting from his greater involvement in childrearing; better family planning as male cooperation increases from better appreciation of what childrearing and family welfare activities entail.

Twenty years ago, in a speech at the Woman's Forum on Population and Development, Salas remarked that policymakers, however belatedly, have realized the true importance of women to the success of any scheme of development which has as its aim the direct involvement of the mass of the people in the development process. His words have again been ahead of his time. For the Philippines, better late than never.

MONITORING SYSTEMS FOR MIMAP

CELIA m. REYES

INTRODUCTION HAS BEEN ATTACKED, battled against, strategized, tackled, &crushed, fought against, warred upon, gender-analyzed and subjected to alleviation, eradication, people participation and empowerment but POVERTY remains as tenacious as ever," this according to Gelia Castillo in her paper (1993). It is true that while there has been a slight improvement in poverty incidence between 1988 and 1991, still 41 out of every 100 families have incomes below the poverty line. This represents 4.9 million families living below the poverty threshold, or about 29 million individuals. Many social scientists have tried to explain this dismal situation. Economic mismanagement, natural disasters, and world recession have been some of the most commonly cited reasons contributory to macroeconomic imbalances. These imbalances, such as inflation, fiscal deficits, and balance-of-payments deficits, have aggravated the problem of poverty. Governments, including that of the Philippines, responded to these imbalances by adopting adjustment policies such as reducing government expenditures and devaluing the domestic currency. The Philippines has been undergoing adjustment policies since the 1980s. However, there has been no systematic evaluation of the micro impacts of macro adjustment policies primarily because of the analytical and methodological difficulties in measuring the impacts and attributing them to specific policies. As noted by Behrman and Deolalikar (1991) this involves the evaluation ofa counterfactual situation in a general equilibrium framework. Macroeconometric or computable general equilibrium (CGE)

"DOVERTY

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

models linked with household models are necessary to assess the impacts of adjustment policies. Some studies have concluded that recent structural adjustment policies in developing countries have affected various groups in the economy in different ways. The predominantly deflationary nature of adjustment policies led to depressed employment and reductions in real income, resulting in higher poverty incidence. Some macro policies had direct negative effects on the welfare of specific groups. Others contend that most of the poor were not made worse off and that some may in fact have been made better off by adjustment policies. The reason for this is that many of the poor are in the rural areas and are thus insulated from shocks because of little or no involvement in market activities. They rely on their own productive capacities for most of their consumption needs. Either view cannot be refuted without information on the actual impacts of adjustment policies on the population, especially the vulnerable groups. Moreover, the objective of protecting vulnerable groups during adjustment implies protection immediately after the adoption of such policies. Thus, they should not be made to suffer continuously until the economy recovers and the government is able to look after them. Specific policies and programs could be implemented to protect them while the economy is undergoing a transitional phase. The design of such policies and programs will benefit from the monitoring of the impact of adjustment policies on the vulnerable groups. Since the Philippines has to adopt adjustment policies to correct the imbalances in the economy, it becomes critical to identify ways of mitigating the costs of adjustment. In response to the search for adjustment paths that would minimize social costs, the Micro Impacts of Macroeconomic Adjustment Policies (MIMAP) Project was conceived. A general framework for analyzing tile micro impacts of macroeconomic adjustment policies was developed in Phase I. It was found out that there were many studies looking at the impacts of macroeconomic adjustment policies on macro aggregates and also se-

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veral studies examining the proximate determinants of household or individual welfare. There was, however, very little research linking the two sets of studies. Not until Phase II of MIMAP was an identification made of the links between the adjustment policies and households. Moreover, a set of indicators was identified to monitor the welfare status of households. Unfortunately, empirical testing of hypothesized relationships and monitoring of these indicators were not undertaken because of the inadequacy of the existing data systems and quantitative models in the Philippines. The third phase of MIMAP aims to provide policymakers with a good information base on the possible impacts of adjustment policies at the household and individual levels, especially as they relate to the vulnerable groups. This can be achieved by developing and institutionalizing a monitoring system consisting of macro and micro indicators. STATE OF MONITORING OF THE WELFARE OF VULNERABLE GROUPS Some groups are bound to suffer from adjustment programs. For example, government's efforts to streamline the bureaucracy as a way of reducing the fiscal deficit and making the government more efficient is bound to lead to unemployment for certain groups, at least in the short run. In designing compensatory programs, targeted programs should address problems of both the "new poor" and the "chronically poor." In most cases, it might be useful to distinguish between the two groups of poor so that more effective safety net programs can be designed. Different strategies may have to be adopted to get them out of the poverty rut. For instance, because of streamlining, government employees who have been laid offcould be given priorities to new government positions so long as they are qualified. On the other hand, those who have been unemployed even before the adjustment policies took effect could be given basic skills training. For both groups of unemployed, therefore, employment-generating programs are necessary.

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Social indicators assume critical roles in monitoring changes in the welfare conditions of the population. It becomes important, then, for the country to enhance its capability in monitoring changes in these indicators. As noted in several studies (Florentino 1992; Reyes and Alba 1994), the present statistical system does not allow for regular and frequent monitoring of the welfare conditions of vulnerable groups. The review of Lamberte et al. (1991) points out the lack of a monitoring, information and feedback system to assess the impact ofmacroeconomic adjustment policies at the micro level. While 'there are timely data on macro variables such as inflation rate, exchange rate, and trade balance, there is no systematic and regular collection of information on the "human dimension." Only macro indicators pertaining to certain aspects of welfare are available, and these are aggregated at the national level. This makes it difficult to come up with a profile of the population, especially of population subgroups, in terms of their welfare status. Data on household/individual welfare can be obtained from censuses, surveys andadministrative reporting systems of various national agencies. Oftentimes, however, their coverage and reference periods are different, making it impossible to get a comprehensive profile of the population subgroups at a specific point in time. Moreover, the collection of data is few and far between, and processing adds a few more years, so that its usefulness for policy design diminishes. In an assessment of existing and proposed monitoring systems of government agencies and NGOs, Reyes and Alba (1994) noted the following: 1. There is a great demand for community-based monitoring systems. Government agencies and nongovernmental organizations have responded to this demand by setting up their own monitoring systems. 2. Almost all of the monitoring systems have some of the minimum basic needs indicators. However, they favor input indicators over output indicators. And while many of them include indicators relating to the provision of credit and other inputs, few

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attempt to measure the effect of these inputs on the welfare status of the beneficiaries. 3. The monitors being tapped to collect the data consist of local government unit personnel. 4. Existing monitoring systems have very limited geographical coverage. Only a few provinces are included in most if not all of the existing and proposed monitoring systems. There is less convergence when we get down to the barangay level. Thus, the chances of utilizing information from the different systems to provide a comprehensive picture of a barangay or even a province are very slim. 5. The collection of data is coterminous with the lifetime of a specific program/project. Consequently, there are no time-series data on socioeconomic variables. 6. Monitoring systems of NGOs sometimes focus on specific groups that are not necessarily vulnerable. Some NGOs are mandated by their sponsors to assist only certain groups. 7. Most NGOs do not maintain their presence at the lower administrative levels, i.e., barangay and municipal. Thus, we find that there are bits of information from many of these community-based monitoring systems that are not consolidated in such a way that they become useful for policymaking. Measurement problems are inevitable. While there is growing consensus on the use of minimum basic needs indicators to monitor welfare conditions, the"actual indicators used may vary. Moreover, their scope may also change. The proposed MIMAP indicator system consists of 14 indicators covering health, nutrition, water and sanitation, income, shelter, peace and order, basic education, and participation. The Social Welfare and Development Indicator System (SWDIS) of the Department of Social Welfare and Development (DSWD) includes about 29 indicators covering

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

additional areas of concern such as clothing and family care/psycho-social well-being. The unit of analysis may be based on residence, household, family, or individual classification. Urban-rural disaggregation may respond to spatial questions but because of the continuous conversion of rural areas to urban areas, it.might lead to incorrect conclusions. For instance, Balisacan (1993) notes that the discrepancy in the poverty trends in 1988 to 1991 between Family Income and Expenditure Survey (FIES) estimates and his own estimates of poverty gap is due to the shifting of urban-rural areas arising from the reclassification of villages. Estimates of the poverty gap based on the FIES show a slight increase in rural poverty from 1.988to 1991 while Balisacan's estimates based on Constant Rural Areas show a decline. MONITORING

SYSTEMS

FOR MIMAP

Since the present statistical system does not provide for regular and frequent information on the welfare conditions of the vulnerable groups, it is necessary to develop monitoring systems that would provide the required information. MIMAP has identified two systems that would provide policymakers with a good information base on the possible impacts of macroeconomic adjustment -- a community-based monitoring system and a household survey. Community-based

Monitoring

System

A community-based monitoring system entails the participation of people in the community to collect, process and use the data. The system will provide information on the welfare conditions of all members of the community. Reyes and Alba (1994) provide more details and slight modifications of the system initially proposed by Florentino and Pedro (1992) under MIMAP Phase II, as shown below. Indicators. A community such as a barangay will gather information on the minimum basic needs (MBN) indicators and other information that the community deems necessary for its own planning needs. The need for

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a database has increased with devolution, and barangays are now tasked with the preparation of annual barangay development plans. The MBN indicators will be useful to the barangays themselves when they make profiles of their communities. The indicators will also help them identify their problems. Thus, while the information that will be collected by the barangay monitors may differ across barangays, the MBN indicators will be a subset common to all. This will facilitate monitoring over time and aggregation of barangay data. The MBN approach is being used by more and more government and nongovernmental agencies as (1) a strategy for poverty alleviation, (2) a tool for focused targeting, and (3) a tool for monitoring and evaluating development projects. Interagency groups have been formed to come up with a set of MBN indicators that can be used by different groups. Initially, the Presidential Commission to Fight Poverty (PCFP), atter a series of consultations with local and national government agencies, NGOs and people's organizations, came up with a set of minimum basic needs indicators. The 19 indicators cover health, nutrition, water and sanitation, income, shelter, peace and order, basic education, and political participation. More recently, an interagency group came up with an MBN document that includes a list of 21 indicators. It is different from the PCFP list for it includes indicators on breastfeeding, immunization, and clothing. The MIMAP indicators shown in Table 1 are intended to form the core of the information system of the barangays. The indicators, which are expected to provide an indication of the welfare status of the barangay, are more output and impact indicators than input indicators. They were chosen mainly because they are easy to operationalize. The indicators will be generated at the national, regional, provincial and municipality levels. Variables that enter into the computations of these indicators will be collected at the barangay level. Coverage. Poor households and vulnerable groups will be the focus of the MIMAP community-based monitoring system. The Strategy Paper of PCFP identifies the following as some of the vulnerable groups: ( 1) lowland landless agricultural workers, (2) lowland small farm owners and cultiva-

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TABLE '.1 MIMAP Indicators and Variables for Various Geopolitical Levels AREA OF CONCERN

INDICATORS: Municipal/Provincial/ Regional/National Levels

VARIABLES: Barangay Level

•

Infantmortalityrate

•

Child mortalityrate

Numberof livebirths;Numberof infantdeaths ( > 1 yr. old) Number•of livingchildren; Number of deaths of children (1-6 yrs. old) Number of children (0-6 yrs. old) by height,weight,sex, age Numberof households by type of toilet facilities used

Survival Health

Nutrition

Prevalence of acute and chronic malnutrition Water & • Proportion Sanitation of households with sanitary toilet • facilities.

Security Shelter

Peace & Order

•

Proportion of households with access to safe water,

Number of households by source of water supply

•

Proportion of households in makeshifthousing

•

Crime incidence

•

Incidenceof armed encounters

Number of-households by type of construction materialsused for roofs and walls of dwellings Number of victims by typeof crime Numberof victims of armed encounters

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453

TABLE 1 (continued) AREA OF CONCERN

INDICATORS: Municipal/Provincial/ Regional/National Levels

VARIABLES: Barangay Level

Incomeof households

Proportion of householdswith incomegreaterthan the povertythreshold Employment

•

Underemployment

Numberof employedpersons wantingmore hours ofwork

Elementaryenrollment

Numberof children (6-12 yrs. old)attending the elementarylevel Numberof familymembers (10 yrs. old& above) able to read and write a simplemessage in any languageor dialect. Number of households with memberswho are involvedin at leastone communityorganization

Enabling Income • & Livelihood

Basic • Education & Literacy °

Political Participation

•

Basic literacy

Proportionof householdsinvolved in at leastone community organization Proportion of householdswho participatedin formal electoralprocesses

Numberof household members(15 yrs. old & above) who are eitherat work (i.e., workedfor at leastan hour during the referencepedod) or with a job/business

Numberof households with eligible/registered/ actualvoters

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tors, (3) upland farmers, (4) artisanal fisherfolk, and (5) urban poor. Barangays in selected provinces where these groups predominate will be sampled. Flow of Information. Primary data collection through household interviews is undertaken every quarter by the barangay monitors. Some data, e.g., those that tend to vary very little over the years, may be collected less frequently, say,: annually. Secondary data coming from administrative reports and other special surveys may be used to supplement the primary data. Preliminary processing of the data is done by the barangay monitor to meet the information needs of the barangay in preparing its development plan. The original household data which are kept at the barangay hall for use by program implementors serve as the databank at the barangay level. A copy of the household data, as well as of the initial tables prepared by the barangay monitor, is sent to the city/municipal coordinator. The latter processes further thebarangay data and consolidates them from the different barangays. He also supplements these with data from other government agencies and institutions, to come up with the databank at the municipal level. The additional tables generated from the barangay data and other sources of information are then fed back to the barangay. Next, the information generated by the municipal/city monitor is submitted to the provincial monitor who in turn consolidates the data from the different municipalities and produces summary tables. These are then inputed into the provincial MIMAP databank. The provincial monitor submits the provincial data to the national monitor, preferably the National Statistics Office (NSO), for final consolidation. Then the data are made available to macroeconomic planners to serve as inputs in their design of adjustment policies and compensatory measures. The flow of information is shown in Figure 1. Monitors. The system utilizes community-based monitors to (1) collect primary data, (2) process the data, (3) collect secondary data, (4) consolidate the data available at the municipal/barangay level, and (5) maintain the databank at their level. At the barangay level, the potential monitors are the

FIGURE 1 MfMAP Monitoring System Flow of Information

Level

Data Sources

_ m

..< m CO

Data Processing/ Databank

Data Users z --t

o ;0 National

National Government

NSO

Agencies

PCFP; NEDA', DSWD; NGOs;

_ co

Other Data Users

tl Provincia/

NSO; Line Agencies; NGOs

Provincial MIMAP Monitor

-< m

co O -rl

Other PPDO Data Users

-0

tl Line Agencies; CityMunicipal

NSO District Offices; NGOs

Berangay

Enumerators; NGOs; POs

MIMAP _

Ci_tMunicipal Monitor

Barsngay Monitor

MIMAP

CPDOfM PDO _

Other Data Users

MIMAP

BDC

ol ol

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Barangay Health Workers (BHWs), Barangay Nutrition Scholars (BNSs), and Barangay Council members. The use of the BNS as a local monitor offers many advantages (1) The present structure provides for a BNS in every barangay. There are now about 14,500 barangays out of the 45,000 barangays in the country that have'a BNS. The Barangay Nutrition Scholar Project has targeted an additional 1,000 BNS every year. (2) The salaries for monitors are provided by local governments so that there is minimal cost involved. (3) The collection of data on nutrition requires some level of expertise which the BNS possesses. Moreover, the viability of the BNS as a community-based monitor is further supported by the experience of the Barangay Integrated Development Approach for Nutrition Improvement of the Rural Poor (BIDANI)Project. The use of barangay health workers as enumerators provides similar advantages. BHWs work closely with the BNS incollecting information on community members and in providing some basic health and nutrition services. Since there• is a barangay council in every barangay, the barangay council member is also a likely monitor. As Gironella et al. (1992) explained, "the councilmen were among those identified (as potential Tagapangalap ng lnpormasyong Lokal) because they have direct contact with their constituents and therefore are perceived to be in the best position to collect data from the villagers without antagonizing them." Moreover, councilmen stand to benefit from being monitors because they could use the data as inputs in the preparation of the annual development plan for their barangays. The Municipal/City Planning and Development Coordinator is the most likely choice as municipal coordinator. In fact, the MPDC/CPDC has been used in the BIDANI system and is being proposed for use in such monitoring systems as the Community-Based Child Monitoring System (CBCMS) of the National Statistical and Coordination Board, the Social Welfare and Development Indicators Systera (SWDIS) of the Department of Social Welfare and Development, and the Community-Based Information System (CBIS) and Local Information System (LIS) for the evaluation of the

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Philippine Plan of Action for Children (PPAC). There is an MPDC/CPDC for each and every municipality (city). His duties include the monitoring and evaluation of the implementation of various development programs, projects, and activities in the local government unit in accordance with the approved development plan. The most important component of the new system is the training of monitors in the planning process. They have to be made aware of the uses of a database in planning new programs and projects as well as in evaluating their impacts. They also have to be trained in the processing of the data so that they can generate the needed information. Institutionalization. The government's thrust toward decentralization will facilitate the institutionalization of the proposed monitoring system. Section 18 of the Local Government Code of 1991 provides that "local government units shall have the power and authority to establish an organization that shall be responsible for the efficient and effective implementation of their development plans, program objectives and priorities." Thus, the LGU can establish a small unit that responds to its need for a local database that will provide inputs for the preparation of its yearly development plans, The barangay council prepares its yearly development plan and submits it to the municipaVcity planning development office. It has the power to identify and implement projects and to allocate its resources. The development plan includes a report on the conditions of its members, an identification of the problems of the community, and a list of proposed projects. Implementation of the monitoring system in all barangays would elimihate the need for many sections of some of the existing household surveys such as the census of population and housing, and labor force surveys. The :latabase arising from the community-based monitoring system will provide regular data on population counts, employment status of the population, infant mortality rates, enrollment rates, and incidence of malnutrition, among others. They will not of course supplant specialized surveys such as income and expenditure surveys and food consumption surveys. These specialized surveys ottentimes require specially trained enumerators who can make repeated visits to respondents to elicit answers to thick questionnaires.

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Since the statistics generated are for specific barangays, the designing of appropriate interventions has been made easier. The indicators would help barangay leaders identify the problems of their communities. Thus, if, say, the rising incidence of malnutrition could be traced to rising unemployment, then food subsidy programs would not be the most effective way of solving the malnutrition problem in the barangay but rather programs to generate employment. In the case of statistics pertaining to the whole Philippines, or even to rural areas, actual interventions in an area may not be the necessary ones, and therefore, we cannot expect improvements in the welfare of targeted beneficiaries. For example, given that there is a high malnutrition rate, then the provision of free milk to children in the affected areas is a more cost-effective instrument in eliminating malnutrition than a nationwide food subsidy program. Another advantage of this system is that it would tap the capabilities of local institutions. Initially, large costs would be incurred hi installing the community-based monitoring systems, especially in the training of local personnel. Once institutionalized, however, the system would become an integral part of the planning process, and require very little maintenance costs. Where there are existing monitoring systems already in place or about to be installed, the strategy is to collaborate with the government agency or NGO that operates (or maintains) the information system. Since there seems to be a growing consensus on the objectives and use of minimum basic needs indicators, coordination may no longer be that difficult. As the different monitoring systems become institutionalized, they could be linked together to form a wider information base. This could be the key to the establishment of a nationwide statistical system at the grassroots level. Household Survey Since it wou Idtake some time to implement a community-based monitoring system on a nationwide scale, a complementary monitoring system can also be utilized to provide policymakers with the needed information. A rider to a nationwide survey, which could be faster to implement, can provide data for a wider geographic area. The Integrated Survey of Households (ISH),

REYES: MONITORING SYSTEMS FOR MIMAP

459

which is conducted almost every quarterprimarily to generate data on labor force and employment, is a possible vehicle for such a survey. Coverage. The proposed rider will cover sample households in sample barangays. Given the present sampling design of the ISH, this would provide estimates of the welfare status of the population disaggregated by rural/urban category and by region. Alternatively, a different sampling scheme can be employed in areas where there is a preponderance of vulnerable groups. Surveys minimize the loss of information arising from averaging over the whole population, and thus, provide a clearer picture of what is happening to these groups. Indicators. The monitoring system will provide data for the MIMAP indicators previously identified. Since employment and income are already contained in the core module, the rider will consist of a few additional indicators. Other regular surveys and riders of the NSO can also be a source of additional information for the sample households. In fact, some of the MIMAP indicators are already being collected in these surveys. This further lessens the scope of the proposed MIMAP rider. Flow of Information. The NSO will undertake the survey of households as a rider to the ISH during the same quarter each year. Since the acquisition of accurate data on nutrition requires some specialized knowledge, information will be obtained by NSO personnel from the administrative reports of the Barangay Nutrition Scholar or midwife assigned to an area. Processing will be done by the NSO as a standard operating procedure. Barangays covered in the survey will be provided with the results from their areas for their own planning needs and as a means to validate the survey results. The results of the nationwide survey will be made available to policymakers. Institutionalization. The NSO is determined to continuously improve the Philippine Statistical System to make it more responsive to the needs of policymakers. In this regard, it is very likely that MBN indicators will find their way into the regular surveys of the NSO. Such inclusion will entail an increase in the budget of NSO to cover field costs and expenses in the processing and disseminating of results. Considering.

460

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

however, that it is a rider to an existing survey with few additional items, then the costs may not be that large. The benefits to be gained in terms of better policies will definitely outweigh whatever costs are incurred. CONCLUSION Because stabilization and structural adjustment policies will be with us for sometime yet, it is necessary to learn more about the impact Of adjustment policies. We can expect our policymakers to design appropriate and more cost-effective policies only if they have good information to work with. A community-based monitoring system would provide regular and frequent information on the welfare status of the vulnerable groups. Given that a good database is an integral part of the planning process, the current thrust on devolution will facilitate the institutionalization of such a system. A rider to the Integrated Survey of Households will complement the proposed system. By covering more households, it will provide a wider view of the impacts of policies on the households. Since there are fiscal constraints in designing safety net programs to counter the adverse effects of macro adjustment policies, targeted programs are more appealing than nontargeted ones. These monitoring systems will be very useful in the design of targeted programs. Targeted programs are nonrmlly less preferred to general subsidy programs primarily because they entail a lot of administrative costs. Community-based monitoring, however, reduces the administl'ative costs. An accurate listing of the target population would reduce leakages to tile nontargeted population, as well as facilitate subsequent updating of the list through periodic data collection.

REYES: MONITORING SYSTEMS FOR MIMAP

461

BIBLIOGRAPHY Balisacan, Arsenio M. "Rural Development in the Philippines: Patterns, Constraints, and Responses." Paper presented at the Symposium on Structures and Reforms for Rural Development in the Philippines, AIT Hotel, Quezon City, 17 March 1993. Behrman, Jere R. and Anil B. Deolalikar. "The Poor and the Social Sectors During a Period of Macroeconomic Adjustment: Empirical Evidence for Jamaica." The World Bank Economic Review 5 (1991): 29 I-313. Castillo, Gelia T. "Rural Development Reconsidered: Some Emerging Niches for Population Studies." Paper presented for the Plenary Session I of the XXIInd General Conference of the International Union for the Scientific Study of Population, Montreal, Canada, 23 August to 1 September 1993. Cornia, G. A., R. Jolly, and F. Stewart (eds.) Adjustment With a Human Face: Protecting the Vulnerable an_d.Promoting Growth Vol. i. Oxford: Clarendon Press for U.N. Children's Fund, 1987. Cornia, G. A. and F. Stewart. "Country Experience with Adjustment." in G.A. Cornia, R. Jolly, and F. Stewart (eds.). Adjustment with a Human Face: Protecting the Vulnerable and Promoting Growth. Vol. 1. Oxford: Clarendon Press for U.N. Children's Fund, 1987. Eusebio, J. S., M.A.G. Tuazon, Z. B. Penaflor, and Associates. "Barangay Integrated Development Approach for Nutrition Improvement of the Rural Poor: A Nutrition-in-Development Network Program." U.P. Los Bafios: College of Human Ecology, institute of Human Nutrition and Food, !991. Florentino, Rodolfo F. and Ma. Regina A. Pedro. "Monitoring the Micro Impact of Macroeconomic Adjustment Policies (MIMAP)." Working Paper Series No. 92-19. Makati: Philippine Institute for Development Studies, September 1992.

462

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT ,

Gironella, Ann lnez N., Nydia A. Flores, and Niela T. Garcia. "Development of a Statistical System at the Grassroots Level." Final report submitted to the Statistical Research and Training Center, U.P. Los Bafios, Laguna, 1992. Lamberte, M., G. Llanto, M.L. Lapar, and A. Orbeta, Jr. "Micro Impacts of Macroeconomic Adjustment Policies (MIMAP): A Framework Paper and Review of Literature." Working Paper Series No. 91-02. Makati: Philippine Institute for Development Studies, February 1991. Lamberte, M., G. Llanto, and A. Orbeta, Jr. "Micro Impacts of Macroeconomic Adjustment Policies (MIMAP): Phase II Integrative Report." Working Paper Series No. 92-13. Makati: Philippine Institute for Development Studies, October 1992. p Reyes, Celia M. and Isabelita Z. Alba. "Assessment of Community- Based Systems Monitoring Household Welfare." Paper presented at the First Technical Workshop of MIMAP Project Phase III, Caylabne Resort, Ternate, Cavite, 17-18 February 1994.

Rodolfo F. Florentino

COMMENTS

I am a bit concerned about the large number of indicators that are being • proposed in the paper. I think 19 may be too big a number to be collected by volunteer workers at the barangay level. The complexity of sources of these indicators is also a cause for concern. For example, the collection of acute and chronic malnutrition data would require the collection of height measurement. Height measurement looks simple enough, but it is fraught with large errors and, therefore, interpretation is rather difficult. As a matter of fact, we have not been able to institutionalize this in the nutrition program even if these data would be the best indicator of chronic malnutrition that allows one to distinguish between chronic and acute malnutrition. But even if we can collect data at the barangay level, their interpretation is another concern. It may be difficult for the proposed volunteer workers, for example to interpret acute and chronic malnutrition and analyze tile data. Just a simple indicator of weight would be enough at that level especially if we are thinking of a community-based monitoring system. Another indicator is micronutrient deficiency. Its detection requires a lot of skills and training which the barangay health workers and nutrition scholars and so on may not be able to do accurately. Anemia, for example, requires laboratory examination which is unavailable in the field. The collection of data on income such as the proportion of households • with the income less than poverty threshold or less than food threshold would again pose difficulties. Perhaps, substitutes can be made instead of income. The determination of food threshold and the poverty threshold is

464

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

also fraughtwith difficulties even at the national level. It will really be very difficult at the local level. Let us also reexamine the proposed use of the BNSs and BHWs for collecting data. For one thing, there are only about 14,500 BNSs right now, growing at a rate of 1,000 per year, in comparison to the number of villages or barangays at 45,000. In other words, we will not be able to cover the large portion of the villages. One BNS covers the whole village of about so many thousand people and collect several data. Our initial proposal is to station a volunteer worker at apurok level or something lower thanthe barangay, that is, several volunteers act as monitors for the barangay. Maybe we could reduce the number of indicators or simplify these for even such things as infant mortality rate and child mortality rate.Let us anticipate the problems which the BNSs may encounter.

Highlights of Discussion

MONITORING

SYSTEMS FOR MIMAP

There has been a growing consensus that community level data are needed to understand the effects ofmacroeconomic policies. It is mainly the raison t_;etre of the Micro Impact of Macroeconomic Adjustment Policies (MIMAP) Project whose primary objective is to provide policymakers with a good information base on the possible impacts of macroeconomic adjustment policies at the firm and household levels, particularly those belonging to the vulnerable groups. The MIMAP Project thus proposes a monitoring system consisting of a set of macro and micro level indicators that closely resemble the Minimum Basic Needs (MBN). The 18 indicators cover the concerns of health, nutrition, water and sanitation, income, shelter, peace and order, basic education, and political participation. The proposed monitoring system is intended to be an integral part of the community planning process. Each barangay will come up with its own development plan. The MIMAP indicators will just be a subset of the information collected at the barangay level. For the monitoring system to be effective, barangays are expected to use the data in the preparation of their plans. So while the direction of data collection is upwards, from the barangay level to national level, a great deal of analysis and utilization of information takes place at every level. This is the very essence of participatory research. The process, however, does not stop there. Inputs to national policymaking will thus be translated into appropriate policies and programs that specifically target the beneficiaries of MIMAP Project, i.e., the vulnerable groups.

466

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

But while the MIMAP Project will attempt to disaggregate data to be more useful for analysis, it should not be seen as the answer to all the information needs at the community level. For one, some of the indicators proposed to be included in its monitoring system may be difficult to measure at the community level and may therefore prove to be of little use for analysis and decisionmaking. Moreover, there's the question of validity and comparability with existing data on certain socioeconomic concerns. However, if one will only view the MIMAP monitoring system as one that can provide an accurate set of variables for particular purposes, then it will be easier to recognize the importance of MIMAP and rally support for it. People are usually divided on the number and significance of indicators because of differences in priorities. Some may think that 18 indicators are too many; others would push for more. But over time, as the project progresses in its pilot-testing and even in its implementation, it can discard some indicators and acquire new ones. Refocusing is certainly a welcome exercise if only to improve the project. Finally, MIMAP can certainly learn from the existing monitoring systems and even collaborate with existing monitors or data gatherers to make sure that is does not commit the same mistakes and thus can move several steps forward. If state universities and colleges can be formed into the research network of government, then we can more or less be assured of quality statistics and scholarly analysis at the provincial or regional levels.

ENVIRONMENTAL CONCERNS: Of Revisits and New Paradigm

SUSTAINING RESOURCE USE IN UPLAND AND COASTAL COMMUNITIES: MACRO

AND MICRO ANALYSES

REVISITED

MARIAN S, DELOS ANGELES

INTRODUCTION

HISPAPER EXPLORES three aspects of sustainability in upland and coastal resources: (1) the depreciation of natural capital upon which upland farmers and artisanal fishermen depend; (2) the factors that affect the economic sustainability of resource extraction from forests, upland soils and fishery resources; and (3) the requirements for sustaining resource conservation efforts at the macro and micro levels. DEPRECIATION

OF NATURAL

CAPITAL

Concerns about the physical decline in the natural capital base have revolved around five issues: (1) impending exhaustion of nonrenewables; (2) extraction beyond the critical limits of biological reproduction among the renewables; (3) degradation, or decline in the quality of resources; (4) impairment of on-site nonmarket services provided, such as nutrient cycling and biodiversity; and (5) negative off-site effects, such as erosion and global warming. For purposes of this paper, more emphasis shall be placed on those concerns which have direct economic significance. Biodiversity concerns which are best addressed by other experts, are not discussed here. Various efforts have been made to estimate the economic depreciation of the natural capital base. Cruz and Repetto (1992) applied the net price

470

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

method for dipterocarp forests and the replacement cost approach for soil resources, and adapted the estimates of Dalzell and Ganaden (1987) for fisheries. The study concluded that resource depreciation in these sectors averaged more than 4 percent of Gross Domestic Product (GDP) during 1970-1987 and 20 percent of gross investment (Cruz and Repetto 1992:2). Subsequent research by the Environmental and Natural Resources Accounting Project (ENRAP), Phases I and Ii, explored refinements of the methods used earlier, particularly to address the tendency of net price methods and replacement cost methods to overestimate depreciation. 1 This result is indicated in Table 1, with considerable differences in magnitude. Regardless of the estimation method, all major Philippine natural resources experience depreciation. Moreover, contrary to popular opinion, the problem is more acute among the potentially renewable natural resources, forests and fisheries, compared with the nonrenewables, Upland soils and minerals. Concern for sustainability may be examined economically in two ways. One is to estimate net investment at the national level, with adjustments made for depreciation of both physical and natural capital. For 1988, gross capital formation amounted to P147.5 billion; on the other hand, depreciation of produced physical assets was P67.2 billion while natural resource depreciation was P2.5 billion. Thus, net capital formation or net investment amounted to P77_.8 billion, a value that is nonnegative. Given some substitutability among natural resource inputs, man-made capital, and intrasectoral transfers, a positive net investment should indicate continuous enhancement of the economy's productive capacity. What should be discerned, however, is whether the trend is for net investments to increase, particularly to allow for the increasing needs of a growing population. A time path of (dis)investments that shows increases larger than population growth rates implies that future generations would not be worse off. For completeness, however, such an analysis should include human 1. The net price method which is insensitive to the lifetime of the natural capital base (Peskin 1992), includes monopoly rent usually associated with resource usc. The soil replacement cost approach assumes that replacement is always feasible and desirable,

DELOSANGELES:SUSTAINING RESOURCEUSE

471

TABLE 1 Natural Resource Depreciation Estimates, 1988 (In million pesos)

Natural resource

Method used

Estimate

net price

(13,064)

net price changein assetvalue

(16,435) (936)

net price changein asset value

(153) (838)

•

replacementcost changein asset value

(5,170) (380)

•

user cost net price changein asset value

(387) (32,295) (3,483)

Copper plus by-products

•

user cost net price changein asset value

(0.12) (3,087) 445

Gold only

•

user.cost net price changein asset value

(387) (29,208) (3,928)

Forestry Major and minorforestresources Dipterecarpsonly

Fisheries:smallpelagics

Uplandsoils

Minerals:copperand gold

Note: Values are used in consolidatedtablefor modifiedaccounts. Source: Environmentaland NaturalResourcesAccountingProject,Phase II

472

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

capital formation. The comparisons so far made underestimate the possibility of substituting human capital for natural capital. A second approach is to examine the sectoral accounts. In Tables 2a and 2b attempts are made to measure the sustainability of the forest and agricultural sectors. The numbers above the double line are the entries normally found in the standard income accounts. The entries below the double line are modifications made applying the Peskin framework currently being pursued by the ENRAP, Phases II and 1II.2On the left column are ENRAP entries on the input side pertaining to (1) natural resource inputs to unmarketed subsistence household production; (2) unpaid use of air and water for waste disposal, and (3) natural resource depreciation. On the right column are ENRAP entries on the output side, including environmental damages due to air and water pollution, and unpaid, direct nature services such as recreation. Important modifications include estimates on unmarketed fuelwood and upland agriculture production, and depreciation of forests and of upland soils. Significant estimates were likewise made for the waste disposal services provided by the water resources network to the forest sector -- in connection with pollution Ioadings due to upland erosion either from logging or agricultural use of sloped land. Damagesthat occur downstream include impacts such as reduction in the life span of dams, decrease in the irrigated land area, and reduced marine productivity due to siltation. One method of examining intrasectoral sustainability is to compare capital formation with the depreciation of both physical and natural capital to obtain net capital formation. Unfortunately, while these modified accounts attempt to incorporate environmental changes, the traditional entries for capital formation in forestry and agriculture have not been estimated. Thus, computing for net investments within the sector is not feasible as yet. Nonetheless, Cruz and Repetto (1992: 2) stressed that "in essence, the Philippine development pattern was to deplete natural resource assets in order to finance current consumption and the acquisition of relatively

Z See IRG and Edgevale (1994) for details of the accounting methodology,

I11 r

o (/I

TABLE 2A Measures of Economic Inefficiency from Forest Depletion

z m r-

(In billion pesos, at constant 1985 prices)

Annual economic rent estimates

Economic inefficiency

GO C CO

_> Z q

Period

Economic cut (A)

Actual depletion (B)

Log production (C)

Excess earnings (B-A)

Unrecorded removals (B-C)

;0 rn

C ;0

1970-74 1975-79 1980-85 1985-89

11,7 14.4 23.8 20.5

37,7 36.2 36.6 11.9

5.8 5.7 4.9 3.2

26.2 21.8 12.8 -8.6

31.9 30.4 31.7 8.7

Average

17.6

30.6

4.9

13.0

25.7

. m O rn

Notes: A - Based on the economiccutfrom 80 percentof 5.2 M hectareold growthforestsin 1969 permanently aUocated for timberproduction B- Based on ENRAP estimatesof forestdepletion,12 December1991 C - Based on PhilippineForestryStatisticData

t_o

TABLE 2B Implied Data Discrepancies, Various Indicators (In million cubic meters)

== ,=

Year

Depletion estimates (A)

Recorded log production (B)

Trade-adjusted Iog production (C)

Corresponding harvest (D)

Unrecorded removals (A-D)

1971 1980 1988

68.2 42.4 12.7

10.7 06.4 3.8

16.7 08.3 4.0

23.8 11.8 5.7

44.4 30.5 7.0 r'n 03

Annual Average Notes:

40.4

06.7

10.0

14.2

26.2

A - Based on ENRAP estimates, 12 December 1991 B - Based on Philippine Forestry Statistics

C - Based on RP-Japan trade data discrepancy (Bautista 1989) D - Computed as: (C) divided by 70 percent conversion efficiency Sources: International Resources Group (IRG) and MADECOR (1991). Executive Summary, Natural Resources Accounting Project, Phase I. Report prepared for the Department of Environment and Natural Resources (DENR) with funding from the U.S. Agency for International Development (USAID)

..< 03

o_ oc_ r"C_

z (_ ITI >

Z E2 E2 Fn < m

-O FF_ Z --I

DELOS ANGELES: SUSTAINING RESOURCE USE

475

unproductive industrial capital." A look at the activities in both upland and coastal sectors through time also leads one to this conclusion. Resource management activities were initiated on a significant scale only during the late eighties, mostly through external assistance programs. FACTORS

LEADING

TO DEPRECIATION

In examining various efforts exerted to reverse resource depletion and to increase incomes we first review the various contributory factors to such depletion. Institutional Failure Poor property rights cause the depletion of natural resources on two counts. First, they lead to extraction rates and methods that maximize the net gains from resource use at the shortest feasible time. Second, investments for resource renewal are not undertaken since access to potential future crops is not assured. For mobile resources such as fisheries, and for the Philippine dipteroearp forests which have long growing periods, open access conditions are aggravated by high preference for current use and future uncertainties associated with various resource markets. Pricing/Market Failures In normal markets where goods are purchased and various production inputs are exchanged, individual decisionmaking is made only in terms of revenues and normal production costs for materials. This accounts only for the direct private costs and benefits of resource use. Natural resource cost is either excluded or undervalued, as are off-site effects such as erosion and downstream pollution. Thus, private resource users such as loggers, upland cultivators, fishermen and aquaculturists produce output levels that are .greater than what would be socially desirable.

476

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Government Failures Government has historically failed to invest in resource protection and renewal and has been remiss in inducing the private sector to invest in "public good" activities like the maintenance of mangrove buffer zones along aquaculture areas. These failures largely reflect, on the one hand, the poor financial position of the government in light of the many demands on its budget and, on the other, its own failure to capture the economic rents from resource use. Another form of government failure is in policy design and implementation. The provision of credit to resource exploitation without due attention to sustaining resource use, for example, has been pinpointed by Octavio (1983) as the cause of excessive fishing effort in the 1970s. Further, government has not reduced transactions costs by not consistently providing better information on markets, appropriate resource use technologies, and assistance in the promotion of joint decisionmaking among competing user groups. Excessive Scale of Extractive Resource Use Because of the failure to generate enough employment and income for the growing population in the lowlands, a significant number of Filipinos have moved to the environmentally fragile uplands and coastal areas, thereby accelerating the problem of soil erosion and fisheries overexploitation. At the same time, the high demand for Philippine resource=based exports such as aquaculture products has led to both intensive but highly pollutive ponds and large-scale conversion of mangrove resources for extensive aquaculture. These conditions resulted in an excessive drawdown of the natural capital stock (Figure 1 shows the behavior of the three resources under study). Forest depreciation peaked during the logging boom in the mid1970s and was highest for pelagic fisheries during the period immediately after the granting of fishing loans. The extent and forms of economic inefficiencies associated with high rates of removal in the case of forest stocks are shown in Table 2a. On the

DELOS ANGELES:

SUSTAINING

RESOURCE

USE

IgL6L

EL61. t_L6 I.

_L861.

._e L

(so_.ud 886[ luelsu°D) sosod "I!IAI

°' o

477

n,"

E n'<

478

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

one hand, excess earnings which indicate a further widening of inequity were largest during the 1970s when Philippine log and wood exports were at their peak. On the other hand, unrecorded removals indicate the magnitude of foregone tax revenues. In Table 2b we note that unrecorded removals (26.2 million eu m) accounted for more than half of the depletion of dipterocarp forests (40.5 million eu m) during 1971-88. This resulted from illegal logging, fuelwood gathering, and conversion of forest lands for extensive agricultural purposes. The Natural Resources Accounting Project, Phase I, or NRAP 1suggests that 41 percent of unrecorded wood removals may have been accounted for by unregulated fuelwood gathering (DENR 1991). UPLAND FOREST

RESOURCES:

AND AGRICULTURAL

USE

Steep Philippine lands are either forested, protected for biodiversity and other uses, or tilled by upland farmers. Presented below are the benefits and costs associated with, or accruing to, different user groups and ecosystem conditions estimated with the use of "modified" sectoral accounts for the forestry and agriculture sectors as presented in Table 3. The framework adopted for these modified accounts allow for both positive and negative adjustments, in contrast to previous accounting work that focused only on negative aspects. Large Informal Sector Inclusion of the estimates ofunmarketed fuelwood gathering in the accounts would have increased the forestry sector's output by P4.3 billion, or 30 percent more than what has been measured through official statistics at P 17 billion. Using LANDSAT data to examine upland cultivation, NRAP I (DENR 1991) also computed extensive-type, agricultural cultivation in lands of slope category from 18 to 30 percent to have increased from one million hectares in 1980 to 1.28 million in 1987. These figures are on the low side since they do not capture small landholdings and areas within

TABLE 3 Modified Gross Inputs and Outputs for Forest and Agriculture (PSIC Nos. 15 and 11), 1988 (In million pesos) INPUT

CO _> Z

OUTPUT

Total intermediateinput Compensationof employees Intermediatetaxes-subsidies

27,220 48,717 3,120

Depreciation Net operating surplus

4,854 52,026

131 tin

Totalintermediatedemand Personalconsumptionexpenditure General 9ovemment consumption expenditure Capital formation* Exports Imports

104,853 30,328 m 1,285 6,132 (6,661)

GROSS INPUTS Depreciation (-)

135,937 (4,854)

GROSS OUTPUTS Depreciation (-)

135,937 (4,854)

NET INPUTS

131,083

NET OUTPUTS

131,083

6,250

Unmarketed household production(+)

6,250

Environmentaldamages (-)

(1.426)

Natural-resourceinputs to unmarketedhousehold production(+): • fuelwood • uplandagriculture Environmentalwaste disposalservices(-) • Air • Water (includingupland agriculture in forestlands)**

o m 0

cco "_ _> z

C _0 C_

m c co m

4,300 1,950 (9,677) (10) (9,667)

• Air . Water ***

(1.426)

¢1D "_

TABLE 3 (continued)

.=. o_

OUTPUT

INPUT

Net environmental benefit (disbenefit)

8,264

Natural resource depreciation (-) • forests • upland soils

(1,316)

Direct nature services (forest-based recreation)***

Natural resource depreciation (-)

(1,316)

(936) (380)

CHARGES AGAINST MODIFIED NET INPUTS Capital depreciation (+) Natural resource depreciation

(+)

MOE)IFIED NET 1:34,604 4,854 (1,316)

OUTPUTS Capital depreciation (+) Natural resource depreciation

140,774

MODIFIED GROSS OUTPUTS

(+)

(96,404) (2,496) 556

m CO Co >

MODIFtED GROSS INPUTS

140,774

¢n

o c) Notes:

n.s. Not significant *

Source:

Excludes machinery, equipment because of difficulty in sectoral allocation of gross domestic capital formation (pers. comm., NSCB).

** Valued in terms of cost of agroforestry and reforestation in degraded land 8% slope and steeper *** Includes damage arising from degraded and deforested forest lands now used for a agriculture Environmental and Natural Resources Accounting Project, Phase II

rn Z om :_ z o E] rn < rn

O -g :z:

,rn Z .-I

DEI_OSANGELES: SUSTAINING RESOURCE USE

481

steeper lands. Nevertheless, the estimate of the value of agricultural output from these lands at P1.95 billion means that adjusted agricultural output would have been 1.7 percent higher than the official statistical value of P17 billion (Table 2b). Poverty

Apart from the apparent population pressure on upland and aquatic resources, there is the problem of widespread poverty. Balisacan's (1991: 6, Table 1) study of poverty incidence by farm households revealed that 83 percent of forestry workers and 77 percent of fishermen were from households with incomes below the poverty line. Both groups appear to derive at least 50 percent of their incomes from farming. Important Off-site Effects Another important concern is the downstream impact associated with degraded a:nddeforested areas. Siltation from soil erosion and mine tailings was estimated by Ebarvia (1994) under ENRAP II to have resulted in the following off-site damages in ,1988:P1,851 million due to reduced coral reef fishes production; P425 million in foregone rice production from the affected irrigated land; P88.6 billion from reduced fisheries in Laguna de Bay; and P58 million from the reduced life spans of the Magat, Pantabangan, Ambuklao and Binga reservoirs. Damages from siltation that may be attributed to deforestation and upland agriculture were estimated to have reached P1,426 million which parallels the depreciation estimate of both forest and upland soil resources at P1,316 million. RESOURCE

CONSERVATION

BY UPLAND

POPULATIONS

Shifting Access to Forest Lands in Favor of Small Users A shift in the patterns of forest land use by type of users occurred between 1980 and 1990 (Figure 2). The drop in the share of timber license agreements (TLA) from 73 percent in 1980 to 57 percent in 1990 was due to the 3. This section draws partly from delos Angeles and Bennagen (1993).

FIGURE 2 Shifts in Access to Forest Land, 1980 vs. 1990

TLA (41%)

._. _o

Rest(64%) .....

:.::._

OtherTLA (9%1 ITP/TF/AF(1%) PLA(6%)

Reforested(4%)

Reforested(1%)

ISF (2%) PLA(3%) RP/TFIAP (3%) OtherTLA (6%) Rest(42%)

TLA (18%)

1980

co co _> Eco O (_

1990 m z

Legend:

Notes: TLA- Timber license agreement ISF - Integrated social forestry PLA - Pasture lease agreement

Total area used is 16 million hectares, Other TI.A includes provisional TIN, private land permits, special permits, etc.

z .E_

tTP - Industrial tree plantaBon TF - Tree farming

Rest includes all other forest land not included in the pie chart.

Sources: FMB/DENR, Philippine Forestry Statistics, 1980 and 1990.._z

u _: ITI

DELOS ANGELES:SUSTAINING RESOURCE USE

483

cancellation of licenses. Substitution by small-scale users of large holdings occurred during the last decade particularly through the ISF, albeit at a slow rate. A slight decrease in the share of pasture lease agreements (PLA) was brought about by the erosion effects of land-extensive grazing practices and the moratorium on the issuance of new lease agreements. An increase in private sector participation in tree farming and tree planting is also worth noting. The large jump in the proportion of reforested area is attributable to contract reforestation. As of 1991, of the 73,602 hectares reforested through government-assisted projects, 60.3 percent were completed through contract reforestation by nongovernmental organizations, communities, and local government units, 19.8 percent through communities in the Integrated Social Forestry Program, and 1.2 percent through the recently-formulated Community Forestry Program. In contrast, only ten years ago, government reforestation work was conducted with limited involvement of upland communities. Providing Inputs to Resource Conservation The effects of resource rehabilitation and conservation practices by upland communities on sustainability and incomes have been showcased by the Central Visayas Regional Project's Upland Agriculture Component. The range of resource rehabilitation and conservation practices by both project adoptors and nonadoptors is shown in Tables 4 and 5. Implementors pointed out the spread effects of the project. Francisco's study (1994) on these practices, made at the end of the eight-year project implementation period, shows the following roles for specific factors: farm area (-), attendance in community meetings (+), and seeds distributed (+) (Table 6). The income effect of resource conservation is presented in Table 7 which shows larger increases in the income of cooperators compared to noncooperators. Securing Property Rights That property rights need to be secure for resource conservation activities to be adopted in the uplands is no longer debatable. Recent studies have in

TABLE 4 Conservation Practices Adopted In Central Visayas Regional Project UplandAgriculture Project Sites, 1992 Technology

Adoptor Number

Nonadoptor

Percent to total

Number

Probability

Percent to totat m 03

A-Frame adoption Constructionof hedgerows Countor ditches Terraces Rockwall Checkdams/diversioncanal Composting Green manure

174 174 104 79 88 87 118 77

78 78 47 36 40 "39 53 35

48 48 118 143 134 135 104 145

22 22 53 64 60 61 47 65

0.000 0.000 0.005 0.005 0.005 0.001 0.000 0.021

Fallowing Crop rotation

37 66

17 30

185 156

83 70

0.409 0.007

Source: Francisco (1994)

_ co'< _ o _. _n c_ zc_ m > zE_ EJ m < m I--

"10 m z --t

DELOSANGELES:SUSTAINING RESOURCEUSE

485

TABLE 5 Adoption of Conservation Technologies, Central Visayas Regional Project Upland Agriculture Project Sites, 1991 Technology

Cooperators

Noncooperators

Number

Percent to total

On-farmsoilconservation

6,626

820

Agroforestrydevelopment Off-farmreforestation Uplandfishpond Microwatershedplanning and implementation

5,336 1,274 725 2,110

72 17 10 28

2,110 6,172 6,721 5,336

28 83 90 72

fact shown that despite the demonstration to noncooperators

without Certificate

extent and pace of adoption without.

For example,

effects of an agroforestry

of Stewardship

still differ between

information

Number

Contracts

Percent to total

project

(CSCs), the

those with CSCs and those

on the Jala-Jala

Project in Rizal which

is presented in Tables 8 and 9 depicts the considerable impacts of CSCs on social and environmental indicators (Rola 1987). In another site, Rola (1987) showed the importance

of tenure, as reflected

by the CSC.

Reducing Information Costs The Bulalakaw phasizes schemes

Upland Development

the importance and facilitating

implementors

through

Project (Borlagdan

1987, 1991 ) em-

of demonstrating the feasibility of agroforestry the exchange of knowledge among farmers and cross-farm

visits.

Basic information

on the target

participants is also important as a basis for the sharing of the benefits costs of activities such as seedling sharing and labor sharing. The cost of formulating encouraging

farmer

and enforcing

participation

contracts

may also decrease

even in the land survey

activities

and by as a

TABLE 6

Determinants of Adoption In CVRP Upland Agriculture

Variables

INTERCEPT

Age of HH head

Highest education in the HH

Household size

Siquijor

0.583379

Bohol

-0276073

Project Areas, 1992

Cebu

Negros Oriental

All provinces 0.859754

0.496100

0.960830

(0.342)

(0.164)

(0.384)

(0.897)

(1.330)

0.015995

0.006526

0.006290

0.021910

0,018354 '_

(0.843)

(0.425)

(0.3581

(1.3821

(2.274) 131 EO • E,_

0.063375

0.062173

0.t15880

0.036650

0.064285

(0.705)

(0.592)

(0.106)

(0.388)

(1.340)

0.084894

0.075230

0.026945

-0.133855

-0.014215

o C)

(0.784)

(0.694)

(0.234)

(1.032)

(0.239)

-0.206479

0.035644

-0.398020*

0.000669

(0.993)

(0.400)

(1.612)

-0.000014

0.000001

0.000028

0.000011

(0.779)

(0.105)

(0.763)

(1.537)

..<

Total farm area

(0.012 )

-0.043521

(1.026)

c_ r11

Gross income

0.000003 (0.68.1)

o °< m m r-

"O m z --I

TABLE 6 (continued) Variables

Slquijor

Distancein time to nearest town centerby vehicle

0.049709*** (0.700)

m i,-

Bohol

Cebu

Negn_s Oriental

All Provinces

-0,007270 (0.528)

-0.005241 (0.356)

0.009270 (1.121)

0,003910 (0.676)

_ > Z m

_¢O C (_

Numberof crops cultivated

-0.004134 (0.626)

-0.054770 (0.527)

0.124583 (0.874)

0.136880 (1.110)

0.116907 (1.932)

_z Z

Attendance in community meetings

1.094269" (1,910)

2.519100" (1803)

1.552900"* (2.307)

-0.691690 (1.154)

0.544810"* (1.923)

m CO ot-

Numberof livestock dispersal

-0.004134 (0.626)

-0.064571 0.108

0,004217 (0.258)

0.653751 (2.011)

0.008717 (1.222)

No. of seeds distributed

0.001984"* (2.083)

0.001210 0.498

0.000866** (2.428)

0.000461*** (2.466)

0.000537"** (3.489)

61.45 4.303***

26.31 0.785

45 2.524**

20 3.650***

R2 F value * ** *** ( )

Significantat 10% Significantat 5%, Significantat 1% T-values

m 131

¢o

488

ESSAYS INSOCIAL SCIENCE ANDDEVELOPMENT TABLE7 Comparisonof GrossIncome BetweenCVRPParticipantsand Nonparticipants,1985-1992 (In pesosperyear) Participant

• Cooperator Noncooperator

1985 4,389 5,062

1989

1992

11,268 7,784

20,843 13,633

Source:H.A.Francisco (1994) basedon1992PIDSSurvey means of "ensuring •confidence in the survey work and in working out solutions to land-related conflicts" (Borlagdan 1987: xvi). This is critical considering that the enforcement of the CSC reveals that enforcement is problematic in terms of boundary and technical provisions (Pulhin 1987). Another important process that cannot be overemphasized is that of building community organizations. This has been found to be the most important determinant of the adoption of agroforestry schemes in earlier and more recent upland development activities (delos Angeles 1985; Aguilar 1982, 1986; and Francisco 1994). The role of government in providing sound market information likewise needs to be reemphasized. Although earlier works already underscored this gap in agroforestry work (e.g., delos Angeles 1983), this problem is still •cited in recent evaluations of upland agriculture development (e.g., Francisco 1994). Thus, while numerous case studies in various• sites indicate the profitability of improved upland cultivation practices, the economic feasibility of implementing them on a scale larger than the farm remains to be seen in light of market conditions. • Future Directions Given numerous studies that show how feasible and privately profitable improved and soil-conservation oriented upland cultivation practices could be, it is puzzling why their large-scale adoption has not yet occurred.

TABLE8

rrl

Integrated Social, Economic and Environmental Impact of the Jala-jala Agroforestry Program of Rizal, 1986

Go > z

Change RockTenurial

No.

No. of trees

status

rap.

planted

Organic

Gross

IpilJpil terraced matter Erosion planted (linear content rate

Family labor income/ input (man-days) farm

(ha)

Wife

meters) (percent) (cm)

Family

(pesos) ;O I'n Go

Withoutcertificate of stewardship contract (mean)

0.19

0.27

-0.25

1,856

o r_0 o rn ¢

11rt

W_thcertificate of stewardship contract (mean) All farms Difference Unit Percent

104

0.62

103

0.84

-0.32

4,526

0.39

0.54

-0.28

3,012

48 86

0.43 226

59 134

0.57 211

-0.07 -28.88

6 86

41 111

2,670 144

Source:Rola (1987); reprintedwith permissionfrom author ¢o _D

490

ESSAYSIN SOCIALSCIENCEAND DEVELOPMENT TABLE 9 Selected Regression Results of the Jala-jala Integrated AgroforeStry Program of'Rizal, 1986

VARIABLE

Estimated constant

Grossincome (Y) (in pesos) Tenurial Status (X1) where 1 = with CSC

2014

Change in erosion rate (X2) Estimated equation

* -T0.05 = 2,045 Source: Rola (1987)

Computed Coefficient T-value* of determination (R2) 0,64

-0,6202

-3,4376

-0.2364

-1,5082

Y = 2014 - 0,62 Xl - 0.24 X2

Gross income (Y) (in pesos) Change in vegetation (Leucaena) (Xl) Change in farm labor (>(2) Change inorganic content (Leucaena) area(X3) Estimated equation

Standardized coefficient

2494

0.54 0.351

0.114

0.673

3.0111

0.194

0.6419

Y = (2494)+ 0.351Xl + 0.673X2+ 0.194X3

DELOS ANGELES: SUSTAININGRESOURCE USE

491

An important clue is provided by the numbers in Table 10, which shows that it would take long for the top soil to be depleted. Even if one considers only the topmost layer, experts estimate a lifetime of 30 years for soil horizon A to be depleted (Francisco 1994). 4 In fact, upland farmers may already be (partly) replacing soil nutrients lost through plant uptake and erosion by applying fertilizer on the site. 5Thus, the erosion problem is less a concern about lost soil nutrients by upland farmers than a problem of the pollution effects on lowland receptors. As mentioned earlier, damages that occur downstream may be considerable. Continuing Subsidies for Upland Resource Conservation Encouraging upland farmers and forest occupants to undertake resource conservation techniques is therefore not so much a task of convincing these users of its short-term private desirability but rather one of inducing them to behave in a socially desirable manner in the long term. In fact, during instances when labor-intensive conservation activities of households are limited and alternative income sources exist, a subsidy for labor costs should be provided. Speeding Up Allocation of Use and Assignment of Exclusive Rights to Various User Groups While such subsidy is already being implemented through various DENR programs, much still remains to be done. The recent cancellation of timber licenses has left some 3 million hectares of residual land without any form of management. This is partly indicated in Figure 2, where the share of forest lands not under private user management increased during 1980-90. At the same time, there are various forms of claims on property rights in the uplands (e.g., Cornista et al. 1989). All of these highlight the need to accelerate the efforts already under way for reforming property rights for 4. This does not of course mean that exhaustion of soil resources at a specific site is,not being experienced. 5. The replacement cost approach which captures the replenishment of nutrients taken in by plants is the main reason why this approach overestimates soil depreciation.

TABLE 10 Length of Years Required to Deplete Soils of Given Depth and Bulk Density by Pedo-Ecological Zone (PEZ) and by Region

Region

PEZ

Effective soiJ depth (cm)

CAR

I II III

131 75 50

1.31 1.09 t.16

13I 109 116

Average I II III

85 91 63 69

1.19 1.37 1.:34 1.13

i 19 137 134 113

Average I I1

74 68 60

1.28 1.20 1.20

128 120 120

III Average I If

98 75 " 96 76

1.20 1.20 1.13 1.22

120 120 113 122

III Average

75 82

1.30 1.22

130 122

111

Average bulk density (gm/cc)

Weight of soil (ton/cm)

Soil loss (ton/ha) 82.42

128.49

56.51

97.82

Depth of soil loss (cm/ha)

No. of years to deplete Soil t depth cm

0.63 0.76 0.71

211 99 70

1.59 1.32 1.41

0.70 0.95 0.96 1.15

127 97 65 61

1.44 1.06 1.04 0.88

1.02 0.47 0.47

74 143 127

0.99 2.12 2.12

o_ 1"12

0.47 0.47 0.89 0.81

208 160 107 94

2.12 2.12 1.15 1.25

z >m zo o

0.75 0.82

100 100

1.33 1.24

< to

_ ('3

Fn Z

Table 10 (continued) Effective soil depth (cm)

Average bulk density (gmfcc)

Weight of soil (torgcm)

Soil loss (ton/ha)

Depth of soil loss (cmfha)

65.50

0.56

129

1.82

0.64 0.56 0.59 0.77 0.70 0.71

86 91 103 142 226 139

1.63 i.82 1.76 1.35 1.45 1.40

0.72 0.85 0.83 0.85

169 87 125 131

1.40 1.18 1.21 1.17

m c m

0.85 0.92 0.90 0.92

114 106 27 139

1.18 1.06 1.06 1.40

0.91 0.61 0.60 0.62

91 248 158 182

1.17 1.65 1.68 1.62

0.61

196

1:65

Region

PEZ

1.19

119

II I11 Average I IL III

52 50 57 110 154 87

1.07 1.19 1.15 1.15 1.23 1.20

107 119 115 115 123 120

Average I U III

117 75 100 112

1.19 1.24 1.28 1.24

119 124 128 124

Average I I1 tlL

96 75 100 112

1.25 1.24 1.28 1.24

125 124 128 124

Average f II lit

96 150 92 112

1.25 1.26 1.28 1.24

125 126 128 124

Average

118

1.26

126

VII

VIII

84.74

105.80

114.04

76.35

No. of years to deplete Soil 1 depth cm

¢n _> z c_ m 03

_D t_

Table t0 (continued) Effective soil depth

Average bulk density

Weight of soil

Soil loss

Depth of soil loss

No. of years to deplete Soil 1

(ton/ha)

(cm/ha)

depth

92.58

0.87 0.86 0.93 0.89 0.60 0.60

133 164 173 157 140 104

1.15 1.16 1.08 1.13 1.66 1.66

0.61 0.61 0.53 0.53

265 169 120 200

1.63] 1.65 1.90 1.90

._ (o -_

Region

PEZ

(cm)

(gm/cc)

(ton/cm)

I II Itl Average I II

116 142 160 139 84 63

1,06 1.07 1.00 1.04 1.10 1.10

106 107 100 104 t10 110

III Average I II

163 103 63 105

1.08 t.09 1.24 1.24

108 109 124 124

Itl

112

1.24

124

0.53

212

1.90

Average t

94 102

1.24 0.91

124 91

0.53 1.04

177 98

1.90 0.96

II III Average I ti

101 158 120 95 91

0.91 0.91 0.91 1.18 1.18

91 91 91 118 1I8

1.04 1.04 1.04 0.75 0.75

96 152 t15 136 121

0.96 0.96 0,96 1,43 1,42

m > z um

III

104 97

1.16 1.18

116 118

0.76 0.75

148 t35

1.44 1.43

< rll r-o

66.31

65.39

m co co > "< 03 _03

Xll

Philippines

Average

94.79

co C)

z C)

131

Source: Francisco (1994)

z.-I

DELOS ANGELES: SUSTAINING RESOURCE USE

495

both upland communities and the cultural minorities (Cornista 1992). The organizational work required for this appears formidable. Wallace (1993) estimate that with an average of 2,500 ha per community, more than 2,000 communities would be needed to protect the entire residual forest. For as long as the granting of exclusive user rights to specific upland areas is slow, the resources therein would always be under threat of intrusion. Cruz (1986), and Cruz and Cruz (1990) estimated that, based on figures from the National Population Census and their grouping of upland and forest communities, some 18.2 million persons occupy the uplands. 6 This represents 30 percent of the country's total population in 1990. Some 8.7 million are in forest lands, of whom 72 percent belong to tribal populations, and 28 percent are migrants. In comparison the official inventory conducted by the Forest Management Bureau (FMB) in 1989 arrived at a figure of only 4.5 million forest occupants (FMB r993, forthcoming). This estimate is about half of Cruz's estimate of 8.7 million forest occupants. Notwithstanding the differences in forest land population estimates arising from methodological variations, there is evidence of a considerable increase in the cultivation of lands over 18 percent in slope. Cruz's estimates of the upland population imply a rate of increase of 2.3 percent per annum during 1980-90. Assuming a monotonic relationship with upland cultivation and fuelwood gathering, this translates into a high rate of entry into forest lands. Between 1980 and 1985 alone, it is estimated that a total of 2.5 million migrants left the lowland rural and urban areas for the uplands (Cruz et al. 1992). Despite considerable reforms in forest policies, a number of policy issues remain. Foremost is the need to delineate the areas that need to be allocated for various user groups and for special purposes, including biodiversity. For as long as this is not done, forests that have a good potential for production and income generation will always be under the threat of a 6. The Philippine government classifies all lands with a slope of 18 percent and over as uplands. Cruz's estimate of 18.2 million inhabitants in uplands thus includes those in urban and alienable and disposable lands of 18 percent and over slope, in addition to those in forest latads which are under the jurisdiction of the Department of Environment and Natural Resources.

496

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

logging ban for one reason or another. The allocation of upland resources for special social goods should be tackled in tandem with the determination those of areas that are best allocated for production. Reexamining Goals and Prescriptions and Allowing for Flexibility The early success of pilot agroforestry projects in the Philippine uplands should not, however, make it a panacea for all forest rehabilitation efforts. In some sites, poor biophysical conditions require considerable inveslrnents before environmental impacts could be realized. In fact, there are those who argue that grasslands would do just as well in reducing on-site erosion losses and sedimentation downstream (e.g., Hamilton 1985, cited in Fujisaka et al. 1986). In other sites, high man-land ratios imply smaller land parcels to work with. This means that s61f-sufficieney in upland production which is often mentioned as a goal in many documents cannot be attained. It is in this context that an argument was made for "policy flexibility with respect to the maximum land area to be cultivated, particularly the marginal lands where the seven hectare limit may be insufficient" (Fujisaka et al. 1986: 355). Other dimensions should be considered as well such as the accessibility to markets of consumer goods and outlets for selling agroforestry farm products. Perhaps the other more important concern about the rapid decline in natural resources relates to foregone options from nonmarket resource values. Direct nature services provided by forest resources amounted to P 13 million (Ygrubay 1994). These were in the form of recreational amenities which were enjoyed with minimal payments. The large consumers' surplus means that there is room for imposing user charges for nature-based recreation to generate funds needed to improve the management of nature parks. Some areas also need to be set aside for biodiversity and bequest and the maintenance of ecosystem services. Under increasing population pressure this becomes feasible only when those areas that are designated for

DELOSANGELES:SUSTAINING RESOURCE USE

497

production, whether for timber, agroforests, or plantations, arc managed efficiently. Finally, the dynamics of linking community-based and communityoriented forestry efforts with large-scale, commercial activities, such as the Industrial Forest Plantation Program and large-scale logging, have yet to be examined. Favorable linkages between these two major groups of forest users need to be explored, along with interrelationships with upcoming user groups such as forest-based recreation seekers. COASTAL

RESOURCES

The fisheries sector has grown as a result of (1) the increase in inputs including labor (number of fishermen, be they full-time or part-time); (2) changes in the amounts and kinds of capital (gears, motorized fishing); and (3) the clearing of mangroves for aquaculture production (Bennagen and Cabahug 1991) as shown in Table 11. Thus, while increasing rents were earned up to the late 1970s these declined and became negative in the 1980s for small pelagic fisheries (Table 12). Various evidences of stress in the ecosystem have likewise appeared, both in physical and economic terms. The decline in coral reef fisheries was attributed to damage from silt and mine tailings, destructive fishing blasting, the use of cyanide, and damaging of anchor, and coral extraction. At the same time, decreased productivity of capture and culture fisheries in Laguna de Bay is caused by increased fishing effort, and by various forms of pollution. Conditions surrounding the degradation of upland resources also apply to fisheries except for an additional complication: fish are mobile, as is the medium on which they thrive, water. Thus, the management of fugitive resources requires conditions that are specific to aquatic resources. To explore issues of improving the management and rehabilitation of fisheries, we draw from a study of an important coastal resources management project.

TABLE 11 Selected Indicators on Philippine Fisheries

._ (.o oo Year

Indicator

1960

1970

1980

1985

444.6 (464.4) t20.0 (93.6) 264.6 (274.6) 60.t (96.2)

988.9 (1,725.2) .381.0 (614.8) 510.5 (857.7) 96.5 (252.7)

1,672.2 (11,644.4) 488.5 (3,784.7) 894.6 (6,017.8) 289.2 1,841.9)

2,052.1 (31,897.3) 512.0 (7,857.2) 1,095.4 (14,715.7) 494.7 (8,724.4)

Exports (in thousand kilograms value in thousand US$, f.o.b.)

515 (206)

2,429 (2,551)

70,238 (138,075)

58,748 (148,534)

Imports (in thousand kilograms value in thousand US$, f.o.b.)

53,131 (14,508)

53,131 (16,784)

28,781 (26,460)

5,362 (1,388)

zO rn >

Employment • Persons employed, by sector -- commercial -- municipal aquaculture

Production (inthousand metric tons, value in Currentmillionpesos) • Commerdal • Municipal and sustenance fishing • Aquaculture

m >

r03 C) Ill

n.a. n.a. n.a. n.a.

275,003 36,470 156,078 82,455

283,765 42,976 87,215 153,574

990,872 56,715 675,677 258,480

m < m -o _ m z --I

TABLE 11 (continued)

_3 m tO

Year Indicator * Householdmembers Fulltime Part time Occasional 5.

Numberof_ishing vessels * commercial motorized -- nonmotorized • municipal motorized nonmotorized -- rafts Average cost of operationin constant 1970 prices • commercial fisheries per boat per operator -- per work • municipal fisheries per boat per operator perworker

Z G)

1960

t970

_[980

1985

m m

n.a.

375,658

1,054,645

n.a.

n.a. n.a. n.a.

165,736 153,187 56,735

366,370 286,564 401,711

n.a. n.a. n.a.

__ _z z c_

n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

231,792 1,915 1,82I 94 229,877 69,428 156,172 4,277

405,241 3,414 3,230 184 401,827 110,652 277,5,36 13,639

n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a.

1,682.26 3,085.75 88.33

1,043.29 1,652.80 82.88

n.a. n.a. n.a.

11.95 8.26 55.08

n.a. n.a. n.a.

m o ¢3

m c _ m

TABLE 11 (continued)

u, o o

Year

Indicator 7,

Apparent catch/worker • commercial • municipal • aquaculture

Notes:

1960

1970

1980

1985

n.a. n.a. n.a.

2.44 2.36 0.48

7.24 9.79 0.69

n.a. n.a. n.a.

(in metrictons)/worker

1. Source: NEDA, Philippine Statistical

Yearbook

2. Source: NEDA, Philippine Statistical Yearbook 3. Source: NEDA, Philippine Statistical Yearbook

1988 1988; Data for 1960 is of 1965 1988; Data for 1960 is of 1965

irl

c_ 03 .> .< 03

4. Source: BAS, Statistical Compendium on Agncufture, Fishery and Forestry, 1988; aquaculture incJudes household members and additional workers during peak period, 5. Source: BAS, Statistical Compendium on Agriculture, Fishery and Forestry 1988 6. Source: (basic data) BAS, Statistical Compendium on Agriculture, Fishery and Forestry 1988 7. Source: (basic data) BAS, Statistical Compendium on Agiculture, Fishery and Forestry 1988; averages were obtained by dividing total cost by item.

E_ c_ o c_

m Z f') m Z 121 < 1"13 r-

O "0 E n3 Z -t

TABLE 12 Estimation of Small, Pelagic Fishery Resource Depreciation(Appreciation) at 1988 Prices and Cost

o m O ¢n > z

Depreciation

Rent

Asset value

(appreciation) asset value

m o) r-

(rail. P) D

(mil. P) E

(mil. P) F

(rail. P) G

-> z

567 643 906 1,421

105 120 172 279

462 523 734 1,142

3,080 3,489 4,893 7,612

(409.1) (1,403.8) (2,719.7)

c) ::o m 0 c;o C_ m

2,080 2,491 2,520 2,532 2,660 2,651 2,881 3,279 3,414 3,441 3,233 2,711

430 532 540 543 577 574 638 754 796 805 740 590

1,651 1,959 1,981 1,989 2,083 2,077 2,244 2,525 2,618 2,636 2,493 2,120

11,004 13,060 13,204 13,259 13,887 13,844 14,959 16,835 1.7,452 17,575 16,620 14,134

(3,391.4) (2,056.1) (144.0) (55.2) (627.8) 43.4 (1,115.7) (1,875.3) (617.5) (123.40 955.9 2,485.1

Fishing effort

Sustainable catch

Sustainable revenue

Total cost

Year

(hp) A

(tons) B

(mil. P) C

1948 1949 1950 1951

10,365 11,812 16,919 27,514

53,003 60,111 84,633 132,806

1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

42,337 52,463 53,212 53,501 56,844 56,609 62,835 74,339 78,474 79,325 72,943 58,194

194,404 232,831 235,559 236,606 248,578 247,746 269,292 306,489 319,067 321,603 302,151 253,327

O1 O .-L

TABLE 12 (continued)

Rent (mil. P) E

Asset value (mil. P) F

Depreciation (appreciation) asset value (rail. P) G

894 1,179 1,547 2,069 2,081 1,867 1,649 1,599

2,817 3,273 3,623 3,746 3,745 3,744 3,679 3,654

18,783 21,822 24,156 24,976 24,967 24,963 24,527 24 359

(4,6486) (3,038.8) (2,334.2) (819.9) 9.4 3.7 436.2 167.3

5,808 6,I64 6,186

2,060 21741 2,885

3,747 3,423 3,300

24 983 22 821 22 O01

(623.6) 2,161.2 820.1

6,166 6,119 6,136 6,173 5,941 5,873 5,426 4,487 4,788

2,749 2,575 2,629 3,250 3,964 4,101 4,838 6,118 5,718

3,417 3,544 3,507 2,923 1,977 1,772 588 (1,631) (930)

22 780 23 626 23.383 19,487 13,177 11,811 3,922 (10,875) (6,199)

_ (779.2) (846.0) 243.1 3,895.4 6,309.9 1,366.1 7,889 5 14,797.1 (4,676.4)

Year

Fishing effort (hp) A

Sustainable catch (tons) B

Sustainable revenue (rail. P) C

Total cost (mil. P) D

1964 1965 1966 1967 1968 1969 1970 1971

88,140 116,197 152,454 203,956 205,062 183,986 162,518 157,595

346,891 416,096 483,198 543,528 544,444 524,407 497,936 490,922

3,712 4,452 5,170 5,816 5,826 5,611 5,328 5,253

1972 1973 1974

203,053 270,193 284,396

542,769 576,I21 578,092

1975 1976 I977 1978 1979 1980 1981 1982 1983

270,949 253,816 259,116 320,339 390,735 404,243 476,,, 806 603,006 563,604

576,264 571,878 573,495 576,940 555,234 548,892 507,097 419,327 447,523

m3 O ._ c_ O3

o C) -_ r-o_ z 1"13 > Z u m < rn r-'13 o rn z _

TABLE 12 (continued)

Year

Fishing effort (hp) A

Sustainable catch (tons) B

Sustainable revenue (mil. P) C

Total cost (rail. P) D

m r-

Rent (mil. P) E

Asset value (mil. P) F

Depreciation (appreciation) asset value (rail. P) G

o > Z o m rm C 03

1984 1985 1986 i 987 1988 1989 1990 1991

496,522 531,142 533,197 528,980 536,112 521,001 502,898 499,979

494,152 470,451 469,015 471,959 466,974 477,496 489,868 491,835

5,287 5,034 5,018 5,050 4,997 5,109 5,242 5,263

5,038 5,389 5,410 5,367 5,439 5,286 5,102 5,073

250 (355) (391) (317) (443) (177) 139 190

1,665 (2,368) (2,609) (2,114) (2,952) (1,179) 928 1,266

(7,863.6) 4,032.3 241.4 (495.2) 8380 (1,772.7) (2,107.0) (337.7)

__m _) ;0c (3 m o_rm

Notes:

A - Based on Appendix Table D.7 of Padilla (1994) B - Computed values using estimated yield effortcurve, equation 11 C- Based on 199t fish price of P13,025 per metricton D - Actual costs not based on the estimated cost curve E - (C- D) F -Capitalized rents at the discount rate of 15 percent or (eto.15) G - Et - Et+l F - Ft- Ft-_ Source: Padilla(1994), AppendixTableD.10 ol o

504

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Lessons from the Central Visayas Regional Project: Nearshore Fisheries Component The Central Visayas Regional Project: Nearshore Fisheries (NSF) Component was implemented to raise the incomes and living standards of smallscale fishermen and to improve the management of marine resources and habitats. To achieve those objectives, the project applied the following strategies: (1) introduction of various technological and resource management interventions; (2) community organization efforts; and (3) infrastructure development. Site Management Units (SMUs) were established for each of the five NSF pilot sites in Bohol, Cebu, Negros Oriental (Bindoy and Bayawan), and Siquijor, to facilitate project implementation in the field. Salient Features and Extent of Adoption The community-based resource management (CBRM) approach hinged on the organization of fishermen's associations (CFA) which served as entry points for the various interventions, including information dissemination and training on fish habitat conservation and management. A total of 114 FAs were organized as of August 1992. Over a period of seven and a half years (1984-91), 8,088 families in 182 barangays participated in project activities. By end of 1991, the project had nearly achieved all its physical targets, sometimes exceeding them. The overall accomplishments include: (1)the establishment of fish sanctuaries covering 4,130 ha of coral reef areas; (2) the installation of 1,074 clusters of artificial reefs (ARs) and 244 units of fish aggregating devices (FADs); (3) the reforestation of 974 ha of mangrove areas; (4)the issuance of 1,490 mangrove stewardship contracts; (5) the introduction of mariculture in 90 ha of farm sites; and (6) the dispersal/redispersal of 132 head of livestock. High participation rates among household cooperators were recorded in artificial reef management, mangrove reforestation, and coral reef (sanetuary) management. The distribution of household participation in the various N SF activities reflected differences in the level of implementation

DELOS ANGELES: SUSTAINING RESOURCE USE

505

across the project sites, Such differences were expected due to variations in biophysical conditions, the phased expansion of the project, management capabilities, and fishermen's attitudes. Activities were also generated among the nontargetted households. Some respondent noncooperators indicated having done AR installation and mangrove reforestation in their areas on their own initiative. Impacts of the NSF Component Fish catch. Survey data indicate that fish catch increased after the installation of ARs. Cooperators reported, on the average, increases of 65 percent and 107 percent in the gill net and handline catches, respectively, over the pre-CVRP levels. An increasing trend in the catch also resulted from coral reef management. Sampled fisherrnen's associations experienced about 80 percent increases in daily catch rates after the establishment offish sanctuaries andthe minimization of illegal fishing activities. Notably, both members and nonmembers observed catch increases in the reef areas adjacent to the sanctuaries. High catch rates were also obtained in FADs or "payao" but more data are needed to assess this technology. Some fishermen attributed increases in their catch to the rehabilitated mangroves near their fishing grounds. Fishermen, cooperators and noncooperators alike, who noted decreases or no change in fish catch levels blamed the rise in total fishing effort brought about by more fishermen, more kinds of fishing gear, encroachment by commercial fishing operations, and other illegal methods in their areas. Determinants of impact. Regression analyses of the CVRPO fish catch monitoring data for 1988-91 gave some insights on the variables determining the impact of the project (Table 13). Increased fishing effort raises the catch offish corral andgill net fishing in ARs andcoral reefs. On the other hand, such increased fishing effort tends to decrease the catch offish corrals near coral reefs and gill nets in the open sea. These differences may signal varying degrees of resource depletion or productivity and gear efficiency.

TABLE 13 Regression of Fish Catch on Factor Inputs by Selected Fishing Area and Fishing Gear, Central Visayas Regional Project Nearshore Fisheries Sites independent variable

Fishing area/gear Artificial reef/fish corral Artificial reef/gilt net Coral reef/fish corral Coral reef/gill net Open sea/gill net Payao Sea grass/gill net

Intercept

Effort (mandays)

287 3,775 331 801 1,396

0.133 1.377"** -0.288 1.216"** 0.594***

0.093** 0.186"** -0.098*** Q414 *-_ -0.219"**

0.895*** 0.147"** 1.063"** 0.067 0.456***

-0.024 -0.174"** 0.353*** 0.108 0.341"**

13.205"** 41.076"** 16.174"** 27.492*** 55.912"**

0.113 0.031 0.121 0.090 0.106

293 413

1.119"** 0.985"**

0.2:3,3 0.000

1.504"** 0.637***

-0.767 _* -0.370***

5.907*** 9.879***

0.048 0.061

Year

Season

R2 ,

m _ CO

_ ca O C)

Notes:

Equationestimated is togfish catch = a + b log fishing effort + c log time + d log season (in kg) (person-days) (t = 1, 1988, (2 = Jan-June, =2,1989, l=JukDec) = 3, 1990, = 4, 1991) *** Significantat 5 percent level ** Significant at 10 percent level * Significant at 15 percent level Effort per trip, in person-days= (No of Hours/8 hours) X Crew

_. ro_ _o m zo m z m < r-m o -o m z

Source: Delos Angelesand Pelayo (1994), based on data from the CVRPO Fish Catch Monitoring, 1988-1991

DELOS ANGELES: SUSTAINING RESOURCE USE

507

Regardless of the fishing area and the gear types used, catch levels in all the project sites appear to have increased with the passage of time, except in Bohol (Table 14). This is indicative of resource enhancement as a result of CVRP interventions. More intensive involvement in community organization activities tends to reduce fishing effort over time (Table 15). However, the opposite is true for participation in technology/management interventions and infrastructure development. Potential gains from the interventions and easier access to the fishing grounds through better roads appear to have resulted in higher fishing effort. Those empirical results indicate the urgent need to regulate access to the near-shore fisheries to maintain the gains from enhanced fish productivity. A more thorough biological stock assessment over time will provide the scientific basis for determining the optimum level of fishing effort which fisheries can sustain. lncome effects. The mean incomes of cooperators and noncooperators increased during the project period and came close to breaking the poverty threshold barrier, but changes for the better in the quality of life are not yet readily apparent. From 1985 to 1988, the annual increase in real income averaged 27 percent among the cooperators and only 11 percent among the noncooperators. While the increases continued during 1988-91, cooperators' income rose by 10 percent and that of the noncooperators' by a higher 23 percent. It appears that nonexclusive access to the fisheries has resulted in the capturing of the larger portion of the gains from CVRP by nonparticipants. Thus, by 1991, seven years after the project started, the gross fishing income of noncooperators was higher than that of project cooperators (Table 16). Measurements of the potential benefits from mangrove reforestation were not feasible because of poor growth and yield data on the replanted areas, the high mortality rates in some sites, and the nonreporting of household consumption of gathered aquatic products (crustaceans and bivalves). However, more direct contributions to future income increases were expected to accrue to CVRP participants with mangrove stewardship contracts.

TABLE 14 Regression of Fish Catch on Effort and Time by Fishing Area and Province, Central Visayas

o co

Independent variable Effort Fishing area/province ARTIFICIAL REEF Bohoi Siquijor C ebu Bayawan, Negros Oriental Bindoy, Negros Oriental BOHOL REEF Bohol Cebu Bindoy, Negros Oriental OPEN SEA Bohol Siquijor Cebu Bindoy, Negros Oriental FADtPayao Bohot (nonCVRP) Cebu (CVRP) Cebu (nonCVRP) Bayawan, Negros Oriental (nonCVRP)

Intercept

(personhours)

4,552 2,551 2,241 615 2,391

4.0723*** -2.0050" -2.5835 4.0512"** -0.8008

4,063 909 630

Year

0.3125"** 0.0480* 0.2706*** 0.0626 0.3093***

-0.3506*** 2.1513"** 4.1530"** 0.0511 2.2423**

47.01"** 15.19"** 47.33"** 0.52 57.74***

0.02 0.01 0.04 0.00 0.04

3.9360*** -1.6172 -1.4044

0.4453*** 0.0235 0.6082***

- 1.0264"** 2.1135"** 0.7389

226.97*** 17.10"** 54.42***

0.10 0.03 0.14

744 110 654 3,032

1.0843 -8.0573*** -16.2406 -6.4017"**

0.0443 1.6264"** 2.4624*** 0.0339***

2.3689*** 2.7238*** 5.9151 4.4826***

11.00"** 23.46*** 97.97*** 199.83"**

0.03 0.29 0.23 0.12

95 440 919

40.1397"* 15.7540** 22.7112"

3.5948*** 0.9337*** 1.0601"**

-18.5800"** -0.5152 0.2114

24.98"** 36.16"** 89.25***

0.34 0.14 0.16

358

-2.0855

2.0704***

-0.3745

84.03***

0.32

m > co _co o c_ rz o m > zo o m < rm o m z -I

TABLE 14 (continued) Independent variable

Fishing areal province

Intercept

Effort (personhours)

Bindoy, Negros Oriental(CVRP) Bindoy,NegrosOriental (nonCVRP) SEA GRASS Bohol Bindoy,NegrosOriental FISH SANCTUARY

60 1,034

-7.2183"** -1.9189

-0.0136 -0.5346"*

582 484

7.6390"** -10.4178"*

719

-9.3492

Year

3.0515*** 4.3088**

9.75*** 3.26***

0.23 0.00

-0.1474*** 0.2867***

-1.0784"** 5.3564***

33.69"** 11.43"**

0.10 0.04

0.1499"**

7.4748

15.73***

0.04

m tO o_ >7 m

Bindoy

._. (n c O_ _, -7 -7 30

m O C

Notes:

Equationestimated is fish catch = a + b (fishingeffort)+ c (time)

m c

(in kgs)

(person-hrs) (t = 1, 1988,

t.n

= 2, 1989, = 3, 1990, = 4, 1991) *** Significantat 5 percentlevel ** Significantat 10 percentlevel * Significantat 15 percentlevel Effortper trip (in person-hrs)= (fishingtime in hrs) X crew Source: DelosAngeles,M.S. and R. Pelayo 1994; basedon datafromthe NSF Fish CatchMonitoringData 1988-1991

510

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT TABLE 15 Regression of Fishing Effort On Nearshore Fishery Project Activities and Time, Selected Cases from Fish Catch Monitoring Data, 1988-1991

Independent variable

Mean values

Coefficient

Intercept Communityorganization(CO) Index

426.6

0,403 -1 A71

-1,907**

613.3

0,614

3.155"**

94.4

1,176 -0.528

1,734** -2.290***

Nearshorefisheriesttechnology index(NSF) Infrastructureindex(!NF) Time (t)

T-value

AdjustedR2 = 0,1134 F = 3.142 *** Notes:

Equationestimatedis log (Effort,in man-hours per fishingtrip) = a + b log (CO) + c log (INF) + d log(NSF) + e log (t) Based on data on 35 fishermenwithdailyobservationsgreaterthan 100 cases per year, and observedfor at leasttwo years (Source:CVRPO FishCatch MonitoringData). CO, NSF & INF datafrom relevantscoresin Table 3 of delosAngeles and Pelayo (1993) based on fisherman'sresidence, as observedfromthe CVRPO 1991 HouseholdProfile

Source: DelosAngelesand R. Pelayo (1994), basedon 1992 PIDS Survey

DELOSANGELES:SUSTAINING RESOURCEUSE

511

TABLE 16 Tests for Differences in Gross Fishing Income Central Visayas Nearshore Fishery Project Participants vs. Nonparticipants, 1991 MEAN INCOME (s.d.), in current pesos n

Cooperators

vs.

NonTCooperators values

Conclusion

All sites

20,946 (18,338)

28,235 (20,961)

(16)

Cebu

24,589 (12,179)

25,641 (9,306)

(0.2015)

n.s.

Negros Oriental

28,642 (27,510)

23,442 (22,413)

0.4145

n.s.

Siquijor

16,188 (14,778)

43,060 (31,366)

(2.2519)

significant at a = .05

Bohol

16,703 (17,541)

25,939 (18,867)

(1.2929)

significant at a = .10

Source:delos Angeles and R. Pelayo (1994), based on 1992 PIDS Survey.

512

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

The noncooperators seemed to depend more on fishing as their main livelihood, while cooperators needed more income from other sources to cover their household expenditures. The net cash income from fishing accounted for only 65 percent of the total net cash income among cooperators, compared to 82 percent among noncooperators. Major Concerns Regulating pollution into water ecosystems. Damage from pollution into water resources cause considerable economic losses. For example, the decline in productivity of reef fisheries due to erosion from upstream resulted in foregone outputs of P1.8 billion in 1988. Fisheries in Laguna Lake likewise experienced losses amounting to P88.6 million. An investigation of the costs and benefits from intensified pollution control in Metro Manila to prevent further deterioration of Laguna de Bay indicates that avoidance of pollution damage of P900 million per year warrants spending an additional P126 million or to P225 million per year during 1993-2000 (delos Angeles and Pabuayon 1994). Among the protected current uses of the Bay, fishery gains constitute 98 percent of the total. Regulating fishing effort. Padilla (1994) estimated various indicators for small pelagic fisheries under alternative conditions: maximum sustainable yield (MSY), economic sustained yield (MEY), and open access fisheries (OAF). The results presented in Table 17 show the inferior open access situation: low catch and revenues, dissipated (or zero) rent to accommodate the largest number of fishermen.

DELOS ANGELES: SUSTAINING RESOURCE USE

513

TABLE17 Valuesof KeyFisheryIndicators at OpenAccess,MSYandMEY

Fishingeffort Catch(tons) Revenues(millionpesos) Rents(millionpesos)

Openaccess

MSY

MEY

537,900 457,000 5,958 0

294,000 573,000 7,462 7,055

261,600 569,000 7,414 7,128

Note:

MSY - Maximumsustainable yield MEY- Maximumeconomic yield Source:Padilla(1994),,

CONCLUDING REMARKS There are important relationships between upland and coastal ecosystems that require a coordinated management of these resources. Table 18 shows that uplands and poor households are major sources of water pollution. Coastal areas continue to be the destination of surplus labor, thus resulting in population pressure. The rehabilitation of coastal and upland ecosystems thus requires tackling population movements and assessing potential income gains from the resources therein. A major direction that should be explored is the granting of exclusive stewardship rights to specific ecosystems in lieu of the commodity-specific licensing system that has characterized the private use of natural resources. Commodity-specific licensing (e.g., licensing of logging, issuance of permits for the gathering of rattan and fuelwood, etc.) has resulted at best in piecemeal approaches to management. At worst, it has caused the shirking of responsibilities among user groups, and led to administrative difficulties and inequitable arrangements.

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ESSAYSINSOCIALSCIENCEANDDEVELOPMENT

TABLE 18 Top Users of Waste Disposal Services Provided by Water, 1988 PSIC

Pollutant/sector

HH 12 31 32

BOD5 Householdsector Livestock,poultryand otheranimal production Food,beveragesand tobacco Textile, wearing appareland leatherindustry

59.0 31,8 7.0 0.9

91 12 21 HH 31 41

SS Public administrationand defense(urban rumoff) Livestock.poultryand other animal production Metallic ore mining Householdsector Food,beveragesand tobacco Electricity

46.7 27.1 13.6 10,2 1.1 0.9

N Publicadministrationand defense (urbanand forestlandrun-off) Agriculturalcropsproduction Livestock.poultryand other animalproduction Householdsector Food, beveragesand tobacco

56.1 17.1 13.7 11.6 1.5

P Publicadministrationand defense (urbanand forest land run-off) Householdsector

56.1 11.6

91 11 12 HH 31 91 HH Note:

% Share to total effluents

Dischargesof toxic water pollutantswere estimatedfor relevantfactors as follows: PSIC 211: Hg - 200 MT/yr PSIC 323: Cr - 79 MT/yr; Sulfides - 159 MT/yr PSIC 331: Phenols - 33 MT/yr PSIC 351,352 and 356:P205 - 33,365 MT/yr; F-14,829 MT/yr; SO4 - 108,833 MT/yr PSIC 353: Sulfides - 25,719 MT/yr; Phenols - 33,700 MT/yr; TOC - 1,232,719 MT/yr

DELOSANGELES:SUSTAINING RESOURCEUSE

515

TABLE 18 (continued) PSIC 363:SO4 - 8,912 MTlyr; K - 7,949 MT/yr PSIC 371:SO4 - 498 MTlyr; Ammonia- 181,804 MT/yr; Chlorides- 238 MT/yr PSIC 411: Chromium- neg.;Zn - neg.; Ni * neg. Totals(in MT/yr):Cr - 79; Sulfides- 25,878; Phenols- 33,733; P205 - 33,364; Flourides- 14,828; SO4 - 118,244;TOC - 1,232,718; Ammonia- 181,804; K - 7,949; Chlorides- 238; Zn & Ni - negligible Source: Environmentaland NaturalResourcesAccountingProject,Phase II, September1994

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ESSAYS IN SOCIAL SCIENCEAND DEVELOPMENT

BIBLIOGRAPHY Balisacan, A.M. "Dynamics of Rural Development: Linkages, Poverty, and Income Distribution." Working Paper Series No. 91-15. Makati: Philippine Institute for Development Studies, 1991. Barker, R. "Natural Resources Management Program Objectives, Procedures, Progress: An Outsider's Perspective." Short-Term Consultancy Report, NRMP-Monitoring and Assessment Component Report 9211. Winrock International Institute for Agricultural Development, 16 August -5 September 1992. Bennagen, M.E.C. and D.M. Cabahug Jr. "Mangrove Forest Resources Accounting." Natural Resources Accounting Project (NRAP-Phase I), Final Report, Vol. 2. Manila, Philippines, 1991. Cruz, M.C., C.A. Meyer, R. Repetto, and R. Woodward. Population Growth, Poverty, and Environmental Stress. Frontier Migration in the Philippines and Costa Rica. Washington, D.C.: World Resources Institute, 1992. Cruz, W. and R. Repetto. The Environmental Effects of Stabilization and Structural Adjustment Programs: The Philippine Case. Washington, D.C.: World Resources Institute, 1992. Dasgupta, P. and KarI-Goran Maler. Poverty, lnstitutionsl and the Environmental-Resource Base. World Bank Environment Paper Number 9. Washington, D.C.: The International Bank for Reconstruction and Development/The World Bank, 1994. delos Angeles, M.S. and R. Pelayo. "Impact Evaluation of the Central Visayas Regional Project: The Nearshore Fisheries Component." In Pefialba et al. Impact Evaluation of the Central Visayas Regional Project Phase I (CVRPI). Discussion Paper Series No. 94-22. Makati: Philippine Institute for Development Studies, 1994. delos Angeles M.S. and E. Rodriguez. "Measuring Benefits from Natural Resource Conservation: The Case of the Central Visayas Regional Projects-I?' Working Paper Series No. 92-03. Makati: Philippine Institute for Development Studies, 1992.

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517

delos Angeles M.S. and I.M. Pabuayon. "Economic Valuation of Impacts of Environmental Degradation in Laguna Lake." Phase ! Study Report submitted to the Metro Manila Environmental Improvement Program with funding assistance from the World Bank and the U.N. Development Programme. Manila: Policy and Development Foundation (PDFI)/ Resources, Environment and Economics Consultants, Inc. (REECs), 1994. Francisco, H.A., F.K. Mallion, and Z.M. Sumalde. "Economics of Dominant Forest-Based Cropping Systems in Mount Makiling Forest Reserve: An Integrative Report." Environment and Resources Management Project-Development Action Plan-Makiling Forest Resej:ve. UP Los Bafios: Institute for Environmental Science and Management, 1992. Francisco, H.A. "Impact Evaluation of the Central Visayas Regional Project: the Upland Agriculture Component." In Pefialba et al. Impact • Evaluation of the Central Visayas Regional Project Phase I (CVRPI). Discussion Paper Series No. 94-22. Makati: Philippine Institute for Development Studies, 1994. ., "Accounting for Depreciation of Upland Soil Resources." Final Report prepared for the Philippine Environmental and Natural Resources Accounting Project, Phase II (ENRAP !I), 1994. International Resources Group (IRG) and Mandalla Agricultural Development Corporation (Madecor). Executive Summary, The Philippine Natural Resources Accounting Project, Phase 1. Report prepared for the Department of Environment and Natural Resources with assistance from the U.S. Agency for International Development, December 1991. International Resources Group (IRG) and Edgjevale Associates. Main Report, The Philippine Environmental and Natural Resources Accounting Project, Phase II. Report prepared for the Department of Environment and Natural Resources with assistance from the U.S. Agency for International Development, March 1994. Kummer, D.M. Deforestation in the Postwar Philippines'. Chicago: University of Chicago Press, 1992.

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Llanto G.M., and M. T. Magno. "Credit Markets in the Fisheries Sector Under CARP: A Review of Literature and Conceptual Framework." Working Paper Series No. 91-I 1. Makati: Philippine Institute for Development Studies, 1991. Padilla J.E. "Depreciation of Small Pelagic Fisheries in the Philippines." Final Report prepared for the Philippine Environmental and Natural Resources Accounting Project, Phase 1I (ENRAP ll), 1994. Pefialba, L.M., M.S. delos Angeles and H.A. Francisco. "Impact Evaluation of the Central Visayas Regional Project Phase ! (CVRP I)." Discussion Paper Series No. 94-22. Makati: Philippine Institute for Development Studies, 1994.

Highlights of Discussion

SUSTAINING RESOURCE USE IN UPLAND AND COASTAL COMMUNITIES

It m_y not be desirable to target for pollution control all the time. Given limited resources, one must prioritize areas where the damage or benefits from _/ollution control are greater than the cost of pollution control, if, for instance, the government were to invest its next million pesos to clean up certain rivers, it would be advisable for it to spend the money on some rivers, rather than on Pasig River which can already be considered as practically "dead". The pure environmentalists may not agree with this totally, but if you would be guided by efficiency in allocating resources, then you start to see the wisdom of selective pollution control. In Germany, for instance, the government decided which rivers should be saved and kept very clean for everybody to enjoy, and which to remain "dead" or to be used for waste disposal. The government, of course, should not be the sole actor in deterring degradation and encouraging rehabilitation of resources. There are positive effects of having cooperators in some resource areas. It has been shown that local people can work very effectively in terms of community resource management. Government, however, should still be at the helm to disseminate information and orchestrate the different activities of the cooperators. How does one determine whether the benefits of pollution control outweigh its costs? The study painstakingly examined the state of affairs of different activities -- households, government, industry -- to the extent of how they produce waste and how they manage their waste. The value of waste

520

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

disposal services provided freely by air and water, was then estimated by the cost of additional pollution control to reduce uncontrolled emissions and discharges. Damage from pollution was estimated using another data set. This approach, which H. Peskin developed in the national income accounting context, is unique. Other effort at the U.N. use instead pollution abatement cost to proxy for damage that is avoided. On the other hand, the Peskin approach allows us to look at the cost and damage separately and compare the benefits of an action. Generally, economists would advise a level of pollution control to be undertaken if the additional benefits from such control equal its added cost. If these are less, then it is better notto control any further. • The measuring mechanism, however, has its defects. For one, we may not be putting the accurate value of damages because-other factors would come into the picture. How can one segregate, for instance, the health damage due to pollution and those due to others like poor nutrition or inherent factors? Others may not report the damage, i.e., not see a doctor, and thus the damage is not included in the official accounts. The role Of community-based resource management for facilitating resource-conservation oriented technological change was emphasized. This is important particularly for open access and common_roperty resources whose resource use conflicts are more problematic.

ADJUSTING TO THE NEW TRADE AND ENVIRONMENT PARADIGM: THE CASE OF THE PHILIPPINES

PONCIANO Ire'At. d_ ANDPAULQUINTO$

INTRODUCTION HESTORYof the Philippine environment during the past two decades is one of growing stress and resource degradation that has recently forced the Philippine polity and society to come to grips with the problem. Poverty, population pressure, unsatisfactory economic policies and performance, poor environment policies and implementation, and naturaldisasters underpin the worsening environmental situation. This paper seeks to contribute to a deeper understanding of the issue of sustainable development in the country by exploring the linkage between environment and trade both at home and internationally from the perspective of the Philippines. The paper is divided into six sections. The second section (p. 522) discusses the interaction between the economy and the environment and natural resource sector. The third section (p. 529) examines the impact of cost internalization on the industry incentive structure and on the international competitiveness of (selected) industries. The fourth section (p. 546) uses a simulation model to determine the likely environmental impact of trade liberalization. The fifth section (p. 551) discusses the growing clamor for environmental regulation abroad and its implications on Philippine trade. The conclusions and policy implications of the paper are presented in the sixth section (p. 555). *Thisis largelytakenfromChaptersI, 2 and7 of Intalet al. "TradeandEnvironmental Linkages:TheCaseof thePhilippines."

522

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

ECONOMY-ENVIRONMENT

INTERACTION

Trade impacts on the environment as it influences economic activity. Specialization resulting from trade heightens the scale of economic activity; environmental degradation is exacerbated in this process when there are market failures and a failure to internalize the environmental costs of production and/or consumption. In the Philippines, the rising resource and environmental stress during the past two decades went hand in hand with the "stop-go" and comparatively poor economic growth in the country. The dissociation between scarcity and price and between benefits and costs in the environment and natural resource sector likewise meant that the weaknesses in economic governance had a magnified effect on the environment and natural resource sector in terms of incentives to rent seeking, increased population pressure on open access resources, and, in some instances, even social conflict. For instance, underpricing and the political economy of logging are the main reasons for the fast denudation of forests in the country. In the Philippines, government rent capture as a ratio of potential rent in logging during the 1970s was less than 10 percent. This contrasts with 33 percent in Indonesia and 83 percent in Sabah, Malaysia (Panayotou 1993a: 75). Because of the tremendous private fortunes that can be generated from logging, the granting of timber licenses was strongly determined by political influence and considerations; in addition, illegal logging was abetted by powerful political and military officials (Sajise et al., 1992). As a result, the institutional mechanisms and regulation for forest protection and reforestation were ineffective and/or poorly implemented. Forest fires, population pressure from tile lowlands, and the shift to agriculture accelerated and aggravated the process of forest denudation in the country. The increased population pressure from the lowlands reflected the unsatisfactory growth of employment creation in the lowlands in the face of relatively high population and labor force growth rates. Given insufficient employment opportunities in industry, agriculture and services in the lowlands, the open access uplands became an important refuge for subsistence

INTALAND QUINTOS: NEW TRADE AND ENVIRONMENT PARADIGM

523

farming. While estimates of the total upland population vary widely, there is a consensus that the numbers have risen substantially during the past two decades. Moreover, the rate of upland migration appears to have accelerated during the crisis period of the early and mid-1980s. There are also indications that population pressure on coastal, artisanal fisheries intensified during the crisis years of the early 1980s (Cruz and Repetto 1992: 47-50). The country's macroeconomic and industrial policies during the 1960s and 1970s were central to the unsatisfactory job creation in industry and agriculture. There was a net transfer of resources out of agriculture during those two decades (Intal and Power 1990), thereby discouraging private investments especially in export agriculture. At the same time, the manufacturing sector turned more capital-intensive and (imported) material-intensive during the 1970s, resulting in the faster deterioration of total productivity in the sector during the decade (Hooley 1985). The failure to direct industrial development according to the country's evolving comparative advantage meant that the Philippines had to rely more on the resourceintensive sectors for foreign exchange during the latter 1960s and the 1970s. Given the underpricing of natural resources extraction and the poor implementation of resource protection measures, the country's renewable resources (i.e., forests, fish) were effectively "mined" beyond sustainable levels. Rent seeking, uncertain tenure rights and the heavy involvement of political, military and other government officials in forestry gave rise to social conflict in a number of instances. Most of the social conflicts involved actual and potential displacements and deprivation of sources of livelihood of cultural communities from their ancestral lands because of logging concessions, illegal logging and the construction of hydroelectric dams. Some of the cultural communities turned to communist insurgents during the 1970s and early 1980s to protect themselves against unpopular logging concessionaires and illegal logging in their areas (Sajise et al. 1992: 21). This contributed to the geographical expansion and worsening of the insurgency problem in the country during the 1970s and the early 1980s (Roque and Garcia 1992).

524

ESSAYS IN SOCIAL,SCIENCE AND DEVELOPMENT

It is clear from the experience of the Philippines that sustainable development requires a more employment-creating economic policy regime and economic growth sustained at a robust rate. At the same time, natural resource and environment management need to be substantially improved. The challenge is in minimizing conflicts between environmental protection and economic growth. Indeed, the ideal is to heighten the symbiosis between the economy and the environment in production and consumption aimed at improving the quality of life, equitably distributing (among social classes) opportunities for income generation, and increasing resources for resource regeneration and environmental protection. In reaction to the economic crisis of 1983-85, the heightened pressure from the international donor community, and the economic success of the more export-oriented economies in Northeast and Southeast Asia, the Philippines began to earnestly shift its trade, industrial, investment, and macroeconomic policy regime during the past few years towards an economy that is more outward-oriented and macroeconomically stable. Thus, tariff rates have been reduced, most of the nontariff barriers have been eliminated and transfbrmed into tariffs, the foreign exchange market has been liberalized, the foreign equity restrictions on Philippine industries have been eased up, and competition policies in the utilities sector have been strengthened. The government's fiscal situation remains fragile, however, and can therefore threaten macroeconomic stability. Nevertheless, the government is in the process of addressing the fiscal problem in large part through executive actions to improve tax administration, proposed legislative measures to increase the tax revenue effort, i.e., the overall tax revenue to GNP ratio, and privatization so as to raise the nontax revenue effort. Cross-country studies (e.g., World Bank, 1987: ch. 5) show that outward-looking developing countries experienced higher export and economic growth rates, utilized scarce capital resources more efficiently, and generated more employment in manufacturing from the 1960s to the early 1980s than developing countries that pursued strongly inward-oriented development strategies (Table 1). Morover, as exemplified by the newly industrialized economies of Asia, the strongly outward-oriented countries

INTALAND QUINTOS: NEW TRADE AND ENVIRONMENT PARADIGM

525

also succeeded in significantly reducing their incidences of poverty over the past two and a half decades. Considering that poverty, the lack of employment opportunities in industry, and the "stop-go" overall economic performance contributed substantially to the resource and environmental degradation in the Philippines, the country's current shift towards economic outwardness and export orientation can contribute significantly towards addressing important sources of resource depletion and environmental degradation in the Philippines. (For example, domestic and municipal wastes are the main sources of water pollution; higher economic growth that reduces poverty, increases per capita income and raises government revenues can lead to improvements in sanitation and waste disposal services that will eventually reduce water pollution.) Nevertheless, the experiences of the Northeast Asian tiger economies suggest that high economic growth and even faster export growth can result in serious environmental pollution. Thus, based on the "Kuznet's curve" or inverted U hypothesis (Panayotou 1993b), the pollution problem of the Philippines can be expected to worsen as per capita income increases before being significantly reduced at sufficiently high per capita income levels. The "Kuznet's curve," which is drawn from cross-country comparisons, captures the historically poor environment policies in most countries especially the developing ones; hence, the "curve" is not immutable. The challenge is to improve environment policies in conjunction with an improvement in economic policies so as to shift the "Kuznet's curve" downward at least, i.e., reduce the pollution intensity of production and possibly delink economic growth and pollution. Delinking growth and pollution requires greater efficiency in the use of resource inputs (i.e., reduced resource inputs per unit of output) and a lowering of pollution per unit of output through cleaner technologies and practices. In short, economic openness and export orientation, which underlie the overall strategy for economic growth, necessitate the adoption and implementation of appropriate policies on natural resources, the environment, and investments.

TABLE 1 Comparative Performance of Countries by Trade Regime

Real GNP growth per capita (%/year)

Strongly outward-oriented Moderately outward-oriented Moderately inward-oriented Strongly inward-oriented

Strongly outward-oriented Moderately outward-oriented • Moderately inward-oriented Strongly inward-oriented Approximate.

Growth of manufactured exports (%/year)

u_ o_

Incremental capital output ratio (average ratio)

1963-73

1973-85

1963-73

t973-85

1963-73

1973-85

6.9 5.0 a 3.9 a 1.6

5.9 1.8 a 1.9 a -0.1

14.8 16.1 10.3 5.7

14.2 14.5 8.5 3.7

2.5 2.5 3.3 5.2

4.5 5.0 6.2 8.7

03 GO

Growth of real manufacturing value

Share of labor force

<> o3

added (%lyear)

in industry

1963-73

1973-85

1963

1980

o3 o o ,_

15.6 9.4 9.6 5.3

10.0 4.0 5.1 3.1

17.5 12.7 15.2 12,1

30.0 21.7 23.0 12.6

o_ m Z o m >

•

Source: 1987 World Development Report, pp. 84-87

rO3

Z E_ <

m I-O "O m z .-{

INTALAND QUINTOS: NEW TRADE AND ENVIRONMENT PARADIGM

Welfare

Analysis

in a Small

of Trade

and Environment

527

Policies

Open Economy

The standard welfare analysis of trade and environment in a small open economy (see Anderson 1992) helps crystallize the needed complementarities between economic and environment policies in the drive towards economic openness and export orientation. Specifically, in the presence of environmental externalities and other market failures, the increased efficiency and income from trade liberalization, economic openness and export orientation must be weighed against any negative environmental effects that can be magnified by expanded and intensified economic activity due to increased openness. The propositions of the standard welfare analysis of trade and environment policies in a small open economy are as follows: 1. Where the good is an importable • If the negative environmental externality is in the production of the importable (e.g., chemicals), and if trade liberalization results in increased reliance on imports, then trade liberalization would improve the country's environment and welfare. Moreover, if there is an appropriate production tax (e.g., pollution tax) on the domestic production of the importable or import substitute, the country's environment and welfare would improve further. • Ifthe negative environmental externality is in the consumption of the importable (e.g., oil), and if trade liberalization results in increased imports and consumption, then trade liberalization worsens the country's environment. In this case, an optimal policy mix should include the imposition of an appropriate consumption tax (e.g., oil levy) on the importable, whether domestically produced or imported. 2. Where the good is an exportable • If the negative externality is in theproduction ofthe exportable (e.g., wood), and trade liberalization results in increased exports and production, then trade liberalization may worsen the country's environment and welfare depending on whether or not the efficiency effects of liberalized trade outweigh the externality effects on the

528

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

environment. In this case, the ideal policy is to impose an appropriate production tax (e.g., stumpage fee) on the exportable, whether for the domestic market or for export. • If the negative externality is in the consumption of an exportable, and trade liberalization results in increased exports and reduced domestic consumption, then trade liberalization would contribute to the improvement of the country's environment. Moreover, the imposition of a consumption tax on domestic consumption and on the exportable would reduce further domestic consumption and improve the country's environment and social welfare. Where the exportable is a production input, the higher the domestic price concomitant to the imposition of a consumption tax, the lower would be the effective rate of protection of the consuming industry. The theory of optimal distortions in international trade shows that in the case where there is an externality or distortion in the economy, the optimal government policy is to intervene directly at the source of the distortion. Thus, for example, if the externality is a production externality, then a move directly aimed at the production externality is the optimal government intervention. Otherwise, additional or by-product distortions result when other intervention measures are resorted to. Specifically, trade taxes or subsidies or quotas result in by-product consumption or production distortions if they are used to address a production or consumption externality, respectively. Thus, trade taxes or subsidies or quotas are less efficient government measures to address production or consumption envirnnmental externalities. In summary, • Where there is an environmental cost, either in production or in consumption, it is better to deal directly with it through a production tax or consumption tax irrespective of the trade regime. • Where there is no domestic policy to internalize environmental costs of production or consumption of tradables (i.e., exportables or importables), a movement towards a freer and more liberal trade

INTALANDQUINTOS: NEWTRADE ANDENVIRONMENT PARADIGM

529

regime may actually worsen the country's welfare. Specifically, where the good is an exportable and the environmental cost is in production, or where the good is an importable and the environmental cost is in consumption, then trade liberalization would worsen the country's environment/natural resources and therefore may end up worsening the country's social welfare if the negative social effectsofenvironmental degradation outweigh the gains from trade. • Even when efficiency gains are outweighed by the negative environmental effects of liberalized trade, the appropriate intervention is not trade-restriction per se but cost internalization. Trade taxes-turn-subsidies is a less efficient way of internalizing externalities than direct production and consumption taxes (or subsidies) because of the attendant by-product distortions in production or consumption arising from the imposition of trade taxes-turn-subsidies. • The analysis brings to the fore the importance of appropriate environmental policies in order to ensure that negative environmental effects of trade and production are adequately addressed. • Given an appropriate internalization of environmental effects either in production or consumption, a policy move towards freer or liberalized trade will improve the country's environment and welfare by raising efficiency and income as well as increasing the demand for and the wherewithal to finance environmental protection. COST INTERNALIZATION, COMPETITIVENESS AND INDUSTRY INCENTIVE STRUCTURE Economic theory dictates that the full social costs (including the environmental costs) of economic activity should be internalized by private agents. Whatever the resulting environmental damage, if any, 'would then be "optimal" since all the costs and benefits are accounted for in the decision

530

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

making of the different agents. Moreover, to establish the proper incentivestructure, ideally, the agent engaged in the activity that is generating the externality must be the one to bear these costs, i.e., the polluter's pay principle. The recently concluded Environment and Natural Resource Accounting Project (ENRAP Phase II) provides the most comprehensive and internally consistent set of estimates of the value of "waste disposal services" &the environment provided to the economy's industries, households and government sectors (de los Angeles and Peskin 1994). Ebarvia (1994) and Orbeta (1994) summarize the environmental damages from soil erosion and sedimentation as well as the abatement costs of water and air pollution should the different industries reduce theiOcurrent rate of pollution emission by 90 percent. The project results reveal that the major sources of environmental damage and pollution are the government, households, forestry and agricultural sectors and not the industrial sector as is commonly believed. Households, for example, account for 48 percent of BOD discharges and 19 percent of particulate matter emissions; public administration and defense accounts for 38 percent of suspended solids discharged because of urban run-off arising from poor drainage systems and soil erosion from public lands. The large contribution of forestry to water pollution reflects the off-site damages from soil erosion and sedimentation caused by logging activities. The large abatement costs in agricultural crops represent the cost of shifts in farming systems in order to minimize soil erosion. The major losers from the ill effects of urban and surface run-off and sedimentation are the fisheries sector, tourism industry and irrigation (Ebarvia 1994). In the industrial sector, the country's major source of pollution is the food, beverages and tobacco sector; this is not surprising because the sector, which is a water polluter, has the largest share of total manufacturing value added. For air pollution, the major sources are the household sector, electricity generation, transportation services and the food, beverages and tobacco sector (Table 2). The ENRAP II estimates of abatement costs could be used as a proxy measure of environmental externalities for examining the possible impact

TABLE 2 Prospective Abatement Costs (in thousand pesos, 1988)

-_ _, >rZ

Prospective

abatement

costs

c o

PSIC

Industry and process

Water

Air

Total

z m --I

AGRICULTURE,

FORESTRY AND FISHERY

8,331,401

17,134

8,344,542 m

Agri crops production

1,588,721

9,276

1,597,997

Livestock, poultry and other animal products

1,059,720

2,705

1,082,425

Agricultural services

n.e.

756

n.e.

Fishery

n.e.

3,155

n.e.

m z -< ::0 O z

Forestry

5,682,960

1,242

5,684,120

Hunting, trapping

n.e.

12,448

127,853

140,301

12,375

88,210

100,585

39,643

39,716

and game operation

MINING AND QUARRYING

Metallic ore mining

Nonmetallic mining and quarrying

m . ¢ z "_

-_ G3

TABLE 2 (continued) tj1

Prospective

PStC

Industry and process

MANUFACTURING

Water

abatement

costs

Air

Total

513,835

732,117

1,245,952

Manufacture

of food, beverages and tobacco

430,545

381,620

812,165

Textile, wearing apparel and leather industries

43,805

40,443

84,248

Manufacture of wood and wood products, including furniture and fixtures

6,188

57,108

63,296

Manufacture of paper and paper products, printing and publishing Manufacture of chemical and chemical, petroleum, coal, rubber and plastic products

15,401

46,224

61,625

15,164

52,633

67,797

m uJ o_ :]> _-

Manufacture of nonmetallic mineral products

392

58,582

58,974

Basic metal industries

292

54,360

54,652

Manufacture of fabricated metal products, machineries and equipment

2,048

32,967

35,015

Other manufacturing

n.e.

8,180

23,921

481,508

505,429

23,693

447,251

470,944

ELECTRICITY,

industries

GAS AND WATER

cJ Ill E]

"o 41

Electricity

Gas and steam

228

n.e.

228

Waterworks and supply

n.s.

34,257

_m Z

TABLE 2 (continued) Prospective abatement costs Z O

PSlC

Industry and process

Water

Air

Total .-{

CONSTRUCTION 50

Constmelion

n.e. n.e.

14,987 14,987

14,987

o ._.

14,987

-_.

0 m

WHOLESALEAND RETAIL TRADE 61

Wholesaletrade

Retailtrade

4,443

65,909

70,352

4,443

12,848

17,291

n.e.

53,061

n.s.

450,562

_ Z

TRANSPORTATION, STORAGE AND COMMUNICATIONS 71

Transportationservices

n.s.

324,833

72 73

Storage.and warehouse Communication

n.s. n.s.

46,040 79,689

¢.n t..)

TABLE 2 (continued)

Prospective abatement costs PSIC

Industry and process

FINANCING, INSURANCE, REAL ESTATE AND BUSINESS SERVICES

Water

Air

Total

n.e.

33,798

81 82

Banking institution Financial intermediaries

n.e. n.e.

7,333 1,123

83 84

Insurance Reat estate

n.e. n.e.

2,194 16,389

Businessservices

n.e.

6,759

1,824,102

110,314

1,934,416

1,804,440 n.s. n.s.

81,724 n.e. 1,805

1,886,164 o 1,805

COMMUNITY, SOCIAL AND PERSONAL SERVICES 91 92 93

Public administration and defense Sanitaryand similar services Educationservices

94 95

Medical, dental, other health and sanitary services Other socialand relatedcommunityservices

13,895 n.e.

1,805 1,805

15,700 1,805

96 97

Recreationaland culturalservices Personaland householdservices

n.e. 2,010

1,805 1,805

1,805 3,815

m c_

o <b r03 __o m _ m > z o <_ m ¢-o _ m z..-I

¢.-

z [3

TABLE 2 (continued)

Q c Prospective abatement costs

r.R

PSIC

industry and process

Water

Air

Total

z --I

Restaurantsand hotels

Internationalorganizationand otherextra-territorialbodies

3,757

1,805

5,562

_ o

n.s.

17,760

;> z

t_ m

HH Household sector Naturesector

3,638,510 n.e.

1,282,737 n.e.

4,921,247 n.e.

_ :o O z m

TOTAL n.e. Not estimated n.s. Not significant Source:ENRAP II preliminaryestimatesas of 28 March 1994

14,342,660

3,316,919

17,665,579

_ a__ ¢,

ot rjl

536

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

of cost-internalizationon Philippine industries,l Based on the ENRAP I1 estimates, the sectors/industries that have the highest pollution abatement cost per unit of output are forestry (22.9 percent), the government sector (i.e., public administration and defense, 10percent), poultry (6.2 percent), livestock (2.5 percent), agricultural crops production (3.6 percent), and mining (1.5 to 2.8 percent). In contrast, most manufacturingindustries have ratios of pollution abatementcoststo total output (i.e., "pollution intensity") of less than 0.5 percent (Table 3). The high "p011ution/environmentaldamage intensities" of agricultural crops, livestock and poultry are somewhatmitigated bythe widely dispersed nature of production and by their locational focus in the countryside rather than in the densely populated urban areas. Small-scaleand dispersed (say, • backyard) livestock/poultry raisers may not pose serious environmental damage; they may even benefit the surroundingenvironment with manurefertilizer.Nevertheless, given the fragility of the Philippine agroecological system (i.e., the preponderance of small islandsand hillyareas; vulnerability to heavy downpours during typhoons), the country needs to shift to less erosive crops and/or to invest in soil erosion preventive agricultural technologies (e,g., terracing). For the metallic ore mining sector, the environmental damages are much greater than the abatement costs, indicating that it is socially imperative to be stricter on mining firms with respect to pollution control. Perhaps the most compelling of all is forestry where investments in reforestation are urgent and its effects are both resource-regenerationand lower environmentaldamagesresulting from forestry activities. The estimates of pollution/environmentaldamage intensities by de los Angeles et al. are national-level estimates. Environment problems have strong locationalvariations.For instance,water pollution is far more serious in some areas of the country (say, Manila) than in others (e.g., Western 1. These are estimates of the costs (annualized capital costs plus operating and maintenance costs) of pollution control devices necessary in reducing existing air emissions and water effluents by 90 percent, by industry sector, in this case, the "costs" internalized pertain to abatement costs rather than the cost of damages.

INTALANDQUINTOS:NEWTRADEANDENVIRONMENT PARADIGM

537

TABLE 3 Philippine Industries, Ranked by Pollution Intensity, 1988 Percent share of abatement cost to output

PSIC

Sector description

15 91

Forestry Publicadministrationand defense

22.8530 9.9900

122

Poultryand poultryproducts

6.1563

11 229

Agd cropsproduction Other nonmetallicminingand quarrying

3.5711 2.7900

121

Livestockand livestockproducts

2.5382

219

Other base metalore mining

2.1900

712

Road passengertransport

1.6524

Storageand warehousing

1.4190

214

Nickelore mining

1.5400

215

Chromiteore mining

1.5200

211-212

Goldore miningand otherpreciousmetals

1.4800

213

Copperore mining

1.4600

361

Manufactureof pottery,chinaand earthenware

1.3756

341

Manufactureof paperand allied products

1.2717

313 363

Beveragemanufacturing Manufactureof cement

1.1561. 0.9087

372

Nonferrousmetal basicindustries

0.7802

331

Manufactureof woodand woodproducts

0.6745

Electricity

0.4942

311-312

Foodmanufacturing

0.4518

321 371

Textilemanufacturing Ironand steelbasic industries

0.3917 0.3447

323-324

Manufactureof leatherand leatherproducts

0.2562

351-352

Manufactureof chemicalsand plasticproducts

0.2124

382

Manufactureof machineryexceptelectrical

0.2112

538

ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT

TABLE 3 (continued) Percent share of abatement cost to output

PSlC

Sector description

81 83

Bankinginstitution Insurance

0.1991 0.1957

Recreationaland culturalservices

0,1915

Real estate

0.1893

61-62

Wholesaleand retailtrade

0,1771

Communication

0,1759

Medical,dental,otherhealthand sanitaryservices

0.1752

Waterworksand supply

0,1646

223

Stone quarrying,clayand sand pits

0.1541

95 97

Other socialand relatedcommunityservices Personaland householdservices

0,1493 0.1477

50 98

Construction Restaurantsand hotels

0.1299 0,1127

Financialintermediaries

0,1088

Other manufacturingindustries

0.1071

342 322 85

Printing,publishingand alliedindustries Wearingapparel Businessservices

0.0983 0,0977 0,0947

355

Rubberproducts

0.0942

713

Water transport

0.0924

381

Manufactureof fabricatedmetalproducts

0,0861

314 332

Tobaccomanufacturing Manufacture and repair of furniture

0,0798 0.0786

383

Manufacture of electrical machinery, etc.

0.0674

International organization and other extra-territorial bodies

0.0629

369

Manufacture of other nonmetallicproducts

0.0542

384

Manufacture of transport equipment

0.0539

INTAL ANDQUINTOS: NEWTRADE ANDENVIRONMENT PARADIGM

539

TABLE3 (continued)

PSIC

Sectordescription

93 714 362 353 354

Education services Airtransport Manufacture ofglassandglassproducts Petroleum refineries Manufacture of miscellaneous production ofpetroleum andcoal Manufacture andrepairofmetalfurniture andfixtures

386

Percentshare of abatement costto output 0.0503 0.0231 0.0201 0.0151 0.0004 0.0000

Source:Environment andNaturalResource Accounting Project,PhaseII

Visayas). The same is true with air pollution. All this points up the need for locational differentiation of any fiscal or nonfiscal action by the government to address the problem of environmental degradation. More importantly, the importance of industrial Iocational policy as a complementary measure to the internalization of environment costs is also highlighted. It can be argued that the pollution abatement costs examined above only pertain to air emissions and water effluents, thus understating environmental externalities which cover a host of other factors (e.g., biodiversity loss, congestion, aesthetic amenities, etc.). The shortcomings of the EN RAP II estimates notwithstanding, we can use hypothetical environmental costs (in percent of industry output) in order to examine the possible impact of cost-internalization on the effective rates of protection and comparative advantage of (selected) industries where the country currently enjoys comparative advantage. The ratios of the domestic resource cost (DRC) to the shadow exchange rate (SER) as well as the ratios of the DRCra (at market rates) to the official exchange rate (OER) for commercial fishery, aquaculture, fish canning, fish drying and other manufacturing, coconut/copra production, forestry, furni-

540

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

ture, copper mining, textiles (export), fabric knitting mills (export), and garments (export) are shown in Table 4. They all exceed unity only at very high levels of environmental costs (all greater than 5 percent of output). A DRC/SER < l implies social profitability while a DRCm/OER < 1 implies private profitability or competitiveness. The notable exception is municipal and inland fishing for which unity is reached when environmental costs equal 5 percent of industry output, which is still substantially high considering that the pollution intensity of fishing is negligible. Sawmills and planing mills and paper products, on the other hand, are unprofitable even assuming that there are no environmental externalities associated with their production in the Philippines. Overall, Table 4 indicates that social and private profitability can be maintained for most of the sectors studied even with an environmental tax of up to 5 percent of output (or more, in the case of a few industries). Examining the effect of cost-internalization on the industry incentive structure, it is notable that at any given level of environmental cost (EC > 0), cost-internalization (via market-based instruments such as environmental taxes) lowers effective protection for all industries compared to where there is no cost-internalization. This is true for all of the industries examined above. Conversely, in the absence of cost-internalization (i.e., zero environmental tax), effective protection rates increase as environmental costs increase. Given this, industries currently enjoying protection may deem cost-internalization as contrary to their private interests. It can be seen from Table 4 that cost-internalization reduces effective protection as environmental costs increase for all the export industries in Table 4.By lowering effective protection, environmental policy based on cost-internalization worsens further the already negligible or negative effective rate of protection for many export industries and, thus, increases the disincentive to exporting. This suggests that the imposition of the "polluter pays principle" on the export industry needs to be tied to broader trade-liberalizing reforms, e.g., a significant redirection of the country's trade and tariff regime toward lower industrial protection of the import substituting industries and toward a more realistic exchange rate.

TABLE 4 Some Measures of Protection and Competitiveness of Selected Sectors

Environment cost (% of output value)

EPR (%)

NEPR (%)

(wf environment tax : environment

EPR (%)

NEPR (%)

(environment tax : 0)

__ o _ z DRClSER DRCIOER

cost) Commercialfishery

Municipaland inlandfishing

o m

-0.88

-17.40

-0.88

- 17.40

0.36

0.43

-1.89

- 18.24

3.95

o13.37

0.43

0.52

m u

10 15 20 30

-3.01 -4.26 -5.64 -8.95

-19.18 -20.21 -21.37 -24.12

9.28 15.18 21.75 37.44

-8.93 -4.02 1.46 14.54

0.50 0.57 0.64 0.79

0.61 0.69 0.78 0.95

0 5 10

57.56 60_.56 64107

31.30 33.80 36.73

57.56 70.13 84187

31.30 4I .77 54.06

0.83 1.00 1.17

1.01 1.22 1.42

:_ ]> _o ¢

68.26

40,21

102.41

68,68

1,34

1,62

73.31

44,43

123.63

86,36

1,51

1.82

87.46

56.21

182.96

135.80

1.84

2.23

¢m Z

..a=

TABLE 4 (continued) Environment cost (% of output value)

EPR (%)

NEPR (%)

(wfenvironment tax = environment cost)

._ EPR (%)

NEPR (%)

(environment tax = 0)

DRC/SER

DRCfOER

Aquaculture and other fishery activities

Fish canning

6.48

-11.27

6.48

-11.27

0.72

0.87

5.66

-11.95

12.94

-5.89

0.78

0.95

10 20

4.74 2.47

-12.72 -14.61

20.23 38.05

0.19 15.04

0.85 O.98

1.02 1.18

-0.58

-17.15

62.07

35.06

1.11

1.34

0 5

19.50 19.4t

-0.42 -0.49

19.50 40.07

-0.42 16.72

0.63 0.81

0.77 0.98

19.29

-0.59

69.20

41.00

0.99

1.19

19.10

-0.75

113.63

78.02

1.16

1.40

20 30

18.78 15.76

-1.02 - 3.54

189.70 906.49

141.42 738.74

1.34 1.69

1.61 2.04

co 0 CO

zC) m

Fishdrying, smoking,and mfg. of other seafood products

> Z

m < m r0 5

17.14 16.74

-2.38 -2.72

17.14 33.61

-2.38 11.34

0.69 0.84

0.85 1.03

0 m Z --I

TABLE 4 {continued)

Environ-

EPR

NEPR

EPR

NEPR

ment cost

(%)

(%}

(%)

>m > z

(°/oof output value)

Coconut/copra

°c m

(wf environment tax = environment cost)

16.20

-3.16

(environment tax = 0)

DRCISER

DRCtOER

z o P z -_ "TI

55.47

29.56

0.99

1.21

15,46

-3.78

85.88

54.90

1,14

1.39

14.36

-4.70

131.09

92.58

1.29

1.56

9.01

-9.16

349.94

274.95

t. 58

1.92

> Z 0

-0.19

-16.83

-0.19

-16.83

0.68

0.83

0.6

-0.30

-16.91

0.32

-16.40

0.69

0.84

-1.09

-17.57

4.24

-13.14

0.73

0.89

-2.07

- 18.39

9.08

-9.10

0.77

0.94

"Production of crude coconut oil, copra cake and meal

Forestry

Z ¢ m _,

0 0.6

-1.54 -1.89

-17.95 -18.24

-1.54 0.03

-17.95 -16.65

0.76 0.78

0.92 0.95

-4.79

-20.65

13.27

-5.61

0.94

1.14

-9.17

-24.31

33.33

11.tl

1.13

1.36

-0,81

-17,34

-0,81

-17,34

0.57

0,81

-2.19

-18.49

5.75

-11.87

0.66

0.91

-3.76

-19.80

13.25

-5.63

0.74

1.01

¢,)

TABLE 4 (continued) Environment cost (% of output value)

Sawmills and planing mills

EPR (%!

NEPR (%)

(wf environment tax = environment cost)

EPR (%)

NEPR I%!

(environment tax = 01

DRC/SER

DRCIOER

-5.57

-21.31

21.88

1".57

0.83

1.11

-7.68

-23.07

31.94

9.95

0.91

1.21

-10.17

-25.15

43.82

19.85

1.00

1.32

0 2

-1.38 -2.37

-17.82 -18.64

-1.38 3.20

-17.82 -14.00

1.62 1.71

1.96 2.07

._ -< o_

-4.05

-20.04

10.92

-7.56

1.8_P

2.24

_(n

(/)

Veneer and plywood

-2.17

-18.48

-2.17

-18.48

0.92

1.12

O o

Paper and Paper Products Manufacture and repair of rattan furniture including upholstery Manufacture and repair of wood furniture, including upholstery

77.80

48.17

77.80

48.17

1.38

1.67

-1.55

-17.96

-1.55

-17.96

0.49

0.60

2.11

-14.91

2.11

-14.91

0.65

0.80

o_ _o rn z O m zo o m < m

Copper mining

0.0045

-4.20

-20.17

-4.19

-20.16

0.70

0.85

"13 m z .-I

TABLE 4 (continued) Environmerit cost

EPR . (%)

NEPR (%)

EPR (%)

i"-

NEPR {%)

> z

of output value) Textile (spinnin'g,weaving, textudzing and finishing) Fabricknittingmills

(environment tax = 0)

0.67

48.99

24.16

51.26

26.05

37.01

14.18

16.67

DRCISER

DRCIOER

z _ z

0.38

Garments

(w/ environment tax = environment cost)

38.14

15.12

16.67

7.08a

8.67a

0.85 b

1.04b

7.29a 0.87b 1.48a 0.75b

8.91a 1.07b 1.80a 0.80b

1.50a 0.76b

1.83a 0.81b

0.53

0.65

-I m zO m ;0 O z m

"average bexport Sourceof Data: 1988 Input-OutputTable(230 x 230 commodityx commodity)

¢.n

546

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

TRADE

LIBERALIZATION

AND THE PHILIPPINE

ENVIRONMENT

Trade liberalizing reforms are expected to impact on the environment by changing the relative effective rates of protection of the different industries which have varying degrees of associated environmental externalities. In the case of the Philippines, trade liberalization across the board can be expected to encourage exportable industries including nature-based industries such as forestry, mining and agriculture which are associated with large off-site environmental consequences. Moreover, liberalizing trade (along with currency depreciation) also favors those sectors where the country enjoys comparative advantage -- which includes not only the nature-based industries already mentioned but also sectors such as food, beverages, tobacco and wood products which are relatively pollutive. A simple multi-industry partial equilibrium simulation model is used in this paper to provide some indication of the likely direction of changes in economic structure and of the environmental impact of trade liberalization (i.e., tariff reduction with or without induced changes in the real exchange rate). The simulation model, which builds upon the model developed by Chunglee for the Philippine Tariff Commission, links changes in industry outputs to changes not only in interindustry effective rates of protection but in the real exchange rate as well. The model is static and assumes fixed input-output ratios and constant factor prices. As such, tile model cannot capture the dynamic effects of investments that can arise from trade liberalization. Moreover, shifts in factor proportions due to changing factor prices and relative prices are not considered. Thus, essentially, the Chunglee simulation captures the impact effects of trade liberalization. Because of the limitations of the model, the simulation results are meant primarily to give some indications of the direction of change in the economy and of the probable impact on the environment. The results of the simulation appear intuitively reasonable (Table 5). An across-the-board reduction in tariffs by 50 percent or the institution of a uniform 15 percent effective rate of protection (EPR) across all sectors

TABLE 5 Trade Regimes and the Environment (In percent)

_, rz o

Change in output 1983

Pollution/damage

intensity e

z o ._.

Description

1-0

IIb

IIIc

IVd

III

base

18.05 20.97

3.5711 0.0000

z <m --t

03-19 19-20

Agriculture Fishing

-1.89 -0.90

9.95 11.t8

3.14 5.42

21 22 23

Logging Other forestry activities Gold and other precious metals

8.24 -9.15

22.59 0.91

26.46 -13.54

47.92 22.8534 22.8534 22.8534 22.8534 22.8534 -3.30 5.1093 5.1093 5.1093 5.1093 5.1093

1.82

14.58

11.69

29.00

1.4800

Copper ore Other metallic mining Sand, stone and clay

3.15 3.28

16.23 16.40

14.74 15.05

32.00 33.31

1.4800 1.7300

1.4600 1.7300

-5.04

6.03

-4.09

8.79

1.6000

28-45 46-47 49-50

quarrying Other nonmetallic mining and quarrying Food manufacturing Beverage Tobacco

-4.43 -7.08 -6.72 -10.89

6.79 10.88 11.32 6.12

-2.69 -4.28 -3.46 -13.05

10.59 16.97 18.01 5.73

2.7900 0.4518 1.1561 0.0798

2.7900 0.4518 1.t561 0.0798

2.7900 0.4518 1.1561 0.0798

2.7900 0.4618 1.1561 0.0798

2.7900 0.4518 1.1561 0.0798

51-53 54-55

Textile manufacturing Garments and footwear

-20.38 0.00

-5.70 19.70

-34187 12.00

-22.21 37.81

0.3917 0.0977

24 25 26 27

m o z> m

-1 ;o_" > G3

"-4

TABLE 5 (continued) Change in output 1983

Pollution/damage

intensity e

Description

1-0

Itb

_11 c

IVd

III

base

56-58 59-60

Wood and wood products Paperand allied products

-6.42 -33.80

12.94 -22.42

-0.47 -65.74

21.84 -61.73

0.6745 't,2717

0.6745 1.2717

0.6745 t,2717

61 62

Publishing and printing Leather and leather

-36.82

-26.19

-72,69

-70.64

0.0983

0,0983

0.0983

63-65 66-75

products Rubber products Chemicals and

-2.02 -33.27

17.18 -21.76

7.35 -64.52

31.88 -60.17

0.2562 0.0942

rrl u)

plastic products Products of petroleum, coke and coal Ce me nt

-23.29

-9.33

-4156

-30.78

0.2124

0,2124

-25,08 -14.63

-11.56 1.46

-45.68 -21.65

-36.05 -5.28

0.0151 0.9087

0.0151 0,9087

0,0151 0.9087

0.0151 0.9087

u_ Go O

78 79

Glass and glass products Other nonmetallic manufactures

-20.39

-5.71

-34.89

-22.24

0.0201

-14,60

1,50

-21.58

-5.19

0.0542

0,0542

Primary iron and steel products

-17.74

-2.41

-28.80

-14.43

0.3447

0,3447

0.3447

81 82

Nonferrous basic metals Fabricated metal products

-3.61 -33.15

I5.20 -21,62

3.69 -64.26

27.18 -59.84

0.7802 0.0861

0,7802 0.0861

Machinery and equipment except electrical

-43.92

-35,04

-69.01

-91,54

0.2112

76 77

_ m 7>

m O _: rn z

TABLE 5 (continued) Change in output 1983

--I

Pollution/damage

intensity e

III

base

Description

1-0

z Ia

IIb

illc

IVd

Q C m Z '-I

O 84-89 90-91 92

Electrical machinery, etc. Transport equipment Furnitures and fixtures,

-t0.67 -22.51

6.40 -8.35

-12.54 -39.77

6.38 -28.48

0.0674 0.0539

O.O4

19.74

12.08

37.92

0.1071

primarily of wood Furnitures and fixtures,

94-95

primarily of metal Other manufactures

-29.70 31.78

Miscellaneous manufactures,

03-96

ALL

n.e.c, and scrap

z -I

° m -17.31 59.30

-56.31 85.10

-49.66 131.43

0.0000 0.1071

0.0000 0.107t

0.0000 0.1071

z > o Ill

<_ -29.13 -9.88

-16.61 5.49

-55.01 -11.88

-48.00 5.09

0.0000 1.7988

0.0000 1.7480

0.0000 2.0443

0.0000 2.0043

0.0000 1.5823

=Case h Post Trade Reform Output given a 50% decrease in EPR from its 1985 levels, given fixed exchange rate. bOase I1: Post Trade Reform Output given a 50% decrease in EPR from its 1985 levels, given flexible exchange rate CCase II1: Post Trade Reform Output given a uniform EPR of 15% across all sectors, from its 1985 levels, given fixed exchange rate.

O _ m z .-t _" _ o _,

dCase W: Post Trade Reform Output given a uniform EPR of 15% across all sectors, from its 1985 levels, given flexible exchange rate eRatio of abatement costs or environmental damage costs to sector output Sources: 1983, 1988 60 Tables, NSO; ENRAP II ¢tD

550

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

without a corresponding change in the real exchange rate leaves much of Philippine agriculture and the manufacturing sectors vulnerable to import competition. Specifically, those industries where the Philippines remains internationally uncompetitive (i.e., the more capital intensive import substituting industries) are the ones that could be hit hardest by the tariff reduction --e.g., paper and plastics, chemicals, machinery, basic metal and metal products, and nonmetallic mineral products. However, when the tariff reform (50 percent reduction in EPR or a uniform 15 percent EPR) is accompanied by real peso depreciation, the overall output effect is positive. The industries/sectors with the largest positive output effects are forestry, wood furniture, mining, and labor-intensive manufactures such as garments and leather products. These sectors/industries in which the Philippines has comparative advantage generally have lower than average effective rates of protection. The heavily protected import substituting industries like paper, chemicals, and basic metals are adversely affected by the tariffreduction despite the induced real peso depreciation. Nevertheless, the negative output and income effects on the import substituting industries are minimized under a flexible exchange rate regime; this reflects the protective effect of a real peso depreciation. The simulation results also indicate that trade liberalization raises the national average "pollution intensity" of production. This arises from the reallocation of output towards logging, mining, and agriculture which have large off-site environmental damages and therefore relatively higher abatement cost to output ratios. Even within the manufacturing sector, there appears to be a reallocation of output towards the industries with higher pollution intensities (e.g., food processing, beverages, wood products). In sum, the available evidence suggests a possible trade-off between trade liberalization and its implied gains in efficiency and welfare, on the one hand, and environmental protection, on the other. This points up the importance of putting in place cost internalization and complementary environmental and natural resource management policies in conjunction with the trade liberalization reform process. It must be pointed out, though, that the simulations do not consider the positive dynamic effects on the

INTALAND QUINTOS: NEW TRADE AND ENVIRONMENT PARADIGM

551

environment of increased competition resulting from freer trade, e.g., state-of-the-art, resource-efficient technology that brings its own ecological gains. Furthermore, liberalizing trade din also help ease population pressure on the country's dwindling (fishery and forestry) resource-base by sourcing more of the country's needs from abroad. At the same time, trade liberalization exerts competitive pressures for greater efficiency on downstream processing industries and thereby helps conserve scarce resources. FOREIGN

ENVIRONMENT

REGULATIONS

AND PHILIPPINE TRADE The preceding discussion highlights the importance of economic openness and strong environmental policy for the Philippines (and other similarlysituated developing countries). It is clear that such policy initiatives at the national level need to be complemented by international efforts toward a much more open international economy and the prevention of the occurrence of °'environment-managed trade" (Stevens 1993). For the Philippines, economic openness means that the country will export or import according to its evolving comparative advantages (disadvantages). Protectionist policies in the export markets (especially in the developed countries) against products where the Philippines has comparative advantage will subvert ongoing efforts toward greater economic openness. In this regard, the recently concluded Uruguay Round will contribute toward furthering economic openness in both developed and developing countries and thereby help provide the international trade regime that is complementary to economic liberalization efforts in the Philippines. The Uruguay Round negotiations did not tackle fully the issue of the environment in the various working groups. Already there is growing pressure for the use of trade sanctions to influence the environment policies of other countries. At the heart of the trade and environment debate is the proposed use of trade sanctions against imports using "unacceptable" processes and production methods (PPMs) (Stevens 1993). In this regard, what is perhaps the most important for the Philippines and other ASEAN

552

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

countries is the proposal for an international agreement or bilateral agreements on tropical timber. There is the danger that, unless the principles of international cooperation on trade and tile environment are clear, the environmental cause can become a subtle form of industrial protection especially in developed countries (e.g., through so-called "life cycle" regulations). So far, domestic environmental regulations in GATT member countries have largely been governed by GATT principles which guard against discrimination of imports and extraterritoriality. During those times when they were charged with arbitrating trade disputes among GATT member countries, GATT panels displayed a propensity to block attempts at institutionalizing environment-related trade restrictions (Bueneamino 1994). To the extent that governments recognized the need for a rule-based liberal international trading system, GATT members were unlikely to break GATT's rules. Many aspects of environmental policy are best dealt with using the principle of subsidiarity, i.e., environmental problems should be addressed at the lowest appropriate level. Environmental regulations pertaining to point-sources of pollution, for example, can be best addressed at local/national levels and need not require uniform regulations across countries. For this reason, and given existing GATT principles, foreign environmental regulations per se do not seem to pose any serious constraint on Philippine trade at present. Foreign environmental regulations that deal with production and even consumption externalities (e.g., emissions standards) have not been generally import-restricting or coupled with import-restricting trade measures. Nevertileless, there is growing concern about global and transboundary environmental problems that has given rise to calls for the harmonization and/or complementarity of national environmental policies and for multilateral environmental agreements (MEAs) outside the GATT framework. Environmentalism used for economic protectionism is probably essentially a transitional phenomenon, born out of wrong perception, lack of information and adjustment difficulties in the developed world. Environ-

INTALAND QUINTOS: NEW TRADEAND ENVIRONMENT PARADIGM

553

mentalism as reflected in changing demand patterns and production processes, however, is a permanent phenomenon. Environmental attributes have SCcl_d into the consumer preferences especially of those in the developed countries. This has led to the adoption of environment-related product and process standards in the developed world. Green consumerism in the developed countries has also given rise to such practices as cco-labelling schemes which in effect enable consumers to directly influence production and product standards without mandatory stipulations from government. • The changes in consumer preferences offer opportunities for new export niches as well as challenges for product and process modifications for old exports of developing countries. Thus, it behooves Philippine exporters to take cognizance of environment-related changes in consumer preferences and production techniques in the developed countries. On the Philippine front, a number of "environmentally preferred products" (EPP) have been or are currently being developed such as handmade paper, charcoal briquettes and various "organic" (biodegradable) substitutes to chemical fertilizers, insecticides and herbicides. Other innovations include alternative building materials or alternative uses of agricultural or industrial waste or by-products such as eoir dust and waste pulping liquor (Israel, forthcoming). To some extent, these developments can likewise be taken as indicative of an emergent green consumerism in the Philippines. Green consumerism and environmental regulations can lead to market segmentation which is, to some extent, inevitable, given the diversity in ecological settings between and within different countries. This diversity understandably warrants disparate environmental "standards" and regulations. Moreover, different populations may have different environmental "preferences" -- choosing different trade-offs between pollution and economic activity, for example. On top of this, different countries have dissimilar institutional frameworks which can be expected to influence future environmental policies. An undesirable mix of these factors may yield an assortment of environmental regulations and procedures that could effectively segment markets and significantly raise the transactions costs of exporting.

554

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Even if these regulations are,not designed to systematically discriminate between imports and locally produced goods, exporters catering to heterogeneous markets may face significantly higher transactions costs compared to domestic-oriented firms. The costs of gathering information on market requirements will be higher the less concentrated the direction of exports is. The costs of reputation-building may become more significant, further raising barriers to entry. Search and bargaining costs for more diverse suppliers as well as markets will likewise be higher. Even :'marketfriendly" measures such as eco-labelling may entail different costs to exporters and their competitors in the importing markets because developed country consumers have more limited access to information regarding foreign products and processes (and their attendant externalities); in addition, there are unequal costs to meeting certification requirements between foreign exporters and domestic producers. For instance, some major commodity exports of the Philippines (e.g., fruits and vegetables, coconut products, animal and vegetable oils) may be especially penalized by protracted certification procedures and requirements which require investigation into production processes and factory conditions. This becomes more so if process standards in importing countries require more lengthy background checks. Even if certification is "voluntary" (i.e., eco-labelling), such process standards may effectively exclude imports from other countries because of information costs. Such labels can have the same effect as brand names. The information asymmetry can also run the other parallel way, i.e., Philippine exporters having limited information on export market requirements. A limited interview of some company managers (who filled in questionnaires) indicated a relatively low level of awareness among those in the Philippine business community of environmental regulations in other countries. In particular, most of the respondents were unfamiliar with the eco-labelling programs in other countries. Considering that environmentalism took root in the developed countries only recently, the corresponding changes in consumption patterns and production techniques remain in flux at present. It is apparent that the

INTALAND QUINTOS: NEW TRADE AND ENVIRONMENT PARADIGM

555

continuous flow of information on world developments in environment-related consumption and production patterns is a useful tool for the Philippine exporters to gain from m as well as adjust to m the environment-related developments in the developed countries. CONCLUDING

REMARKS

The Philippines will benefit from the adoption of more outward-oriented economic policies together with stronger domestic environmental management. A more liberal trade regime can encourage local finns to be more competitive and, thus, more efficient. The more rapid adoption and diffusion of state-of-the-art technology, most of which comes from industrialized countries (where environmental standards are higher and stricter), would mean a younger capital stock (i.e., newer machines) that uses resources more efficiently in economic as well as ecological terms. Export-oriented industries would be induced to cater to the requirements of the major export markets which are also the countries with relatively stricter environmental standards. The importance of stronger domestic environmental management must also be emphasized. Overall, it appears that stricter compliance with existing Philippine environmental regulations can be achievedwithout breaking the backs of most industries. Cost-internalization does not appear to be a serious threat to the country's export performance. Moreover, the abatement costs presented earlier in the paper are even overestimates in view of the (generally) cheaper option of process-innovations and the positive economic returns from waste minimization compared to strictly end-of-pipe technologies. (Several success stories of Philippine firms reducing production costs and at the same time reducing pollution load through waste minimization process innovations have been catalogued by the Industrial Environmental Management Project of the DENR and USAID.) However, because the social benefits of pollution control or prevention are dispersed and may therefore exceed the private benefits to a firm, a lower than optimal

556

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

level of investment is to be expected under unregulated conditions. This is why there is a need for regulatory standards to begin with. An Industrial Environmental Management Project (IEMP) study reports that environmental investments remain low despite existing regulations, in part because of lax government enforcement (SGV Consulting 1993). The incentive to comply is ambiguous. Furthermore, as indicated in the qualitative responses of company representatives, a weak implementation of Philippine environmental "standards" in the face of stricter environmental standards abroad would induce some exporters to shift to the domestic market. Moreover, maintaining lax environmental regulations and enforcement will entail greater costs in abatement, resource degradation and depletion in the future. Uninternalized costs of externalities are equivalent to subsidies that unduly bias some industries over others without fully accounting for the actual social costs. However, distributional considerations cannot be overlooked. There is a need to grant more leeway to small firms in the course of getting tougher on domestic industry as a whole. For one thing, economies of scale may be significant in environmental investments. For another, unlike large firms for which internally-generated sources of financing may be available, small and medium-sized enterprises find it difficult to gain access to capital for environmental investments due to low or negative private returns (SGV Consulting 1993). These firms should thus be the focus of technical assistance and special financing programs in the future. Likewise, targeting or prioritization should consider locational factors. Regulating small and dispersed sources of pollutants cannot be approached with the same urgency and the same instruments as large and/or spatially concentrated sources. Given that some market differentiation in the developed world (due to diverse standards and/or consumer preferences) is inevitable, a mechanism or program should also be established to encourage export-oriented firms to undertake environmental management investments to meet the existing environmental regulations in foreign (OECD) markets. Such incentives should aid in minimizing adjustment costs and offsetting the higher transaction costs of exporting. Market niching will also be facilitated if the

INTAL AND QUINTOS: NEW TRADE AND ENVIRONMENT PARADIGM

557

foreign offices of the Philippine government can assist in gathering information on market requirements or emerging preferences abroad. Lastly, the relative urgency of basic public infrastructure needs in the Philippines for environmental management should be duly noted by (international) environmental organizations, multilateral institutions and the international donor community. Whereas local and international discussions (e.g., in mass media) have tended to highlight the environmental effects of pollutive industries, the basic infrastructural needs of the Philippines such as sewerage, sanitation, municipal wastes, and drainage systems, have not been given due emphasis as imperative for environmental protection. Lobbying for stringent standards of regulation in developing countries focusing primarily on industries ignores the different priorities faced by such nations. More importantly, in view of the fiscal constraints facing the Philippines and other developing countries, genuine environmental concern necessitates that aid and financial resources be directed also towards basic infrastructure investment and technical assistance for environmental protection.

558

ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

BIBLIOGRAPHY

Anderson, K. "Welfare Analytics of Trade and Environment Policies." In K. Anderson and J. Blackhurst (eds.) The Greening of World Trade Issues. London: Harvester-Wheatsheaf, 1992. Buencamino; Jose Antonio. "GATT and the Environment." Paper presented at the AIM Policy Forum on GATF and the Environment: Implications for the Philippine Sustainable Development, Manila, Philippines, 1 August 1944. Cruz, W. and R. Repetto. The Environmental Effects of Stabilization and ,Structural Adjustment Programs: The Philippine Case. Washington, D C.: World Resources Institute, 1992. de los Angeles, M. and H. Peskin. "Environment and Natural Resources Accounting Project Phase l[: Main Report." Paper presented at the International Workshop on the Contribution to Policy of Environmental and Natural Resources Accounting, Tagaytay, Philippines, 16-21 January 1994. Ebarvia, M. C. "Valuation of Environmental Damages." Workshop Paper No. 3 ENRAP Phase II Final Workshop. Quezon City, Philippines, t6 March 1994. Hooley, R."Productivity Growth in Philippine Manufacturing: Retrospect and Future Prospects."PIDS Monograph Series No. 9. Makati: Philippine Institute for Development Studies, 1985. Intal, P. S. and J. Power. Trade, Exchange Rate and Agricultural Pricing Policies in the Philippines. World Bank Comparative Studies on the Political Economy of Agricultural Pricing Policy. Washington, D.C.: The World Bank, 1990. Intal, P. S. et al. Trade and Environmental Linkages. The Case of the Philippines. Draft Report to UNCTAD and Philippine Government, 1994. Orbeta, E. M. "Valuation of Direct Environmental Waste Disposal Services." Workshop Paper No. 2 ENRAP Phase II Final Workshop. Quezon City, Philippines, 16 March 1994.

INTAL AND QUINTOS: NEW TRADE AND ENVIRONMENT PARADIGM

559

Panayotou, T. Green Markets." The Economics of Sustainable Development. San Francisco and Cambridge, Mass.: ICEG and HIID, 1993a. Panayotou, T. "Empirical Tests and Policy Analysis of Environmental Degradation at Different Stages of Economic Development." World Employment Program Working Paper. Geneva: International Labor Organization, 1993b. Roque, C. and M. Garcia. "Economic ln_quality, Environmental Degradation and Civil Strife in the Philippines." 1992. Mimeo. Sajise, P. et al. Saving the Present for the Future: The ,State of the Environment. Quezon City, Philippines: University of the Philippines Press, 1992. SGV Consulting and RCG/HBI. "Financial Resources to Fund Environmental Investments." Policy Paper No. I. EMB/USAID: Industrial Environmental Management Project, 1993. Stevens, C. "Trade and Environment: The PMS Debate." OECD, 1993. Mimeo. World Bank. Worm Development Report 1987, 1987.

Highlights of Discussion

TRADE AND ENVIRONMENT

Estimates show that the country's present export industries are less pollutive than the import industries. But given the dynamic context of trade and industry, it may be that our present imports will be tomorrow's exports. And with the rate of technological progress and capital accumulation, we may run the risk of producing industrial exports that exact a heavy toll on the environment, creating a dilemma in trade and environment relation. Does this therefore mean that pro-trade is anti-environment in a dynamic context? Not necessarily. A dynamic and sustainable trade regime tells us to incorporate environmental costs in production. Over time, as more Filipinos find it more profitable to produce what they used to import, the threat of highly pollutive production becomes greater. In fact, this is already a concern in Cebu. The electroplating industry which produces hazardous waste calls for common waste treatment facilities, similar to what the German government is offering. In Manila, more of the same facilities will be needed as the electronics industry expands its production and operation. That is why it makes sense to develop policies now, as what the Department of Environment and Natural Resources (DENR) is doing, on how to deal with pollution management appraisal, compliance monitoring systems, cost internalization and similar programs to protect the environment as the country pursues a dynamic trade approach. We should demand better anti-pollution facilities and be stringent in regulating industrial pollution especially for large firms. Otherwise, the cost of dealing with hazardous waste in a wider context will be greater.

A WORD FROM THE HONOREE: Rural Development

Reconsidered

RURAL DEVELOPMENT RECONSIDERED: , SOME EMERGING NICHES FOR POPULATION STUDIES* IIIII

III

IHII

GEuA T. CAsrt_o

INTRODUCTION

T IS NO EXAGGERATION to say that practically every refers development-oriented .document produced nationally and internationally to population as an "inevitable given," quite often as a denominator to which other factors have to adapt or cope with. For several decades, rural-urban classifications of population seem to have sufficed, and we occupied ourselves with either rural or urban development. In the process, we often criticized economic and social development policies as being urban-biased and often against agriculture and the rural sector. A higher incidence of poverty in rural than in urban areas has made rural poverty a continuing concern. Poverty has been attacked, made the object of strategies, tackled, crushed, warred upon, gender analyzed and alleviated, eradicated, and made the occasion for people participation and empowerment_ but poverty remains as tenacious as ever. With growing urbanization and increasing demands on development from the reduction in the suffering brought on by the trilogy of poverty, unemployment and inequality, and with the added requirement of environmental conservation and sustainability, the rural-urban framework seems to be an oversimplification. It fails to capture the fundamentals of our natural

* Paper prepared for Plenary Session I of the XXlInd General Conference of the International Union for the Scientific Study of Population, Montreal, Canada, 23 August to I September 1993.

566

ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

resources which in recent years have considerably appreciated in value even as we recognize threats to their sustainability. In the meantime, rural development is losing its salience as environmental issues grow in rural settings. This paper is an attempt to identify soma of the emerging popu!ationrelevant rural scenarios which require a more crentive degree of un¢ler-" standing of complex interactive determinants and consequences both at the micro and macro levels. Now more than ever, environmental concerns are directing us to a common future -- a global village at the time location-sl_cificities are called for to improve goodness of fit between a problem and the proposed solution. The following scenarios which are illustrative rather than exhaustive and definitive have emerged with little or no input from the scientific study of population. Hopefully they will become part of your research agenda: 1. Population factor in environment-development fora; 2. "Silent" population functions in ecosystem dynamics; 3. Population increase and changing resource base; 4. Agricultural intensification, labor supply and fertility behavior; 5. Health-agriculture-environment linkages; 6. Diversified livelihood strategies and rural-urban interactions; 7. Disasters and the rural community; and 8. Common heritage of mankind. The Population Factor in Environment-Development Fora To give us ideas of how population was presented in recent development fora, we cite Some quotes: "The UNFPA State of World Population Report 1992 titled "A World in Balance" says that a slower andmore balanced population growth can be advanced by ending absolute poverty, improving health and education, and raising the status of women." (ENHR Forum 1992)

CASTILLO: RURAL DEVELOPMENT RECONSIDERED

"Rapid population growth can exacerbate the mutually reinforcing effects of poverty and environmental damage...Agricultural stagnation in Sub-Saharan Africa is a particularly clear example of the mutually reinforcing nexus of poverty, population growth and environmental damage. The slowly evolving intensification that occurred in the first half of this century was disrupted by the sharp acceleration of population growth in the past four decades. Low agricultural productivity, caused mainly by poor incentives and poor provision of services, has delayed the demographic transition and encouraged land degradation and deforestation which in turn lowered productivity...The only lasting solution to the diverse problems caused by rapid population growth lies in policies that will improve human skills, increase productivity and thus, incomes. Improving education for girls may be the most important long-term environmental policy in Africa and in other parts of the developing world." (World Bank 1992: 7-8) "Poverty, environment, and population can no longer be dealt with -- or even thought of--as separate issues; they are interlinked in practice and must be linked in policy formulation...Unless poverty is alleviated, there is little chance that we will be able to stabilize world population." (World Commission on Environment and Development 1992) "The most favorable economic environment for releasing the constraints on crop and animal productivity and for achieving sustainable adaptation to the resource and enviromental constraints that will impinge on LDC (least developed countries) agriculture is one characterized by slow growth of population and by rapid growth of income and employment in the nonagricultural sector...The importance of favorable growth in the nonfarm economy is particularly important for the landless and near landless workers in the rainfed upland areas which have been left behind by the advances associated with the seed-fertilizer-water technology of

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the last quarter century. Rapid growth in demand arising out of higher incomes, rather than from population growth, can generate patterns of demand that permit farmers in these areas to diversify out of staple cereal production and into higher value crop and animal products. It may also permit the release of some of the more fragile lands from crop production to less intensive forms of land use." (Ruttan 1993) "The interlinkages between poverty, population growth, and environmental degradation are many and complex. In a long-term perspective,there is no doubt that world population must be stabilized if the efforts to protect the environment are to be successful." (SAREC 1992: 12) "There is a need to define and assess the carrying capacity of the earth at all scales; to find acceptable ways to slow population growth; to reduce overconsumption; and to examine alternative consumption patterns and lifestyles." (ASCEND 21, 1992: 10) "Rice is the basic food of nearly half the people on earth, most of them concentrated in Asia. Expanding populations and intensifying rice production are highlighting the extent of the food-resources-environment conundrum." (IRRI 1992: 2) "The uncontrolled population surge has been blunting the gains in rice production." (Roque 1993) In the Chapter on Rural Development and the Environment, the SAREC Annual Report 1991/92 provides one clue as to why rural development in a general sense has lost its "development appeal." The report says m "An increase in food production and natural resource management are decisive factors in promoting improvement in developing countries. In the 1980s it became increasirigly evident, particularly in Africa, that advances in agricultural and resource utilization did not meet the requirements of growing populations. Accelerated

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environmentaldegradationmade both national governmentsand donorsturn their attentionto environmentalissues.The World Commissionon Environmentand Developmentin 1987presented the conceptof sustainabledevelopment.This basicconcepthighlightsa numberof problemsconcerningfoodproductionandnatural resourcemanagementin developingcountries."(SAREC 1992: 33) Balisacan'sassessmentoffers yet anotherclue asto why the passion for rural developmentdoesnot seemto be asintenseas it was in the 1960s, 1970s and even early 1980s. "The record for the nearly half-a-century of rural development in the Philippines was dismal in relation to East Asian and many other developing Asian countries. This was nat-due to the absence of rapid agricultural growth in the Philippines or to the lack of direct employment generation programs in rural areas. While agricultural growth faltered in recent years, the agricultural sector in the Philippines performed remarkably well vis-a-vis other developing Asian countries from the second half of the 1960s to the early 1980s, the height of the so-called Green Revolution period. Direct employment generation programs were also popular instruments of development policy over the last 4 decades. However, during this period, the ranks of the unemployed and underemployed continued to swell; real wages persistently fell. The incidence of rural poverty remained high and seemed substantially unaffected by the rapid agricultural growth then taking place. Distribution of income became less egalitarian. The farm-nonfarm rural linkages expected to be induced by agricultural growth were simply weak or nonexistent. What went wrong?" (Balisacan 1993)

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These quotes from leading development institutions and authorities lead us to three observations: 1. It seems that neither population growth nor poverty is perceived as directly susceptible to policies and interventions, but both bear directly on environmental damage. That food production must keep pace with population growth is an adaptive response, and its adverse impact on environment emerges as an accepted fact. What has happened to the proactive, more direct approach to slowing down poPulation growth such as family planning? Does it not work anymore? Or has the Pro-Life-Pro-Choice debate so politicized the issue that we can no longer deal with the problem squarely? Or have we forgotten where babies come from? 2. Even if absolute poverty were to end as envisioned by UNFPA, could population growth be mitigated without some form of family planning including the vigorous promotion of natural family planning? Even the World Bank's analysis of poor agricultural performance in Africa, attributed to the sharp acceleration in population growth and its pinning of the blame on low agricultural production for delaying the demographic transition, shows a roundabout reasoning which gets us nowhere. If we "improve human skills, increase production and income, and improve education for girls," would population growth automatically slow down? What is the process by which this comes about? If this is well-known to population experts, why do development-environment fora seem so immune from it? 3. Perhaps one of the reasons for rural development's declining importance in development debates is its ill-defined, broad, and comprehensive but amorphous nature which makes performance indicators more elusive for analysis. For example, positive agricultural growth and improved health and education are usually passed off as positive achievements as such and not accounted for as

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manifestations of rural development. Are we not asking too much of rural development to simultaneously address equity, growth, poverty reduction, employment generation, participation, empowerment, environmental conservation and sustainability? Small gains in each of these components must count so we can move on from there. Meanwhile, rural development will probably continue to disaggregate itself into its many components such as food production and natural resource management, etc., because that is how funding will be provided. This is not necessarily bad because rural development probably needs a more clearly defined problem to focus on for which we can have more operationally identifiable "handles." Furthermore, when rural development program inputs fail to have a positive impact, it might be due to insufficient magnitude, persistence, and intensity of implementation or even to "leakages" in program resources. However, sustainable development is potentially as intractable as rural development and could suffer the same fate. It, too, must find its own operationalization and measurable indices. "Silent"

Population

Functions

in Ecosystem

Dynamics

Partly as a response to criticisms levelled against the green revolution as having bypassed resource-poor farmers in less favorable growing conditions and partly because of the failure in adopting many experiment-stationgenerated agricultural technologies, new approaches to agricultural research were invented. Along with the recognition of local heterogeneity and location-specificity came "farmer-first-and-last," farming systems research (FSR), on-farm research (OFR), farmer participation, diagnosis and design approach (D&D), agro-ecosystem analysis, rapid rural appraisal (RRA), user's perspective with agricultural research and development (UPWARD), etc. Agricultural research currently takes place within the framework of particular ecosystems usually preceded by a diagnosis or characterization phase which includes not just environmental but socioeco-

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nomic variables as well. For example, research at the International Rice Research Institute is"structured into integrated projects within eco-system based programs for irrigated, rainfed lowland, upland, deepwater and tidal wetland rice systems. A cross-ecosystems program seeks to develop new tools and acquire new knowledge that links changes at the rice genome level to the plant and crop system and tothe major ecosystems where rice is grown. Project planning is based on diagnosticanalysis at the farm level and on socioeconomic analysis of demands and trends in labor, land, and capital. (IRRI 1992: 33) In the case of the International Council for Research in Agroforestry (ICRAF), its research activities are grouped within six projects based on ecoregions that are representative of ICRAF's three priority agro-ecological zones: the humid tropics of West Africa, Latin America and Southeast Asia; the sub-humid highlands of East and Central Africa, and the Plateau of Southern Africa; and the semi-arM lowlands of West Africa. The rationale for their program on characterization and impact says-"Whether farm households choose to adopt particular improved agroforestry technologies depends upon the needs of these households and a set of biophysical and socioeconomic potentials and constraints. Needs, potentials and constraints such as climatic risk, soil fertility, governmental policies, degree of integration of farmers in the market, and rapidly changing demographic patterns induced by health problems such as AIDS vary across the major land-use systems in priority ecoregions." The characterization of major land-use systems will provide the essential framework for assessing the extent of resource degradation and for obtaining baseline data for subsequent evaluation of the environmental and socioeconomic impacts of agroforestry adoption (ICRAF 1993). The agroecosystem analysis popularized by Conway and associates emphasizes six systems properties. Of these, productivity and sustainability

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are of the greatest concern; stability, equitability, autonomy, and solidarity are also of interest. Population size and composition are mentioned as extremely important factors in determining the impact of the social system on the ecosystem. Examples show this impact coming mostly through labor availability (SUAN et al. 1990). A more recent development is the landscape ecology approach to the study of sustainable agriculture and natural resource management in the tropics. Landscape indicates the appropriate scale which emphasizes interactions between ecosystems...The landscape is the niche with human beings as inhabitants, and more significantly, as manipulators of the component ecosystems. In this way, these end-users become the lifescape that is superimposed into the landscape" (University of Georgia consortium 1992, and Bellows 1993). Obviously, this landscape-lifescape is mueh more complex than focusing on one ecosystem alone. A premilinary characterization of the Manupali Watershed in Bukidnon from the top to the bottom of the landscape shows seven ecosystems composed of(1 )primary forest with cultivated incursions oll ridges, (2)forest margin becoming a zone of agricultural expansion, (3) high grassland and lower grassland with 20 percent cultivation, (4) permanently sloping maize lands, (5) flatter river valley and lowland rice, (6) cultivated lake bottom and margins, and (7) lakeshore with settlements around (University of Georgia consortium 1992 and Bellows 1993). It is reasonable to assume that the role of the population in each ecosystem from irrigated lowland rice to the different ecosystems in the landscape approach will differ although there is no doubt that patterns will emerge. Although, at the abstract level, the degrading effect of population on the _nvironment seems so well-accepted intuitively, it is curious that in actual research programs, population variables are minimal and largely unspecified. The empirical evidences as per ecosystem eategory would help very much in designing technologies and estimating the carrying capacity, preferable with the participation of local resource-users and decision-makers. There is the question of what population parameters to take into account in (I) the characterization of different ecosystems, (2) the generation or

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selection of relevant technologies, and (3) the eventual assessment of impact. There are virtually no inputs from population experts in these research programs. Curiously, but not' unexpectedly, the only population parameter which has been specified in some of these ecosystems-oriented research is:women or gender concerns --but only because of affirmative action initiatives. And even then, the integration of gender was often a little bit awkward. If the population-environment interaction is going to be accounted for only in the arithmetic division of resource-use products over population, the dynamics of how population pressure bears on the fragile state of our natural resource will always be a "black box." We cannot blame agricultural or even ecological researchers for this relative "silence" of population in their research projects. They have enough complex problems to deal with on their own. The initiative should come from population experts. Is it possible to design research projects which will actually test population-environment interactions at an ecosystem level of sufficiently large scale so that such interactions can actually be observed, modelled and measured? Population increase and Changing Community Resource Base Mellor (1989) argues that "the historical answer to problems of low-potential areas has always contained a major element of migration which, in turn, depends on good performance in the high-potential areas and their urban enclaves." The traditional migration routes monitored by demographers are ruralurban, urban-rural, rural-rural, and urban-urban. Within the rural-rural route, there are more significant routes to look out for such as upland to lowland, lowland to upland, coastal, mountain, etc. In other words, ehvironmental concerns tell us that migration from one resource base to another is even more important. In a study of population pressure in the uplands, Cruz (1986) estimates that about 29 percent of the total Philippine population and 55 percent of the migrant population for the country reside in the uplands. We seem to be in a situation where there is no escape from the problem of the low-potential

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areas because that is where millions of people are. Their survival often depends on subsistence production in these very areas. One suspects that this "moment of truth" is not peculiar to the Philippines. To provide concrete illustrations, we cite cases of population increase and changes in land-use patterns in specific communities. Delorino's (! 988) study of the Macagtas Watershed Area of Northern Samar, reports 188 households in 1975 with a total population of 977. In 1980 there were 248 households with a population of 1,337. Land-use trends were 50 percent forest in 1952, 75 percent pla_t_d to coconut with only 3.4 percent secondary forest in 1979, and 82 percent coconut and no more forest in 1987. The entire watershed area is titled, tenanted coconut land owned by private individuals. Estimates of erosion rates in the watershed increased from 28 t/ha per year in 1952 to 45 t/ha in 1979 and further to 53 t/ha in 1987. The change in land use changed the vegetative cover as well as cultivation practices (Delorino 1988). Another watershed study by Pasicolan (1988) shows that the yearly average rate of forest transformation to other land uses between 1953 and 1979 was 23 ha/year and 60.5 ha/year from 1979 to 1987. From 72 percent forest in 1953, the area has become 68 percent grassland in 1987. In the meantime, as much as 61 percent of households are full-time fuelwood gatherers while 34 percent are part-time and 5 percent are occasional gatherers. The selling of firewood is a year-round activity, and 91 percent of the people have no regular employment. Bigger household income, larger household size and more man-days increase the level of fuelwood production. Distance from the gathering site is not a limiting factor for them. Fuelwood gatherers have a high degree of awareness of the consequences of their activity and would prefer farming to firewood production if the land they used to farm had not lost its productivity. Alternative job opportunities are hard to come by. in the meantime, there are 1,000 households in the lowland of this watershed dependent on rice production. This is the so-called high potential area. The lowlands' continuing viability depends on the stability of the low-potential upland. They are not independent of each other. It is usual for resource economists to examine both on-site and off-site costs.

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For an illustration of the damage done by the lowland to the upland, de los Angeles (1988) studied a group of erstwhile lowlanders cultivating a watershed area in Luzon. Over a short three-year period, yields went down from an average of 27 cavans (sacks) per hectare in 1.978to 14 in 1979 and only 9 in 1980. The lowlanders in search of land to cultivate brought their lowland cultivation practices to the upland, thus creating rapid resource depletion. Fabro's (1990) historical analysis of farm diversification in a 296-ha upland community of 182 families with a population of 1,000 also found a history of farm fragmentation. A typical example found was a one-family farm of 16 ha parcels that had been subdivided among 24 families. More than 70 types of both annual and perennial crops were reported to have been planted by farmers from the early 1920s to the present. In the trial and error process to determine what crops or crop mixes would best fit their ecology, some 20 traditional crops, notably rice and corn, were gradually replaced before being finally dropped by the farmers for reasons of low/declining productivity, high risks and the comparative advantages offered by alternative permanent crops. At present, highly diversified farms have about 33 to 44 types of crops plus two to four types of livestock in an average area of 2.6i ha From 22 to 32 types of intercrops plus two or more kinds of livestock in about a hectare of owned or partly-owned land comprise the farming system of moderately diversified farms. Less diversified farmers have only 12to 2 ] intercrops and one or more types of farm animals. Smaller farms have a higher crop density and land-use intensity. Backyards and home lots are intensively utilized for traditional vegetable crops. The available spaces between the permanent crops are devoted to ginger, cassava, and other root-crops (Fabro 1990). Even the coastal areas have not been spared from population pressure. Lim (1989) reports three fishing municipalities of San Miguel, Bay, Camatines Sur which increased from a total of 1,336 households in 1977 to 2,342 in 1980. The majority of the fishermen were no longe r fishing in the area they used to frequent five years ago. Fishing effort became more intense over a longer period of time, farther distances were negotiated and less catch

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was made. A migration survey of the Bay area's 22 fishing communities showed that 16 experienced net in-migration from 1959 to 1979. Migration from the areas was associated with higher education, larger family size, and the acquisition of more skills. Quite interesting is the Hayami et al. (1989) report on the "Transformation of Laguna Village in the Two Decades of Green Revolution." Among their findings are (1) average population per hectare of rice area increased from 1.8 persons in 1903, to 3.8 persons in 1966 and further to 8.9 persons in 1987; this was paralleled by increases in the economically active population per hectare from 1.7 persons in 1966 to 5.6 persons in 1987; (2) total population in the village increased from 393 in 1966 to 549 in 1974, 644 in 1976, 698 in 1980, and 816 in 1987; the increase in the total number of households largely paralleled the growth in population; it increased from 66 in 1966 to 95 in 1974 and further to 156 in 1987; (3) one consequence of the strong population pressure on land was the increase in the number of landless laborers with no farm to operate even on rental basis. The share of landless households in the total number of households increased from 30 percent in 1966 to 50 percent in 1976 and further to 66 percent in 1987; and (4) average farm size declined from 2.3 hectares in 1966 progressively down to 1.7 hectares in 1987 (Hayami et al. 1989). These community-level case studies are being cited to provide a backdrop for so-called community-based resource management where the definition of the community revolves around natural resources such as lakes, rivers, watersheds, etc. Hopefully, they also provide real-life concrete illustrations of natural increase or migration consequences in a manner that touches the community' s life. The hard fact of life, however, is that we might be able to do more about natural increase than about in-migration. Agricultural Intensification, Labor Supply and Fertility Behavior It has often been argued that farm families have more children because of their need for labor, not to mention support for parents in their old age. But as the 1991/92 SAREC Annual Report says

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"Numbers mean different things depending on specific situations. On the global level, growing numbers are perceived as constituting a threat to the environment. In many rural communities in Africa, exactly the opposite is true. Too many mouths to feed and too few hands to help till the land." (SAREC 1992: 12) The irony of a high rate of population growth vis-h-vis labor shortage at the local level is not easy to comprehend. In some rice-growing areas in the Philippines, for example, labor for rice production sometimes has to be paid in advance in order to ensure that farm help will be available during times of need. In Laos, villagers consistently mention the lack of labor as a constraint to the intensification and expansion of production. The main response indicates the need to have more children (SUAN et al. 1990:123). Adalla (1992) observes that an aging farm labor force makes labor-intensive agricultural practices such as rapid composting and integrated pest management "automatically undesirable" technologies. Parents as well as their children regard farmwork as less than a white-collar job. Their dream is to get a college degree and work outside the farm. Those who fail to finish schooling prefer to work in factories or to be tricycle drivers than farm workers, in other words, working in the farm is not always a preferred occupation. Findings to reinforce this observation come from a study done by the Philippine Business for Social Progress of three poverty groups: small lowland rice farmers, upland farmers and sustenance fishermen. When asked if they would encourage their children to go into farming or fishing, only about a half replied in the affirmative (Philippine Business for Social Progress 1992). Systematic studies of the phenomenon of "many people but short of labor" are badly needed to lend further empirical support to largely anecdotal observations. One such effort is Servano's study on the "Impact of Crop Intensification on the Economic Value of Children." Her findings are as follows: "Contrary to the usual expectation that increasing cropping intensity would increase labor requirements, both family and hired

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RECONSIDERED

labor use declined for adults as well as for children. The latter was due to (1) less participation of children in operations such as land preparation where tractor replaced animal power, planting where direct seeding replaced transplanting and threshing, and blowing where machines replaced conventional techniques, and (2) the planting of two or more rice crops which eliminated the planting of other crops utilizing children's labor." "Reliance by parents on children for old-age support did not decline with the shift from semi-intensive to intensive farming. Moreover, more parents in the intensive area found their children better able to provide them with their material needs. Also, these parents felt they had invested a lot in providing them with higher education; thus they had higher expectations of being taken care of in return." "The perceived cost of children in terms of the burden in providing them with a higher level of education was not affected by crop intensification. No matter how much it costs the parents to educate their children, it could not be interpreted as a burden especially if incomes had been rising due to higher crop yields. The general rearing costs of children was not felt to be a great burden by intensive farmers." "As for the time cost of childbearing to mothers becoming higher in intensive farming areas, no strong confirmation could be had. Both groups of mothers tended to conduct their market activities close to their homes, suggesting that they could work and care for their children at the same time. The perceived benefits of children tended to be associated with cropping intensity. On the one hand, work participation particularly in the farm declined in intensive areas; on the other hand, reliance on children in terms of monetary support and parents' old-age security did not decline. With the perceived benefits from children increasing overall and

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the perceived costs having a fairly weak association with crop intensification, high fertility may still be a rational proposition, even in the area of high cropping intensity." (Servano 1983) The choice between labor-saving and labor-absorbing technologies is not a simple one. Even in the argument tOrelieve women of their drudgery, sometimes one woman's drudgery is another woman's livelihood. What is more imPortant, although often more difficult to do, is to generate productive employment. Whether this absorbs or saves labor can be a secondary issue. In the case of labor use for environmental conservation, the returns to labor are usually delayed returns and may therefore be a negative incentive. Health-Agriculture-Environment Linkages Since health and specific diseases coexist with certain aspects of agriculture and forestry, whether ecologically or seasonally, there is a lot of common ground for productive interactions between the health-agriculture-andenvironment research communities. In the search for a better fit between disease patterns and control programs, health researchers have developed something analogous to the agriculturist's agroecosystem. For example, in 1990, the Institute of Medicine Malaria Study Committee reported on a Paradigm Approach to Malaria Control which identified nine major malaria paradigms: forest, highland fringe, irrigated agriculture, urban, desert fringe, African wet savannah, seasonal vivax, seashore/coastal, and Indian village type. Seven variables have to be examined with respect to each paradigm level of endemicity, population characteristic (social, economic, behavioral), health infrastructure, malaria control tools (vector control, drugs, information, education, communication, and surveillance), and development projects such as dams and road building. Very illustrative of the linkages mentioned in this section of the paper is the Proposal for a Research Project on Rice Ecosystem Management for Human Disease Vector Control, the main objective of which is to "create a knowledge base for the development of farmer-operated rice ecosystem

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management methods for the control of human disease vectors which will contribute to minimizing the human vector-borne disease hazards associated with irrigated rice ecosystems, to a reduction of the use of chemical insecticides for vector control and to an improved healths status of rice farming communities. These diseases considered in the Asian context are malaria, schistosomiasis, and Japanese encephalitis (IRRI et al. 1992). Mott (1989) cites the state of schistosomiasis which has otten been assumed as a rural disease. The changing global demography requires a reconsideration of this assumption. He presents the case of urban schistosomiasis in Brazil which he says is the cumulative outcome of local transmission and the migration of infected persons from the rural endemic areas that may culminate in permanent transmission. Bias et al. (1987:110) report a general prevalence of infection in the three environments (poblacion, coastal, and inland), with the highest prevalence rate inland. The prevalence in respect of age, sex, occupation, and environment followed a pattern explainable on the basis of opportunities to contract infection. Maiga's (1988) findings on the consequences of schistosomiasis among peasant farmers of Niger show that they measure the harmful effects in terms of financial expenditures. Diseases adversely affect production because the farmers' weakened physical resistance could lead to their dismissal from work. Ninety-five percent believed that diseases affected their self-sufficiency in food or the security of their food supply. As a matter of fact, poor health topped the farmers' list of obstacles to their economic growth and well-being. It is not just coincidence that labor demand and food scarcity peak at the same time as malaria transmission. Tudor-Silva et al. (1988) report that although labor mobilization .for vector control created an ideal environment for educating the colnmunity about malaria transmission and control, the peak demand for communal labor (shramadama) is also the peak demand for agricultural labor in Sri Lanka. Furthermore, Mwabu (1988) found out that "the rise in the value of time in the wet season raises time costs of medical services and thus, other things being equal, the rate of their

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utilization falls. The drop in utilization rates impairs the program's ability to control diseases and again its effectiveness falls. A different connection between agriculture and health is revealed in Rola's (1988) study on pesticides, health risks, and farm productivity which found no correlation between pesticide expenditures and yields suggesting the overuse of pesticides by farmers. Most farmers believed that reducing the use of pesticides would reduce yields. And although practically all of them knew that pesticides were hazardous to health and the environment, they continued to use them in the belief that chemicals were necessary for maintaining an economic level of production. However, to minimize exposure to the hazards of pesticide poisoning, more and more farm operators hired labor to do the spraying. Those hired were younger people from poorer landless farm labor groups that were poorly paid themselves. But there is something relatively new on the horizon: the phenomenon of human-assisted migration of plant pests and diseases and, of course, the potential adverse impact of AIDS in agricultural production, particularly in Africa. Diversified Livelihood Strategies and Rural-Urban Interaction The economic situation in many developing countries is such that ill order to survive, households have to find several sources of income; but since households differ in resource base, they also differ in livelihood strategies. As Nabarro (1984) put it in the case of farm households -"Farmers who have substantial deficits innovate out of desperation and those who have surpluses innovate by choice." An example of coping mechanisms of the rural poor in Benguet and Mountain Province shows the following: (!) looking for employment either as farm laborers and/or wage earners in nonfarm activities, (2) husbands leave their wives to do the farming while they work elsewhere, (3) raising livestock for sale and selling part of their own produce even if such is not sufficient to meet household requirements, (4) engaging in weaving and other handicrafts, (5) expenditure-reducing activities such as not buying

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expensive clothes and food, (6) foregoing leisure, (7) eating without viand, and (8) relying on credit (Consolaeion and Francisco 1989). Besides these, there are diversification of agricultural practices including mix of commercial and subsistence crops, planting crops of different maturity periods, niche shifting, land shaving, relying on intra- and interhousehold patterns of assistance, and participating in different kinds of work groups and social networks which provide social safety nets, etc. (Castillo 1990). Between rainfed and irrigated villages and between ethnic groups in the same village, there are differences in patterns of household income. Furthermore, the role of farm income in the total family income is also declining. Philippine data in 1971 showed that while about 57 percent depended on it as a main source of family income, in 1985, this figure is only 23 percent. In other words, farming affects more families as apartial rather than as a main source of livelihood. This trend is not peculiar to the Philippines (Castillo 1993). David and Otsuka (1992) likewise report that-"The share of rice income is generally less than 50 percent even in favorable areas, implying that income from non-rice and nonfarm sources are generally important, even in typical rice-dependent villages in 7 Asian countries .... The profitable opportunities for planting other crops and employment in the nonfarm sector greatly reduced the income gap across production environments." A less-recognized phenomenon is that rice farmers are net purchasers of rice. For example, 64 percent of households in an irrigated, two rice-crop village and 72 percent of households in a rainfed, one-rice crop village, both in Sta. Barbara, Pangasinan, buy rice from the market particularly in the months of August to October when prices are higher (Paris 1987). The rural-urban impact of new rice techonology is expressed in general terms this assessment made by IRRI (1993: 6). "The reduction in production costs associated with the adoption of modern varieties allowed farmers to accept lower unit prices for bigger rice harvests .... Lower prices transfer some of the gains

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realized through modem technology from rice producers to rice consumers. This is an important contribution to alleviate the poverty of rural landless and urban poor who spend a much larger proportion of their incomes for rice than do those with higher incomes. As net consumers of rice, small and marginal farmers m the largest population group in most Asian rice-growing countries -- also benefit." "Urbanization also affects rice consumption. When income levels are low, urbanization increases the consumption of grain. But as incomes increase, rice consumption reaches a relatively high level. Beyond that income level, food habits-change, and the demand for grains, particularly rice, ceases to grow." With these trends, there is the observation that in peri-urban and urban areas, particularly low-income ones, urban agriculture is not a strange component of the urban landscape. (Mazingira Institute 1992; Maekel and Siebert 1992). Another very significant source Of income in many developing countries is labor migration, be it rural to urban or to another country. Balisaean's (1992) estimates based on various rounds of the family income and expenditure surveys in the Philippines show that the share of rent, remittances, gifts, support, assistance, and relief in total househoMincomes swelled from only 17 percent in 1961 to 32 percent in 1985 and 27 percent in 1988. The proportion of households mainly dependent on these income sources rose substantially from about 5 percent in 1961 to 19 percent in 1985 and 16 percent in 1988. Finally, the proportion of families reporting remittances, support assistance and relief as a source of income increased from 22 percent in 1961 to 88 percent in 1985. The relationship of rural-urban migration to farming i n Thailand is shown by Padermchai and Shinawatra (1992). The authors found migration to be very high in the age group 16-30 years but higher among women (40-43 percent) than men (30 percent). The proportion of migrants returning home, however, was higher for males (26.4 percent ) than for females

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(6 percent). While male migrants found such urban jobs in construction, factories, and hotel and restaurants, more than 50 percent of the female migrants found themselves in the entertainment business, otten in the sex trade. Since this job for women is better-paying, remittances from female migrants are higher than from males. What is the impact of such out-migration? "Migration causes labor shortage.., higher wage rates, and adoption of mechanization; but farm households enjoyed increases in income from remittances especially from female migrants m even if they have lower education and less skills than the males" (Padermchai and Shinawatra 1992). Although changes in land-use systems take place everywhere, land conversions are more dramatic in urbanizing and industrializing areas. In one Philippine prov.inee where rapid changes are taking place, the rate of conversion is highest in sugarcane and rice. From 1988 to 1990, a total of 675 hectares of rice lands (most of them irrigated) and 722 hectares of sugar lands were converted into industrial and residential uses. Cabanilla (1991 ) argues that such conversions render past public investments in rice and irrigation useless and that rice production is pushed farther away l_om consumption centers. The 675 hectares of converted rice lands which were cropped 2.3 times a year meant foregoing the production of 6.208 MT of rough rice. It also meant the opening up of new irrigated rice lands farther away with increased transport costs and irrigation investments. The extremely low returns from rice and sugarcane farming compared to the price of the land for nonagricultural uses have certainly contributed to these conversions. Ironically, many of the farmers who sold out were recent beneficiaries of the land reform program which, theoretically, was supposed to benefit land-tillers. Provided such farmers used their monies profitably, land conversion could have brought them instant wealth which they have never had before. However, the loss of land in the absence of alternative employment opportunities made them very vulnerable to unemployment and to being reverted to poverty with no more land to return to.

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But in terms of the concept and measurement of rural development performance, Balisacan's (1993) recent analysis opens up a whole new set of issues which deserve serious consideration by all population experts. His analysis points out that the "usual indicators of intertemporal rural poverty and income distribution are technically flawed." The criteria for defining urban areas include population density, infrastructure (network of streets either at parallel or right angle orientation), and, regardless of population density, at least six establishments (commercial, manufacturing, recreational and/or personal services) and at least three of the following: town hall, church or chapel with religious service at least once a month, a public plaza, part or cemetery, a marketplace where trading activities are carried on at l_ast once a week, and a public building such as a school, hospital, puericulture center or library. Given these criteria for urban areas and the thrust of rural development programs which aim precisely to acquire these elements in the criteria and to encourage nonfarm sources of income (another urban criterion), success in rural development automatically leads to urban classification, in other words, the end goal of rural development is urban development based on the definitions. As Balisacan points out i "...the physical area of the rural sector is, almost by definition, shifting over time. As population grows and/or economic activity expands, an initially rural area will be classified as urban, sooner or later. Wh ile this may not be a problem for purposes of measuring, say, urbanization trends, it tends to create a systematic downward bias on rural performance indicators. Suppose, for example, that rapid sustained agricultural growth in some regions leads to a similarly rapid expansion of nonfarm employment and incomes. This induces urbanization, thereby reducing the physical size of rural areas. To the extent that household incomes rise faster in urbanizing areas than in non-urbanizing areas, poverty incidence in geographically expanding urban areas tends to fall relative to that in contracting rural areas. This is particularly so if there are con-

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straints to the movement of labor from the slow to the rapidly growing areas, or if there are considerable lags to such movement. Thus, while the growth stimulus is initially rural-based, the gains in poverty reduction are registered as urban-based, The data, as reported, would seem to suggest that rural development programs, even if they are successful in spurring rural income growth and reducing rural poverty, do not matter much." Balisacan (1993) shows that these definitions make a difference in rural poverty measures by the use of Constant Rural Areas (CRA): "The CRA estimates show a significant reduction in rural poverty from 1985 to 1991. Head count poverty fell from 56 percent in 1985 to 48 percent in 1988 and 41 percent in 1991. The poverty gap and the distribution-sensitive indices reveal the same pattern. The usual Family and Income Expenditure Survey (FIES) shows less significant reduction, with headcount poverty falling only from 59 percent in 1985 to 52 percent in 1991. In contrast, the CRA estimates show continued progress being made in rural poverty alleviation, with the poverty gap falling from 18 percent to 15 percent during this period. The discrepancy is in the shifting of urban-rural areas arising from reclassification of villages." These findings suggest that the shifting in the classification of urban and rural areas fails to credit rural development gains to rural areas. When rural development succeeds, high performing rural areas automatically become urban as per definition. This looks like a no-win situation for rural development -- where it is regarded as just a route to urban development and "NIC-hood" (newly-industrialized country status). If rural development is to have a value in and of itself, we must develop new indicators of "rural-hood" perhaps based on the state of our natural resources which is more "permanent" than population density, infrastructure, establishments, and nonfarm sources of income.

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Disasters and the RuralCommunity Besides natural calamities such as volcanic eruptions, floods, typhoons, earthquakes, tornadoes, cyclones, droughts , etc., around the world today, there are innumerable social conflicts - ethnic, racial, political, religious-which often result in population displacements. While print and broadcast media are almost always on-site to report on these happenings, not enough population studies are on handto follow upthe consequences of such events on the human population, let alone the environmental impacts. An example of a natural event is the eruption of Mt. Pinatubo on July 14, 1991 •which is regarded as the greatest volcanic disaster in terms of human impact since the Krakatau eruption in 1881. The U.S. Department of Interior reported that the fine particulate matter which Mt. Pinatubo ejected into the stratosphere will have global ecological impact and that the massive destruction of communities as a result of volcanic mudflows, lahars and floods will have a serious impact on Philippine society for many years to come (Lockwood and Janda 1991). •Ladrido-Ignacio (1992) argues that the magnitude of the disaster; while measurable in and of itself, is more dramatic in the intensity of its human consequences. In addition to the physical aspects, psychosocial stresses are generated following adisaster. The displacement &individuals andfamilies to new settlements or geographical areas, the housing of people in overcrowded camps and evacuation centers for indefinite periods, inactivity, the lack of recreational andproductive activities, and unemployment, rendering people dependent on others for daily subsistence, cause a general disruption of the social organization andthe breakdown of traditional social supports. Significant psychosocial stresses are also experienced by disaster workers particularly if they themselves have been affected by the disaster but need to immediately overcome their own reactions and help other victims. A further aggravation is that most disaster victims have been living in socially disadvantaged conditions even before the disaster. Disaster management, therefore, needs to integrate a psych0social dimension which involve_ the victims themselves so that they can be transformed from victim to survivor.

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There is also a case for man-made disasters, a good example of which is the displacement of 35,000 people in Southern Negros (part of a Philippine province) who are among an estimated 1.3 million refugees from the war between the government and rebels. Since no agency keeps track of the movements of these refugees, floating populations of people try to survive sometimes with and often without support from international, government, or private relief agencies (Tortes 1993: 1, 12). Similar events are replicated in Eastern Europe, Africa, Cambodia, etc. One war site which has been studied at some length is Cambodia, particularly with respect to the impact on rice production there. Paris et al. (1992), citing the results of other surveys, report the following: "Prior to 1969, Cambodia was a net exporter of rice with annual export of rice peaked at around halfa million tons in the mid 1960s. However, during the 1975-79 Khmer Rouge regime, rice farming was disrupted because of the relocation of people and the loss of lives of up to 2 million Cambodians. Since 1979, most rice farmers have returned to their pre-1975 villages (not usually to the same fields) and they gradually achieved advances in rice output despite the major problems of lack of water, poor irrigation, low seed stocks, insufficient inputs, implements, draft animals and shortage of human resources; The heavy loss of population in the 1970s and the continuing need for army conscription has resulted in the heavy involvement of women in agricultural production. Women, who constitute 64 percent of the adult population also head some 35 percent of the households. The Common

Heritage

of Mankind

Our Common Future, Earth Summit 1992 and Agenda 21, two proposed global environment and development programs, both point out our interdependence within this planet as highlighted to a degree by the ashfall from the eruption of Mt. Pinatubo which transcended political and geographical boundaries. Global warming, albeit difficult to observe, is another manifes-

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tation that we are in a global village. However, of all the common heritages of mankind, plant genetic resources (PGRs) seem to be the most universal and most tangible, besides being easy to collect. And unlike hills, mountains, oceans, rivers, and plains, PGRs are moveable. They can be removed from their center of origin, transferred and used elsewhere, and even patented for the exclusive profit of someone remotely connected with their origins. Intellectual Property Rights (IPRs), Plant Breeder's Rights and even the emerging concept of Farmers' Rights are a challenge to the concept of common heritage of mankind, particularly because many poor countries are rich in genetic diversity and indigenous local knowledge regarding a wide range of plants, many of which are little known and underutilized. All these have appreciated in value even as threats to their existence are increasingly being recognized. At this point, we should ask, what is the impact of population increase, population diversity, and population movement on the state of PGRs ? What is the role of PGRs in achieving food production goals to meet population needs in favorable as well as unfavorable environmental conditions? Worede and Mekbih (undated) argue that the dynamics of traditional cropping system should be understood before they are replaced with modern agriculture. They cite the following practices in a center of diversity: "In Northern Ethiopia, particularly in the drought-prone areas, wheat and barley are grown in particular mixtures. In favourable years, farmers will get yields of both crops, and in poor years, they will mainly reap barley. The mixture of landrace populations consists of genetic lines which complement each other. They are all adapted to the region in which they have evolved, but differ in the mechanism through which they express traits such as drought or pest resistance. The mixtures of both crops are kept together for the coming planting season, but during consumption the two are used separately for different food preparations." "In the Gonder area of northwestern Ethiopia, farmers plant more than six crops together in their backyards, including maize,

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faba bean, sweet sorghum (used for chewing the stalk like sugarcane and for chicken feed), cabbage, tomato, potato, pumpkin, and bottle gourd. Most of these backyardactivities are the responsibility of women. In the southern and central part of the country, the farmers focus more on perennial crops. A highly diversified range of crops and trees used for fencing materials are planted. These crops mature at different periods making maximum use of scarce land and labour resources, minimizing weeding problems and maintaining soil fertility." The authors likewise describe the exchange of seeds and planting materials among farmers. Through networks, exchange in local markets, and interregional exchange, farmers get to know where to locate new supplies of seeds when traditional landraces become degraded. For this and other reasons, IPRs, Plant Breeders' Rights and even Farmers' Rights will be inimical to these established traditions which have ensured the continuing supply of seeds on a shared, reciprocal, and exchange basis. PGRs might be the last of our common heritages that are still being shared --but perhaps not for long, if present inclinations are pursued. RURAL DEVELOPMENT RECONSIDERED The population factor in the environment-development fora has often been treated as inevitable given other factors to which we have to adapt or cope with. It seems that neither population growth nor poverty (both of which bear directly on environmental damage) is perceived as directly susceptible to policies and interventions. Even as research and development efforts begin to adopt an ecosystem framework, the population functions in the ecosystem continue to remain silent in a "black box." Population increase and a changing resource base dramatically illustrate the inadequacy of rural-urban categories in describing migration patterns. Population movement from one resource base to another is too importantto be buried within the classification of rural-to-rural migration. The connections between

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ESSAYS IN SOCIALSCIENCE AND DEVELOPMENT

agricultural intensification, labor supply, and fertility behavior deserve further scrutiny with respect to the nature of these connections. The simultaneity of a high rate 0fpopulation growth with labor shortage in particular ecological settings must find better explanations than file seasonality of demand and the desire to bear more children. The arguments for or against labor-saving and labor-absorbing technologies are probably much too simple particularly when returns to labor might be delayed in the case of environmental conservation or rehabilitation programs. Although health and specific diseases coexist with certain aspects of agriculture and forestry, whether ecologically or seasonally, the health- agriculture-environment research communities have yet to productively interact. Diversified livelihood strategies of rural households blur the rural-urban distinctions. Urban employment contributes to agricultural development while the latter reduces food costs to the urban population. Some urban functions spill over into rural areas and drastically change land-use patterns. Natural as well as man-made disasters have a profound impact on rural communities, but after all the media hype, the human consequences frequently-recede into oblivion. As we reaffirm the value of the common heritage of mankind, proprietary interests lay claim on pieces of this inheritance. As we modernize agriculture, we will continue to lose genetic diversity which is one cornerstone of sustainability. Furthermore, Pingali's (1992) cross-sectional analysis yields correlations between environmental degradation (measured by an index of deforestation) and poverty indicators. Although he reminds us that correlations do not attempt to establish causality, the results show the following: • The percentage of population below the poverty line is directly related to the level of deforestation. /

• The net migration rate is inversely related to the level of deforestation. Regions with high levels of degradation experience population out-migration while regions with low levels of degradation experience population in-migration. Unemployment rates tend to be higher also in the regions with lower degradation

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because of in-migration. The capacityto absorb migrant labor from other regions may have been exhausted. • Regions with higher levels of degradation have a higher age dependency ratio. These are also the regions with a higher dropout rate from elementary schools, implying that young children are substituting for adults in the workplace. • Infant mortality is also positively related to deforestation. As a consequence of the criteria used for classifying communities as rural or urban, any place which succeeds in rural development acquires an urban status. Curiously, while we define what is urban, we do not define what is rural. It is a residual category -- that which is not urban is rural. Although places can change from rural to urban, and from agriculture to industry, the reverse does not occur. Even urban blight undergoes urban renewal. There is a process called urbanization, but not ruralization. Does this mean that the ideal state of affairs is urbanhood? Because rural communities have a natural resource base, and if environmental degradation is associated with rural poverty (including its health and education dimensions), then it stands to reason that agriculture and the management of natural resources should be the central concern of rural development, and indicators to this effect must be developed. A sustained, • renewed, and productive natural resource base will not automatically qualify a community for urban status. Instead, such qualities should be the essence of rurality in rural development. Obviously, population, institutions, equity, participation, etc. will come into the picture, but growth and income increases will be very inadequate --even misleadingindicators of rural development. Obviously, much rethinking needs to be done along this line, but ! invite population experts to find new niches beyond aggregations of people broken down by age, sex, rural or urban, whether they are practitioners of contraception or not.

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BIBLIOGRAPHY Adalla, Candida B. "Integrated Nutrient and Pest Management Technology Transfer: Insights Gained and Lessons Learned." Inaugural lecture delivered as holder ofL.B. Uichanco Professorial chair in Pest Management, December 17, 1992. ASCEND 21 (International Conference on the Agenda of Science for Environment and Development into the 21st Century).Vienna, Austria: Cambridge University Press, November 1992. Balisacan, Arsenio M. "Rural Poverty in the Philippines: Incidence Determinants, and Policies." Asian Development Review X (1992): 125-63. Balisacan, Arsenio. "Rural Development in the Philippines: Patterns, Constraints, and Responses." Paper presented at the Symposium on Structures and Reforms for Rural Development in the Philippines, AIT Hotel, Quezon City, March 17, 1993. Bellows, Barbara C. (ed.). A Participatory Landscape-Lifescape Appraisal of the Manupali Watershed in Bukidnon, Philippines: Characterization and Identification of Research Priorities for the SANREM-CRSP. January 1993. Blas, Bayani L. et al. "Epidemiology and Control of Schistosomiasis in the Philippines: Progress Report as of 1987." Asian Development Review X (1992): 110. Cabanilla, L. S. "Some Critical Policy Issues on Rice Self-Sufficiency: Lessons Learned from Laguna and Camarines Norte." SEARCA Professorial Chair lecture. College of Economics and Management, University of the Philippines in Los Bafios, December 16, 1991. Castillo, Gelia T. "Where Food and Population Meet: The Filipino Household Among Other Households." Paper prepared for the State of the Nation Assessment Project of the University of the Philippines, 1993. Castillo, Nina T. "Coping Mechanisms of Filipino Households in Different Agroecological Settings," Transactions of the National Academy of Science and Technology XII (1990): 257-73.

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Consolation, Cipriano C. and Herminia A. Francisco. "Rural Poverty in Ethno-Community: An Analysis." In Policy Considerations for Structural Changes and Development in Philippine Agriculture. UPLB Agricultural Policy Research Program, September 1989, pp. 448-49. Cruz, Ma. Concepcion J: "Population Pressure and Migration in Philippine Upland Communities." In Fujisaka, P. Sajise, and R. del Castillo (eds.). Man, Agriculture, and the Tropical Forests. Winrock International Institute for Agricultural Development, 1986, pp. 87-118. David, Cristina C. and K. Otsuka. "The Green Revolution and Income Distribution Across Production Environments in Asia." Paper presented at the Rice Research Seminar, International Rice Research Institute, January 16, 1992. Delorino, Rolando A. "An Evaluation of Reservoir Sedimentation: The Case of Macagtas Water Impounding Project, Catarman, Northern Samar." Masteral thesis, University of the Philippines at Los Bafios, June 1988. de los Angeles, Marian. "Economics of Upland Resource Depletion: Shifting Cultivation in the Philippines." Working Paper No. 88-02. Makati: Philippine Institute for Development Studies, 1988. Essential National Health Research (ENHR) Forum, Vol. 3, No. 2. Geneva: Task Force on Health Research Secretariat, 1992. Fabro, Rita M. "Patterns of Farm Diversification in a Coconut-based Ecosystem." Masteral thesis. University of the Philippines at Los Bafios, May 1990. Hayami, Yujiro, Masao Kikuchi, Luisa Bambo, and Ester Marciano. "Transformation of a Laguna Village in the Two Decades of Green Revolution." Agricultural Economic Paper No. 89-17. International Rice Research Institute, August 1989. Institute of Medicine Malaria Study Committee. "The Paradigm Approach to Malaria Control: A Report of the Institute of Medicine Malaria Study Committee." A report presented to the FIELD-TDR (Tropical Disease Research Program of WHO) meeting, October 1990.

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International Centre for Research in Agroforestry. Agroforestryfor Improved Land Use: ICRAF's Medium Term Plan 1994-1998. Draft form, March 1993. International Rice Research Institute and the WHO/FAO/UNEP/UNCHS Panel of Experts on Environmental Management for Vector Control, and Vector Biology and Control Project, Los Bafios, Philippines, Geneva, and Arlington, Virginia. Proposal for a Research Project on Rice Ecosystem Management for Human Disease Vector Control, 1992. International Rice Research Institute. Sharing Responsibilities: IRR1199192. 1993. Ladrido-Ignacio, Lourdes. "Disaster -- The Impact of a Catastrophe on the Hmnan Community." Paper presented at the 14th Annual Scienctific Meeting of the National Academy of Science and Technology, Manila, October 1, 1992. Lim, Cristina P. "Population Pressure, Migration and Fishing Effort in Coastal Areas of Camarines Sur." Masteral thesis. University of the Philippines at Los Bafios, March 1989. Lockwood, J. and R. Janda. The Pinatubo Volcano Observatory. Reston Virginia: US Department of Interior, July 1991. Mackel, Rudger and Michael Siebert. "Recent and Potential Types of Use for the Seasonally Wet Grasslands in Zambia." In Applied Geography and Development Vol. 40. Tubingen, Germany, 1992, pp. 7-21. Maiga, Moussa A. "Epidemiology of the Socioeconomic Consequences of Schistosomiasis Among Peasant Farmers of Niger." In A.N. Herrin and P.L. Rosenfield (eds.) Economics, Health, and Tropical Diseases. University of the Philippines School of Economics, 1988, pp. 223-39. Mazingira Institute. Urban Food and Fuel Study. National Report. Nairobi, Kenya: Mazingira Institute, July 1987. Meilor, John W. Agricultural Development: Opportunities for the 1990s. Food Policy Statement No. 10. International Food Policy Research Institute, 1989.

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Mott, KennethE. "Contrasts in the Control of Schistosomiasis." Memorias Do Instituto Oswaldo Cruz. Special Issue, Suppl. 1, Vol. 84 (1989): 8. Mwabu, Germano. "Seasonality, the Shadow Price of Time and Effcctivenoss of Tropical Disease Control Programmes." In A. N. Hcrrin and P. L. Rosenfield (eds.) Ecomomics, Health and Tropical Diseases. UP School of Economics, 1988, 259-70. Nabarro, David. "Social, Economic, Health, and Environmental Determinants of Nutritional Status." Food and Nutrition Bulletin 6 (March 1984): 18-32. Padermchai, Patcharawan and Benchaphun Shinawatra. "Female Out-Migration in Amphoe Dok Kham Tai, Phayao Province, Thailand and Its Impact on Rice Farming Systems." Paper presented at the International Workshop on Gender Concerns in Rice Farming, Chiangmai, Thailand, October 20-25, 1992. Paris, Thelma R. Women in Rice Farming Systems: Preliminary Report of an Action Research Program in Sta. Barbara, Pangasinan, Philippines. Laguna: International Rice Research Institute, January 31, 1987. Paris, Thelma R., A. M. Mandac, Chin Chharom, and Say Puteah. "An Assessment of the Economic Contributionsof Women in Rice Farming in Cambodia." Paper presented at the InternationalWorkshop on Gender Concerns in Rice Fanning, Chiangrnai, Thailand, October 19-25, 1992. Pasieolan, Paulo. "Environmental Impacts and Some Factors Affecting Firewood Extraction: The Case of Callao National Park Upper Watershed Area, Penalba, Cagayan." Masteral thesis, University of the Philippines at Los Bafios, April 1988. Philippine Business for Social Progress. Evaluation Report of PBSP Poverty-Group Targetted Provincial Development Strategy, 1992. Pingali, Prabhu L. "Agricultural Growth and the Environment: Conditions for their Compatibility in Asia's Humid Tropics." IRRI Social Science Division Papers No. 91-12. Laguna: International Rice Research Institute, September 1992.

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Rola, Agnes C. "Pesticides, Health Risks, and Farm Productivity; Philippine Experience." University of the Philippines in Los Bafios: Center for Policy and Development Studies, July 1988. Roque, Anselmo S. "The Country's Rice Situation: Fragile.'; Philippine Daily Inquirer, April 1, 1993, p. 23. Ruttan, Vernon W. "Research to Achieve Sustainable Growth in Agricultural Production.: Into the 21st Century." Paper prepared for the 6th International Congress of Plant Pathology, Montreal, Canada, July 29, 1993. Servano, Rosalinda S. "Impact of Crop Intensification on the Economic Value of Children." Masteral thesis. Xavier University, August 1983. SUA.N (The Southeast Asian Universities Agroecosystem Network) and the LAO PDR Ministry of Agriculture and Forestry. Two Upland Agroecosystems in Luang Prabang Province, Lao PDR: A Preliminary Analysis. Khonkaen, Thailand: The SUAN Secretariat, April 1990. Swedish Agency for Research Cooperation with Developing Countries (SAREC), Stockholm, 1992. Torres, Socorro L. "No Safe Haven for War Refugees," Philippine Daily Inquirer, April 12, 1993, pp. 1 and 12. Tudor-Silva, Kalinga et al. Malaria Control Through Community Action at •the Grassroots: Experience of the Sarvodaya Malaria Control Research Project in Sri Lanka from 1980 to 1986. Social and Economic Research Project Reports No. 4, WHO-Tropical Disease Research Programme, 1988. University of Georgia et al. A Landscape Approach to Sustainability in the Tropics, The Global Plan for the SANREM CRSP, 1992. Worede, Melaku and Hailu Mekbib. "Linking Genetic Resource Conservation to Farmers in Ethiopia." Mimeographed, undated. The World Bank. "Development and the Environment. "World Development Report 1992. Oxford University Press: The World Bank, 1992. World Commission on Environment and Development. Our Common Future. London, April 22-24, 1992.

SYMPOSIUM-TESTIMONIAL IN HONOR OF DR. GELIA T. CASTILLO: Highlights of Proceedings

OPENING

REMARKS

PONCIANO S. I!¢1"AI_ ,lit *

OOD MORNING to everybody. I would like to thank you for joining us in this symposium. It is really a great honor to be with some of the best minds in the social science community in the Philippines. This activity is our way of thanking Dr. Gelia Castillo who has been a major supporter of the Philippine Institute for Development Studies (PIDS). PIDS is a policy research institution primarily working on economic policy issues. Professor Castilio was a member of the PIDS Board of Trustees from 1988 to 1990. Dr. Castillo has also been involved with the International Development Research Centre (IDRC) Board for quite a long time and so we thought of linking with them in honoring her. We asked IDRC to help finance the publication of a book and special issue of the Journal of Philippine Development in her honor. This journal is the house organ of PIDS and considered as one of the major economic policy publications in the country. We are glad that IDRC acceded, and today, we have Dr. W. Randy Spence of IDRC's Regional Office with us in this symposium. The other objective of this symposium is to highlight the interaction between economics and the other social sciences. Hopefully, economists can learn a lot from such interaction since we have quite a number of the best minds in the country here. I also hope that you could somehow learn something from us as economists.

*President,PhilippineInstitutefor DevelopmentStudies

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Once again, I want to thank you for joining us. I hope we will have interesting discussions today and tomorrow. I also want to invite you to tomorrow's formal testimonial in honor of Dr. Castillo. Finally, may I say that it is our pleasure to also have Dr. Castillo's husband with us in this symposium. Professor Leopoido Castillo is himselfa well-known scientist in his area. Thank you and good day.

OPENING II1|1111

REMARKS I

_, RANDY SPENCE*

OODMORNING. I am quite aware that this is essentially a Philippine symposium in honor of a very distinguished scientist and that I am a bit of an outsider. But I hope you will forgive me and my colleagues atthe IDRC if we also consider this as an international celebration. Dr. Castillo, after all, was a member of IDRC's Board of Governors for three terms or a total of eleven years from 1979 to 1990. And as an institution that supports research internationally, we put a great importance in having professional staff from countries where we work in and in having members of the Board from these countries. The time, energy, and ideas that they give us are very important to us. Dr. Castillo's accomplishments in the Philippines are well-known. One only needs to glance at the module topics in today's symposium m rural sociology, rural development, rice technology, reproductive health, environment, human capital and so on -- to see the many areas where she has earned renown. Her list of publications and books is similarly impressive. Some of the titles that I have looked at date back to the early seventies with the Philippine farmers m The Green Revolution at the Village Level: A Philippine Case Study; The Filipino Women as Manpower: The linage and the Empirical Reality; All in a Grain of Rice: A Review of Philippine Studies on the Social and Economic Implications of the New Rice Technology; Alternatives for Rural Youth: Three Village Level Case Studies; The Farmer's Laborer; and Beyond Manila: Philippine Rural Perspective.

*Regional Director, International Development Research Centre-Singapore

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ESSAYS IN SOCIAL SCIENCE AND DEVELOPMENT

Dr. Castillo also had a most distinguished and productive international career which started with a Master of Science and Ph.D. degrees in Rural Sociology from Pennsylvania University and Cornell University. Some 30 years later, she earned an honorary doctorate from the University of Agriculture in Wageningen in The Netherlands. She likewise had involvement with a large number of associations and international organizations, including a teaching stint at Cornell University in the sixties, consulting with the Ford Foundation, being on the advisory panel of the World Bank in the seventies, with the United Nations Director's Advisory Committee in the eighties, as a trustee in Holland for the International Service for National Agriculture Research, with the International Potato Center, the Advisory Committee on Rural Development with the International Labor Organization, UN Advisory Committee on Nutrition, and others. At IDRC, Dr. Castillo certainly stands out among its governors in terms of the guiding hand that she had provided over the years. Ours is not a perfect organization but it is made a lot better by the kind of guidance that we receive from persons like Dr. Castillo. We, at IDRC, are deepty grateful to her and on this occasion, therefore, I convey our greatest respect and affection. People are people, but Dr. Castillo has a reputation at IDRC for having a firm but gentle hand which is quite willing to raise the level and pitch of the discussions when needed. I believe that I speak for international organizations in honoring one of your -- and one of our -- most distinguished and dedicated scientists. 1 greatly look forward to the symposium and to meeting Gelia again many times in the future. 1 suspect that retirement is a kind of disguise for her to be even more busy and do the things that she wants to do. But I hope that it also brings a degree of peace and better opportunities to continue to share with us and the others the great wisdom that she has always had in the past. Thank you.

IN HONOR OF DR. GELIA T. CASTILLO

E_ILQ.JApeR

I TISMYDISTINCT HONOR and privilege to deliver this testimonial speech in JLrecognition of the achievements and contributions of Gelia Castillo -academician, university professor, national social scientist, eminent sociologist, dedicated teacher, outstanding woman and person. What sets Gelia apart from the rest? A many splendored individual, Gelia stands out for her ability to synthesize. She has creatively woven disparate pieces of information into major scholarly works like All in a Grain of Rice, Beyond Manila, and How Participatory is Participatory Development? She has a keen eye for detail and the patience to wade through volumes of materials, drawing insights and kernels of wisdom even from lousily written reports or poor scholarly works. More importantly, she is able to weave these details together with her own research conaibution into a wonderful tapestry of broad social concepts and universal themes. Gelia also has that ability to simultaneously see the trees and the forest in full detail and vivid color, so to speak. Gelia's aptitude for integrating and culling issues has made her an invaluable chair or member of advisory councils, development missions, evaluation teams, steering committees, and executive boards of Philippine institutions such as the National Economic and Development Authority, Population Commission, Central Bank, Department of Agriculture, Department of Health, Development Academy of the Philippines, National Commission on Women, Philippine Rice Research Institute, Philippine Institute for Development Studies, Policy and Development Foundation, and Philippine Business for Social Progress. *President, University of the Philippines System

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The list of foreign professional and development organizations she has advised or reviewed is equally long -- the International Development Research Centre, World Health Organization, International Labour Organization, East-West Center. Communication Institute, International Rural Sociological Association, World Bank, International Fund for Agricultural Development, International Center for Living Aquatic Resources Management, United Nations University, International Potato Center, and Equity Policy Center. I am sure I missed out on many other institutions. Even foreign universities have invited her to serve as an External Reviewer for graduate student examinations. Closer to home, Gelia has served various committees and task forces of the University of the Philippines. She was very much sought after for crucial committee work. While I was Chancellor of UP in Los Bafios, I knew that Gelia's membership in a committee was a guarantee that there will be no snowjob or whitewash. Gelia always calls a spade a spade. Remarkably, however, her skills as a social scientist and humanist make whatever medicine she prescribes go down easily. I have had first-hand experience as the target of Gelia's critical, analytical and rigorous assessment. The commission she headed concluded that social scientists were second-class citizens in the UPLB campus while I was directly responsible for its management. If her comments came from another person I might have taken it as an offense. However, she delivered her message with sincerity, goodwill, deep conviction and a touch of humor. She was supportive rather than combative. As a consequence of her disarming style, unassailed logic and coherent thinking, I listened attentively and took her message seriously. What is noteworthy about Gelia as a person is that her integrative mind and breadth of intellectual vision were nurtured by a lifetime involvement in development concerns, a commitment which has brought her to various provinces in the Philippines and to 40 countries. Gelia's development concerns have spanned a wide range of interests (agriculture, women, poverty, health, etc.), and she pioneered and blazed the trail for Filipino social scientists in these areas. The continuing thread throughout her pro-

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fessional life has beenthe tireless commitment to find and benefit the poor in development efforts. Gelia's name in development and academic circles has been associated with that rare combination of intellect, style and above all, commitment to the poor. Gelia's unceasing efforts to orient scientists toward alleviating the plight of the downtrodden is matched by her many attempts to initiate and nurture exchanges among social scientists and between natural and social scientists. She has been a champion of multidisciplinary and interdisciplinary work, although being the realist that she is, she is also quick to caution against some of its pitfalls. In honoring Gelia, I feel that we are honoring ourselves in her reflected glory. We are honoring her hometown in Pagsanjan, Laguna, the Laguna High School which a number of us attended, and the University of the Philippines both in Diliman and Los Bafios with which she has been most closely associated. She does honor to Filipino institutions, to Filipino scientists and to her country. So Gelia, on behalf of all of us present and your many other colleagues who could not be here, we salute you for your many accomplishments. On behalf of the farmers and the poor in the countryside who have benefited from your work, let me express our deep appreciation. But most of all, thank you for exalting us Filipino scientists and for bringing honor to the University and your country. Mabuhay ka!

REMEMBERING GELIA

SAMUEL C. HSlEH*

N JULY I accepted a visiting Philippines part of the1965, graduate education programprofessorship sponsored byin thethe Ford Foundationas and Cornell Univerity. I went to the University of the Philippines in Los Bafios to teach graduate students in the fields of agricultural economics and rural development. It was there that I first met Dr. Gelia T. Castillo, who was then a professor of rural sociology. Since i had always been interested in how to integrate the sociological aspects of agricultural and rural development in Taiwan, I was therefore quite enthusiastic to have met Gelia and maintain a dialogue with her to enable me to integrate my own research program at Los Bafios with the Department of Rural Sociology. In carrying out the agricultural development program, my colleagues and I involved individual farmers as the producers and actors in rural development. In addition to taking account of economic and financial considerations, we als0 had to give consideration to the human factor and the social aspects of the rural development program, in particular, the behavior of farmers as producers, consumers, decisionmakers and operators of farm production. It was in this context that I collaborated with Gelia in several studies while teaching at the University of the Philippines in Los Bafios.

*Dr. Samuel C. Hsieh is Governor of The Central Bank of China in Taipei, Taiwan. He was tbrmerly a visiting professor at the University of the Philipines in Los Bafios under the Ford Foundation-supported UP-Cornell Graduate Education Program from 1965 to 1967, and was Director of the Projects Department of the Asian Development Bank in Manila from 1967 to 198 I.

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One of my graduate students, Dr. Charlie Lu, developed his Ph.D. dissertation studying 17 villages in the central part of Luzon province, directing specific attention to the behavior of farmers and their decisionmaking and production activities. We worked together, and our approach was to interview farmers by means of questionnaires in order to learn about their decisionmaking in farm planning, their choice of farm practices, their use of fertilizer and their adoption of different kinds of farm practices in rice cultivation. Throughout the program, we maintained an open-minded approach without any preconceived concepts or ideas regarding the research, interviewing farmers simply to find out in their own words how they were adopting farm practices and mapping out their farm plans. Gelia gave us useful suggestions on the design of the questionnaires, the analysis of the results, and their interpretation. We always appreciated Gelia's charming personality and professional insight when we worked together on a number of research projects that incorporated sociological and economic considerations. I consider Gelia to be one of the top rural sociologists with a worldwide perspective and solid experience in interpreting the sociological aspects of agricultural development and their implications for national policy. I greatly enjoyed our very close working relationship during my two years of stay as visiting professor in Los Bafios. From a nonprofessional angle, my family and I also greatly enjoyed the times we spent with Gelia. On many occasions, we got together with her at social functions or private dinners professionally. Gelia was one of the few sociologists with whom I worked very closely (particularly during my stay in the Philippines) in developing a multidisciplinary approach to solve many of the agricultural production problems related to development. In 1967, I joined the Asian Development Bank in Manila as the Director of the Projects Department, and remained there for fourteen years until 1981 when I returned to Taiwan. I thus spent a total of sixteen years in the Philippines. During all those years, regardless of whether I was in Los Bafios or Manila, I kept in constant touch with Gelia both professionally and privately.

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I am very happy to contribute to this special volume honoring Dr. Castillo. I should therefore like to take this opportunity to congratulate the PIDS for having such a special issue and to congratulate Dr. Gelia T. Castillo for her outstanding achievements on a worldwide and national basis both as a professional sociologist and a private citizen of the Republic of the Philippines.

TESTIMONIAL IIII

IIII Goea3ouPP_m

B_.LF of the researchers and staff of (UPWARD), the User's Perspective with • nAgricultural Research and Development I would like to offer additional words of appreciation for the contribution of Professor Castillo to our Asia-wide network as its Senior Adviser. For the bright, enthusiastic young women and men now linked to UPWARD, Professor Castillo has proven to be a profound source of wisdom and stimulation. From insightful comments on research proposals to friendly but always probing questioning during workshops and conferences, she has helped sharpen the scientific quality of work and at the same time has insisted that the users be kept firmly in the forefront of research and development planning and implementation. Professor Castillo has been a stalwart supporter of UPWARD through thick and thin. Thin times are inevitable with innovative endeavours and it was precisely when funding seemed most uncertain and resources most limited that her infectious enthusiasm for the UPWARD approach and encouragement to researchers and staffcame through most strongly. We are deeply grateful for the support she has given, and we are determined to show through our research and development activities that her guidance has not been misplaced. Empirical demonstration that user *Coordinator, User's Perspective with Agricultural Research and Development (UPWARD). UPWARD's mission is to help make agricultural research and development responsive to the needs and circumstances of farming households and other endusers of agricultural technology through building user-sensitive, food systems-oriented research capacity among young Filipino and other Asian professionals.

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perspective research leads to more appropriate, sustainable development for the most needy would be a true testimony to Professor Castillo's social and scientific vision.

AGRICULTURAL "FATIGUE" AND RURAL DEVELOPMENT "BLUES": ARE THEY BOTH PASSE? II

I IlllL

lll!

GELIA T. CASTILLO 'S _ESPONSE

ETMESTART with an unequivocal answer which says,but "no!" there is agriculture "fatigue" and rural development "blues," neither agriculture nor rural development has become pass6. In this assessment, I am unknowingly joined by a most unlikely partner, Metro Manila Authority Chairman and Quezon City Mayor lsmael Mathay, Jr., who, in his speech before the Pan Xenia Fraternity's 71st Anniversary celebration, batted for an "honest- to-goodness" countryside renewal to stem the migration to Metro Manila. He said that "the development of the countryside would also allow provincial areas a deeper and more substantive participation in the government's program to turn the country into a newly industrialized one by the turn of the century. ''1 Unfortunately for Mayor Mathay, we might be able to do more about natural increase than about in-migration. After all, the subliminal message seems to be "If you want to get ahead in life, migrate to the city; squat on valuable government property; be a registered voter; join a militant organization (perhaps even the military); fight relocation; and eventually be rewarded with a house and lot (lighted and watered) somewhere in the suburbs. No matter how cynical this may sound, there is no such offer in the rural areas. After all, what did these

I. In Philippine Daily Inquirer, September 26, 1994

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migrants have in the places where they originated: a makeshift dwelling on somebody else's lot (most of them were previously squatters, too); no land to till, let alone own; no doctor in the barrio; •no Church services except during fiesta; a lousy school, even if tuition was free. And some of us think they should return to the barrio for such an idyllic life! if one has the choice of being poor in Leyte or Bicol, and poor in Quezon City, the choice seems obvious." After 40 years of rural development, a reacquaintance with the concept tells us that perhaps rural development is in a no-win situation. Whenever a rural area progresses to a certain degree, the place is classified as urban, as per statistical definition (Balisacan 1993). While we define what is urban, we do not define what is rural It is a residual categorization that which is not urban is rural. Bahr and Mertins (1993), for example, estimate that the proportion of increase in the urban population resulting from migration• (including reclassification) is around 43 percent in developing countries. But more important is the reality that classifying a place as urban rather than rural neither solves nor ends the rural problem. Rural-urban interactions are a fact of life evident in such trends as (1) rural poor moving to the cities to become the urban poor; (2) farming that affects more families as a partial rather than main source of income; (3) nonfarm income (which could come from urban wage labor) becoming a part of the diversified livelihood strategy of many rural households; (4) rice income constituting less than 50 percent even in typical rice-dependent villages; (5) a considerable increase in importance of the role of remittances in the life of the rural household; (6) migration to urban areas (particularly female migration) contributing to the rural househoid's income, part of which is invested in farming; and (7) improved food production benefiting the urban poor through lower prices. Conversion of farmland for industrial and residential purposes impacts on both rural and urban areas. On the other hand, urban agriculture has become an important survival strategy for urban dwellers, particularly low-income ones.

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In the meantime, the content of international development dialogues and national development plans seems to have shifted away from agriculture, the rural poor and rural development toward the environment, urbanization and the urban poor. An illuslration of this may be gleaned from the advice of the Dutch National AdvisoryCouncil for Development Cooperation: "The Council considers that the situation of many groups of urban poor is often more helpless than that of the rural poor, however difficult comparisons may be. In rural areas, the poor live in networks of family relationships, and economic ties change which can have a damaging impact such as that of the Green Revolution." The Council also pointed out that "attempts to prevent urban poverty by increasing prosperity in rural areas is a strategy that cannot,succeed."2 Obviously, the many studieswhich have been done onthe positivegains from agriculturalgrowth and from rural-physical and socio infrastructure have not communicated their message. Anyway, successful rural development always results in urban reclassification as per definition! But to treat rural poverty and urban poverty as discrete and separate phenomena is to be naive about their relationships. In order to partly overcome the bias against rural development arising from the technical flaw in the definition of urban area, we must look for the essence of rurality which, once done, will not automatically qualify a place for urban classification. Because rural communities have a naturalresource base and since environmental degradation is associated with rural poverty and a higher level of out-migration, then the productive and sustainable management of natural resources and the institutional arrangements which make it possible should be the central concern of rural development, and indicators to this effect must be developed. 2. National Advisory Council for Development Cooperation, Recommendation on Development Cooperation and Combating Urban Poverty. Ministry of"Foreign Affairs, The Hague, Netherlands, March 1994,No. 103,p. 3.

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Productivity, growth and income increases are inadequate indicators of rural development particularly if they have been achieved through the "mining" rather than "husbanding" of resources. A sustained, renewedand productive natural resource base achieved through viable institutional arrangements will not be antithetical to urban development but will be its strong underpinning. The challenge in this is very great indeed because it will require supportive policies, productive technologies, ecological literacy, innovative use and management of resources, creative structures for relating to each other, resolving conflicts, learning together, etc. In this regard, community-based resource management, and participatory approaches, among others, have been advocated and are actively being pursued but much more should be learned to make these operational on a larger scale. We cannot always count on traditional systems because the world has changed, and it is changing even more. We have to develop new traditions under new circumstances of population pressure, resource depletion and degradation. Regarding agriculture, Lundren points out the tendency to "treat natural resources as external to agriculture," hence many organizations ha)e, as a result, different programs for agriculture and natural resources. The reality, he asserts, is that "the most intensive, widespread, important and potentially (and actually) most destructive form of natural resource management, and without any comparison in developing countries, is agriculture and related activities." The more correct statement, he concludes, is that "nature is made up of natural resources and the most important form of natural resources management is agriculture." (Lundren 1993.) On agriculture "fatigue," for example, after 30 years there is a cloud in the rice horizon. IRRI scientists have discovered a disturbing phenomenon:

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"Long-term experiments show that yields from irrigated fields that have continuously supported 2-3 rice crops a year have declined by as much as 40 percent over the past 25 years. This declining yield occurs in both high and low input systems both on and offthe IRRI Farm. 3 This and the preoccupation with sustainability issues is giving rise to very exciting developments in agricultural systems research. Some honestto-goodness interdisciplinary work is taking place. Let me cite two examples. In pest management in rice, the simple recommendation of "no early spraying" is being designed on the basis of science-based knowledge on the behavior of plants, insects and humans (Rapusas et al. 1994). Another is farmer participation in the varietal evaluation of sweet potato. Instead of starting from the breeding of new varieties, farmers are selecting from a screened collection of improved, local, imported, and traditional potatoes. In some instances, superior strains of degenerated but preferred varieties have been found, cleaned, regenerated, and given back to farmers (Rasco 1994). In the process we are discovering that indigenous/local knowledge, science and technology can come together productively and, hopefully, in a more sustained fashion. Furthermore, we have also found that subsistence production and commercialization are not opposite poles in a linear model but often occur simultaneously and in opportunistic combinations with nonfarm livelihood strategies. Plant genetic resources, farmers' rights, and intellectual property rights are very contentious issues which require creative social science research beyond ideology. Agriculture, therefore, is not a finished task and will not go away simply because a higher proportion of the population has been classified as urban. The urban poor would become poorer if food production were to decline. In fact, agriculture has become much more complex, and thepeople dimension has become more demanding of the human intellect and the human spirit. It needs the best ot"science, including social science. 3. IRRI Hotline, Can we keep it up? IRRI-NARS Scientists Investigate Yield Decline, IRRL Vol. 2. No. 6, June 1992.

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Finally, let me thank PIDS, particularly Jennifer Liguton and her staff for putting this symposium together; IDRC for making the publication possible; and Randy Spence for being here. In PIDS, I have always found rigor and relevance (and will continue to expect these); in IDRC, I learned internationality and humanity in developmentperspective. To be honored by colleagues with such excellent papers is reward enough. It makes all those years and the coming ones worthwhile indeed! In the golden girls, I found a lifetime of loyal friendships hard to duplicate anywhere. Ateneo de Manila made me part of the culture of Tao Para sa Kapwa (a man for his fellowmen) in giving me an honoris causa. The University of the Philippines gave me the freedom to be free, to define and do what I have chosen to do. To President Emil Q. Javier, the "University in the Service of the Nation" is a laudable vision but I would modify it slightly to say: The University should lead the nation for it is in leading that it serves but it has to earn its right to lead through excellence. Thank you all for making my day!

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BIBLIOGRAPHY Bahr, J. and G. Mertins. Urbanization in Latin America: Applied Geography and Development, Vol. 4, 1993, pp. 89-109. Balisacan, A. "Rural Development in the Philippines: Patterns, Constraints and Responses." Paper presented at the Symposium on Structures and Reforms for Rural Development in the Philippines, AIT Hotel, Quezon City, March 17, 19931 Lundren, B. Sustainable Management of Natural Resources. Report prepared for SIDA, Stockholm, Sweden, May 27, 1993. Rapusas, H.R., C. Dedolph, M. M. Escalada and K. L. Heong. Workshop Report: Message Design for a Campaign to Encourage Farmers' Participation in Experimenting Insecticide Spraying in Vietnam. Ho Chi Minh City, Vietnam, Rice IPM Network, May 25-28, 1994. Raseo, E. T. Jr. Coordinators'Report, 1993-94, Southeast Asian Program forPotatoResearchandDevelopment. Los Bafios, Laguna, Philippines, SAPPRAD, 1994.

ABOUT

THE HONOREE IIIIIIIIIIIII

GELIAT. CASTILLO

R.GELIAT. CASTILLO is a distinguished rural sociologist who is, in the words of Priscilla Juliano (a colleague at the University of the Philippines-Los Bafios), very "rural" as well as very Filipino. From humble roots, she excelled early in life, graduating valedictorian at the Pagsanjan Elementary School and Laguna High School, and later, rnagna curn laude in A.B. Psychology at the College of Liberal Arts of the University of the Philippines. In 1958, she earned her masteral degree in rural sociology at Pennsylvania State University. Two years later, she took her doctoral degree in the same field, with social psychology and community development as minor courses, at Cornell University. Through the years, Dr. Castillo maintained her ties with her alma mater, the University of the Philippines, working as an academician and scientist. But her activities extended far beyond the University and has taken her to 31 provinces and 41 countries. She has served in more than 70 national and international boards, advisory committees, and review teams concerned with a wide array of subjects -- agriculture, health, population, development policy, women-in-development, social dimensions of science and technology, rural development, nutrition, the family, employment, land-use systems, etc. Among the agencies she has served (to mention a few) are the: Philippine Institute for Development Studies, Philippine Rice Research Institute, Forestry Development Center, Comprehensive Employment Strategy Mission to the Philippines and Sri Lanka, Makiling Task Force, International Development Research Centre (Canada), International Rice Research Institute, Advisory Group on Nutrition, Women-in-Rice Fanning Systems, Commission on Health Research for Development, International

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Plant Genetic Resources Institute, International Foundation for Science, Tropidal Disease Research Program, Human Reproduction Research Program, Global Commission on AIDS, International Center for Research in Agroforestry, International Health Policy Program, and International Potato Center. Despite her involvement in international development, Dr. Castillo devoted most of her scientific endeavours in the Philippine scene. For four decades, she persisted to carve a niche for the social sciences in various R & D establishments that center on agriculture and health. She researched on Filipino women long before gender was invented. Her work in many R & D milieu has helped her define for others the Filipino social scientist's generic research role and earned for her the accolade "practicing nationalist.who examines the problems of society with the eye of a 'native'" from the College of Agriculture of UP-Los Bafios when it honored her with the Outs_nding Researcher Award in 1983. Dr. Castillo has written numerous articles in both local and international publications but she will be remembered best for the three books about her country: All in a Grain of Rice: A Review of Philippine Studies on the Social and Economic Implications of the New Rice Technology (1975), Beyond Manila: Philippine Rural Problems in Perspective (1979), and How Participatory is Participatory Development? A Review of the Philippine Experience (1983). In an unusual tribute to her, Jaime Valera, a colleague, had this to say: "In a competitive academic setting such as ours, several negative things may be said of Dr. Castilto. Among others, I would fault her for being professionally consistent: • She does not accept administrativepositions even if these may hint of the development of the field where she is an expert. • She has this uncanny narrow sense of focusing on significant issues about rural societies in developing countries. This narrow sense is really a definitive and

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well-considered acute perceptionof rural development issues. • She admits not keeping up with the conventional Western literature but instead creates a substantive part of the literature in Philippine rural sociology. • AsI see it, she believes that sociology should not throw the baby (the substance)of social science in place of the bath water (the hard data or quantitative analysis which seemingly is more scientific). This is because there are many unexamined features of social life. One person can only do so much especially if it is performed in an outstanding manner. • Dr. Castillo is a nagger of sorts. She pushes people to do competent work. This is also reflected in her ability to stimulate the asking of important sociological questions about things we take for granted. • I fault her for such an academic or intellectual independence; her consistent ability to do exceptional academic pieces. Probably, this is due to the fact that (as she usually claims) she can be supported by her competent husband who is an outstanding animal scientist." Her contributions in her field have been recognized by various institutions both domestic and abroad. She was the recipient of the Jose P. Rizal Pro Patria Presidential Award for Outstanding Agricultural Scientist in 1966for herrevealing studies on Filipinofarmers,rural women,agricultural extension and community development and for presenting the social and economic implicationsof the new rice technology in her book,All in a Grain of Rice. In 1968, she was chosen by the Federacion Internationalde Damas Abogadas as one of the Ten Outstanding Women of the Philippines for her research work in rural sociology. She was also conferred the honorary

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degree of Doctor of Agricultural Sciences (Honoris Causa) for "very excellent merits in the field of rural sociology" by the Agricultural University at Wageningen, The Netherlands in 1983. In the same year, she was elected member of the National Academy of Science and Technology. In 1988, Dr. Castillo was appointed by the University of the PhilippinesLos Bafios to the rank of University Professor, one of the few to be elevated to this highest academic position. In 1993, the Philippine Social Science Council bestowed her with the title National Social Scientist in sociology. In 1994, the Ateneo de Manila University conferred on her the degree of Doctor of Science ltonoris Causa for her work as "a pioneering social scientist, a learned and progressive thinker, a compassionate person and supporter of research institutions" and "for her research in rural development _nthe Philippines and in other countries."

LIST

OF CONTRIBUTORS

PRESENTORS

/ COMMENTATORS _11

CONTRIBUTORS

Marian S. delos Angeles

Research Fellow Philippine Institute for Development Studies

Arsenio M. Balisacan

Associate Professor School of Economics University of the Philippines, Diliman

Ma. Cynthia Rose B. Bautista

Associate Professor V1 Department of Sociology University of the Philippines, Diliman

Romeo M. Bautista

Research Fellow International Food Policy Research Institute, Washington, D.C.

Ledivina V. Carifio

Mercedes B. Concepcion

University Professor College of Public Administration University of the Philippines, Diliman Board Member Commission on Population; Former Professor and Dean Population Institute University of the Philippines, Diliman

Cristina C. David

Research Fellow Philippine Institute for Development Studies

Robert E. Evenson

Professor of Economics Economic Growth Center Yale University

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ESSAYSIN SOCIALSCIENCEANDDEVELOPMENT

David Glover

Director Economy and Environment Program for Southeast Asia, International • Development Research Centre, Singapore

Alejandro N. Herrin

Professor School of Economics University of the Philippines, Diliman

Ponciano S. lntal, Jr.

President Philippine Institute for Development Studies

Bruce Koppel

Vice-President for Research and Education East- West Center, Hawaii

Exaltacion E. Lamberte

Associate Professor Behavioral Sciences Department De La Salle Universi,T

Mario B. Lamberte

Vice-President Philippine Institute for Development Studies

Paul L. Quintos

Supervising Research Specialist Philippine Institute for Development Studies

Celia M. Reyes

Research Fellow. Philippine Institute for Development Studies

Edita A. Tan

Professor School of Economics University of the Philippines, Diliman

GUEST Solita Collfis-Monsod

WRITER

Professor School of Economics University of the Philippines, Diliman

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TESTIMONIAL PRF_SF_2CTORS / CONTRIBUTORS Samuel C. Hsieh

Governor The Central Bank of China, Taiwan

Emil Q. Javier

President University of the Philippines System

Gordon Prain

User's Perspective with Agricultural Research and Development (UPWARD)

COMMENTATORS / REACTORS Jose V. Abueva

Professor of Political Science and Public Administration College of Public Administration; Former President University of the Philippines System

Fermin D. Adriano

Program Coordinator Agricultural Policy Research and Advocacy Assistance Program University of the Philippines, Los Bahos

Rodolfo F. Florentino

Director Food and Nutrition Research Institute

Sylvia H. Guerrero

Director Center for Women's Studies University of the Philippines, Diliman

Mahar K. Mangahas

President Social Weather Station

Corazon M. Raymundo

Director Population Institute University of the Philipines, Diliman

Gwendolyn R. Tecson

Professor School of Economics University of the Philippines. Diliman