Big business can help fight poverty

UP economist Noel de Dios has a good idea on how to get more inclusive growth: get big business deeply involved in the fight against poverty. Since the bulk of our poverty stricken population are in the rural areas, get big business involved in agriculture.

Noel, in a recent Business World column, argues his point: “A leap in productivity and incomes among today’s poor can come only by linking them with those who already possess exceptional access to knowledge and resources. If one speaks of agriculture, for example, this cannot be done without inducing major corporate businesses – those already inserted in national and global value-chains – to enter agriculture in a big way and include the poor in their plans.”

Indeed, all the Corporate Social Responsibility activities of the large corporations are only self serving feel good press releases unless the outcome makes dramatic transformations in the lives of those at the bottom of the pyramid. As Noel puts it, “only large infusions of capital, technology, and market intelligence from the private sector can transform the conditions of the poor today.”

But Noel knows things are always easier said than done specially in this country. Thus, he points out that “for all this to occur, difficult questions must first be answered: What policies and regulations hinder the entry of private capital and technology in agriculture? (Here one must wonder what hinders conglomerates like Metro Pacific, San Miguel, SM, and Ayala from becoming more involved in commercial agriculture rather than in malls, condos, airlines, and toll ways.)

“What feasible production and trading arrangements in agriculture can reduce transactions costs and yield scale-economies for major companies? How can massive corporate entry into agriculture be facilitated without undermining the spirit and reversing the gains of a completed agrarian reform?

“What organizational preparations are needed to build trust between small holders and large corporate ventures? What facilitative role should local and national governments play? None of these questions admits of an easy or quick answer, although each of them is urgent. The answers required are not only intellectual but also political.”

Among the major conglomerates, only San Miguel has experience in working with farmers as part of their supply chain. But even with San Miguel, they had big problems in the case of the Sumilao farmers in Bukidnon. Church and some influential lay leaders took San Miguel through the wringer and accused the conglomerate of using its clout to dispossess farmers of their land.

What San Miguel had was a plan to integrate the farmers with their supply chain. San Miguel will buy their produce and thus give them a ready and steady market. Some of their children will also have employment opportunities in the on-site processing facilities of San Miguel. But San Miguel was demonized.

In the end some compromise agreement was reached. But the drama of farmers walking all the way from Bukidnon to Manila damaged the corporate reputation of San Miguel. It probably discouraged similar forays of other conglomerates into agriculture, which almost always necessarily means getting into problems with land reform.

Indeed, we may have to reconsider our concept of land reform. We have failed to use it as a means to uplift our farmers out of poverty for many decades now. But we still insist on this same tired concept anyway.

Economist Noel de Dios observes that we are forcing the farmer to be an entrepreneur under our current land reform concept and I guess we should know by now that assumption is simply faulty. Says Noel: “a major reason that interventions in behalf of the poor have been small in scale and limited in scope: the poor are improperly and indiscriminately shoe-horned into the unrealistic role of entrepreneurs…

“From this misconception flow the many well-meaning but ultimately feckless small credit schemes for ‘livelihood projects’ such as the ineluctable sari-sari stores, jeepney and tricycle purchases, food-stalls, and precarious small-scale subsistence agriculture.”

 Noel continues: “No doubt, individual success stories can always be told. But to think that the poor can systematically lift themselves up en masse by such means is a pipe dream.”

I suppose this is where leadership from Malacanang comes in. Will P-Noy be bold enough to break out from proven past failures to try new approaches towards inclusive economic growth?

I realize doing something on land reform is politically tricky for P-Noy given the Luisita problem. But there should be enough Filipinos willing to go with a bold plan that offers a greater promise for success than the approach we are now taking.

We missed some past opportunities to improve efficiency in the agricultural sector because it is just too bloody (sometimes literally so) to deal with land reform issues. We have one other deadline we need to take note of and that is 2015 when Asean becomes one big market. By then, we simply have to be competitive in agriculture, or be eaten up by our Asean neighbors.

We just have to be constantly innovative in our approaches to fight poverty. Dump old concepts that didn’t work. Try new ones. We may fail with some new approaches too but we may also succeed with some. We will never know unless we try. Trying is what P-Noy should be all about. I hope he is up to it.

Year of the Snake

Gong Xi Fa Chai! 

Southeast Asia is celebrating this week the Chinese Lunar New Year. Even if we are a Latin American country trapped in this region, this is an annual celebration that is gaining more and more importance through the years.

Before going on Christmas break, the Senate passed on second reading a bill that would make the day on which the new lunar year falls a non-working holiday. Sen. Edgardo Angara, sponsor of Senate Bill No. 3323, said making Chinese New Year a non-working holiday was meant to be a sign of “goodwill and amity between the Philippines and China.”

Oh well… I like the tikoy that comes with the holiday except that the Mandarin carp tikoy my friend Ed Yap sent me looks too beautiful to eat… I simply had to post its picture on Facebook. Other than that, all the talk about tigers, snakes and dragons elude me.

Nevertheless, Z, my astrologer friend decided to educate me on what my “birth animal” means. I am supposed to be a Metal Tiger or Tiger Descending the Mountain. Apparently, not all tigers are created equal in the Chinese calendar.

As a Metal Tiger, I am supposed to be tough, hard working and generous. Like most tigers, I am supposed to be prone to mood swings and will complain vigorously if I feel insulted or deceived (no wonder I am a columnist!). But my anger is supposed to be short lived and I am naturally forgiving, rarely holding grudges for long (unless I can’t update my FB status while on the run due to my erratic internet service, haha!).

A feng shui expert (Dr. Andy Tan, a medical doctor who has practiced feng shui professionally) spoke before the Philippine Chapter of the International Association of Business Communicators and had this to say about tigers: The tiger  born from 12 midnight to 4 a.m. is a hungry, voracious tiger; always fighting for his/her space. The tiger born later in the day (after 4 a.m.) is a nice, cute feline (tame cat). Hmm… have to check my birth certificate what time I was born.

Z has this take on what the Year of the Black Water Snake has in store for tigers like me: “It will be an anxious year for one used to getting what you want when you want it. You’re accustomed to working at warp speed; blocks in your path which slow you down test the limits of your patience (not that you have much, if any). Friends and family make undue demands on your resources. Think positive; avoid worry lest your health suffer.”

Dr. Tan’s take: cash is king, therefore, save-save-save; avoid lending, you can borrow; avoid arguments, avoid confrontation. Now I have a good excuse when people try to borrow money from me… sorry but that’s bad feng shui. I like that.

Oh well… this tiger believes we are masters of our fate. We shouldn’t blame our situation on the stars or some ancient Chinese animal tales. If we are at peace with our God and we discern that through our conscience, we should be doing well.

Gong Xi Fa Chai!

Beauty

As in any holiday, people go out of their way to be beautiful. Here’s a timely reminder.

Beauty comes from within. Within jars, tubes, bottles and compacts.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco