The promise of farmland consolidation

It’s good to see that President Marcos has personally distributed land titles to agrarian reform beneficiaries, following his signing of the Agrarian Emancipation Act last year which condoned the farmers’ outstanding debts. With debt condonation, farmers will be free to sell or lease their land, although there’s a proviso that they are not allowed to sell it for a period of 10 years.

The theoretical effect of debt condonation is a more vigorous and free land rental market that will allow farmer beneficiaries to invest in more land improvements, transfer the lease of the land to more productive farmers or entities, and engage in more promising contractual schemes such as farmland consolidation.

Based on the experience of agriculturally advanced countries, farmland consolidation—which formally groups contiguous and proximate farm lots—tends to enable the agriculture and fisheries sector to achieve economies of scale, and thus achieve cost-efficient production, harvest, processing, and marketing operations that subsequently increase their income.

Over the years, the average farm size in the Philippines has dwindled from 3 hectares per family during the 1980s, to the current size of only 0.9 ha. Too many small farmers working on atomized farmlands causes many problems down the supply chain line, including vulnerability to the exploitative monopolistic power of middlemen. Also, many of the country’s fishers remain unorganized and tied to the use of small fishing boats.

Actually, land consolidation was formally started by the Agricultural and Fisheries Mechanization Law of 2013 that promoted contiguous farming as one of the flagship programs of the Aquino administration. In 2022, the Duterte administration issued Department of Agriculture (DA) Memorandum Circular No. 21 that provided supplemental guidelines on what it termed the farm and fisheries clustering and consolidation (F2C2) program.

According to Ernesto Ordoñez, 1,296 clusters have already been formed covering an area of 779,596 ha as of this writing. However, this number is still too small as it covers only 5 percent of land that can be potentially developed. Thailand, which has been ahead like other neighboring countries in the implementation of farmland consolidation, reached $42.3 billion worth of agriculture and fisheries production in 2023, which is six times that of the Philippines’ $7.1 billion.

According to the DA, an average of 292 clusters were formed from 2022 to 2023. This may not be a bad clustering rate and, if maintained, will accelerate the consolidation of the remaining 4,818,404 ha of our arable lands within the next few years. However, there is still a need to study the quality and completeness of our current clustering processes for the farm lots—whether they be corporate farming schemes, cooperatives, farm clusters, irrigators’ associations, private initiatives, or block farming schemes.

A study conducted in 2022 by Bawita, et al. on the extent of Philippine agricultural consolidation has observed that a viable and successful farmland cluster must observe the following factors: water, funding, social preparation, management, technical requirements, national agency for monitoring and evaluation, and establishment of model farms.

With regard to funding, the DA has to increase the budget for its F2C2 program, given that its program budget in 2024 was trimmed by 14 percent to only P145 million. The study also said that social preparation has been a problem since it involves getting the stakeholders to accept a novel project and to participate in its implementation.

To me, however, the most important factor that should be thoroughly evaluated are the technical requirements that include farm layout and sizing alterations that would allow large-scale mechanization, and the formulation of a master plan that would indicate farm layouts, irrigation, drainage, and infrastructure facilities. These procedures are expensive and take time to implement, such that an in-depth study is really needed to evaluate the extent of their implementation if we want our current F2C2 program to succeed. —————-

Meliton B. Juanico is a retired professor of geography at the College of Social Sciences and Philosophy at the University of the Philippines Diliman, and is a practicing licensed environmental planner.