VAF – POLICY STUDY

Philippines and Vietnam

Year 3 Annual Report

October 2007 – September 2008

I. EXECUTIVE SUMMARY

The first objective of this study is to understand the policy environment of VAF system in the Philippines and Vietnam. In particular, it examines a range of policy interventions, where incentives are directed to encourage smallholders’ investment in VAF system. The study under this objective has been completed, and has been summarized in form of a policy brief. Basically, the Philippines’ study concludes that:

at least in theory, the policy environment in the Philippines is supportive of VAF system, but is insufficient in stimulating smallholder investments.

incentives for smallholders were limited while disincentives persist.

large holders tend to benefit more from national level policies than smallholders, because the former have more access to policy information and can leverage the associated costs of policy implementation.

some issues are effectively addressed through national-level policies, while a number of issues are better addressed by locally formulated policies.

where national-level policies do not effectively address the needs of smallholders, locally crafted policies are needed to offset this gap. Policy linkages between national and local levels need to be established, and policymakers need to mobilize adequate responses at both levels.

finally, the viability of VAF system depends on a whole set of policy environment that government can provide.

We have organized several meetings with the local government of Lantapan to feedback the above findings. The second objective of this policy study is to developan incentive-based policy to promote VAF system at the local level, which is now being carried out with the Local Government of Lantapan. Several meetings have been organized with Lantapan Government officials and policymakers to draft aMunicipal Ordinance that defines an incentive mechanism not only for promoting VAF, but for a range of sustainable farming practices adopted by farmers in Lantapan. The draft Municipal Ordinance is now under review by the Legislative Council for adoption. A localized code of practice or set of acceptable sustainable agriculture practiceswere also developed to support the Ordinance, covering a range of good farming practices including VAF system. Adoption of these practices, serves as criteria for farmers and farmer organizations to benefit from the incentives in-placed. Planning-workshops were also facilitated, which resulted to the development ofa 5-year Investment Plan on Incentive Policy for SFS in Lantapan.

The synthesis of the Vietnam and Philippines policy studies has been completed, and a report is currently being finalized.Both countries have policies that provide incentives to promote the forestry and vegetable sectors, but are insufficient to stimulate smallholder investments. While large holders benefit more from national policies than smallholder because of their access to information and resources to influence policy implementation, national incentives for Vietnam’s fruit and vegetable industry are more directed to commercial producers in urban areas rather than smallholders in remote areas. Distinctive difference also exists in the process of policy development in both countries. While local governments in the Philippines have policymaking powers enabling formulation of local policies, in Vietnam, the impetus for policy change liesin the central government through the national assembly. The implication in scaling up the impacts of VAF is that, in the Philippines, both national and local policies need to be strengthened to effectively provide adequate response to smallholders, while efforts to promote VAF in Vietnamwould be most likely initiated at the level of the National assembly rather than from the province or commune level.

II.RESEARCH STRATEGY AND DEVELOPMENTAL OBJECTIVES

Local officials, policymakers and other stakeholders find value in the results of our policy review/scoping, particularly on the concept of incentives. The research findings were considered significant in terms of their potential impacts to policy change at the local level. Our analysis revealed the need for local policies to be appropriately fitting to the needs of local people—as a way of responding to national-level policies. Specifically, policymakers in Lantapan have realized their limited response in terms of policy support to small farmers—an important realization in relation to their economic development strategy, which is to transform into a viable and sustainable “vegetable” basket in the region.

As part of our policy-action research process, we facilitated the development of the SFS Investment Plan, alongside the adoption of the SFS Ordinance at the Legislative Council. The Implementing Rules and Regulations (IRR) of the Ordinance are currently being formulated, focusing on institutional arrangements necessary for the implementation of the Incentive Program.The Municipal Agriculture’s Office (MAO) is tasked to spearhead the implementation of the Incentive-based program, but coupled with capacity-building needs, the office will also develop and implement a capacity building program in preparation for implementation in 2009.

III.RESEARCH OUTPUTS BY OBJECTIVE

Objective 1:To understand the policy and institutional context of VAF systems at the national and local level

Objective 1.1. The analysis of the policy environment of VAF system in the Philippines has been completed. Significant research findings include:

  • At least in theory, the policy environment in the Philippines is supportive of VAF system, but is insufficient in stimulating smallholder investments. Incentives for smallholders, albeit limited exist; correspondingly, disincentives persist.
  • Large farmers tend to benefit more from national level policies than smallholders, because the former have more access to policy information and can leverage the associated costs of policy implementation.
  • It is recognized that some issues are better resolved through national-level policies, while a number of issues are better addressed by locally formulated policies.

For the vegetable sector, issues on price regulation and control, commodity protection, reducing costs across the market value chain, non-tariff barriers, and global trade require national-level policy interventions.

For the tree sector, issues regarding restrictive policies, transaction costs, land tenure and resource rights, and domestic and international market incentives are also to be addressed through national-level policies.

At the local level, promoting smallholder investments in VAF system requires decisive policy action in terms of improving the effectiveness of the extension system, with emphasis on improved technology provision and support for market linkages and infrastructure.

  • Policy linkages between national and local levels need to be established, and policymakers need to mobilize adequate responses at both levels.
  • The viability of VAF system depends on a whole set of policy environment that government can provide.

These findings were feedback in several meetings with the local government of Lantapan, and the research report was summarized in a policy brief for wider dissemination.

Objective 1.2. The synthesis of policy reviews for VAFsystem in the Philippines and Vietnam has been also been completed. Some of the key findings are:

  • The policy context in the Philippines and Vietnam is generally supportive of VAF, with generic incentive packages to boost the forestry and vegetable sectors, but is insufficient in stimulating smallholder investments.

In the Philippines, large farmers benefit more from national policies than smallholders, as they have more access to information and have the resources to leverage policy implementation.

  • In Vietnam, forestry incentives have more to do with land allocation, shifting from the notion of resource exploitation towards social forestry, from monoculture or extensive forestry to intensive forestry with agroforestry methods, integrated management and multi-purpose forest utilization with special emphasis on poverty alleviation. Major policy incentives include increasing land tenure security, allocating forest and forest land to individual households for forest development, protection and practice of agroforestry models, investment and credit policy, benefit-sharing policy, extension and technology transfer, and promoting the processing and marketing of timber and non-timber forest products.

For fruit and vegetables, only commercial producers are actively involved in the growth of the sectors because national incentives are more directed to commercial producers in urban areas rather than to small farmers in remote areas. Though vegetable home-gardens and poor households received encouragement from local authorities, the incentives are vague, or has not yet been demonstrated or translated into the any local proposals.

  • In both cases, the policy change reflects the governments’ efforts to build farmers’ capacities to actively participate in the process of integration into WTO, and bridges that link them to the greater market, however the challenge that remains is the weakness in the bridging work among policymakers at various levels, researchers and educators, local entreprenuers, industry and local producers. Apparently, the efforts are yet, insufficient to translate policy incentives into valuable production models, including VAF.
  • In both countries, promoting VAF system will require policy actions that address issues impeding the growth of the vegetable sector, such as price regulation and control, commodity protection, cost reduction across the market value chain, removing tariff barriers, and global trading regimes; and transaction costs, land tenure and resource rights, and domestic and international market incentives for the forestry sector.
  • Distinctive difference exists between the policy development process in the Philippines and Vietnam.

In the Philippines, local governments have policy-making powers, enabling formulation of local policies that stimulate smallholder investment in VAF. Where the benefits of national level policies do not trickle down at the local level, local governments can offset this gap and provide adequate response.

In Vietnam, despite the participatory nature of policy-making processes, the impetus for policy change relies on the leadership of the central government through the National Assembly.

  • There are implications to scaling up the impacts of VAF in both countries.

In Vietnam, efforts to promote VAF through policy incentives should emanate from the National Assembly, than from the province or commune level.

In the Philippines, without undermining the importance of national-level policies, efforts at the local level, particularly with local government units can be strengthened, to enable them to effectively provide adequate response to smallholders.

Objective 2:To develop and test an incentive-based policy option and institutional framework for promoting VAF systems (specifically for the Philippines)

This is the “design stage” of the policy intervention. Several meetings were initiated with local government officials and policy-makers regarding the development of incentive-based policies for SFS, including VAF system, which resulted to the development of a Municipal Ordinance on “Providing an incentive-support system to encourage adoption and investment in SFS in Lantapan, Bukidnon”. Subsequently, planning-workshops were conducted to develop the ‘5-year Development Plan on the Incentive Policy for Sustainable Farming in Lantapan (2008-2013)’. The development plan identified the types of incentives covered, includinginput subsidies, improved extension services, subsidized crop insurance, micro-financing, infrastructure and marketing access, and awards and recognition. There are two categories of incentives that can be applied: individual and people’s organizations, with two tiers of criteria to be observed by farmer-applicants.

The budgetary requirements to implement this Ordinance will be taken initially from the LGU’s special projects, namely the Mindanao Rural Development Project (MRDP) and Mindanao North Coast Integrated Area Development Project (MNCIADP). But since these projects have specific terms of reference, the Local Development Fund will fund those aspects and areas that will not be covered by these projects. For example, only seven barangays were covered by MRDP; hence, incentives to deserving farmers in the remaining barangays will have to be funded through the LDF. Packaging the SFS Investment Plan will be done simultaneously with the adoption of the Ordinance in October. During this period, the proposed SFS ordinance will be presented to the 14 barangays and other local special bodies in Lantapan for review and endorsement.

The SFS Investment Plan is a policy instrument which aims to support and sustain adoption and investment of good practices by smallholders in the municipality. The interests among policy-makers, LGU staff and other stakeholders in this incentive-approach to agricultural development have been observed through their willing participation and time invested in planning meetings—such investment in time would have been impossible, without perceived value to this policy intervention. The challenge that remains is in designing a viable institutional arrangement or mechanism to implement the program---this will be the focus of work through the remainder of this year. Initially though, a capacity-building program for local technicians is envisaged, to ensure that sufficient local capacity is available in terms of the technical aspects of the SFS incentive program.

The focus of our work in year 4 will be evaluation of the policy intervention (incentive-based policy), using a modified version of the Institutional Analysis and Development (AID) framework of Elinor Ostrom and colleagues at Indiana University.

IV. NON-DEGREE TRAINING ACTIVITIES

Short-term training events

(Please find attached Form 17)

V. PUBLICATIONS, PRESENTATIONS AND OTHER SANREM CRSP PRODUCTS

Delia Catacutan, Dang Than Ha, Caroline Duque-Piñon, Lee Thanh Loan. 2008. The Policy Context of Vegetable-Agroforestry (VAF) Systems in the Philippines and Vietnam: Are there incentives for smallholders? Research Report. World Agroforestry Centre (ICRAF), NongLamUniversity (NLU) and SANREM CRSP: Bukidnon, Philippines.

Delia Catacutan, Dang Than Ha, Caroline Duque-Piñon, Lee Thanh Loan. 2008. The Policy Context of Vegetable-Agroforestry (VAF) Systems in the Philippines and Vietnam: Are there incentives for smallholders? Powerpoint presentation during the 3rd SANREM CRSP Annual Meeting in Los Baños, Laguna, Philippines, 26-28 May 2008.

D. Catacutan, C. Duque-Piñon. 2008. The Policy Environment of Vegetable-Agroforestry (VAF) Systems in the Philippines: Are there incentives for smallholders? World Agroforestry Centre (ICRAF) and SANREM CRSP.A poster presentation during the 3rd SANREM CRSP Annual Meetingin Los Baños, Laguna, Philippines, 26-28 May 2008.

D. Catacutan, C. Duque-Piñon. 2008. The Policy Environment of Vegetable-Agroforestry (VAF) Systems in the Philippines: Are there incentives for smallholders? World Agroforestry Centre (ICRAF) and SANREM CRSP.A poster presentation during ICRAF’s Annual Science Meeting in Nairobi, Kenya, 3-7 March 2008.

D. Catacutan, C. Duque-Piñon. 2008. The Policy Environment of Vegetable-Agroforestry (VAF) Systems in the Philippines: A closer look of policy ‘incentives and disincentives’ for smallholders in the Philippines. Policy Brief. First Quarter 2008, Issue No. 1, January 2008. World Agroforestry Centre (ICRAF) and SANREM CRSP.

Working Group – RUPES-Manupali Watershed. 2008. Site Profile: RUPES Lantapan. Municipal Government of Lantapan, Provincial Government of Bukidnon, National Power Corporation (NPC) – Pulangi IV, National Irrigation Administration (NIA) – Manupali and the World Agroforestry Centre (ICRAF).

D. Catacutan, C. Duque-Piñon. 2007. The Policy Environment of Vegetable-Agroforestry (VAF) Systems in the Philippines: Are there incentives for smallholders? Research Report. World Agroforestry Centre (ICRAF) and SANREM CRSP: Bukidnon, Philippines.

VI. NETWORKING ACTIVITIES
  • Hosted the 3rd TMPEGS Annual Meeting in Lantapan, Bukidnon last May 2008.
  • Hosted the Field Day in Lantapan, Bukidnon during the 3rd SANREM CRSP Annual Meeting in the Philippines last May 2008.
  • Presented the results of policy analysis of VAF system in the Philippines and Vietnam during the 3rd SANREM CRSP Annual Meeting last May 2008 held in Los Baños, Philippines participated by SANREM international and local researchers and partners.
  • Presented the results of policy study in the Philippines to SANREM counterparts in Vietnam in April 2008.
  • Participated in the national training-workshop on ‘Trees in Multi-Use Landscape in Southeast Asia (TULSEA): A Negotiated Toolbox for Integrated Natural Resource Management’ in MalaybalayCity, 11-15 February 2008. The Bukidnon participants were mostly member of the Working Group – RUPES-Manupali Watershed. As mentioned in 2007 Annual Report, the policy study of TMPEGS benefited from using the tools and approaches developed under this project, particularly RHA.
VII.PROJECT HIGHLIGHTS
  • Completed analysis of policy environment of VAF system in the Philippines.
  • Completed the synthesis report of the policy context of VAF system in the Philippines and Vietnam.
  • Conducted planning-workshops to develop the SFS Investment Plan from 2008-2013.
  • A local policy supportive to VAF system was drafted and currently endorsed at the Municipal Legislative Council for adoption.
  • Developed SFS Investment Plan, with VAF production system included in the list of fundable farming systems.

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