Agriculture

and
Rural
Development
• Agriculture and rural development are sine
qua non* for national development

• *absolutely indispensable
 Agrarian* Structure
• Agriculture accounts for a major share of
economic output /In 2018, it accounted for 4
percent of global gross domestic product
(GDP) and in some developing countries, it
accounts for more than 25% of GDP.

• Most of world’s poor live in rural areas/

About 78 percent of the world’s poorest people
live in rural areas and rely largely on
agriculture (World Bank)

• Trend of rural to urban migration

• *-related to land and tenure

 Other realities in Agri
•

•
Top 10 countries with highest
share of Agri in GDP (2018)
More than 60% of the world's population (9-billion)
depends on agriculturefor survival.

Twelve (12) percent of the total available land, or about

1.5 billion hectares, would be used for agricultural
crops. Ninety percent (90%) of this land is found in
Latin America and sub-Saharan Africa
AGRICULTURE & POVERTY

AGRI-BASED
Agri contribution to growth

URBANIZED TRANSFORMING

Rural Poor as share of total poor

 Why low growth in agri
• Mostly use traditional
tools
• With limited land,
intensive cultivation is
practiced
• Labor scarcity during
busy periods;
underemployed some
other time
 Broad stages in Agri Dev

1. Subsistence (low productivity, peasant

farm, staple crop, own consumption)
2. Mixed or Diversified (staple + other
crops, small part for consumption,
significant part for sale)
3. Modern (specialized and geared towards
commercial markets)
Issues in Phil Agriculture
• Low productivity (50% of labor force, 20%
of GDP)
• Small farm size (78% of farms are less than
3 has)
• Many do not own land (peasants)
• Declining labor in agri (2G and 3G prefer to
work in urban, ave age of farmers is 58 yrs
old)
• Lack basic skills in farming, reluctant to
adopt new technology
Issues in Phil Agri
•

•
•

•
Elements of integrated rural development
•

•
 Additional Elements for
Rural Dev
•

•
•
 Conditions for Rural Dev
• Land Reform (ownership)
• Supportive Policies
• Integrated Development Objectives
• Agricultural development (production, post-harvest,
transportation, finance, services)
• Plus: social services (health, education, housing)
• Plus: declining rural-urban imbalance
• Plus: environmental sustainability
 Tapos na semester

• yehey!!!!!!

• May pahabol pa……

 Chapter 10
1) Difference between GLOBAL WARMING and CLIMA T E
CHANGE
2) What is SUS TAINABILI T Y?
3) Why are the poor of the main victims of environment
degradation?
4) What are environmental problems in URBAN AREAS?
5) How can DEV ELOPED C OUN T RIES help improve the
ENVIRONMEN T?
HUMAN CAPITAL

ECON DEV
TTH5:30
 HUMAN CAPITAL

• Term used by economists for education and

health, and other human capacities that can raise
productivity when increased
• Analogy: physical capital
 Objective and component

COMPONENT: OBJECTIVE
-absorb tech -well being
-inc. productivity - Satisfying life
 Joint investments

education health
EDUCATION

-MOST HEALTH -HEALTH IMPT.

PROGRAMS RELY FACTOR IN
ON SKILLS SCHOOL
LEARNED IN ATTENDANCE
SCHOOL -HEALTHIER
- SCHOOLS TEACH CHILDREN LEARN
BASIC HEALTH MORE
-FORMATION OF -HEALTHIER

HEALTH
HEALTH PEOPLE MORE
PERSONNEL PRODUCTIV IN
EDUCATION
• IDEAS?
Income vs education
Age-earnings-education
 Educational development

DEMAND-SIDE SUPPLY SIDE

• Higher educational • Number and location
attainment, higher of schools usually
future income based on political
• Cost of education process
 Factors affecting education

•
•
•
•
•
•
•
Can education increase, rather
than decrease inequality?
• Opportunity cost for poor families is higher (ex.
Work at home, farm)
• Actual costs increases (ex. Elem-HS-col)
• Lower quality of schools in poor, far areas
 Brain
• International migration draineducated workers
of high-level
from poor to rich countries
• Irony: Heart doctors vs. preventive illness; modern archi vs.
low-cost housing, clinics; modern equipment vs. simple
hand tools
• The number of teachers leaving their posts for greener
pastures abroad has risen five times from 1992-2002.
•
EDUCATION IN THE
overcrowded classrooms; lack of teachers, seats and
PHILS
textbooks; dilapidated schools, or in worst cases, makeshift
classrooms under trees, bleachers or other open spaces;
declining performance of students especially in Math and
Science; lack of competencies of recently graduated teachers;
growing Number of teachers going abroad
 HEALTH

•
 HEALTH CHALLENGES

• •
• •
• •
•
•
•
•
•
• •
• •
• • C OVID19
 HEALTH EFFECTS

CHILDREN ADULTS
• Child mortality • productivity
• morbidity
 Health systems

• All activities whose primary purpose is to

promote, restore or maintain health
• Includes:
• Public and private health departments, hospitals,
clinics, manpower
• Informal networks (traditional healers)
Health issues in PHILS
 USAPANG COVID:
IS THE WORST OVER?
37K New Cases
34K – 7DMA
COVID DEATHS: 60,000
 Child labor

• Children, under 15, work.

• What are the results, consequences?
• EDUCATION? – disrupts schooling;
stop altogether
• HEALTH- not healthy; stunted
• GENERALLY, cruel and exploitative
Child labor in the Phils

As of 2011, there are 3.2 million child laborers who

are mostly in hazardous work, out of the 5.5 million
children at work.[ PSA.gov.ph]
 Approaches on child labor
1. Address poverty to address child labor
2. Get more children into school
3. Measures to regulate, prevent abuse or
support children working
4. Totally ban child labor in its abusive forms
• Slavery, trafficking, compulsory, debt
bondage, child prostitution, pornography,
drug-related
• Longer working hours of children, multiple jobs juggled by child laborers, and exposure
to social hazards (such as use of illegal drugs) and occupational health and safety
hazards.
• One out of five households surveyed for the study showed incidence of child labor.
• High tendency for child laborers to stop schooling. Child laborers normally work for an
average of ten hours daily for a tiny fraction of the prevailing minimum wage and
extreme cases of 24-hour shift in mining, even as the magnitude of their work is
comparable to those of adults.
• Ninety-six percent (96%) of households surveyed were living below the poverty
thresholds of their region and have an average monthly family income of P1,000 –
P3,000 (highest incidence of child labor at 40%).
• Seventy-seven percent (77%) of households surveyed do not own land and has no
accessibility to land.
• The children and their families have no means to escape the vicious cycle of
generational poverty as child laborers work the same kind of low-income, labor-
intensive jobs and generate just enough income to eat and work the next day. Unable to
finish basic education, they are unable to apply to stable work which demands technical
skills they do not have
• POVERTY/ lowWhy Child labor
family income,
• land-grabbing
• lack of regular and decent jobs with living wages for
parents
• low awareness on rights of children among poor
families.
• companies continue to exploit child laborers through
lower wages, lack of benefits and protection
• weak government mechanisms and instruments to
combat the employment of children.
• Child laborers are forced to leave their formal
education; focus on their work; vulnerable to abuses,
violations; and, little chance and opportunity to have a
 Why
• People, especially government
the poor, are not well-informed about
health
• People spend too little on health
• The market (private sector) would not spend much on
health infra, R&D and technology
• GOVERNMENT RESPONSIBILITY ON PEOPLE’S
HEALTH IS CONTINUOUS AND PERMANENT
 WHY GOVT?

• Education is a right, and the government has the

obligation to fulfill that right. The people must
continue to creatively and consistently undertake
proactive actions to put government on its heels to
address this alarming state of the education, if we
want to move forward and entrust the fate of our
nation to ably-educated young people.
Population growth &
econ dev
 Key demographic concepts
• Doubling time – years/time to take to double the
population
• Natural increase in population – excess of births
over deaths (fertility over mortality)
• Crude birth rate - The number of children born alive
each year per 1,000 population (often shortened to
birth rate).
• Death rate - The number of deaths each year per
1,000 population
 Demographic concepts

• Total fertility rate – average number of children

a woman, of childbearing age (15 to 49) can have
• Life expectancy at birth – how many years a
person is expected to live
• Youth dependency ratio – proportion of youths
(14 below) to economically active population (15-
64)
 Concepts ++

• Hidden momentum of population growth –

tendency for population growth to increase
despite decline in birth rates
• Malthusian Theory – population increases at
geometric rates while food supply at arithmetic
rates
• What Malthus overlooked: technological
progress; developments in modern medicine,
health, and population programs
 Population structure
• ¾ live in developing countries; ¼ in developed
• Higher population growth in developing
countries
• Higher fertility rate in developing countries
• Life expectancy higher in developed countries
• Population is more youthful in developing
countries
Population growth
WORLD POPULATION 2020/2050
Population pyramids
JAPAN POPULATION PYRAMID
CHINA: ‘70, 2015, 2050
PHILIPPINES, 1980: 2021
Demographic charax
 Why demand for children is
high in LDCs
• Children as “investment goods”
– as labor and financial support
in old age
• “Survival Rate”: Produce more
children since some of them will
not survive
 Own analysis
• High population is good for economic
growth/development vs. High population is
NOT good for economic
growth/development
• What developing countries can do to lower
population growth
• Read about a successful population program
of a country
Poverty, inequality
and development

ECON DEVT
 Measuring poverty
• inability to meet the basic needs to ensure continued survival
• $1.99 per day (international)
• poverty threshold is the minimum income required to meet the basic
food and non-food needs such as clothing, fuel, light and water,
housing, rental of occupied dwelling units, transportation and
communication, health and education expenses, non-durable
furnishing, household operations and personal care and effects.

• for the Philippines, 2018 figure is PhP 10,481 monthly for family of five
• THE 2020 FIGURE IS ………

• Poverty incidence is defined as the proportion of families whose

income is below the poverty line to the total number of families
 Poverty incidence in the Phils

2000-
33%
BUT COVID
2003- INTERVENED
30%

2006-
32.9%
 Kuznets ratio

• Kuznets ratio as the share of income received by

the poorest 40% divided by the share of the richest
20%. This is a measure of equality, in the sense
that it is high if society is quite equal
A graph on which the cumulative percentage of total
national income (or some other variable) is plotted
against the cumulative percentage of the
corresponding population (ranked in increasing size of
share). The extent to which the curve sags below a
straight diagonal line indicates the degree of inequality
of distribution
 assignments

• Gini Ratio (world and ASEAN)

• Gini Ratio (Philippines and regions)
 Gini ratio
• It is a measure of the extent to which the distribution
of income/ expenditure among families/individuals
deviates from a perfectly equal distribution, with
limits 0 for perfect equality and 1 for perfect
inequality.
 Gini
1 South Africa 63.38
ratios 2 Namibia
3 Haiti
60.97
60.79
4 Botswana 60.46
5 Suriname 57.61
Highly unequal ---0.50 to 0.70 Central African
6 Republic 56.24
7 Comoros 55.93
Relatively unequal – 0.36 to 0.49 8 Zambia 55.62
9 Lesotho 54.18
Relatively equitable –0.20 to 0.35 10 Honduras 53.67
11 Colombia 53.49
12 Belize 53.26
13 Brazil 52.87
14 Guatemala 52.35
46 Philippines 43 2012 15 Panama 51.67
16 Swaziland 51.45
17 Rwanda 51.34
18 Guinea-Bissau 50.66
19 Chile 50.45
HIGHEST POVERTY
INCIDENCE
 Richest:
1. Eq. Guinea
2. Seychelles
3. Mauritius
4. Gabon
5. Botswana
6. Algeria
7. S. Africa

Poorest:
1. Guinea
2. Ethiopia
3. DRCongo
4. Madagascar
5. Liberia
 LAT AM
Richest:
1. Chile
2. Uruguay
3. Argentina
4. Brazil
5. Colombia

Poorest
1. Bolivia
2. Guyana
3. Paraguay
4. Ecuador
5. Peru
 Absolute poverty
• The number of people who are unable to command
sufficient resources to satisfy basic needs
• Number or percentage of people living below a
specified minimum level of income—international
poverty line, at $2 per day
• 40% of the world’s population live below $2 per
day
 Esep-esep

•
• Reduction of poverty AND acceleration of growth: in conflict or they
complementary?
• FEWER POOR- HIGHER GROWTH?
• MANY POOR – LOWER GROWTH?
• FEWER POOR, spend on education- long term investment
• Many rich – don’t save and invest domestically, unlike poor
• Many poor, (poor health and nutrition, low education)- low productivity
• Fewer poor - > spend on locally produced necessities (food, clothing)
• Fewer poor - > psychological and political advantages (more
participation in development process)
 MULTI-DIMENSIONAL
POVERTY
• encompasses the various deprivations
experienced by poor people in their daily
lives not just lack of income
• -expressed in an index that considers
health, education and standard of
living
 COMPONENTS OF MP
• HEALTH
• any child has died in the family
• any adult or child in the family is malnourished
• EDUCATION
• not even one household member has completed five years of
schooling
• any school-age child is out of school for grades 1 to 8
• STANDARD OF LIVING
• lack of electricity
• insufficiently safe drinking water
• inadequate sanitation
• inadequate flooring
• unimproved cooking fuel
• lack of more than one of five assets—telephone, radio,
 Why is high inequality bad?
• 1) leads to economic inefficiency
• With plenty of poor, low overall savings rate;
• Poor spend on basic needs, education/ health- > investments;
spend locally
• Rich spend on imported luxury goods, non-essentials; don’t
generally save and investment domestically
• Saving money in safe havens abroad is called CAPITAL FLIGHT
• When inequality is high, lower average income, lower savings,
lower rate of economic growth
 Why inequality is bad
• 2) undermine social stability and solidarity
• -rich strengthens political power; which is used to
encourage favorable outcomes to themselves  often
leading to lobbying, political donations, bribery, cronyism
• -not level playing field
• Defend their positions (land reform)
• Extreme case, civil strife (rich vs poor) El Salvador, Iran
 Why inequality is bad
• 3) Extreme inequality is generally
UNFAIR

• Which would you choose: EVERYONE IS EQUAL?

EXTREME INEQUALITY? OR SOME INEQUALITY

• If everything is fair (no incentive to work hard,

gain skills, innovate)
 FACES OF POVERTY
• RURAL
POVERTY
(subsistence
farmers, small
farmers, low-
paid farm
workers,
landless
 FACES OF POVERTY

•WOMEN AND
CHILDREN (Highest deprivation:
poor, malnourished, little access to medical services, clean
water, sanitation); less access to education, formal sector
employment, social security, government programs
• Poorest are those female-headed households
• Biases: incomes male vs female; unremunerated work
(cooking, parenting, household, etc)
 FACES OF POVERTY

• ETHNIC MINORITIES
AND IPS (discriminated in resources,
job opportunities, assets – ex land); most
likely malnourished, illiterate, poor health,
unemployed
 Poverty in the PHILIPPINES
• 25% live below the poverty line
• 38% with poor housing
• 6% no toilet
• 35% no safe water source
• 50% dispose of their garbage
improperly
• 80% of elderly have no pension
 Poverty groups in the
philippines
• RURAL POOR
• Comprising 55% of
population (about 57 million
Filipinos)
• subsistence farmers, small
farmers, low-paid farm
workers, landless
• Low income from crops,
subjected to land conversion,
displacement
 Indigenous peoples
• 157 ethnic groups, 14% of
population (12-M), and 5-M
Moros
• Dispossession of ancestral
domain
• Subjected to stereotyping,
prejudice and discrimination
 women
• Half of total population
• Not generally bad (vs. world situation)
• female-headed households have higher average
incomes than male-headed households; poverty
incidence of women-headed households is lower
than male-headed households; literacy rate among
women is consistently higher than among men;
elementary school completion rates are higher for
girls than boys; and high school completion rates are
the same for women and men, but more women
attained a college-level education
• Subjected to physical work, trafficking and sexual
abuse
 Informal sector

• About 10 to 15% (or about 4-5

million)
• Unregistered businesses,
vendors, domestic helpers,
construction workers, drivers
• Low, Irregular incomes
 OFWs
• About 10 million Filipinos
• 5-M are permanent
migrants, 4-M temporary
workers, 1-M irregular
plus undocumented
• Suffer from low wages,
abuses, work in
hazardous and difficult
conditions
• Social costs of physical
separation from families
 Why poverty persists
1) economic backwardness, more
specifcally the underdevelopment of
agriculture and industry;
2)inequitably distributed income, assets,
and opportunities; and
3)inadequate social services and limited
social protection.
Next: what do we do with
poverty?
 5 broad areas on intervention
1. income – minimum wage, living wage
2. Asset – land reform, opportunities for education
3. Income and wealth – progressive taxation, indirect taxes
4. Direct transfers – services (health centers, schools,
feeding programs in poor areas), money (CCT and food
for work), subsidies (price subsidies ex. NFA rice,
pantawid pasada) <4Ps: 4.4million families with P78-B
budget in 2017>
5. Increase capabilities and social capital of poor
(enterprise development, micro-finance)
 Philippine case – combatting
• poverty
agricultural and fisheries development; food subsidies and
nutrition programs; livelihood and employment assistance;
community water and sanitation; education and health services;
and socialized housing.
• In the 1980s and 1990s, added to these were protection of
workers; institution-building and people’s participation in
governance; and recognition of ancestral domains.
• From the 2000s until today, the major innovations are a more
comprehensive disaster response; CCTs; and the framework of
social protection.
Flagship poverty projects (Phils)
Admin Timeframe programs
MARCOS 1965-83 Samahang Nayon, Masagana 99, BLISS
housing
C. AQUINO
• MARCOS1986-1992
(1965 -86) CARP, National Livelihood Program,
Tulong sa Tao
RAMOS 1993-1998 SRA-MBN, 20 poorest provinces
ESTRADA 1999-2001 Lingap para sa mahirap; National Anti
Poverty Commission
ARROYO 2001-2010 Kalahi-Cidss, social services
Start of CCT in 2008
B. AQUINO 2010-2016 4Ps
DUTERTE 2017-2022 PAMANA in conflict affected areas,
BBB, Balik Probinsiya
 Policy directions (NAPC 2017)
• Build Filipino industry with a program of national industrialization
(fully supported with exemptions, credit, technology, linkages,
etc)
• Implement real agrarian reform and agricultural development
(land, irrigation, seeds and inputs, credit, post-harvest, market,
linkages)
• Regulate foreign investment (ensure FDIs contribute to
employment, value added, exports, technology transfer)
• Improve infrastructure (physical – roads, flood control and
drainage; Social infra – like education, health, housing, water and
sanitation, electricity)
• Social protection (basic health, maternity, nutrition, education of
children, sickness and disability, old age)