Helmets were not the only ones lost that day.....

(image courtesy of gearpatrol.com)

Last Friday, 22 March 2012, I met a Phd student from Belgium Sebastien and his wife Ally at Holy Name University where Sebastien was temporarily stationed while doing his fieldwork in the Philippines.  Sebastien studies climate change adaptation and participatory planning in the Philippines for his degree at the University of Namur (F.U.N.D. P) and he chose Bohol as the place to conduct his fieldwork though he plans to cover a few other sites in the Visayas. 

I met Sebastien through email when he sent me a letter of inquiry after reading a paper I wrote and presented in the Development Studies Association conference in the United Kingdom sometime in 2008.  I explained to him the context of the research he told me his research interests. When they finally decided to come to the Philippines, they went to Bacolod first to explore possibilities of conducting the research there.  We met in Manila a few days after they arrived and still offered him assistance, just in case he would pursue his initial plans of coming having Bohol as a base for his fieldwork.

Sometime in February they decided to come to Bohol. I introduced him to my friends at the Centers for Research and Local Governance and to some people in Bohol who are in the best position to inform his research. We met that day to update each other and to show them around as well.  They parked their motorbike at HNU and we used my car to go around. I decided to bring them to Dauis Church, and showed them a project which I opposed before within the church grounds (that until now I still do not visit or enter with conviction) and proceeded to Grand Luis Lodge for some fresh air and drinks.

Sebastien is a keen observer and an insightful researcher.  Within their first month, his wife and Ally went around the “usual” tourism places in Bohol and like me and the others, lamented over the state of tourism development in the province.  He contrasted how Apo Island in Negros managed tourism, with the growing commercialisation of Bohol as a destination.  He wondered why we allowed the public beach to be private properties of resorts and whether local people have benefitted from tourism activities.  He also mentioned that he find it quite disturbing to see some people begging for money from foreigners like them.

But Sebastien and his wife also noticed the hospitality of the Boholano, the kindness of people around, and the many good things about Bohol - the cleanliness of the sea, the lush greenery, the peaceful and quiet mornings at their place near the Alona Beach.  He said they made the right choice in coming to Bohol than spending it somewhere else.  The day ended in high note and Sebastien was hopeful that with the assistance of people around, he will be able to complete his research in due time.

I learned days later that Sebastien and Ally lost their helmets. They left them inside the motorbike compartment when I took them out to that mini-tour that Friday. In a succeeding meeting, Sebastien mentioned that it is not good to be that trusting, and one needs to be alert at all times.  I felt sad with what happened to them and to the many others that experienced a similar fate.  Bohol, for me, is the best place to stay and a lot of tourists would agree, not until things like these shock your day.

Months back, a burglary happened at our rented apartment in Dampas, near the HNU Janssen Heights campus.  A computer, cellphone, a camera, were taken away by burglars, aided by a child that entered through the aircon hole in one of the rooms at dawn.  We went to the barangay office and the police and reported the incident.  The barangay tanods did an investigation of some sort, the police did nothing.  It is no wonder that no one gets caught, because our government does not give a damn.  I have heard of similar stories after that – burglars sneaking through homes during the night, getting what they can, but no one is doing anything about it.  This is the reason why, even in broad daylight, people commit crimes.  This is the reason why Sebastien and Ally lost their helmets that day.

But there is more to this than just the failure of our police force to protect its citizens.  The reason for this is the nature of development that happened in Bohol and elsewhere in the country.  Development has been exclusionary under this capitalist model. As Joseph Stiglitz argued, development under capitalism has not delivered its promise to the billions of the world’s poor (Stiglitz, 2002: 217).  If you look around Bohol today, who really profits in development?  Undoubtedly, not the poor Boholano, not the poor Filipino.

I was struck by the argument of a friend at a coffee drinking session one time, that the negative consequences of development are social evils – increasing crimes against persons and property, and prostitution.  I would have wanted to add, in this current brand of development.  Amartya Sen, in his influential book Development as Freedom, argued that “development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect of public facilities as well as intolerance or overactivity of repressive states” (Sen, 1999: 3).  Surely, the path of development of this province and this country did not remove poverty, did not remove poor economic opportunities, did not remove systematic social deprivation and so on. Because had it done so,  beggars do not ask money from foreigners in Panglao, people can still enjoy the beach which does not have to be labelled as “public”, and Sebastien’s and Ally’s helmets were not lost that day.

Development requires a strong state, a strong government (Kohli, 2004:  367).  I look forward to the day when our provincial and national governments have the balls to redefine how development should proceed in this country and not just implement projects that temporarily treat the wounds of the poor.  

Promoting Scarcity or Courting Abundance?

(The essay below is published recently in A Revista Conexao Politica, published by the Universidade Federal do Piauí in Brazil. The essay was translated into Portuguese and is published in both English and Portoguese courtesy of my friend, Prof. Batista.  As the essay looks into politics and voter behaviour, I find it apt to put it here at Boholanalysis.)

Introduction

Some countries in the world may have buried machine politics and the predominant role of bosses in defining local governance as matters of nostalgia (Stone, 1996). But undoubtedly, this is not necessarily the case in developing countries which seem to be poor reflections of the colourful past of advanced democracies.  Machine politics and bosses still thrive in these environments where there is widespread insecurity and poverty and where on the hands of politician, rather than the state, rests the relative power and means to appease these conditions (Hedman and Sidel, 2000).

What happens to machine politics and bosses in a period of increasing scarcity, where financial crisis affects the availability of resources to serve competing users, uses, and interests? While this essay may be construed as an exercise in retrospection, it serves the purpose of understanding the persistence of machines in local governance in present-day fledgling democracies characterized by increasing financial insecurity, by looking into one aspect of machine dynamics – the rules of supply and demand in local politics. Grounding the discussion on two persuasive literatures – Erie’s Rainbow’s End (1987) and Chubb’s Patronage, Power, and Poverty in Southern Italy (1982) – this paper attempts to answer the question as to what is the most appropriate political behaviour of machines when confronted by resource insufficiency and massive voter demand.

In answering the question, the paper briefly outlines Erie’s theory of balance between claimants and resources (Section 1) as well as Chubb’s theory on the power of scarcity manipulation (Section 2). In the succeeding section (Section 3), the paper provides an attempt at analyzing the merits and limitations, points of differences and convergence between the two theories presented. As a matter of conclusion, the paper presents answer to the primary question by arguing that despite the similarities and differences in conceptualization, there is a prevalent characteristic that underlines both explanations– that these are context theories that explain the development of machines in a continuum or progression.  Accordingly, the appropriate behaviour depends on the phase to which the structure of local power and the corresponding condition of the electorate belongs.

Section 1. Erie’s Balancing Act

Erie’s theory is anchored on the statement that “The secret of the machine longevity, then, was bringing electoral demand into balance with resource supply” (Erie, 1988: 10). He argued that the nature of local politics and the dominance of machines in election results require that the demand of electorate, not necessarily the whole but a substantial portion of it, must be met and taken cared of at all times.  Failure to do so will tip the balance of the equation leading to the machine’s downfall.

Drawing his generalizations in the analyses of big machines in Irish-American cities between 1840 – 1985, he proposes that what local machines were successful of was to increase the resource base on one hand, to be able to meet the increasing demand for patronage, and deflate voter demand on the other, to compensate for resource insufficiencies.

This requires from machines a handful of things.  First, it requires that the machine is aware of the nature and propensity of demand, not only in terms of current but also of future terms, in order to gauge the magnitude of supply required.  Second, it requires that the machine knows well the limitations of its supply base as well as the prospects of expansion.  Third, it must be able to determine the appropriate mix of resource enhancement and voter deflation strategies that will not compromise current political gains with long-term machine sustainability.

The case presented by Erie suggests certain types of resource enhancement strategies as tax increases, increases in public debt, annexation and incorporation, reliance on private sector patronage, and alliances with county, state and federal bosses to capture additional public sector patronage (his theory of intergovernmental alliance).  But in this case, resource creation is conventional wisdom, since any sane person who would enter politics will know that resources are necessary and that with the growing demographic trend, one has to prepare more.

What is novel about Erie’s theory is the concept of voter demand deflation. It moved away from the traditional notion of indiscriminate inclusion and extensive mobilization in order to “enlarge the electoral universe and pre-empt (their) opponents by reducing the pool of voters available for counter mobilization” (ibid., p. 217). He justifies this by positing costs reasons (doing so would drain the machine of its resources) and the dangers of patronage and power reallocation (shifting allocation from the Irish to the non-Irish).  Several forms were used in this respect but the primary of which were repression and corruption.

How does Erie understand this exclusionary procedure? First, he argued that the procedures of incorporation were highly exclusive – as soon as the machine reached its point of stability, it stopped mobilizing the electorate and warded off new joiners, thereby concentrating on its traditional power base. Second, the machine made a glaring distinction between the new and the old and put an economic premium into the distinction by over-rewarding previously incorporated groups and under-rewarding newly incorporated ones.

This conceptualization however, while novel, is not surprising. The theory, which leans more on the supply side of the equation as evidenced by the statement “to bring the electoral demand, into balance with resource supply”, alludes to the concept of the infiniteness of electoral demand and the boundaries of resource supply. Hence, because the supply is scarce, it is but a logical proposition to curb the abundant demand in order for the machine to cope up and survive.

Within this frame of analysis, Erie did not discount the importance of the manner of distribution when resources are pooled and when target demand has already been defined.  He argued that the Irish-American machines worked on the concept of “different strokes for different folks”, segregating the electorate to classes and their particular interests.  For example, the machines appropriated costly patronage and welfare services to poor inner city wards while offering efficient low cost homeowner services to outlying middle class homeowners.

Part of the whole process, is the skilful management of externalities that has effects on both the supply of patronage and the demand for it.  The resilience of machines first is exemplified by its never ending search for patronage sources, as the bundle decreases due to externalities, and as opportunities for creation becomes evident.  Secondly, this resilience is also evident by the intentional exclusionary procedures that machines undertake in order not to enlarge the mass of people to whom it shall make itself accountable in the midst of an inevitable increasing trend.

Section 2.  Chubb’s Rules of Exploiting Scarcity

Chubb’s theory of machine success, in response to the question of demand and supply, is comprehensively captured by the statement that “the power of the party rests on the manipulation of scarcity, on maintaining large numbers of people in competition for scarce resources” (Chubb, 1982: 215).

Chubb’s proposition is situated in a particular context, where there is amass poverty and insecurity and the only way to salvation is a government that should have responded sensitively to the needs of the people.  In the context of Palermo in Italy, the government did, but in an entirely different way, a clientelistic way that did not only dispense actual material favours but also, ironically, hope.

Chubb’s proposition does not indicate the neglect of the supply side of the equation.  As a matter of fact, she laboriously expounded on it.  However, the process of the party’s wealth creation in the context of the research locale was highly dependent on regional spending, government funds, and nothing else.  While Erie mentioned increased taxation for purposes of revenue maximization, such can not be made an option in Palermo where the majority of people were poor and where even the business community, a primary source of tax revenue could not even be relied upon since it was highly subsidized, and where the white collar employees, a source of tax-deducted-at-source, represented a huge powerful negotiating block that would be very sensitive to these types of deductions in gross pay.

The forms of patronage in Palermo did not differ significantly from Erie’s account.  The primary support mechanism is related to the provision of jobs, by manipulating the public payroll and by the dispensation of hopes of job acceptance through recommendations.  In the case of the business community, there was a very high degree of public intervention in the form of direct public spending (incentives, subsidies, contracts and special industrial salvage programs), credit assistance (both from private and public banks), and the exercise of discretion in the implementation of the regulatory powers of government (e.g., licensing).  As such, “the different strokes for different folks” argument earlier mentioned, also holds true in Chubb’s proposition where the machine sliced the electorate into chunks of homogenous needs.

The critical element, however, of Chubb’s analysis which also made it significantly different from Erie’s account is the trade of future goods in the political exchange - the element of hope that she repetitively referred to in her book. In which case, there is a trade of actual versus future goods. However, this paper argues that both the supply and the demand side are trading on hope in specific and particular instances. For example, the moment the patron signs a recommendation, it is a promise in itself, and thus a future element.  Conversely, the moment the client receives it, he undertakes the promise to vote, thus, another future commodity. However, it will be different if what is traded is a recommendation for a vote on election day and the recommendation is given only upon the sight of an affirmatively-filled ballot.

This analysis, however, is not peculiar. In moments of supply scarcity, it is customary for sellers and buyers to trade future goods (like in the case when two persons pay to reserve an out-of-stock item in an antique shop). What is peculiar is the proposition that one does not have to do so much about supply (like the antique shop owner searching for the reserved item), but to maintain the scarcity (make the item always unavailable) to ensure that the supply is most sought assuming demand is increasing (more people request for the item) or is held constant (the same persons come back to follow up on the request).

How then does Chubb operationalize this theory in the context of local politics?

Chubb proposes that there is a great incentive to maintain the poverty and insecurity that characterized an area while the machine retains political control in alleviating it. So long as there is poverty, and so long as the machine holds the key to all resource opportunities available, the machine will always succeed.  This proposition is very volatile and vulnerable and requires a handful of things.

First, it requires that development is kept beyond the gates.  It means warding off all opportunities that will give people a certain degree of economic power, because surely it will have large implications on political ones.  The reason why Chubb argued that it is economic development, and not economic crisis that presents the greater threat to a machine, is the recognition that it offers alternative sources of economic goods that may not anymore be controlled by the machine and may therefore compete with its power to accommodate the demand. 

Second, it requires the continued hegemony of the government (and therefore the machine, assuming situations of majority control) in the provision of alternatives to the poor. The cooption of business sector, the control of non-profit institutions, the subjugation of labour unions and even the misapplication of development funds are necessary in order to recreate every day the same poverty that fuels the scarcity that assures the machine’s immortality. 

Finally, while ensuring that poverty and insecurity persist, the machine should be able to raise the banner of hope and the promise of the future that one only attains by a sustained loyalty to the machine.  Thus, stories of inspiration, of ascending up the ladder, of entrepreneurial success that owes largely to the possibilities that the machine can offer, should float in the minds of people so that while scarcity is in the air, the much-desired abundance does not seem to be so far.  Conversely, stories of failure because of disloyalty should also be spoken of in the streets so that the reliance on the politics of hope will become more convincingly real.

Section 3.  Points in Conversation

It can be said that both Chubb’s and Erie’s account focused more on the economic favours that the machine can logically, or illogically allocate to clients - patronage, services, contracts, franchises, tax freezes, jobs, garbage collection, homeowner services and how these can be sourced. Both exclude in the discussion the allocation of power as a form of patronage that may also be ably distributed to generate significant results if dispensed and managed at their appropriate levels.

In this context, it can be said that both theories propose that more than anything else, a machine’s birth and survival rely heavily on the economic resources it can dispense to be able to get the monopoly of the political power that it seeks to establish.  This, among others, reflects the electoral exercise as a cycle of economic-gain-for-political-power exchange. The voters get favoured economically, while the boss got favoured politically.  However, this is entirely not so.  With every dispensation of economic favour, a political power is added to the demand side, thereby increasing its potency to bargain and to demand for more.  Also, with every vote that a client gives, it is with the client’s awareness of the patron’s economic gain in it and the latter’s increased power to gather the resource.

Thus, the demand and supply side can not be simply understood as an expression of economic needs and favours. Had this been so, voters may not have the power to demand other types of goods and the machines may not have to give in.    In Italy for example, the bargaining power of the white collar middle class causing fear to the leaders, and even resulting in the passage of a bill that it previously rejected, is an indication that indeed, what were dispensed as jobs are not mere jobs in themselves but also a fraction of the power that the ruler holds. In US cities, the fact that machines shift the response to the client’s demand speaks of the power that the latter is able to wield.

It is important to note here, that in the context of this demand and supply analysis, Chubb’s proposition comes from the same ground as Erie’s – that the supply is finite while demand is entirely the opposite. While Erie suggested on expanding demand and restricting supply, the components of the equation, Chubb’s prescription is not on these but on the context at which the equation is held to operate.

The demand and supply law of economics only applies to the assumed situations of scarcity (which undoubtedly characterizes the world) that when needs are unlimited and there are boundaries in supply, one has to manipulate either the demand or the supply in order to achieve optimal results. Thus, the scarcity, in this case, is a given, in the context of the equation, without which the equation is meaningless. It may be tempting to conclude that Chubb’s prescription is on the demand side, by holding it as constant (as suggested in Erie’s argument), but this paper would argue that it is not so. The scarcity is the reason of the equation, and Chubb’s argument focused on this. In her theory, one does not have to manipulate the equation, but rather to make its underlying assumption hold true at all times.

Erie on the other hand treats scarcity as a given that one can not do anything about, hence his preoccupation with manipulating the two elements of the equation. This is maybe conditioned by the assumption that abundance is never possible, but if it is, it will always be relative and time-bound. However, the differences in generalization are more on the point of reference, the context of the argument rather than the belief of an economic assumption of finite resource, which, after all, is general knowledge. 

Palermo’s scarcity was so overwhelming, that its influence on conceptualization is persuasive. On the other hand, the US cities may have not been in the same condition in its recent history, that’s the reason why the theory can not support the construct.  But what if Erie’s study is situated in the same scarcity situation as Palermo, at a point in the US history that mirrors exactly the same condition? It is very likely that a different generalization may have been arrived at, and may even liken Chubb’s conclusion. Conversely, Chubb’s interpretation is grounded on the seemingly unlimited control of the state since, as earlier pointed out, the manipulation of scarcity requires the precondition of power monopoly.   What if given the scarcity that there was, the machine does not have a near-to-absolute control?  More likely, Erie’s proposition is more tenable.  Indeed, without the machine or the government’s power monopoly, the manipulation of scarcity is not at all possible, even when the population is characterized by intense poverty and insecurity. If the power veil is susceptible to the piercing, the maintenance of scarcity will lead to higher expectations and graver discontent that can even incite revolt.

Conclusion

This is not to argue that the appropriate behaviour of the machine in situations of scarcity and high voter demand is dependent on place, or culture, or time, or ethnicity mix, or nature of people, but rather on the phase by which local politics, defined as the system of control, evolve (the supply side) and the manner by which development, defined as improvement of well-being, has taken place (the demand side). If local control rests on the hands of the machine at a state of monopoly, and the electorate is characterized by extreme poverty and voiceless existence, then managing scarcity will perpetuate the machine naturally. On the other hand, if the control of local politics is on a stiff competition, while society is fragmented as to socio-economic condition where some can afford better living while others can’t, then the machine that has the most resource and is able to capture a significant support base, will likely fare better and exist longer than others.

On this last note, Chubb may be right when she argued that the state of economic development and the structure of political power serve a mutually reinforcing bond. It is just that she framed the argument in the negative that it precludes all other types of conditions to benefit from the explanation.

Banks are only for the rich

For the last half of 2012, I was desperate to find a decent bank willing to lend me money to finish my house at an interest rate that I can afford.  My wife, another Certified Public Accountant in the house besides myself, went through an options analysis including the Home Development Mutual Fund (HDMF) and a few commercial banks that promise interest holidays, or low interest rates, or fast processing and so on and so forth.  She found out that when one borrows from HDMF at an amount beyond Php750,000, the interest rates converge with that of commercial banks so we decided to apply a housing loan from both PS Bank and Bank of Commerce. 

The experience was not that pleasant.  Both banks were slow at responding to request for information and failed several times to get back to us as to the status of our applications.  PS Bank, for example, treats us as miserable clients, not worthy to be lent some money despite our positive and highly liquid cash position, because our access road is not yet developed though it exists.  In an age of cash-flow lending, its lending system is stuck to collateral issues that despite our explanation, our application got disapproved twice.  They told us we need to pave our access road so that our loan will be approved.  That time they did this assessment, our house was already 60% complete.

Bank of Commerce, on the other hand, eventually lent us the money, but not without making us feel miserable as well.  They said that after application, we will be able to get the approval we need and the first release in a month’s time.  After two months and after exhausting our savings, nothing happened.  All promises and a string of requirements; not until I burst in anger towards the close of 2012 did we get a positive response.  Both my wife and I felt that the bank employees enjoyed our powerlessness; they enjoyed hearing our pleas for consideration.  It made us realize that banks exist not for financially insignificant people like my wife and me.  But we continued pleading to almost the point of losing our sense of dignity.  Had we the choice, we would not go through the same experience again. 

Banks, or financial access to banks, are just for the rich. I should say. Or with our case, the persistent poor who got angry towards the end.

In Abhijit Banerjee’s and Esther Duflo’s book, PoorEconomics, they posited the argument that “credit constraints are likely to be much tighter for very poor borrowers than for somewhat richer ones”.  However, they also presented cases, where capable, educated people, with strong business models were never trusted by banks.  They also presented cases that those that lent to the poor are not your banks – these are micro-finance institutions like Yunus’ Grameen in Bangladesh, Padmaja’s Spandana in India, or TSKI in the Philippines.  Banks are not for the poor.  When the world’s largest micro-finance institutions start to behave like banks, they might also start to lose the advocacies that in the first place, gave birth to their existence. Microfinance institutions then, are the options for the poor, as these institutions offer lesser interest rates than usurious money lenders, but less stringent in terms of requirements as compared to banks. 

But where will those in the middle range of the income spectrum, like me, go?  Surely, banks find us less bankable and more risky.  Microfinance institutions will also find us ineligible.  There are limited options for us, as there are limited options for the poor.  In one study we conducted at the end of December 2012 in 11 agricultural barangays in Batuan, Duero, Guindulman, Pilar, and Sierra Bullones, we found out that the poor could not access banks, not even microfinance institutions as indicated in the graph below:

When I talked with a friend who teaches at a local university here in Tagbilaran as to her sources of credit, she mirrored the results of the community study as depicted in the graph above.  Banks have not granted her loan.  If she needs immediate cash, she goes to her friends and family.  For bigger requirements, she borrows from the employee’s cooperative to which she is a member.  But at one time in her life, she wanted to put up a business venture but failed to do so because no single bank would finance her business and she was rated “not credit worthy”.

Banerjee and Duflo’s book, while not necessarily referring to the middle income group said that these borrowers “run the risk of being too large for the traditional moneylenders and microfinance agencies but too small for the banks”. Funding this set of people with financing needs will remain a challenge.

So you’re planning to go to the bank for your financing needs? Think again.

A City Left to Rot

Travelling within Tagbilaran City is such a trouble and a great discomfort that I would rather stay at home than go somewhere else.  If I have a choice, I wouldn’t go to the city centre where the banks are located or report to my office at Step Up Consulting Services.  It would seem that as I drive, I can hear the shriek and the cry of the poor car coupled sometimes with my son’s loud “ouch” when I hit a pothole large enough to have his head banged against the windows.

Every person who lives in Tagbilaran City will understand when I say that Tagbilaran nowadays seems like a city left to rot.  I highlight three reasons below why I say so.

POINT 1.  Tagbilaran roads are outrageously bad, the streets within the city center are dirty caused by mud on rainy days or by dust when the sun is out.  If you live somewhere in Janssen Heights and would like to go to the St. Joseph Cathedral, you can never have a smooth ride except when you travel through the Dampas-Mansasa Road down to VP Inting St. and back to CPG East Avenue’s occasional potholes.

In the city government website in February 2010, an article appeared that was entitled “Mission Accomplished” . I quote the news item below:

“When Mayor Dan Neri Lim assumed office last 2004, only 15% of the roads in Tagbilaran City were in good working condition. Majority of the city roads were rocky and dilapidated.

According to City Engineer Pianicita Castolo, the city roads have been untouched for almost thirty years.

Thus the improvement and rehabilitation of these city roads started as soon as Mayor Dan Lim took office. Almost 68 million pesos were spent for the improvement, rehabilitation and maintenance of these city roads which started last 2004.”

Reading this article from history sounds like a joke, especially when you read it alongside a Bohol Chronicle article in April 2012 calling for the implementation of road projects.  According to the article, the city government appropriated Php282 million for road projects in the 2012 budget.  But you get to wonder where this money is spent. The only improvement I can see in the last week is the filling-up of potholes along B. Inting and G. Visarra Street with low-grade anapog that will get the streets muddy during heavy rains.

POINT 2.  Water is still a big problem.  At our place in Dampas, water pressure is low at different parts of the day and there is intermittent service interruption. In other parts of the city, water service is not available as both Bohol Water Utilities Inc. and the City Rural Waterworks System are unable to increase service coverage. 

In December 2011, Bohol Chronicle reports that:

“The Tagbilaran City Waterworks System is faced with limitations causing the deteriorating water service to its water subscribers in the city

Newly installed waterworks chief Engr. Servando Acedo admitted the increasing complaints on the water service is due to the limited pumping units amid financial constraints in putting up new water sources.

Acedo, who previously was assigned at the City Engineering's Office, now heads the waterworks vice Engr. Wellington Pilongo who is reportedly on a "forced leave."

Acedo said that as of now, the city waterworks has 19 pumping units with two out of service. However, he said that even if the 19 units will function, it is still no enough to satisfy the water consumers in the city.”

The 2010-2013 Executive Legislative Agenda admits this growing problem in the city and targets a 24/7 adequate supply of potable water in city households.  Its almost the end of term of our city government leaders and this target seems to be nothing but a wild dream.

Point 3.  Tagbilaran’s solid waste are still thrown in Dampas’ open dumpsite.  Everytime the garbage truck passes through our house for the regular waste collection, I become intensely worried, as I know where the waste will go.  Back in 2008, UN Habitat reports that “The city generates about 92.6 tons (92,668 kgs.) of solid waste daily. Households are the biggest waste generators with 38.5 tons (41.46% of the total volume of waste). They are followed by general merchandise stores with 15.5 tons and the public markets with 14.6 tons per day.”  The figures are probably double now, as the projection for population is over 3% every year from 2008, besides the fact that tourism figures and business establishments have increased significantly since the 2008 study. 

Back in October 2011, Bohol Chronicle reports that “The 2.6 has. garbage facility has been recommended closed due to large areas of exposed waste that could leak leachate into ground water and drainage systems aggravating the present health situation of surrounding communities.” This, amidst complaints from nearby towns like that of Barangay La Libertad, Baclayon whose residents complained after the nearest accessible road leading to the city was blocked by mountains of garbage reportedly strewn across the roads.”

What then is the future of Tagbilaran City?

It is alarming that these three problems, bad roads, water supply, and solid waste can very well kill the economic advantage that Tagbilaran holds as an entry point to Bohol’s tourism destinations.  But then, no one seems to be hearing. Despite how much has been written in Bohol newspapers, how loud the discussion gets in the radio, not one among our leaders has taken action.

(photos taken from http://i.ytimg.com/vi/e_M_QEPkdrM/0.jpg and http://sin.stb.s-msn.com/i/26/68887DF64629626E59864479208.jpg)

How do you help the Boholano farmer?

Since economic reforms started to be implemented in developing countries in the 1980s, there has been a vigorous debate over the nature of the changes brought by market liberalisation and de-regulation, and over their results. As the debates over ‘getting the prices right’ and ‘appropriate incentives’ subsided by the early 1990s, the discussion moved towards, on one hand, the discussion of the role of globalisation in economic restructuring, and, on the other hand, of issues of institution building and good governance. Generally, the literature has focused on issues either at the international, regional, national or sectoral levels. While these debates have generated key insights, relatively little has been said on commodity-specific dynamics of change and on the possibilities (and the limitations) of economic upgrading for developing countries offered by specific markets.

In local economies as Bohol, while there were a lot of discussions and interventions in the sphere of agriculture, initiated by the government, the non-profit organizations and even the private sector, not much has been said and written on the manner by which commodity flows to and from the hands of farmers.  While much of the interventions focused on increasing agricultural production through the introduction of proper technologies and even providing agricultural input assistance, little has been made to analyze the dynamics of commodity chain - from input suppliers to output buyers – to be able to understand as to whether or not the farmer, to whom interventions were directed at, actually profited from his work in the farm.

Back in 2004, I conducted a study in the town of Sierra Bullones funded by the Soil and Water Conservation Foundation.  The study attempts to respond to the need of a data-based commodity analysis that would propel the discussion of appropriate interventions in the field of agricultural economics.  The study, to a large extent, attempts to characterize economic relationships between three players – the farmer, his supplier of agricultural inputs, and his buyer of agricultural outputs with specific emphasis on the movement of goods vis-à-vis price and the related value adding activities of the players in the process.  The particular interest of the study is on transfer prices from one player to the other and as such, it becomes inevitable to include as part of the analysis, the suppliers of the identified suppliers, or the buyers of the identified buyers, in order to deepen one’s understanding of the chain. Samples of the diagrams developed are presented below:

The above graphs show one basic fact; that while the Boholano farmers are the ones tilling the fields and producing the basic agricultural commodities, they are not the ones actually earning the largest profit.  In most cases, their capacity to earn is dwarfed by the middlemen, whose economic power in terms of financing and access to the market facilitates control over farmgate prices.  For lack of alternative and the need for money for sustenance, the farmers are forced to sell their produce to middlemen, though how oppressive prices are.

In the communities subjected to the study, people’s organizations in the form of cooperative or association, have been organized to serve a handful of purposes, one of which is access to capital for agricultural activities.  However, while this intervention would yield productivity, it does not ensure improved earning capacity of the farmer, especially when he does not have control of the prices of his agricultural produce.

The prices of agricultural commodities are not controlled by the farmer. These prices are controlled by an artificial market – that of the trader, whose buying strategies are mandated by his desired profit in the purchase transaction.  In which case, it is pointless for the farmer to account and accumulate his costs on a per kilo of output, since in the rules of local trade, this is immaterial.  While the costs may be high, considering all actual costs (like fertilizer and pesticides) and imputed costs (like the costs of household labor), the farmer can not make use of this to apply a cost-plus pricing strategy (total costs plus desired profit equals selling price). This is because of the fact that the buyer dictates the price, and if he refuses, re runs the risk of not having his produce sold, in as much as there are other farmers like him who are willing to sell at the trader-dictated prices.

Thus, interventions on agriculture that focus on productivity are half-baked strategies because as earlier pointed out, this does not have direct correlation with improved economic condition of the farmer.  Improved economic condition of the farmers happen only when it is the farmer that actually profits in the value chain.

In the past, the community-based organizations have already embarked on some initial steps in addressing the problem.  Some cooperatives have already started going into palay trading – buying member-farmers’ produce at a higher cost and selling them afterwards.  This initial but bold strokes can be extended further. 

Marketing and business models have repetitively emphasized that the goal should be revenue maximization and cost minimization without sacrificing product quality.  Revenue maximization gives us a lot of options, one of which is to shorten the gap or the chain from the producer to the consumer and eliminating the middleman or the trader position in the value chain.  Doing so would mean that the middleman’s profit will now be enjoyed by the producer.

This role replacement is however, not a very easy thing to do.  For one, the farmer must possess the capacities of the middlemen.  He must have the business acumen, the entrepreneurial drive, not just a sense of contentment or a deeply ingrained “bahala na” value.  He must have the financial capability to finance business transactions and the leverage to wait up for profits patiently when they do not yet come.  He must have the appropriate networks and a strategic positioning in the poblacion-centered economy.

It would appear then that no single farmer could possibly realize role replacement. Even a barangay-based cooperative will have a difficulty.  It is in this light that a new scheme needs to be developed for the purpose of realizing the goal of greater economic empowerment for the farmer.

The time has come, for the government to start looking beyond production and fix the market inefficiencies that impoverishes the Boholano farmer all the more.