Integrating bio-physical, social, financial and market factors for a sustainable upland agricultural development in Casiguran, Aurora, Philippines

Issue Date

12-2012

Abstract

Adoption or adaptation of new technologies particularly among upland farmers is not an easy task. It is recognized that any successful land use allocation decision, particularly in upland areas, has to consider the environmental, social and economic constraints of a given locale.

This paper aimed to provide a design of an upland agricultural development plan that integrates the biophysical, social, financial and market factors for sustainable implementation in Casiguran Aurora, Philippines. Market scanning through the use of a ten-year moving average farm gate price indexes was initially undertaken to determine the market potentials of candidates crops. Market soundness based on farm gate prices reflects not only the supply and demand interactions of the various crops but has likewise reflects the cost of transportation of the buyers from Casiguran, Aurora to their respective locations. The biophysical scanning (e.g. slope, climate, soil fertility, and water availability, assessments) based on soil suitability analysis, site visits to determine water resource availability, examination of secondary data on climate conditions and GIS mapping to determine slope and elevation information was likewise undertaken to further scale down the crop mixes. After which, farm level profitability and social scanning were undertaken to complete the process of integration of all relevant factors. Market-farm profitability indexes were used to integrate market and financial soundness for individual crop that compose the crop mixes. A test on the model's financial viability based in incremental costs and benefits of the crop mixes identified and sensitivity analysis to reflect decreasing benefits and increasing cost scenarios were undertaken.

Results of the scanning process yielded a crop mix that included lettuce, Chinese cabbage, carrots, and sweet pea for vegetable crops; black pepper and ginger for annual/biennial crops; and banana, rambutan, cashew and pommelo for fruits and plantation crop based, on market and profitability criteria. The study has identified the crop mixes in terms of its technical compatibilities with that of soil characteristics, climate, water availability, and topography/slope of the study area. The cation exchange capacity (5.6-6), percentage base saturation (>60), exchangeable calcium (12-15) magnesium (12-15) magnesium (2-6.4) and sodium (1.39) are rated high and are generally sufficient for crops identified. Low available potassium, phosphorous and organic carbon was noted and was likewise considered in determining the crop mix.

The slope suitability and the current forest cover of Casiguran were considered in estimating the proposed area for cultivation in the site. Based on the slope of proposed site, three (3) zones have been identified as the major basis in designing in the land management option to address the sustainability aspects of development of the upland area.

The list was further modified to include pak-choy, squash, vanilla, purple yam, robusta and Arabica coffee, mangosteen, durian, lanzones, and pili to reflect the preferences of the local farmers. The final composition of the crop mixes was based on the integration of their soil suitabilities, climatic, water, and slope requirements, market potential, farmers' preferences, and farm level profitabilities.

The estimated Net Present Value (NPV) of PhP 64 million, Financial internal Rate of Return (FIRR) of 42%, and a Benefit Cost Ratio (BCR) of 2.16 suggest that the proposed upland development plan has a very strong financial viability. Sensitivity test revealed that the NPV is the most sensitive for any given benefit decrease or cost increase with sensitivity indicators (SIs) of 36.67 and 21.68, respectively. The proposed project's BCR is less sensitive to any benefit decrease and cost increase with SI values only 14.81 and 25.93, correspondingly. The overall financial analysis proved that the investments to be made in developing the upland area shall provide significant amount of benefits to the investors. This study recommends that agricultural development in the Philippines uplands should ensure that an integrated technical, market, financial and social soundness are incorporated in the design. To further ensure sustainability in the proposed area, a land management option by slope category (i.e. terracing and contour hedgegrows) is highly recommended by this study. In particular, the need to consider the bio-physical, market and financial factors must be stressed among the upland farmers not only to protect the upland area but also to ensure the sustainability of their upland farming operations and their incomes.

Source or Periodical Title

Philippine Journal of Crop Science

ISSN

0115-463x

Volume

37

Issue

3

Page

40-54

Document Type

Article

Frequency

tri-quarterly

Physical Description

chart, map, graph, table

Language

English

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