American aid to the Philippines a failure

Title

Language

English

Source

Panorama XIX (5) May 1967

Year

1967

Rights

In Copyright - Educational Use Permitted

Fulltext

■ This is part of the statement of Wesley C. Haraldson before the American Congress showing how U.S. Aid to the Philippines has not had much suc cess. It provoked some indignation and criticism from politicians in the Philippines. It received favorable comment from non-political observers. AMERICAN AID TO THE PHILIPPINES A FAILURE United States assistance to the Philippines must be viewed within the context of the history of this young Re public. The Philippines was occupied by the Japanese from ’42 to '45; thousands of its people were killed, pro perty and institutions des troyed. In the military re conquest of the country, ad ditional thousands of people were killed and property damage and destruction ran into the hundreds of millions of dollars. One year after liberation the country acquired poli tical independence. Under the circumstances, the first phase of US assis tance had to concern itself with the physical rehabilita tion. A second-phase began in 1952 under the Quirino-Foster foreign aid agreement which was largely concerned with nation building. This phase gave emphasis to the development of national agencies of government, edu cation institutions, the train ing of administrative, profes sional and technical people to carry out the functions of government. During this pe riod we helped to create such national institutions as the Agriculture Extension Ser vice, farm cooperatives, agri cultural credit agencies, the National Irrigation Adminis tration, the Bureaus of Ani mal and Plant Industry, the Bureaus of Soils and Forestry and a rural banking system. Particular emphasis was given to fostering democratic, pri vate and government institu tions, trade unions, farm or ganizations and civic groups. In 1956 during President Magsaysay's administration, we actively sponsored land reform and were instrumental in the creation of a national community development pro 46 Panorama gram which we supported for the next ten years. By 1965 we had completed this second phase of our as sistance. As we look back over the changes that have transpired in the Philippines since World War II we can, I feel, find satisfaction in the fact that a democratically, freely elected government is well established, that a large body of trained and competent technicians and administra tors are available, that the College of Agriculture in Los Banos is the best in Asia, that literacy is widespread, that public health has been improved, and that freedom of speech, freedom of assem bly, freedom of worship, and the pursuit of private enter prise are highly cherished va lues in the Philippines. Mr. Gaud said on March 9, 1967: "The problem in the Philippines is not so much the creation of new de mocratic institutions, but the strengthening and improve ment of existing ones.” The Philippines has one of the highest rates of popu lation growth in the world and has one of the lowest per acre yields of any major rice producing country. As a re sult the food gap is widening every year, in turn necessi tating huge imports — two years ago nearly 600 thou sand tons, last year over 100 thousand tons, and this year 350 thousand tons — if they are able to buy rice in this quantity. And this is a big "if”. The Philippine Gov ernment for the past six months has been frantically trying to buy rice and is cur rently negotiating at arm’s length with Red China. Agriculture in the Philip pines — except for plantation crops aimed at export — is a product of almost studied neglect — inadequate trans portation, limited irrigation, insufficient farm credit pro grams, price policies aimed at cheap food for urban areas which discourage farm pro duction, high rate of tenancy, absentee land ownership, poorly organized markets and high interest rates. The ave rage rice farmer in Central Luzon makes about 800 pesos a year from his farming ope ration — this is roughly $200 — and the average family has six members. His condition has not changed appreciably in the last fifty years. Perhaps more critical than the actual condition of the May 1967 47 rural inhabitant of the Phil ippines today is the ever in creasing gap between urban and rural living. Many cities are experiencing building booms — large government buildings, elegant banks and commercial complexes and sumptuous, if not extrava gant, residential suburbs. In the past ten years the rich have become richer and the poor have become poorer. That political unrest, cyni cism toward government and threats to established law and order are prevalent is readily understandable. About eighteen months ago we made a critical appraisal of past successes and failures, of potentials and barriers to rural development. Advice and counsel were solicited, experiences in other coun tries studied. This critical appraisal led to a number of compelling conclusions. We had in the past obviously depended too much on government — gov ernment credit, government supply organizations, govern ment marketing, government irrigation — extension — seed development — fertilizer im ports, etc. The government was expected to do almost everything. And we had worked almost exclusively the national government; the state and local governments became involved only inci dentally. Also we had'work ed on individual projects at different times — more irri gation, more fertilizers, more credit, community develop ment or cooperatives — de pending to a large degree on the particular specialized in terest or bias of our senior agricultural officers, assum ing that somehow these dif ferent activities would con verge in serving the farmer. But they didn’t. Philippine farming remained largely untouched. Productivity in 1965 was no higher than in 1945. Stemming from this reap praisal, we, in cooperation with the Philippine Govern ment, designed an experi mental pilot program of ru ral development which we tried out in two separate pro vinces, Laguna and Tarlac, selected because they repre sented important rice-pro ducing provinces and because they had progressive, active and cooperative Governors. This program was called SPREAD — Systematic Pro gram for Rural Economic Assistance and Development. 48 Panorama The key word was “systema tic.” We were interested in the totality of rural life — not just credit or fertilizer or irrigation — but all the ma jor factors involved in farm ing operations. The program content was developed around four major criteria: 1. The farmer must be come more productive. If this didn't happen all else was for naught. He could be given wells, screens, toi lets, barrio halls — but if he didn’t become more produc tive these would rust and de cay. 2. The program must pay its way — no subsidies, no grants, no special prices. The only thing free was advice. An individual can be helped by charity, but three fourths of the population cannot be so helped. 3. To the greatest extent possible the program was to depend upon private enter prise — private banks, fer tilizer companies, seed com panies — private producers and distributors. 4. To the greatest extent possible the program was to involve the farmers them selves, the local and provin cial governments, the local business and civic leaders. Local resources must be mo bilized. Development must involve all the people. The program had three major parts: 1. Improved capability of provincial and local govern ment to administer and gov ern. This included such di verse activities as (a) assist ing the provincial govern ment to improve equipment pools — graders, trucks, bull dozers, etc. and the repair and maintenance facilities so that it could better maintain roads, build new feeder roads and repair dams, dikes and ditches; (b) tax mapping and land classification; (c) im proved planning and train ing capability. 2. Expanded and improv ed technical service to the farmer. This included such things as seed demonstration plots, rat eradication pro grams, training of local offi cials in modern farm techno logy and upgrading the com petence of regular extension workers. 3. Supervised credit. As we have learned in the U.S., this is an excellent vehicle for linking together the eredit and technical advice ne May 1967 49 cessary to bring about mo dern farm practices. After one year — two crops for irrigated land — the re sults of these two pilot pro grams were so impressive that the Philippine Govern ment officially adopted the same technique for its na tional rice self-sufficiency pro gram. This covers a total of eleven provinces — Tarlac and Laguna plus nine others selected because they have the highest concentration of irrigated land. We are, na turally, supporting this ex panded effort. The crux of modernizing traditional agriculture is to convince the simple farmer that he can in fact be a scien tific farmer and can have at his command the necessary inputs to accomplish this end. It i^ of no avail to convince the farmer of the profit ability of fertilizer if no fer tilizer is available, or he can not find credit with Which to buy it. It is useless to preach modern agriculture to him unless the institutions are available to support him in this new role. The farmer in a traditional society is a pretty sensible person. He has learned to live with and adjust to the raw forces of nature. Some times it rains too much or too little, too early or too late. The rats and insects take their annual toll. Ty phoons strike all too fre quently — usually just before harvest. Good seed, fertilizer, pesticides are available some times not at all. In these cir cumstances the farmer plays it safe. His traditional prac tices won’t make him rich, but he’ll get by. I frequently ask my Phil ippine colleagues — officials and businessmen who com plain about the indolence of the Philippine farmer — what kind of a steel industry or Chemical industry would they have if the management couldn’t depend upon a firm supply of raw materials, couldn’t depend upon trans portation, or labor, or price or markets. The answer is obvious — a very primitive and backward industry. So too with farming. What is needed in the Philippines and other tradi tional societies is the institu tional support which will de pendably and adequately backstop modern farming methods. This involves tech nical advice, credit, supply and distribution of fertilizers, 50 Panorama markets, etc. These plus in centives of an adequate price and reasonable security will usually insure dynamic and progressive farming. I want to back up a bit and describe more fully seve ral of the major efforts under our SPREAD Program. 1 Supervised Credit — it is critically important to link together technical advice and credit. Either one without the other is for the most part wasted. As part of our SPREAD experiment, we co operated with the Central Bank and private rural banks to test out the effectiveness of supervised credit in the Philippines. We deposited Pl 25,000.00 in each two banks, drawing 4-1/2 per cent per annum on our depo sit. ( The banks were author ized to lend out the money as production credit to rice farmers at 12 per cent, pro vided each loan was approved by a farm credit technician supplied by the Central Bank. This specially trained tech nician would help the fanner draw up a farm plan — seeds, fertilizer pesticides, amounts, costs and work schedules. No collateral was required — the farm plan was the security. These credit technicians would visit the farmer clients, advising them on problems and checking the observance of the farm plan. Almost to a man, all partici pating farmers increased their yields by three to four times over previous years. To a man, they paid off their loans fully — some even be fore maturity. — Wesley C. Haraldson, Part of his State, merit before the U.S. Con gress, April 25, 1967. May 1967 51

pages

46-51

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