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PHILIPPINES: Hi-Tech Seeds Yield Mainly High Costs

For your info - Patricia Dines

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From: Rich Winkel, INTERNET:rich%pencil@UKCC.uky.edu
To: Patricia Dines, 73652,1202
Date: Thu, Feb 20, 1997, 10:19 AM
Subject: PHILIPPINES: Hi-Tech Seeds Yield Mainly High Costs

/** reg.philippine: 106.0 **/
** Topic: IPS: PHILIPPINES-AGRICULTURE: Hi-Tech Seeds Yield Mainly High
Costs **
** Written  3:07 PM  Feb  7, 1997 by newsdesk in cdp:reg.philippine **
       Copyright 1997 InterPress Service, all rights reserved.
          Worldwide distribution via the APC networks.

                      *** 04-Feb-97 ***

Title: PHILIPPINES-AGRICULTURE: Hi-Tech Seeds Yield Mainly High Costs

By Luz Rimban

BANGA, Philippines, Feb 4 (IPS) - Two years ago, the majority of
the 6,000 corn farmers in this southern Philippine agricultural
town found their fields ravaged by a disease called 'stalk rot'.

Much of the yellow corn they harvested was damaged: The cobs had
only a few kernels and the yield fell far below expectations.

The culprit, they say, was the product of modern agricultural
technology -- hybrid seeds developed by the U.S. multinational
Cargill and given free to them by the agriculture department,
which promised farmers they could double their yield.

The yellow corn seeds were part of a five-year, 75 billion peso
(2.8 billion dollar) programme designed to make the Philippines
self-sufficient in grain.

''Farmers thought they would benefit because the seeds were
given to them free,'' said Violeta Ilomen, an agricultural
technician who plants corn on a 1.5-hectare plot of land in Rangay
village, Banga.

Most of Banga's farmers consider the seeds, and the government
programme, a failure. ''I would rather spend 1,300 pesos (50
dollars) to buy my own bag of seeds than get the free seeds from
the government,'' said farmer Violeta Ladines.

[**] The seeds were of a hybrid variety requiring large amounts of
costly fertilisers and pesticides.  

PD NOTE: Using the sales model of - Give away the razors, pay for the
blades.  They probably also get "credit" for a "humanitarian" donation!!

Developed by Cargill, which is the largest privately-owned
multinational firm of its type in the United States, the seeds
were bought under the Philippines' Grains Production Enhancement
Programme -- a package of infrastructure, credit and agricultural
subsidies given to farmers as an incentive to raise productivity
by using high-yield, hybrid seed varieties.

Cargill muscled its way into the Philippine corn seed market by
cornering the grains production programme contract with the aid of
Ayala Corporation, one of the largest local conglomerates.

But Cargill's seeds produced plants that could not thrive in
the region's wet climate, and were susceptible to diseases.

Activists say that what happened in South Cotabato, the
country's biggest corn-producing province, exposes how substantial
government subsidies for agriculture can benefit big agribusiness
firms to the detriment of farmers and consumers.

''Cargill is here to take command of a strategic sector of the
economy and it does that by trying to win over and get the seed
market,'' said Francisco Lara, executive director of the NGO
Management and Organisational Development for Empowerment, which
studies agricultural policy.

Critics say that the grains enhancement scheme dramatises the
dilemma of Philippine agricultural policy: raising productivity by
using high-yield, hybrid seed varieties. But the seeds and
fertilisers and pesticides that go with them are produced by giant
multinationals. Increasing productivity in this manner thus also
entails increasing dependence on multinationals.

Moreover these imported inputs also raise farmers' production
costs and prices, making it cheaper for owners of poultry and
livestock farms to import yellow corn -- again from multinationals
like Cargill.

Cargill is considered the world's largest grains trader,
operating in at least 65 countries. Its diverse business empire
ranges from corn to oilseed, malt, flour, wheat, cattle, beef and
chicken. Its products go into the world's most famous food brands:
corn syrup in softdrinks, sweeteners in chocolate bars, beef and
chicken for the biggest fast-food chains.

The Philippines is relatively uncharted territory, but a
potentially big market for Cargill. As the population grows and
Filipino diets change, farmers have been urged by the government
to shift to planting yellow corn, which is in demand as feed for
livestock and poultry. The fastfood culture and the growing
popularity of processed meats are fueling this demand.

It is this market that Cargill hoped to capture when, in 1992,
it forged a partnership with the Ayala subsidiary Ayala
Agricultural Development Corporation (AADC). Cargill develops and
breeds the seeds that are then produced and marketed by AADC.

In 1994, Ayala-Cargill won a 73-million peso (2.8 million
dollar) contract to supply farmers with hybrid seeds for yellow
corn under the second phase of the government's grains enhancement
programme. With the contract, Cargill was able to put its foot in
the door of the Philippines' agricultural market.

Looking at the South Cotabato case now, AADC president Antonio
Laurel said: ''Cargill wanted the best of both worlds. They made
the mistake of bringing in seeds from other countries, thinking
that a hybrid corn seed in Thailand would do well here.''

Cargill boasts of being the leader in tropical corn research
with breeding centres in Thailand, Brazil, Mexico and South

But Laurel says that hybrid seeds are ''sensitive and site-
specific, performing well in some locations and doing poorly in
others.'' Farmers in Banga say the Cargill seeds cannot stand the
wet and humid climate of South Cotabato.

Officials at Cargill Philippines refused to be interviewed for
their responses to the negative feedback to the experiment with
their seeds, and to farmers' claims that it had been a failure.

''Cargill shies away from publicity and these kinds of
activities,'' country controller Romeo Verzola said in a brief
telephone conversation.

Cargill has previously had its share of bad publicity in Asia.

In December 1992, 79 Indian farmers stormed Cargill offices in
Bangalore to protest its presence. After smashing windows and
tearing out phones, they threw out documents from the company's
fifth-floor office, then burned papers and hybrid seeds.

Filipino farmers have not been violent in their response even
though they claim to have suffered substantial losses as a result
of the programme.

The Cargill seeds were supposed to yield as much as five tonnes
per hectare, but some farmers say they only harvested 3.7 tons.
And since hybrid seeds require twice the usual amount of
fertiliser and pesticide inputs, many farmers fell into debt.

Seven out of 10 farmers surveyed in a MODE study blamed Cargill
seeds for their low productivity, and said the government
programme only drove them deeper into debt.

Though Ayala admitted having ''product problems'', former
agriculture secretary Roberto Sebastian, who conceptualised and
introduced the grains scheme, refuses to blame the company for the
farmers' misfortune.

''We have been investigating that, but it is not fair to just
totally blame Ayala Agri simply because the farmers had some very,
very low germination rates because there are other factors,'' says
Sebastian. ''It's possible that the farmers did not follow the
procedures in producing the seed.''

The quality of Cargill seeds used in the first phase of the
government's grains programme in 1993 had been questioned by a
government task force in May 1994. Yet a month later, the
agriculture department awarded the contract for the second phase
of programme -- and to Ayala-Cargill alone.

The grains programme was supposed to run from 1993 to 1998.
But midway through those years and partly due to the Ayala-Cargill
fiasco, the plan was modified. It was renamed 'Gintong Ani'
('Golden Harvest'), focusing instead on providing farmers access
to credit rather than giving them free seeds.

Escudero now says the seed subsidy was not the proper way to
raise productivity: ''Any arrangement where the farmer is not
given a choice is bound to fail.''

Laurel admitted ''it was not fair to the farmer because the
farmer was forced to take only Ayala-Cargill seeds. We got too
much flak, so we said we don't want this aggravation.''

Despite its failure in South Cotabato, the grains programme
succeeded in introducing corn farmers to the use of hybrid seeds
produced by the multinational agribusiness firms, and making them
these firms' regular customers.

Opinions differ on the wisdom of using hybrid seeds to try to
ease a corn shortage in the country, which last year required an
importation of at least 421,000 metric tons, the biggest corn
importation since 1983. The entire tonnage consisted of yellow
corn, needed by the growing livestock and poultry industry.

Laurel maintains the only way to go is hybrid, with the
potential of yields of up to five tons compared to 'native' or
open pollinated varieties that yield one to two tons per hectare.
''lf you can do that quantum leap, maybe we can solve our corn
shortage because overnight you can double your harvest.''

Critics argue the potential benefits come at great cost to
growers. ''Farmers are being sucked into yellow corn production,''
Lara said. ''Now they are conditioned to produce corn for the feed
market and not for consumption.''

Lara says that while yellow corn may bring farmers profits,
these profits are in turn eaten up by expenditures on rice and
white corn, which they used to plant for their own needs.

Agricultural experts add the high-variety, hybrid seeds that
produced in laboratories overseas are good for only one planting.
''You cannot replant them and you eventually have to go back to
the original source,'' said Oscar Zamora, agronomy professor at
the University of the Philippines in Los Banos, Laguna province.

[**] Worse, Zamora says the new technology alters traditional
farming practices among Filipinos who ''culturally, like to share
seeds; when they have something good they tell their friends and
they share the seeds.''

With moves toward the protection of plant breeders' rights in
industrialised nations, Zamora says farmers will become more
dependent on multinational firms whose business is to breed seeds,
and who thus reap the biggest profits.


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