Digging up the roots of poverty

Ike Señeres .

AFTER more than 100 years since its foundation, Filipino farmers are still poor and right now, it does not look like they are going to be liberated from the clutches of poverty within the next 100 years, not unless something is done to reverse their situation. Anytime and anywhere, I will challenge anyone who will dare to say that they are poor because they are lazy, because they are not. I will also challenge anyone who will say that it is the fault of their grandfathers and fathers that is why they are poor, because their ancestors are victims too, just as they are. As a matter of fact, there is a high probability that after them, their descendants, their children and even the children of their grandchildren will also remain poor, not unless they are able to graduate from below the poverty line. The reality is, we are going to take the blame if we could not reverse this situation within our lifetime not because there is something special about us, but because we now have the tools to make a difference now, in our own lifetime, and not in the future yet.

The great scientist Albert Einstein is widely credited for the saying “The definition of insanity is doing the same thing over and over again, but expecting different results”. To paraphrase Einstein, it seems that after many parties in power and after many Administrations in passing, practically doing the same thing, we are still expecting the same results, that we could stop the cycle of poverty, and finally get different results, perhaps by way of making our farmers richer rather than poorer. Looking back however, it seems that the problem is not doing the same thing over and over again. Our problem is that our farmers have been telling the government over and over again what they need, but they have never gotten it over the years. To be specific, our farmers have been telling the government over and over again for so many decades that they need irrigation, farm-to-market roads and post-harvest facilities.

In theory, it could be said that our farmers could still make money even without irrigation, farm-to-market roads and post-harvest facilities. These three factors are critical infrastructure inputs that could lower their cost of goods and operating costs, but that does not mean that they no longer have some profit margins for them to make some money. Yes, they do have some remaining profit margins, but what is left for them to make some money is usually eaten up over and over again by a corrupt financing and trading systems that has been victimizing them for so many generations, so much so that we could definitely say that these evil systems are the root causes of poverty among our farmers. Too bad that this reality is not being taught in our history lessons but the fact is, it is still continuing over and over again in our present times.

Now that we have a National Competitiveness Commission (NCC), it should look into the fact that there is actually a conflict of interest if the local businessmen who are lending money to the farmers are also the same businessmen who are buying their produce. It would be easy for these businessmen to claim that they are actually “helping” the farmers because they are lending them money and that they are buying their goods, but as a matter of fact, they are actually “victimizing” the farmers by imposing lending rates that are too high, and by dictating farm gate prices that are too low. Up to now, I still do not understand why anti-trust and anti-usury laws are practically non-existent in our country, but I do understand why our farmers continue to remain poor, and that is because their cost of money is too high, and yet their margin of profit is too low. Do the math, go figure!

After looking around for a long time, I finally found a group of investors who are willing to develop an e-commerce platform that would enable cooperatives to sell to each other, and to sell to each other’s members. Selling to each other is a business to business (B2B) transaction, whereas selling to each other’s members would be a business to consumer (B2C) transaction. It would appear that the combination of the B2B and the B2C transactions would create an ecosystem that would enable all the estimated 30,000 cooperatives to have a built-in market for all of their products, so much so that they would no longer need to go out of their own ecosystem to sell their own goods. What that also means is that they would be in a position to lend to other farmer’s cooperatives at more affordable rates, and buy from these cooperatives at higher prices, thus giving them better margins. Going straight to the point, cooperatives have the potential to reduce poverty, more so now that they could sell their goods using an e-commerce platform.

E-mail: iseneres@yahoo.com