Sustainable Smallholder Agriculture Clusters in the Philippines

Sustainable Smallholder Agriculture Clusters in the Philippines:

Why do some fail while others survive?

John Angus Oakeshott

B.Sc. (Agr.), M.B.A.

A thesis submitted for the degree of Doctor of Philosophy at

The University of Queensland in 2019

School of Agriculture and Food Sciences

Abstract

The important role and contribution of smallholder farmers (SHF) in the southern Philippines towards national food security and the fabric of the nation is without question. This study identified the priorities for a SHF collective action approach for sustainable livelihood improvement. These priorities developed into the Sustainable Agricultural Cluster Framework (SACF) that included the interactions, perturbations and transformational influences to describe the SHF collective approach.

Since 2010 the Philippines has enjoyed an annual economic growth of over 6% in Gross Domestic Product (GDP); however, poverty and hunger persists and in some rural regions continues to worsen. The failure of GDP benefits reaching the vulnerable poor and influencing poverty puts more importance on policies to strengthen and enhance national food and nutritional security. An increasing population, lack of infrastructure, encroachment of global marketing, decaying resources, SHFs limited knowledge of marketing and production, and Climate Change threaten the development goals of the Government of the Philippines. These structural and natural disaster threats disproportionately affect the SHFs and other vulnerable poor.

Rural projects and structural adjustment programs frequently focus on financial improvement and promotion of farming practices that integrate into an economically efficient conventional food system. Whilst providing long-term benefits to the national economy these transformational programs can impose economic hardships on SHFs, or worse a permanent collapse of their local food system as they embrace the global trade of the conventional food system. The rising GDP of the Philippines shows that a sole focus on financial restructuring does not address hunger, poverty or local food security.

The poor and vulnerable SHFs in the southern Philippines individually make a negligible contribution to the nation, but measured as a group, are highly significant contributors to food security, nutrition security, biodiversity, biosecurity, local culture, and local community development. SHF collective action groups, referred to as agricultural clusters, optimally comprise a group of ten to twenty SHFs collaborating in production and marketing in a local food system. There are direct SHF benefits from participating in agricultural clusters and spillover benefits that improve livelihoods and sustainability of their rural communities.

Cluster organizations are unique and shaped by their members within their environments. SHFs benefit from membership of an agricultural cluster through the sharing of resources, labour, risks, and ideas that contribute to improvement in livelihood categories measured under headings of finance, social, human, natural and physical. Joining a cluster to access benefits and improve living

condtions appears a rational economic decision for a SHF. This economically rational approach drives government policy and investment into agricultural clusters as a fulcrum for social formation, information transfer, and transformational change.

The high failure rate of agricultural clusters suggests the SHFs hold a different view of rationality. SHFs consider an extensive range of complex and dynamic factors to make rational decisions based on their unique circumstances to bring livelihood improvements to themselves, their family, and their community. Neoclassical economic theory of their present conditions is not the basis of SHF decisions. Financial concerns incorporated and balanced against slow emergent factors or sudden shocks to livelihoods influence SHF decisions.

Using a Constructivist Grounded Theory approach this study conducted in the southern Philippine islands of Mindanao, Bohol, Leyte and Samar, investigated the factors that influenced the sustainability and capacity of SHF agricultural clusters to adapt and develop within their environments. Interviews of twenty-two agriculture cluster facilitators provided insights and an understanding of general and germane issues on cluster sustainability. Subsequent sixteen Focus Group Discussions with agricultural cluster smallholder farmer members provided individual cluster and smallholder farmer perspectives. Emerging from the data was a collection of five categories important for sustainable agricultural clusters. The five data categories combined and integrated created two new frameworks on agricultural clusters. These are a Sustainable Agricultural Cluster Framework (SACF) and a Cluster Maturity Framework (CMF). Both frameworks are practical instruments for facilitator development activities and a planning tool to understand the potential mode of action of interventions. Development interventions match their needs measured using the CMF maturity-level assessment and the potential impacts of these interventions and alternatives assessed using the SACF.

The results indicate smallholder agricultural clusters are sustainable when there exists a balance of identified concepts grouped under five-livelihood categories; social, human, financial, physical, and natural.

Declaration by author

This thesis is composed of my original work, and contains no material previously published or written by another person except where due reference has been made in the text. I have clearly stated the contribution by others to jointly authored works that I have included in my thesis.

I have clearly stated the contribution of others to my thesis as a whole, including statistical assistance, survey design, data analysis, significant technical procedures, professional editorial advice, financial support and any other original research work used or reported in my thesis. The content of my thesis is the result of work I have carried out since the commencement of my higher degree by research candidature and does not include a substantial part of work that has been submitted to qualify for the award of any other degree or diploma in any university or other tertiary institution. I have clearly stated which parts of my thesis, if any, have been submitted to qualify for another award.

I acknowledge that an electronic copy of my thesis must be lodged with the University Library and, subject to the policy and procedures of The University of Queensland, the thesis be made available for research and study in accordance with the Copyright Act 1968 unless a period of embargo has been approved by the Dean of the Graduate School.

I acknowledge that copyright of all material contained in my thesis resides with the copyright holder(s) of that material. Where appropriate I have obtained copyright permission from the copyright holder to reproduce material in this thesis and have sought permission from co-authors for any jointly authored works included in the thesis.

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Publications included in this thesis

No publications included

Submitted manuscripts included in this thesis

No manuscripts submitted for publication

Other publications during candidature

Peer-reviewed papers

Oakeshott, J. (2016). Sustainable smallholder farming clusters in the Philippines. Acta Hortic. 1128, 339-346; DOI: 10.17660/ActaHortic.2016.1128.52 https://doi.org/10.17660/ActaHortic.2016.1128.52

Oakeshott, J.A. (2018). Sustainable smallholder farming clusters in the Philippines. Acta Hortic. 1205, 109-116, DOI: 10.17660/ActaHortic.2018.1205.12 https://doi.org/10.17660/ActaHortic.2018.1205.12

Conference presentation

Oakeshott, J.A. (2013); Sustainable Smallholder Farming Clusters: Can Smallholder Agricultural Clusters become Competitive Suppliers? Conference paper at The Fifth International Conference on Agribusiness Economics and Management, Davao City, Philippines, 27-28 November 2013.

Oakeshott, J. (2014); Sustainable Smallholder Farming Clusters in the Philippines, Conference Paper at 29th International Horticultural Congress 2014, IHC2014, Brisbane, Australia, 17-22 August 2014.

Oakeshott, J.A. (2016); Sustainable Smallholder Farming Clusters in the Philippines; Conference paper at The International Symposia on Tropical and Temperate horticulture – ISTTH2016, Cairns, Australia, 20 November 2016.

Book

Oakeshott J. and Hall D. (eds) 2013. Smallholder HOPES—horticulture, people and soil. Proceedings of the ACIAR–PCAARRD Southern Philippines Fruits and Vegetables Program meeting, 3 July 2012, Cebu, Philippines. ACIAR Proceedings 139. Australian Centre for International Agricultural Research: Canberra. 298pp.

Contributions by others to the thesis

No contributions by others

Statement of parts of the thesis submitted to qualify for the award of another degree

No works submitted towards another degree have been included in this thesis.

Research Involving Human or Animal Subjects

Ethical clearance was granted by the School of Agriculture and Food sciences Human Ethics Committee which reviewed the ethical issues relating to this research against national ethical policy and guidelines. A copy of the ethics approval letter is included in Appendix 1: Ethical Clearance.

Acknowledgements

I started this journey under the trust and supervision of Professor Ray Collins and Dr Tim Sun. My journey was interrupted for a couple of years during which time Ray and Tim had moved onto other ventures, but I am grateful for their early support. On recommencing the journey, Dr Gomathy Palaniappan, Professor Helen Ross, and Dr Leslie Baxter thankfully agreed to supervise through to completion. We are all in full-time employment and this study and supervision was undertaken after hours, on weekends, late nights, or any opportunity of least conflict with work or family. I am very grateful for this support. I especially want to thank Dr Baxter for his nightly calls and ability to untangle my thoughts into a logical story.

I am also grateful for the support from Ma. Lilia Vega from Visayas State University who provided professional support during the field trip and managed to retain her sense of humour and calmness when presented with difficult logistics or translation timelines.

Thank you all. I enjoyed this journey, the field trips and late-night chats and hope for it all to continue.

Financial support

No financial support was provided to fund this research

Keywords

Agriculture cluster, smallholder farmers, Philippines, Sustainable Livelihood Framework, Grounded Theory

Australian and New Zealand Standard Research Classifications (ANZSRC)

This thesis links to the disciplines clusters in the Federal Government’s Excellence in Research for Australia (ERA) initiative to:

ANZSRC code: 160804, Rural Sociology, 50%

ANZSRC code: 070108, Sustainable Agricultural Development, 50%

Fields of Research (FoR) Classification

The categorization of the thesis according to the field of research (FoR) is;

FoR code: 1608, Sociology, 50%

FoR code: 0701, Agriculture, Land and Farm Management, 50%

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Dedications

To Ritzi, Sierra, and Skittles, for your joy of life and constant distractions that kept me sane and happy, without which I would have finished this many years ago.

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Table of Contents

ABSTRACT ...... I

TABLE OF CONTENTS...... IX

LIST OF TABLES ...... XII

LIST OF FIGURES ...... XV

CHAPTER ONE: NATURE AND SCOPE OF THE STUDY ...... 1

INTRODUCTION ...... 1

BACKGROUND ...... 2

THE PROBLEM ...... 11

RESEARCH QUESTIONS ...... 11

STUDY AREA ...... 11

REFLEXIVITY AND POSITIONING OF AUTHOR ...... 13

ORGANIZATION OF THE THESIS ...... 13

CHAPTER TWO: RESEARCH DESIGN ...... 15

INTRODUCTION ...... 15

RESEARCH FOCUS ...... 15

GROUNDED THEORY ...... 19

GROUNDED THEORY SCHOOLS ...... 19

CLASSIC, STRAUSSIAN, AND CONSTRUCTIVIST GROUNDED THEORY ...... 20

DATA COLLECTION ...... 27

SUMMARY ...... 37

CHAPTER THREE: FRAMEWORK ...... 38

INTRODUCTION ...... 38

ASSET-BASED DEVELOPMENT ...... 39

SUSTAINABLE LIVELIHOODS FRAMEWORK (LF) ...... 40

COMMUNITY CAPITALS FRAMEWORK (CCF) ...... 41

CHOOSING THE LF ...... 42

LF VULNERABILITY CONTEXT ...... 43

SUMMARY ...... 46

CHAPTER FOUR: SOCIAL CATEGORY ...... 48

INTRODUCTION ...... 48

SUPPORT NETWORKS ...... 52

POLITICS ...... 59

RELIGION ...... 64

RELATIONSHIPS AND PARTNERS ...... 68

TRUST…………...... 73

VALUES AND ATTITUDES ...... 76

SUMMARY ...... 81

CHAPTER FIVE: HUMAN CATEGORY...... 85

INTRODUCTION ...... 85

LEADERSHIP ...... 86

EMPOWERMENT ...... 92

MOTIVATION ...... 95

MANAGEMENT ...... 98

MARKETING ...... 104

FACILITATORS ...... 107

SUMMARY ...... 110

CHAPTER SIX: NATURAL CATEGORY ...... 115

INTRODUCTION ...... 115

WATER ………………………………………………………………………………………..118

PEST AND DISEASES ...... 119

LAND…………… ...... 121

WEATHER ...... 124

SUMMARY ...... 126

CHAPTER SEVEN: FINANCIAL CATEGORY ...... 128

INTRODUCTION ...... 128

ACCESS TO FINANCE ...... 130

GOVERNMENT FINANCE ...... 135

INSURANCE ...... 138

REPAYMENTS ...... 139

SUMMARY ...... 142

CHAPTER EIGHT: PHYSICAL CATEGORY ...... 144

INTRODUCTION ...... 144

LAND ACCESS ...... 145

PRODUCTION EQUIPMENT (MOBILE) ...... 147

STRUCTURES (IMMOBILE) ...... 150

SUMMARY ...... 152

CHAPTER NINE: THEORY AND MODEL ...... 154

INTRODUCTION ...... 154

CATEGORY RELATIONSHIPS ...... 154

THE CLUSTER MATURITY FRAMEWORK REVISITED ...... 157

CLUSTER ACTIVITIES ALIGNED TO CLUSTER MATURITY ...... 158

THE SUSTAINABLE AGRICULTURE CLUSTER FRAMEWORK (SACF) ...... 162

SUMMARY ...... 166

CHAPTER TEN: DISCUSSION ...... 168

INTRODUCTION ...... 168

ANSWERING THE RESEARCH QUESTIONS...... 168

CONTRIBUTION TO THE ESTABLISHED BODY-OF-KNOWLEDGE ...... 174

RESEARCH QUALITY ...... 180

LIMITATIONS ...... 181

SUMMARY ...... 182

CHAPTER ELEVEN: CONCLUSION ...... 184

CONCLUSION ...... 184

RECOMMENDATIONS ...... 187

FINAL WORD ...... 188

GLOSSARY, ABBREVIATIONS AND ACRONYMS ...... 190

LIST OF REFERENCES ...... 192

APPENDICES…………...... 228

APPENDIX 1: ETHICAL CLEARANCE AND CONSENT FORMS ...... 228

APPENDIX 2: SUCCESSFUL CLUSTER EXAMPLES ...... 241

APPENDIX 3: FAILED CLUSTER EXAMPLES ...... 244

APPENDIX 4: CHECKLIST FOR MARKET TRAINING ...... 245

APPENDIX 5: FACILITATION ...... 246

APPENDIX 6: ACCESS TO FINANCE – CHALLENGE FOR SMALLHOLDERS ...... 247

APPENDIX 7: HISTORY OF ACCESS TO FOREST AND LAND IN THE PHILIPPINES ...... 248

APPENDIX 8: SHIFTS IN PARADIGMS OF SMALLHOLDER RESEARCH AND DEVELOPMENT ...... 249

APPENDIX 9: AGRI-FOOD CLUSTERS IN THE PHILIPPINES ...... 251

APPENDIX 10: GOVERNMENT AGENCIES FOR CLUSTER REGISTRATION ...... 252

APPENDIX 11: WHY AND WHEN WE COOPERATE? ...... 254

List of Tables

Table 1: Benefits of an agriculture cluster for a SHF ...... 9

Table 2: Comparison of Four Paradigms ...... 16

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Table 3: Comparative approaches ...... 25

Table 4: Agriculture Cluster Facilitator Interviews ...... 31

Table 5: Facilitator Interviewee Participants ...... 31

Table 6: FGD participating Agriculture Clusters ...... 34

Table 7: Components of GT Data Collection and Coding ...... 36

Table 8: Emerged Categories and Factors ...... 39

Table 9: Comparison between Traditional Needs/Deficit-Based and Asset-Based Approaches ...... 40

Table 10: Perturbations and Constraints ...... 44

Table 11: Constraints, perturbation, and adaptations ...... 46

Table 12: Social Capital Discussion Topics ...... 51

Table 13: Support Network Channels ...... 56

Table 14: Programs for agricultural clusters ...... 56

Table 15: Support Network - Important for sustainability from refocused analysis ...... 59

Table 16: Politics - Important for sustainability from the refocused analysis ...... 64

Table 17: Religion - Important for sustainability from refocused analysis ...... 68

Table 18: Relationships and Partners - Important for sustainability based on the refocused analysis ...... 72

Table 19: Types of Trust ...... 75

Table 20: Trust - Important for sustainability based on the refocused analysis ...... 76

Table 21: Facilitator’s Terms describing Attitudes ...... 79

Table 22: Values and Attitudes - Important for sustainability based on refocused analysis ...... 80

Table 23: Ranking of social concepts for cluster sustainability ...... 83

Table 24: Human Capital Discussion Topics ...... 86

Table 25: The Six Global Leadership Dimensions ...... 89

Table 26: Leadership - Important for sustainability based on refocused analysis ...... 92

Table 27: Empowerment Model for Smallholder Clusters ...... 94

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Table 28: Empowerment - Important for sustainability based on refocused analysis ...... 95

Table 29: Motivation - Important for sustainability based on the refocused analysis ...... 97

Table 30: Management - Important for sustainability based on the refocused analysis ...... 103

Table 31: Marketing - Important for sustainability based on refocused analysis ...... 107

Table 32: Facilitation - Important for sustainability based on the refocused analysis ...... 110

Table 33: Ranking of human concepts for sustainable clusters ...... 113

Table 34: Natural Capital Discussion Topics ...... 116

Table 35: Water - Important for sustainability based on the refocused analysis ...... 119

Table 36: Pests and Diseases: Important for sustainability based on the refocused analysis ...... 121

Table 37: Land - Important for sustainability based on the refocused analysis ...... 123

Table 38: Weather - Important for sustainability based on the refocused analysis ...... 125

Table 39: Ranking of natural concepts for sustainable clusters ...... 127

Table 40: Financial Capital Discussion Topics ...... 129

Table 41: Smallholder business models to reduce financial risks ...... 134

Table 42: Access to Finance - Important for sustainability based on the refocused analysis ...... 135

Table 43: Government Aid - Important for sustainability based on the refocused analysis ...... 137

Table 44: Insurance - Important for sustainability based on the refocused analysis ...... 139

Table 45: Factors influencing smallholder repayments ...... 141

Table 46: Repayment - important for sustainability based on the refocused analysis ...... 142

Table 47: Ranking of financial concepts for sustainable clusters ...... 143

Table 48: Physical Capital Discussion Topics ...... 144

Table 49: Land Access - Important for sustainability based on the refocused analysis ...... 147

Table 50: Mechanization in the Philippines - country comparison (horsepower/ha) ...... 148

Table 51: Equipment - Important for sustainability based on the refocused analysis ...... 149

Table 52: Structures - important for sustainability based on the refocused analysis ...... 152

Table 53: Ranking of physical concepts for sustainable clusters...... 153

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Table 54: Cluster Maturity Stage 1 - sustainability activities and capacity development ...... 159

Table 55: Cluster Maturity Stage 2 - sustainability activities and capacity development ...... 160

Table 56: Cluster Maturity Stage 3 - sustainability activities and capacity development ...... 161

Table 57: Cluster Maturity Stage 4 and 5 - sustainability activities and capacity development ..... 162

Table 58: Benefits of SACF ...... 166

Table 59: Reasons for an agricultural cluster to fail ...... 169

Table 60: Conditions that improve agriculture cluster sustainability ...... 171

List of Figures

Figure 1: Food Systems - Impacts, Outcomes and Drivers ...... 4

Figure 2: Study area – facilitator interviews and SHF focus group discussions...... 12

Figure 3: Chapter Organisation and Layout ...... 14

Figure 4: The Uniting and Differentiating Principles of GT ...... 23

Figure 5: Induction, Deduction, Abduction ...... 26

Figure 6: Flow of data collection, data, and methods ...... 27

Figure 7: Cluster Maturity...... 33

Figure 8: The FGD Study Trip Map ...... 34

Figure 9: The Coding Process Example ...... 35

Figure 10: Sustainable Livelihoods Framework ...... 41

Figure 11: Community Capitals Framework ...... 42

Figure 12: Perturbations ...... 44

Figure 13: Types of Smallholder Strategies ...... 46

Figure 15: Support network structure for an agriculture cluster ...... 52

Figure 16: Number of support providers...... 57

Figure 17: Barangay structure ...... 60

Figure 18: Finding the political and development balance ...... 63

Figure 19: Discipline, religion and cluster maturity ...... 67

Figure 20: Cluster member Average Age versus Cluster Maturity (self-assessed) ...... 69

Figure 21: Circumplex Model: Cohesion and Relationships ...... 71

Figure 23: Situational Leadership Model and Cluster Maturity ...... 90

Figure 24: Situational Leadership, Cluster Maturity and Political Relationships...... 90

Figure 25: Combined - Circumplex model and Situational Leadership Model ...... 91

Figure 27: Management Map - Facilitators and their agency ...... 99

Figure 28: Three Alliance Relationships ...... 100

Figure 29: The Promoter Model for Management Development ...... 101

Figure 30: Inter-Organizational Relationship Promoter Model ...... 102

Figure 31: Distance (km) versus Cluster Maturity (self-assessed) ...... 106

Figure 32: Management Process for Facilitators ...... 110

Figure 33: Human Capital relationship to Social Capital ...... 111

Figure 34: Social and Human Category Cluster Development Model ...... 112

Figure 35: Facilitators and FGD topics ...... 116

Figure 36: Financial environment of smallholder farmers ...... 131

Figure 37: Financial environment of smallholder farmers ...... 151

Figure 38: Point of sustainability of agricultural clusters ...... 154

Figure 39: Relationships within and across categories ...... 155

Figure 40: Spiralling Capital Assets ...... 156

Figure 41: Cluster Maturity Framework revisited ...... 157

Figure 42: Cluster Maturity and Spiralling ...... 157

Figure 43: Sustainable Agriculture Cluster Framework (SACF) ...... 164

Figure 44: Sustainable Agriculture Cluster Framework (SACF) - Factor Level ...... 165

Figure 45: Steps to develop the SAC Framework...... 167

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Chapter One: Nature and Scope of the Study

Introduction

This study examines the factors that influence the sustainability of southern Philippines smallholder farmer (SHF) agricultural clusters. Clusters are composed of SHF members living in close proximity taking collective action in production and marketing activities (Bosworth & Broun 1996; USAID 2008; Gálvez-Nogales 2010). This collective action approach improves the efficiency and effectiveness of the cluster operations through ‘agglomeration economics’ (Monteiro et al. 2011). If facilitated or managed professionally an agricultural cluster can significantly improve farming production and marketing to support the development of livelihoods of SHFs and their communities (IDH 2018).

In the Philippines, development agencies frequently use agricultural clusters to coordinate SHFs into facilitated collaborative groups aimed at transforming rural livelihoods (Batt 2008; Montiflor et al. 2008; Rola-Rubzen et al. 2012). However, in the southern Philippines clusters experience high failure rates when a program of facilitation ends (Briones 2003). The success or failure of clusters can be related to how the cluster farming members respond, adapt and draw on their existing resources and support networks in their dynamic and unique environments.

Smallholder agricultural clusters in the southern Philippines exist in a complicated environment threatened by frequent natural disasters, volatile markets, dynamic relationships and armed conflicts. Their business environment is largely unregulated (Levy et al. 2005) and supply chains are more adversarial than complementary (Oakeshott 2018). Every cluster is unique with multiple interactions and feedback loops that change outcomes in ways that are difficult to predict.

Individual non-clustered Filipino SHFs make decisions in response to slow emergent change or sudden shocks in their environment. This strategy of ‘coping’ (Castillo 1990) in response to a change is more of an innate strength than a conscious strategy. The capacity to cope through difficult times and rebuild after setbacks involves investing in small risks for small changes where gains are largely predictable, and losses are not devastating.

The benefit of an agricultural cluster for SHFs is their move from their individual coping strategy into a group forum where shared knowledge, resources and risks open opportunities for the implementation of transformative changes that bring greater livelihood benefits.

This study of agricultural clusters builds on conclusions from Ebo and Ebo (2017) that Philippines food security and sustainability can be improved at the micro level by targeting individuals and groups to strengthen and enhance their production decisions. This study followed those conclusions and targeted SHFs grouped into agricultural clusters to investigate sustainable, efficient and effective production and marketing system. The conclusions suggest potential exists to develop a sustainable food and nutrition security system that utilizes agricultural clusters that integrate and manage their own environments.

Grounded Theory (GT) was the selected methodology for this study because it is appropriate in studying views, actions, and group perceptions of people adapting to change. Constructivist GT was chosen above Classic and Straussian GT since it provides a guide to conceptualize into the form of a story from the data that emerges. This involved interviews with twenty-two cluster facilitators and sixteen Focus Group Discussions (FGD) with SHF members from agricultural clusters across the southern Philippines that provided data which strengthened and enhanced the sustainability of agricultural clusters. Analysed transcripts, compared with current literature, developed patterns and a story about agricultural cluster sustainability. The emergent data and story strengthen and enhance current theories and frameworks to develop an understanding of the sustainability of clusters in the southern Philippines. The study output was a Sustainable Agricultural Cluster Framework (SACF) and a Cluster Maturity Framework (CMF). These are intended as both practical instruments for facilitator development activities and a planning tool to understand the potential mode of action of interventions. The CMF assists facilitators to identify the cluster development needs and the potential impacts of these interventions, and alternatives are assessed using the SACF.

Background

Agriculture is a major contributor to the Philippines economy and rural livelihoods. The sector contributes 20% to the national Gross Domestic Product (GDP) and employs 37% of the national labour force (Habito 2012; PSA 2015; WFP 2015). Within the population of 108 million Filipinos (PSA 2019), an estimated 51% live in rural areas on 4.5 million farms (Moog 2006). Most of these farm households are poor. The national poverty incidence among agricultural households is averaged at 57% (Reyes et al. 2012); however, in some communities, the rural household poverty levels reach as high as 70% (AusAID 2009).

Poverty in the Philippines is correlated with larger families, agricultural-related occupations, and lower educational achievements (Reyes et al. 2012); which is synonymous to the rural population.

The inequality between urban and rural household has poverty estimates three-times larger and food insecurity five-times greater in rural households than the non-agricultural households (ibid). These households are nuclear but functionally extend to include other households of the same barangay (village) and together they ‘cope’ and ‘share’ problems where collective decisions improve their livelihoods and survival (Castillo 1990).

Providing food security and food nutritional security (FS&FNS) for growing populations within the current global food system is a looming problem for every nation (FAO 2019a). The Philippine’s food system has similarities to other developing countries with food harvested and moved through a complex network of traders, transporters and processors to the final consumer. Each step of the supply chain entails a range of specific activities requiring specialist skills and relationships. There are two dominant food systems in the Philippines. The first is the conventional system of agricultural production and marketing that is driven by the constant lowering of costs, heavy reliance on fossil fuels, and integration into the global market. The second, non-conventional, food system is a people-centric one comprised of the economically vulnerable rural population, for production that supports densely populated local urban centres (Reyes et al. 2012). In this study, the non-conventional system refers to collective action of producers operating in local food systems in the southern Philippines where food is produced by SHFs in geographical proximity to each other and to their consumers. This local system operates with direct marketing using less fossil-fuel based inputs, less food transportation, less packaging and less processing. This local system supports and builds communities, reduces the rural urban migration and promotes local stewardship of the land and ecosystem. Non-conventional food systems also include Fair Trade and Organics.

The conventional food system threatens to undercut the local system with a focus on economies of scale leading to cheaper prices. The laser-levelled land and expansion of mono-culture crops potentially increases the degradation of local ecosystems, loss of traditional foods, and initiates social impacts such as the erosion of cultures and gradual decay of healthy communities (Kuhnlein & Receveur 1996).

As the demand to produce cheap calories increases, the nutrition levels decrease (Nestle 2013). In the Philippines, there is an accelerated transition from traditional diets based on root crops, vegetables and fish, to a modern diet based around the lower nutrition conventional food system characterized by higher intakes of fats, sugars and salts. The consumer demand for cheaper food forces retailers to source from the global traders; that potentially undercuts the local economy and production. Once healthy communities are threatened with a ‘triple burden’ of overconsumption,

micronutrient deficiency, and hunger (FAO 2004a; Virchow et al. 2016; Briones et al. 2017; Ebo & Ebo 2017). Whilst both food systems clash, they exist side-by-side and are both challenged to supply food that is increasingly diverse, convenient, healthy, high quality and with safety guaranteed (Shepherd 2007). Figure 1 illustrates the impacts and outcomes of changes in the food system facing developing countries as the conventional food system encroaches.

Kennedy, Nantel and Shetty in FAO (2004a) Figure 1: Food Systems - Impacts, Outcomes and Drivers

The economic and social drivers are pushing the food system further into global conventional food systems where food supply is year-round, cheap and based on cost efficient production. Malthusian famines have not eventuated at a global level largely because of the cost-efficient food system; however, this system threatens livelihoods with unhealthy diets, erodes cultures, ecosystems and biodiversity.

A difficult challenge exists to find the balance between the global efficient conventional price- focused food system while protecting the local food systems that offer stewardship of the land and healthy rural communities. The conventional food system dominates industrialized countries and has an increasing presence in transitional economies such as the Philippines (IPES-Food 2016) because it is easier for buyers to purchase cheap uniform produce at low transaction costs from global traders and the larger farmers practicing Good Agricultural Practices (GAP). The local food system composed of SHFs is less attractive to buyers unless this transactional cost and produce 4

quality assurance power imbalance is addressed. To ensure FS&FNS these two food systems will need to complement each other as the The World Bank (2017) predicts an increase in food production of more than 50 percent is required to feed the world by the year 2050.

For the Government of the Philippines, growing the agriculture sector at a greater rate than population growth is important (Tort 2019). The agriculture sector is currently growing at 1.1% per annum and the population is growing at 1.8% per annum (ibid). It is an easy decision for policy makers to support fewer professional and efficient producers in a conventional system for FS&FNS rather than many disparate SHF in a diverse and complex local food system. The Government of the Philippines needs to find the balance to ensure national food security and the livelihoods of the rural poor are protected without erosion of local communities and ecosystems. Therefore, both food systems need support.

From the natural environment perspective, the rapid population growth in the Philippines is directing agriculture towards a conventional food system. The Philippines has the seventh fastest rate of global deforestation (CBD 2019b) due to the encroachment of human activity into the natural environment. This entails the encroachment of housing into natural resource areas and expansion of working lands. The conversion of forests into agricultural land and greater intensification of production has the potential for the gradual erosion of the ecosystem and local biodiversity (CBD 2019b; FAO 2019c). This threatens the Philippine ecosystem regarded as one of the world’s 18 mega-biodiverse countries supporting up to 80% of the global plant and animal species in a range of ecosystems (CBD 2019b).

From the perspective of rural communities, government failure to support services and meet expectations for national FS&FNS can trigger political instability (Smith 1998). In 2007-2008, rioting occurred as food systems failed during the period of the Global Financial Crisis (GFC) (Headey & Fan 2008; Cribb 2010). More recently, Venezuelan food riots occurred as the economy collapsed (Brodzinsky 2016). In the Philippines the unfulfilled expectations from Government following extreme weather and crop failures directly contributed to an increase support for destabilizing regional insurgent groups (Crost et al. 2018). The unrest from the threat from climate- induced disasters and poor support services places the Government under pressure to meet community expectations and avoid support shifting to insurgent groups. Meeting these expectations and the delivery of public services into the remote rural areas in the Philippines is challenging given the difficult terrain and weak local institutions (WorldBank 2017).

From the perspective of farmers, the SHFs generally avoid transformative livelihood improvement strategies involving larger investments and higher risks required to compete in the global marketplace. Infrastructure and capital equipment required for production and processing is costly and a high-risk investment in a volatile market. This risk averse response in preference for small incremental changes is because they are poor (FAO 2019b) and seek solutions of least immediate stress with losses minimized. This ‘coping’ strategy might not be enough to withstand the encroaching global traders of the conventional food system. Policies to support SHFs and retain a balance between the conventional and non-conventional food systems will assist the cause of national FS&FNS. The other area of program focus is to build capacity of the SHFs. A better understanding of SHFs will help design policy and program support.

Globally, there are an estimated two billion SHFs on less than 2 hectares of land (Thapa & Gaiha 2011). Whilst many of these SHFs are subsistence farmers, they are a heterogeneous group of individuals shaped by their unique situations, dynamic environments, and by community where they live. Defining SHFs goes beyond only a measure of farm sizes or crops because economic returns per unit area vary by the product, production system, and local environment. Farm size is also complicated in areas where SHFs have poorly defined farm boundaries, which was the situation that emerged from the data in some western Mindanao communities. Avoiding the farm size and production economics in the definition of SHFs allows the focus to shift towards other equally significant factors that characterize the SHFs. This definition is focused on influences of family, available resources, opportunities and choices. For this study, the following definition of SHFs is used:

SHFs exist in family-labor intensive and traditional farming systems based on local resources and low capital input with limited opportunities for livelihood improvement because of limits on production area, finances, knowledge, marginalized in decision-making in society, and where limited opportunities result in unfulfilled existence and potential (Rahman 1978; Habito-Cadiz 1994; Breuer 2011; Dixon et al. 2012).

SHFs often express frustration on difficulties of accessing finance to procure increasingly costly production inputs such as seed and fertilizer. The formal banking sector regards SHFs as a group with high risk, high transactional costs, seasonal incomes, low financial literacy, and residing in areas with static local economies that are geographically hard-to-reach (DAR & Landbank 2008). Consequently, SHFs face high interest rates, bank paperwork that requires a financial mediator to

negotiate their terms, and bank collateral rules on property security where one failed harvest has the potential to leave them without a home or income (DAR).

Post-harvest market requirements for SHFs are increasingly complex and regulated. SHFs are disconnected from markets with fewer opportunities (Murray-Prior & Rola-Rubzen 2011) and struggle with diminishing terms of trade as their farm costs increase faster than returns. The farm- gate traders are often adversarial, and consumers demand not only quality staples but also an increase in diversity. The SHF isolation and reliance on one or few traders results in a power imbalance favouring traders, and SHFs become ‘cost-takers’ with the smallest returns among all the supply chain participants (Aguinaldo et al. 2013). SHFs generally produce the least costly commodity items. At the Philippines national level, agricultural terms of trade is declining in these commodity items, and that threatens the SHF livelihoods and the national FS&FNS (FAO 2004b).

Difficult terrain and remoteness are an obstacle for rural supplier access that impacts on SHF production capacity from lack of materials and the high costs. Other production threats include the increase in pressure from transboundary pests, declining soil fertility, and degradation of limited natural resources. Production resources such as the macro-plant nutrient phosphorus is regarded as having passed ‘peak’ supply and will become less available at a greater cost (Cribb 2010). Access to water will also be further restricted and limited with an estimated 3.6 billion people globally suffering from water stress; that is expected to rise to 5 billion by 2050 (Chartres & Varma 2010; GCA 2019). During the field data collection for this study, the southern Philippines was amid an El Niño Southern Oscillation (ENSO) event and the lack of water was a common topic of discussion. Due to greenhouse effects on global warming, the occurrence of these ENSO events is predicted to increase (Cai et al. 2014).

Climate change is an additional threat to these existing agronomic and livelihood challenges and the capacity of the Philippines to sustain food production against this threat faces significant challenges (Bell et al. 2016). Currently farming contributes to 30% of the total global greenhouse emissions (WorldBank 2017) and the Catch-22 of the changing climate is increase production will increase emissions and production losses. The 50% increase in food production forecast requirement by 2050 (ibid) will increase emissions. This extra atmospheric CO2 leads to an increase in climate disruption that results in damage to production with losses forecast as high as 25 percent (WorldBank 2017; GCA 2019). The Philippines is ranked as the third most vulnerable country to climate change risks (Paun et al. 2018). The current Philippines cost of natural disaster damage to the agricultural sector averages USD477 million each year, which in 2014 was 25% of the national

budget allocated to this sector (FAO 2015). Production policies to support the conventional fossil fuel-based food systems will increase emissions and increase these reparation costs. These climate- induced natural disasters affect the most vulnerable Filipino SHF households dependent on farming for livelihoods and FS&FNS (WFP 2015). Policies are required that balance the national FS&FNS requirements with support for SHFs and local food systems. Appendix 8: Shifts in Paradigms of Smallholder Research and Development (R&D) presents further background on SHFs changes in R&D interventions aimed at livelihood improvements.

SHFs can achieve greater crop and livestock productivity and FS&FNS with improved management (Fischer et al. 2014). A potential route for SHFs to be competitive in the market, sensitive to their environment, and improve their livelihoods is to utilize collective action and agglomeration economics in the form of agricultural clusters. This collective approach operates at lower input and labour costs (De Schutter 2009) that allow the SHFs to become competitive in their local food system against the market pressures from the conventional food system. Agricultural clusters composed of like-minded individuals sharing similar ambitions are an important vehicle for transformation of livelihoods (Okamura 1986) to share knowledge, investments and risks.

For this study, the following definition is used for SHF agricultural clusters:

A smallholder agricultural cluster is composed of individual SHFs living in close proximity and collaborating in farm production and marketing enterprise activities of the same or mixed produce in the same supply chains (adapted from Bosworth & Broun 1996; USAID 2008; Gálvez-Nogales 2010).

An estimated 569,000 agricultural cooperatives operating globally (UN 2009). In the Philippines, an estimated 59,132 registered cooperatives and associations are active (CDA 2017b; DOLE 2017a), and an unknown number of these are suspected to no long trade. Appendix 9: Agri-Food clusters in the Philippines lists the types of agri-food clusters in the Philippines.

In the Philippines agricultural clusters generally operate to collectively plant similar crops that are graded to a similar standard, then consolidated and transported in bulk to reduce transaction costs, then sold in high volumes to attract bulk buyers, and this results in an increased net income (Montiflor et al. 2008). Agricultural clusters have potential to impart more livelihood benefits than only higher net income. Livelihood benefits include new knowledge, skills, innovations and adoption of new ideas and opportunities to adapt and control technology interventions and fulfil their individual development priorities (Mulwa 1987). Increase in profits is a benefit of agricultural clusters for SHFs (Rola-Rubzen et al. 2012), that is attributed to:

1. The lower wage and cost structures (De Schutter 2009), 2. The potential for improvement in economies of scale, and the sharing of networks, knowledge and risks (Murray-Prior, 2008; Proctor and Vorley, 2008; Reardon and Berdegue, 2006; Shepherd and Cadilhon, 2008), 3. Building efficient and effective production and marketing (Habito-Cadiz 1994), 4. Improve management of resources, building links to other partner institutions (Bamberger 1991; Habito-Cadiz 1994), 5. Attracting external providers and services, (Chamala S 1995; Rola-Rubzen et al. 2012; Moustier 2013).

Table 1 summarizes the livelihood opportunities and benefits against the SHF main areas of activity that were identified during the study interviews and SHF FGDs.

Table 1: Benefits of an agriculture cluster for a SHF

Obstacles Smallholder farmer benefits on joining a cluster Economies of scale; Potential to lower the cost of inputs and services; Access to other member skills, networks and resource; Cluster becomes a convenient point of entry for government and public and private support agencies; 'Co-opetition': competition between stakeholders within the cluster for improvement; Improve productivity through access to specialised suppliers, skills and information; Innovation gains a Production higher priority as the cluster improves their process of production; Growth of the cluster attracting new firms and new suppliers; Potential new products and new client; Indirect access to subsidised inputs (from donor assistance programs); Improved knowledge of pest, diseases, IPM, ICM, and GAP; Faster access to market information improves speed of adaptability; Increasing innovation; Accessing finance;

Implementation of standards and quality assurance; Warehousing, grading, packing, processing and value Post-harvest adding to the product; Opportunities for infrastructure developments; Grower-marketer-retailer collaboration; Branding and image creation; Improved market access; Improved Marketing bargaining power; Spreading suppliers through clusters allows for scheduling of harvests and reduces risk of under/over supply; Better understanding of the consumer value and the value of their own produce;

Innovation dissemination and rapid transmission and adoption of ideas; Sharing knowledge and equipment Knowledge and general human capacity development; Exchange of talent, skills and information; Improved knowledge of their food system; Decision Sharing risk and uncertainty - emboldening; Empowerment and self-determination; Personal recognition and making validation

The philosopher Victor Frankl (1959) said that group membership is one of the activities which bring positive life purpose and meaning. This allows the individual to choose their attitude to the circumstances, which leads to the development of empowerment. Studies on agricultural clusters support the group membership view of Frankl and show that membership is not based solely on tangible rewards. Joining an agricultural cluster provides SHFs an emotional element linked to a

desire to belong which is the driver for membership (Macapagal & Nayal 1994; Schmid & Soroko 1998). Robison and Siles (1998) support these studies when they said that one of the reasons an individual will join an organization is a need for validation and personal recognition.

Joining a cluster for personal recognition and fulfilling emotional factors does not eliminate the individual’s need to satisfy personal benefits and interests (Gillinson 2004). An example is the ‘free rider’ problem that occurs in a voluntary situation; that is, where a worker will not contribute an equal effort in the belief the collective action will occur without their contribution (Olson 1965). In this situation, a SHF balances a decision based on energy and resources they wish to conserve for their own benefit against the benefits they receive from collective action and their poor contribution to the group that risks expulsion. Successful collective action recognizes individual needs and harnesses their resources to resolve these problems (Patron 1987). These main points are expanded in Appendix 11: Why and When We Cooperate?

The Government of the Philippines and donor organizations utilize smallholder agricultural clusters as the fulcrum to influence rural development through their livelihood transformation projects (CRS-Philippines 2007; LFPI 2009; JICA 2012; Louis Berger 2012). A common system of interaction between government and the cluster in the Philippines is through a facilitator from a development agency (Monteiro et al. 2011). The role of these facilitators is to guide the agriculture cluster through its inception to establishment.

Agricultural clusters are not the complete solution for developing rural livelihoods as they also experience high failure rates when supporting project facilitation ends (Briones 2003; Castillo et al. 2003). The structure, formation, and failure of strategic alliances between organizations has similar elements of relationships and interactions that exist in agricultural clusters. There is plenty written on strategic alliance formation between organizations but little on the characteristics for sustainable alliances (Spekman & Mohr 1994; Zaman & Mavondo 2001). This is like agricultural clusters where information is brief on characteristics of sustainable clusters. Understanding the characteristics of an agricultural cluster that directly contribute to their competitive advantage will reduce failure rates and improve sustainability.

This study explores the collective action factors and characteristics of SHF agricultural clusters that realize benefits for livelihood improvement, developing food and nutritional security, healthy community, increasing income, strengthening biosecurity and enhancing ecosystem management of their local environments.

The Problem

SHF are facing many threats affecting their terms of trade and livelihoods. The background discussion outlined these challenges and how SHFs may benefit from clustering resources for economies of scale and sharing of ideas, risks and labour. Joining a cluster to improve living condtions appears a rational economic decision for a SHF. This rational approach is also supported by Government and donors who act as a fulcrum of social formation and information transfer for livelihood improvement. However, SHFs are either not making economically rational decisions or hold a different view of rationality. The problem of clusters collapsing at the end of a period of external facilitation suggests SHFs are giving priority to decisions that are economically irrational. This suggests a dissonance between the rational processes of an agricultural cluster and the appearance of irrational decisions of SHFs on ‘how’ they sustain the cluster.

This study looked for patterns in the decisions of SHFs that explain the cluster collapse and the influence of their actions and environment. Understanding these decisions assists cluster facilitators and policy makers to develop sustainable strategies that address these isssues and strengthen the potential of the cluster. The broad objective is to create a picture of why agriculture clusters fail and how to make them sustainable.

Research Questions

The aim of this study was to better understand how the sustainability of smallholder agricultural clusters in the southern Philippines can be improved. The objective was to identify and contextualize issues and decisions of SHFs who join an agricultural cluster and understand their cluster participation experiences and how these influence the cluster sustainability. A key part of this process was to collect data from both successful and failed clusters in the southern Philippines. The following two research questions were designed as foundations for answering the aim:

1. What conditions can improve agricultural cluster sustainability? 2. How can complex agricultural cluster data be effectively utilized and transformed into a planning instrument to benefit the sustainability of SHFs in the southern Philippines?

Study Area

The study area was the south-eastern area of the Philippines; specifically, the islands of Samar, Leyte, Bohol, and Mindanao. This selected area overlapped with the researcher’s area of responsibility at the time of employment in the Philippines. Planning the field data collection benefitted from the researcher’s developed network of contacts and familiarity with the geography 11

and logistics. This area is also the agribusiness centre of the country (Dy 2014) with the country’s poorest Provinces (Galarpe 2019) where different types of clusters are concentrated. The area also has an ethnic diversity with differences in values and attitudes which provided additional insights into the way collective action was approached in clusters. The ethnic groups encountered in the study area included Cebuanos, Bisayans, Boholanos, Warays, Hiligaynons, Ilocano migrant farmers, and Mindanao Lumads from the Manobo and Mandaya tribes.

Figure 2 shows the selected study area where interviewed agriculture field staff operated and the SHF agricultural clusters Focus Group Discussions (FGDs) were undertaken.

Figure 2: Study area – facilitator interviews and SHF focus group discussions

The researcher has thirty years of experience in agriculture development in both the private and government sector, of which ten years have been spent in developing countries working with SHFs. These years of experience provide the knowledge to identify the problem, the research questions, and identify participants within the study area which overlapped with work activity region. The ability to undertake this study in the geographic area with the selected smallholder participants was challenging, even with many years of experience. Experience was a pre-requisite.

Reflexivity and Positioning of Author

Reflexivity is the process of reflecting critically on the self as a researcher (Guba & Lincoln 2005, p. 210)

The constructivist Grounded Theory approach for this study requires data to be co-constructed by the researcher and participants and interpreted during analysis through the lens of the researcher’s experiences (Thornberg, 2012). I spent ten years working as a consultant on an Australian government funded agricultural research and development program in the southern Philippines. Based in Davao City, the funded program area was the same as this study area. The work program provided familiarity with the geography, logistics, and smallholder farmers in the study region. Prior to the Philippines I worked in the Australian broadacre horticulture industry in both government and private sector positions, agricultural market consultancy work in rural Japan and Korea, and a short period of agricultural production research in Qatar. This experience was in highly mechanized production with effective cool chains from paddock to plate. Quite different to remote smallholders in the Philippines that are labor intensive, no cool chain, and often with poor market-access roads that are impassable during inclement weather. Utilizing the Grounded Theory methodology for this study, I make no pretenses for impartiality as my perspectives, experiences, and assumptions sculpted this research. This research required reflexivity and awareness on what I saw and heard, what I brought to the situation, and then how I interpreted the situation (Charmaz, 2006, p. 15). Awareness and conscious reflecting on my own influence on the data collection and interpretation was a constant process to understand correctly the smallholder agricultural clusters in the Philippines.

Organisation of the thesis

This study has eleven chapters to take the reader along a similar journey of discovery to that of the researcher. Sustainability of agricultural clusters in the southern Philippines is the identified problem for this research. Constructivist Grounded Theory is a set of principles that can be utilized as flexible guidelines that was selected as the methodology for this research to develop a framework to describe and understand the problem. The analysis leads towards a framework that is ‘grounded’ in the data co-created between the researcher, smallholder farmers, and agriculture cluster facilitators. As part of the research process, literature is not reviewed and compiled in a specific chapter but interspersed throughout the entire thesis anytime during the study (Charmaz 2006). According to Charmaz, the use of literature during the continuum of the research is acceptable since it fosters researchers’ reflexivity about their decisions and actions and augments creativity 13

(Charmaz 2014). This research does not follow a standard doctoral outline with a chapter to foreground the research but embraces Charmaz’s approach of interspersed data and literature review. Each chapter ends with a summary to consolidate or highlight factors that contribute to the ultimate framework.

The first three chapters provide the background, problem, objectives and framework of the study. Chapter two outlines the Constructivist Grounded Theory (GT) methodology selected for this study. The Constructivist GT approach allows for a constant review of literature at any stage of the research that augments the study decisions and creativity through reflexivity and self-reference examination. To capture the process of constant review, chapters’ four to eight contain the analysed field data interwoven with a review of literature. Interweaving the literature review with field data reflected the research process. Presenting this study in a story line was considered the best format that led the reader towards the theory and discussion of sustainable agricultural clusters in chapters’ nine to eleven. Figure 3 illustrates the organization and layout of the chapters.

Figure 3: Chapter Organisation and Layout

Chapter Two: Research Design

Introduction

This chapter explains the methodology and methods used to collect and analyse data to answer the two research questions. The chapter commences with an explanation of the research focus and explicates the relationship between the research questions and the research paradigm. The selection of Constructivist Grounded Theory as the methodology for this study is deliberated. The study methods, tools for data collection, and selection of study participants and their profiles are presented. This chapter ends with a summary of the research quality and validity.

Research focus

This study explores the experiences of SHFs in agricultural clusters and the conditions required for sustainable livelihood improvement.

Gilbert Ryle’s seminal work on knowledge (1949), guides the focus of this study on how clusters can be sustainable. Ren (2012) debates the relevance of these concepts of knowledge-how and knowledge-that, the characteristics of how clusters are sustainable is an interesting lens to view the sustainability of agricultural clusters and SHF decisions. The knowledge-that is used to identify and create agricultural clusters is well documented and case studies are numerous; however, the knowledge-how to make an agricultural cluster sustainable is brief and ambiguous. This study investigates the knowledge-how, and the development of a theory and practical instrument that can support SHF’s decisions and their actions of ‘doing’.

The knowledge-how focus on experiences of SHFs as they actively construct and create their own subjectivity from their interactions with factors that influence these experiences, positions this research design into a constructivist paradigm (Guba & Lincoln 2005).

Paradigm Thomas Khun’s The Structure of Scientific Revolutions (Khun 1970, p. 175) provides a definition of a paradigm as standing “for the entire constellation of beliefs, values and techniques, and so on shared by the members of a community”. According to Morgan (2007, p.50) across the different paradigms there is “shared belief systems that influence the kinds of knowledge researchers seek and how they interpret the evidence they collect”, and the difference between paradigms is the “level of generality of that belief system”.

Across the many disciplines involved in research there are four major paradigms, Table 2; Positivism, Post-Positivism, Constructivism (Galliers 1991), and Critical Theory (Guba & Lincoln 2005). Positivists believe in a stable reality that can be observed from a viewpoint that does not interfere with the object of the study. It is a quantitative empirical research approach (Philips & Burbules 2000; Zammito 2004). Post-Positivism is similar and emphasises quantitative data, but differs from Positivism by allowance of qualitative data to strengthen the findings (Wildemuth 1993). Constructivists believe there can be multiple realities and entities in a dynamic relationship influencing each other and knowledge is a compilation of these human-made constructions (Raskin 2002; Castelló M. & Botella 2006).

The fourth paradigm, Critical Theory, critiques society and is oriented towards change; which differs from the other three that are oriented to understanding or explaining an event or phenomena (Horkheimer 1982). For this study, the concern is only with Positivism, Post-Positivism, and Constructivism as they are the paradigms attributed to the three Grounded Theory ‘schools’ of practice that are deliberated later in the chapter.

Table 2 show the main elements of the philosophical paradigms for Positivism, Post-Positivism, Constructivism and Critical Theory compared by their ontology, epistemology and methodology.

Table 2: Comparison of Four Paradigms

Adapted from Gupta, 1990; Gupta and Lincoln, 1994

Paradigm Positivism Post Positivism Constructivism Critical Theory Historical conditioned Ontology virtual reality shaped Fixed, stable, Fixed, stable, observable, Multiple realities socially over time by social, Understanding observable, measurable measurable (imperfectly and constructed by individuals political, cultural, the nature of (apprehend able reality) reality probabilistically apprehendable economic, ethnic, and reality) gender value. Understanding of the processes Knowledge is objective Knowledge is objective and and experience, an informed and measurable, The process is to critique Epistemology measurable, reductionist, consensus created jointly reductionist, tendency and transform social tendency towards quantitative through interactions with How to find out towards quantitative structures approaches research participants. Tends about the world approaches (value-mediated findings) (findings probably true) towards a qualitative approach (findings true) (created findings)

Role of Disinterested scientist Disinterested scientist Empathising participants An activist and advocate Researcher The values of the Value free research and researcher shape the Value free research and The values of the researcher The role of research codes police the study along with research codes police the ethics shape the inquiry values and biases ethics consideration of others involved

This study falls within the paradigm of constructivism where the external observer is in a reciprocating relationship with the constituent parts under observation. The researcher through experience and background has mutuality with the research participants and the substantive field of study. The researcher’s empathy, values and biases towards the substantive field of study positions this research as a constructivist enquiry. This position is further detailed in the following discussion of conceptual terms for ontology and epistemology.

Ontology Ontology asks the questions about the nature of reality and the humans within the world (Denzin & Lincoln 2005). Social science research requires an understanding of the researcher’s collaboration with the subjects as this creates an opportunity for a researcher’s values and preferences to influence the research process and findings (Blaikie 1993). Ontological beliefs can be summarised into two basic concepts of reality. Firstly, there is the objective position which regards reality externally with a detached researcher independent of experiences and conciousness (Levers 2013), or secondly, the researcher is actively involved and only through experience a reality is constructed from within human thoughts and conciousness (Bryman & Bell 2003; Levers 2013). For the purpose of this study, the latter constructed perspective is the research position, regarded as a relativist ontology where multiple realities exist, as many as the multiple interactions between the observer and the observed. This is where reality is a subjective human experience (Guba & Lincoln 2005). This relativist ontology leads into the question of how this knowledge can be measured and understood. This is a question covered by epistemology.

Epistemology Epistemology and ontology are closely linked as they both consider reality, and one informs and depends upon the other (Hatch & Cunliffe 2006). Ontology describes our view of the nature of reality, while epistemology examines the way of inquiring into this reality (Easterby-Smith et al. 2008). Epistemology explores both the sources of knowledge and asks how we know what we know (Crotty 1998; Eriksson & Kovalainen 2008).

Understanding the meaning of the world is described within either of two main epistemological perspectives, the objective Positivism or subjective Constructivism. Positivism regards truth exists within objects and independent of human bias (Crotty 1998). Constructivism, where this study is positioned, is a belief that knowledge from observations is mutually influenced by both the observer and the observed (Levers 2013) through the influence of gender, class, language, and ethnicity (Denzin & Lincoln 2005). Regarding this study, Charmaz (2006), places a Constructivist Grounded

Theory within the Constructivism paradigm by implying the approach uses a multiple reality ontology that is a finite subjective experience (Denzin & Lincoln 2005) constructed by individuals.

Constructivism Constructivism covers all theories of cognition that emphasize the active contribution of the subject through their experience and reflection towards the construction of their own understanding, knowledge and meaning (Honebein 1996; Kraschl 2013). The history of constructivism is hard to trace because it covers a range of epistemological views associated with cognition: philosophy, psychology, sociology, and other sciences (Kraschl 2013) with renowned proponents that include Jerome Bruner, Jean Piaget, Lev Vygotsky, and John Dewey (Honebein 1996). Jean Piaget is regarded as leading the formalisation of the constructivism through his explanation of knowledge construction by a mechanism of learners’ knowledge internalisation (Dickson et al. 2016).

Piaget (1952) developed the term of schemas that are used to make sense of the world, that can be regarded as the basic building blocks of intelligent behaviour and organisation of knowledge. Schemas change and are constantly modified in a process he termed adaptation and organisation (ibid). For example, a smallholder farmer has an intact schema for planting cabbages that provides a pattern of behaviour for tilling the land, spacing the rows, applying basal fertilisers and water, and planting the seedlings. Whenever the farmer plants cabbages, the schema will be extended and reinforced, or modified as new varieties, fertilisers, or pests and diseases are introduced to the situation.

In each agricultural cluster within a community, individuals are constructing meaning from their own experience and mental models. A constructivist approach assists researchers and these individuals understand their everyday lives within their community setting. A cluster facilitator can design a constructivist learning environment by incorporating constructivist goals within their design (Cunningham et al. 1993; Knuth & Cunningham 1993) and eventual implementation (Honebein 1996).

To first understand the agricultural cluster, a constructivist paradigm includes a range of research methods; these include Narrative Study, Case Study, Ethnographic Study, Phenomenological Study, Descriptive Study, and Grounded Theory (Kim 2005). For this study, a constructivist Grounded Theory approach was undertaken. The next sections discuss Grounded Theory and why this approach was chosen for this study.

Grounded Theory

Grounded Theory (GT) is appropriate for studying group perceptions, especially when people are adapting to change, to understand how their views and actions relate to their social context and their environments (Benoliel 1996; Morse 2001; Corbin & Strauss 2008). In this study of SHFs, their interaction with agricultural clusters occurs in a dynamic environment where data that emerges from a GT methodology describes how events are happening (Strauss & Corbin 1998a; Holloway & Todres 2003).

A Case Study methodology was originally considered as an approach to this study with its similarities to GT in allowing for inductive theory development (Harris & Sutton 1986; Gersick 1988) and the process for referencing extant literature when formulating the research questions (Eisenhardt 1989). The similarities have allowed Case Study and GT methodologies to converge and successfully combined (Lehmann 2010). Balancing the aim of the study within the allowed timeframe for data collection from in-depth site case-studies of clusters was regarded as logistically challenging. It was therefore a pragmatic decision to collect data using a GT approach within a limited time schedule and available budgets. Another attraction of the GT approach is the constant comparison, backward and forward iterations, and reflexivity that incorporates and builds on extant literature and the researcher’s prior experience. The Constructivist GT also allows for generality incorporating a range of perspectives for a general theory to emerge from the data. A case study approach may result in an idiosyncratic theory based on specific single or multiple cases.

Options were all considered, and GT methodology was accepted as the best approach to answer the research aim and questions within the timeframe and budget. Philosophical considerations and the choice of which GT within the GT ‘school’ are discussed next.

Grounded Theory Schools

In their seminal book, The Discovery of Grounded Theory, Glaser and Strauss (1967) provided a way to conceptualize data using inductive reasoning, and specifically at the time of their writing, as a method for analysis of qualitative data with theory that emerges from the data (Robrecht 1995). GT methodology is an approach for analysis as well as a strategy for collection of data. The resultant theory is regarded as ‘grounded’ in the data. The general GT approach is guided by the research questions and commences with an initial broad question, the ‘grand tour’, that becomes more focused as the study progresses (Creswell 1994; Strauss & Corbin 1998a; Charmaz 2014), then analysed, a theory emerges.

The point of divergence of GT into three main schools of practice occurs in the data collection process and relationship between the researcher, the data, and the literature. The three GT schools are Classic, Straussian, and Constructivist. The next section discusses the evolution of GT into these three main schools of practice.

Classic, Straussian, and Constructivist Grounded Theory

The three main GT schools have their own versions of undertaking research, using either a Classic, Straussian, or a Constructivist approach. These three GT methodologies share the same origins but have diverged sufficiently to be regarded as unique GT methodologies (Kenny & Fourie 2015). These three ‘schools’ are still bound by shared principles of GT such as memo writing, constant comparison, theoretical sampling, and substantive vs formal theory. The differentiating principles are the underlying philosophy, the use of literature, and the coding framework (Kenny & Fourie 2015) that are discussed in the next parts.

Classic GT Glaser and Strauss (1967), and particularly Glaser’s later publications (2005), argue for a ‘classic’ GT that delays literature reviews until the analysis of the data is near completion. Their position is to keep the researcher open to new ideas and free from contamination from any pre-existing concepts (Thornberg 2012). The principle of Classic GT is that emergent theory is discovered from the content of data (Kenny & Fourie 2015), and utilizes a two-stage coding process (Holton 2010) designed to be objective.

Glaser and Holton (2004) describe the importance of an open mind free of influences, and state that researchers should not consult academic literature at any stage during their GT study. Glaser also states that the discovery of theory through the objective coding makes GT a research method and therefore removed from any philosophical considerations (Glaser & Holton 2004). Charmaz (2000) however identified positivist connotations within Classic GT as practitioners create an objective position with their assumptions of an external reality and the independence of the observer. Classic GT therefore does embrace a positivist’s concern of removal of a researcher from the research data (Kenny & Fourie 2015). Glaser (2002) refuted these views of Charmaz. He also maintained his position that an inductive approach can only be used in GT with a researcher tabular rasa, with no advance knowledge of the subject, so that nothing will constrain the emergence of a theory from the data (Glaser 1992a; Kelle 2005). Critics questioned Glaser’s tabular rasa as inconsistent methodology because a researcher’s ideas naturally and unintentionally influence every stage of the

study; and therefore, the data collection and coding becomes interpretivist and contrary within the debated view that Classic GT is a Positivist paradigm (Kelle 2005).

Straussian GT Corbin and Strauss (2008), subsequently developed a four-stage coding framework, and whilst it follows the Classic GT progression, it is far more detailed and specific. The process they designed was intended to provide ‘step by step’ directives for researchers, that even Strauss and Corbin admit might appear complicated, but argue this is appropriate as it reflects human life (Strauss & Corbin 1990; Kenny & Fourie 2015).

The Straussian theorists accept the use of induction and deduction approaches and accept that not every study will develop a theory. They take the position that literature can be used at every stage of the study, which again challenged Glaser’s Classic GT position. Where Classic GT theorists take the position of tabular rasa regarding prior knowledge of the study and an open mind to new ideas and free of influences, the Straussian GT theorists argue that ignoring prior knowledge is impractical and condescending on the sensitivity skills of the researcher. Straussian GT theorists suggest the open mind should embrace previous experience, knowledge of the subject, and literature (Dunne 2011; Kenny & Fourie 2015). Straussian GT methods use techniques that produce useful descriptions; induction, deduction, and validation (Strauss & Corbin 1998b). The later writings of Strauss also imply an acceptance of an abductive reasoning (Reichertz 2009; Bryant & Charmaz 2010), suggesting a Post-Positivist Philosophy accepts how a researcher influences research (Strauss & Corbin 1990; Charmaz 2014).

Glaser (1992a), challenged this Straussian method suggesting it leads to ‘forcing’ the theory and the analysis into preconceived categories, and therefore ignores the emergence of the theory from the data. Glaser (1992b), even suggested the described process was a new method and no longer GT. However, Charmaz (2006), supports the position of Straussian theorists and developed it still further.

Constructivist GT The next divergence moved further from the Straussian GT methods and became known as Constructivist GT. In Plato’s cave1 allegory (Ostergaard 2019), he illustrated the world as an interpretation of the things we sense that can only be a representation of the real world.

1 Subjects face a wall of a cave and only see shadows of the people moving outside the cave. Subjects can only interpret reality from these shadows. 21

Constructivist GT takes this cave allegory as a central metaphor that research and investigation is only an interpretation of reality.

My approach explicitly assumes that any theoretical rendering offers an interpretive portrayal of the studied world and not an exact picture of it (Charmaz 2006, p. 10).

The basis of Constructivist GT is the constant interaction and immersion of the researcher with the data, time, place and social factors which all influence and lead to a co-creation of theory. Data is co-constructed by the researcher and participants and interpreted during analysis through the lens of the researcher’s experiences (Thornberg 2012). The Constructivist GT retains the rigor of other schools of Grounded Theory but also incorporates empathetic understanding of participant meaning, actions and environment whilst encouraging reflexivity of the researcher. This leads the researcher to an interpretive depiction of the situation rather than an objective report.

The application of Constructivist Grounded Theory is regarded as a set of principles that can be utilized as flexible guidelines. Literature is not reviewed and compiled in a specific chapter but interspersed throughout the entire thesis anytime during the study (Charmaz 2006). According to Charmaz, the use of literature during the continuum of the research is acceptable since it fosters researchers’ reflexivity about their decisions and actions and augments creativity (Charmaz 2014). This aligns with a relativist belief where every point of view has its own truth (Annells 1997) and recognition of the researcher implicated with the data is consistent with Constructivist Philosophy (Kenny & Fourie 2015).

The approach suggested by Charmaz (2008) argues against the detailed data analysis process that involves constant validation (Heath & Cowley 2004) from an objectivist and detached researcher perspective promoted in the Classic and Straussian methods. Constructivist GT implicates the researcher within the data and theory and hence the knowledge has inherent subjectivity and an interpretive portrayal (Charmaz 2014). This makes Constructivist GT explicitly emergent as with other GT schools. This study follows the GT guidelines by not starting with an existing theory, but then diverges to the Constructivist GT to develop a conceptual interpretation of the data that emerges from the interaction between myself and the smallholder farmers.

Data collection, analysis, and literature comparison occurred simultaneously and as the analysis and interpretation proceeded the final framework emerged that is a shared notion or reality. All the smallholder data collection was conducted in the smallholder communities to get as close to understanding the smallholder perspectives as possible; however, realizing replicating their exact experiences is not possible (Charmaz 2006, p. 130). Charmaz explains it this way:

‘Entering the phenomenon shrinks the distance between the viewer and the viewed. Subsequently, we might better understand our research participants multiple realities and standpoints’. (Charmaz 2008, p. 133)

The process of co-construction also entailed recognition of the power differential between myself and the smallholders (Mills et al. 2006) that was partially overcome by using a familiar local to facilitate group discussions.

Figure 4 shows graphically the uniting and differentiating principles between the three GT methodologies. The three key areas of divergence are highlighted; the underlying philosophies, use of literature, and the coding framework.

Figure 4: The Uniting and Differentiating Principles of GT

A benefit of Constructivist GT for this study is the value placed in the reciprocal nature of the relationships between facilitators and smallholder farmers that Mills et al. (2006) posit is not

apparent in the traditional form of Grounded Theory. This relationship was examined through interviews with cluster facilitators and Focus Group Discussions with smallholder farmers.

Critics of Grounded Theory focused on if a theory is really produced, what are they grounded in, and the use of inductive knowledge (Thomas & James 2006). Specific criticism of Constructivist GT came from Glaser (2002), who criticized the co-construction between researcher and participants to create a theory as an and ‘unwanted intrusion of the interviewer’ (paragraph 8) and not constructivist. These criticisms from Glaser for the position of the researcher as a neutral observer is rejected by constructivist theorists (Bryant 2007) and other criticisms by GT theorists (Thomas & James 2006).

Constructivist Grounded Theory provided a way to learn about the challenges facing smallholder farmers in agricultural clusters and the relationship with their facilitators and wider community. The final product of this study is a framework that interprets the co-constructed activity of theorizing.

Constructing Grounded Theory - Abduction In theory development, there is explicit importance in Grounded Theory (GT) of induction by Classic GT theorists, and then deduction by the Straussian GT theorists (Glaser & Strauss 1967; Glaser 1978; Charmaz 2014).

A third research approach was developed for situations where the ability to complete a theory proved a challenge when only using induction and deduction approaches. Strauss and Corbin (1998b), referred to these situations when researchers needed to revert to using ‘plausible relationships’, or ‘imaginative leaps’ (Ezzy 2002), as a necessary step to form the vital elements of the theory that are missing from their process of induction and deduction. This ‘leap’ is the third research approach referred to as abduction. This approach was described in the seminal work by Charles Peirce (1940), where he suggests an ‘intellectual jump’ is taken to create or add something new to the substantive theory that does not already exist in the concepts. Reichertz (2009), agrees with Pierce’s positioning of abductive reasoning as a GT research approach because GT does contain and embrace an abductive research logic. In the Constructivist GT process where memos are used to document data gaps, abduction helps develop the conceptual conjectures (Charmaz 2008).

Reason by abduction is intended to make a probable conclusion from what is known. Abduction occurs during data analysis by researchers to use insights to shape beliefs about the meaning of their

data when deduction and induction approaches are constrained (Boutilier & Beche 1995). The resultant conclusions and substantive theory are therefore only probable.

Bryant and Charmaz (2007 p603) define abduction as:

‘…a type of reasoning that begins by examining data and after scrutiny of these data, entertains all possible explanation for the observed data, and then forms a hypothesis to confirm or disconfirm until the researcher arrives at the most plausible interpretation of the observed data.’

Table 3 shows the comparative approaches to develop theory. Figure 5 illustrates the relationship between abduction, induction, and deduction in research.

Table 3: Comparative approaches

Dudovskiy (2016)

Deduction Induction Abduction

In a deductive inference, when In an inductive inference, known In an abductive inference, known Logic the premises are true, the premises are used to generate premises are used to generate testable conclusion must also be true. untested conclusions conclusions

Generalize from the general to Generalize from the specific to the Generalize from the interactions From/To the specific general between the specific and the general Data collection is used to Data collection is used to explore a Data collection is used to explore a evaluate propositions or phenomenon, identify themes and phenomenon, identify themes and hypotheses related to an existing patterns and create a conceptual patterns, locate these in a conceptual Use of data theory framework framework and test this through subsequent data collection and so forth Theory falsification or Theory generation and building Theory generation or modification; Theory verification incorporating existing theory where appropriate, to build new theory or modify existing theory

Figure 5: Induction, Deduction, Abduction

The Grounded Theory for this Study This study sits within the Constructivist Paradigm and uses a Constructivist Grounded Theory (GT) process to collect and analyse data. The choice of GT school methodologies is led by which approach will best answer the research questions (Holloway & Todres 2003). The preceding discussion on the three GT ‘schools’ highlighted the key differences based on coding structures and philosophical paradigms. These are summarized as:

1. Classical GT: The coding process is designed to discover an emergent theory (Glaser & Holton 2004). 2. Straussian GT: A robust coding process designed to create a theory that apprehends the data (Strauss & Corbin 1990). 3. Constructivist GT: A coding process designed to construct a conceptual interpretation of the data that results from the interaction between the researcher and participants (Charmaz 2008). Data is co-constructed by the researcher and participants, and interpreted during analysis through the lens of the researcher’s experiences (Thornberg 2012).

Constructivist GT has two stages of coding (Charmaz 2008); the first, is the Initial Coding which is the ‘grand tour’ to look for insights and theoretical cues. The second stage of coding is known as Refocused Coding where recurring codes, or codes that are of significance are identified. Memo writing is used in the second stage to analyse codes and categories as well as identify gaps that progress towards the construction of theory.

The Constructivist GT method is regarded as a guide to conceptualize the data without forcing deductions (Thornberg 2012). Typically, the interpretive understanding of the data leads to a form of ‘story’ that includes all the “categories, conditions, conceptual relationships, and consequences” (Hallberg & Lillemor 2006, p. 147).

The benefit of Constructivist GT for this study is the value placed in the reciprocal nature of the relationships between facilitators and smallholder farmers that Mills et al. (2006) posit is not apparent in the traditional form of Grounded Theory. This relationship was examined through interviews with cluster facilitators and Focus Group Discussions with smallholder farmers.

Constructivist GT also has the following three benefits (Charmaz 2006, pp. 134-5)

1. Grounded Theory methods provide a way for constructive theorizing activities to proceed 2. It is not the method but rather the researcher’s unfolding interests that shape the content of the activity 3. How researchers proceed and act in theorizing is reflected in the final product

During the process of data collection and constant comparison to literature, an existing framework describing smallholder livelihoods was identified and introduced into this study. This was a slight departure from the traditional tenets of GT; however, the framework was beneficial to shape research questions, data collection, analysis, and theorizing. Therefore, Constructivist GT was selected as appropriate to understand and interpret the smallholder agricultural sustainability issues in the southern Philippines.

Data Collection

The data collection tools used in this study are briefly described. Figure 6 shows how the methods and tools for data collection were interwoven during this study, starting from the left and moving right the process involved constant comparisons and rechecking.

Figure 6: Flow of data collection, data, and methods

Desktop Research The Constructivist GT process allows a continuous referencing to literature at all stages of the study (Charmaz 2008) to augment creativity and strengthen the interpretation of the data. Desktop research was used to collect information on the background, current policies, supporting agencies, and operating environment of agricultural clusters and to review the concepts that emerged from the interviews and FGDs.

Computer software Storage of interviews and FGD transcripts, coding, memos, literature, and comparative analysis was undertaken using NVivo 12 Plus® software. This is a recognised qualitative analysis software package. The FGDs were digitally recorded into an MP3 format using a hand-held unit, and all FGD and interview were transcribed, translated and then stored in the NVivo 12 Plus® software.

Selection of Participants Three field trips were undertaken during the study. The first two field trips conducted interviews with agricultural cluster facilitators to understand the general issues of cluster sustainability from their experience and within the boundaries of their organisation goals. The third field trip was to conduct Focus Group Discussions with SHF agricultural cluster members. The third field trip examined specific individual clusters and other general issues from the perspective of SHFs.

The sample of facilitators were chosen from three organization types: Private Sector, Non- Government Organizations (NGO), and the public sector Local Government Units (LGU). Advice on the facilitators to interview came from local contacts in the Agricultural Training Institute, Provincial Agricultural Office, and Universities. The geographic area selected was the south- eastern area of the Philippines; specifically, Leyte, Samar, Bohol and Mindanao since this area was familiar to the researcher. The eventual facilitator sample was based on their area security, time, budget, and accessibility. The facilitators from insecure conflict areas in western Mindanao areas of Cotabato, Maguindanao, and Zamboanga were interviewed in safe zones.

The third field trip was to undertake SHF agricultural cluster FGDs. There are many thousands of agricultural clusters being facilitated across the Philippines by many government, non-government and private sector organizations. Central records on the numbers of current facilitated clusters are not available. Agricultural cluster FGDs in the study region of Leyte and Samar were selected because the area was familiar to the researcher and there is a high concentration of agriculture clusters of various types. Advice on the best clusters to contact was received from facilitators

interviewed and Visayas State University (VSU) staff. The eventual sample was refined to fit within the allowable timeframe, budget, area security and availability of cluster members.

Logistical Issues Security issues necessitated careful planning and local assistance to avoid problems. Advice was obtained direct from the Australian Embassy in Manila and also from the Australian Department of Foreign Affairs and Trade’s website (DFAT 2016). Local advice on safety and security was provided by Philippine National Police (PNP) Local Area Commands, staff from the Provincial Agricultural Offices, Visayas State University, and local NGOs and private organisations.

Time and travel expenses were carefully managed within the limited budget and available days of leave from full-time work of the research team. The costs included a local research assistant travel costs to confirm site visits with local communities two-weeks prior to the FGDs in Leyte and Samar. The four-person team involved in the Leyte and Samar field work included a driver, two research assistants for translation, and the study researcher. The interviews with the facilitators only involved the study researcher who travelled solo to the meeting sites in Mindanao, Bohol and Leyte.

The GT process required data collected and analysed directly following an interview or FGD which provided insights and additional questions for the next interview or FGD. This was a challenging undertaking during the FGD field data collection when only a brief analysis was undertaken to inform the next FGDs. Even with an enumerator and translator working in tandem, the challenges of touring in poor remote regions only allowed for the detail analysis to be completed post field trips. The facilitator interviews were undertaken in English and analysed immediately which follows the orthodox GT process.

Facilitator Interview Method The facilitator interview field trips conducted in the southern Philippine islands of Mindanao, Bohol, and Leyte in June and September 2016. One-on-one interviews of 22 agriculture cluster facilitators were conducted from the three identified sectors: private, Government, and NGO.

Each interview commenced with a discussion and signing of the consent form. An informative interview style was then used to gain specific facts, details, and contacts. The intention of the opening question was for a ‘grand tour’ of their thoughts on the issues that influence sustainable agricultural clusters. Even though they promote different GT ‘schools’ both Glaser (1992b) and Charmaz (2008) suggest employing an initial question that is broad and provides insights into the collected data. Facilitators were asked ‘what is their main concern with agricultural clusters?’ and

then secondly, ‘how can agricultural clusters become sustainable?’ These same questions were asked to all the agriculture cluster facilitators to allow the facilitators to lead the conversation into their chosen areas. The end of data collection was reached at the point of data saturation. This was when no new concepts or categories were discussed and the existing concepts were well understood by the researcher (Charmaz 2006). Following each interview, the interview transcripts were transcribed, and an initial coding was undertaken prior to the next interview. This process of concurrent interview and analysis assisted subsequent interviews as the interviewer gained more insights that allowed the questions to became more focused (Creswell 1994; Strauss & Corbin 1998a; Charmaz 2014). The aim was to gather a broad spectrum of views in the early stage of the study that would be enriched and refocused during the second field trip for the FGDs. All the names and details of participants were coded in a separate book carried by the researcher and locked in a secure cabinet. Data repetition was achieved when no new topics were being added to the list.

Facilitator Profiles Each of these organization types differs in their approach to cluster facilitation. The selection of the three organization types was to ensure a cross section of opinions was being captured in the interviews; it was not to make any comparison between their facilitation methods. The three organization types working with agricultural clusters can be described as:

1. Local Government Units (LGU): Funded and with administered oversight from the Government, these cluster facilitation organizations implement Government programs and policies. The Local Government Units in this study refer to Provincial Agricultural Office, Municipal Agricultural Office, and the Department of Agrarian Reform. 2. Non-Government Organization (NGO): In this study NGOs are regarded as organizations that are generally non-profit, but independent from regional and governmental agencies with an orientation in agricultural development. 3. Private Sector: Organizations that are not controlled by the Government and run as an enterprise for profit. The cluster facilitators generally come from rural-farm input suppliers and large corporate farming organizations which cluster farmers to increase supply of raw materials (i.e. cacao, coffee).

Table 4 shows the facilitator’s organization and the region where they operate. Within each cell, the number of facilitators interviewed is displayed above an informant code used to identify the individual facilitator.

Table 4: Agriculture Cluster Facilitator Interviews

Table 5 shows the demographic backgrounds of the interviewees. The twelve female and ten male facilitators interviewed were all University graduates, with four holding postgraduate degrees. Six of the facilitators were graduates in community development, whilst the sixteen other facilitators were agricultural science or business graduates. The mean age of the facilitators interviewed was 45 years old (median 45; mode 50). The interviewees were experienced, with an average of 13 years as cluster facilitators (median 13; mode 25).

Table 5: Facilitator Interviewee Participants

Organisatio Years of Community Participants Age Education Gender Region Religion n type Facilitation Development

1 Bohol LGU 1 (2) 46 - 55 University/College Male LGU Bohol Catholic 16 - 20 Unassigned 2 Bohol LGU 2 (2) 46 - 55 University/College Female LGU Bohol Catholic 6 - 10 Unassigned 3 Bohol NGO 1 (2) 36 - 45 University/College Female NGO Bohol Catholic 11 - 15 Unassigned 4 Bohol NGO 2 (2) 46 - 55 University/College Male NGO Bohol Catholic 6 - 10 No 5 CDO NGO 1 (2) 46 - 55 University/College Male NGO Nth Mindanao Catholic 16 - 20 No 6 CNGO1 < 25 University/College Male NGO West Mindanao Catholic 2 - 5 No 7 DAR1 > 55 Postgraduate Female LGU Leyte Catholic 21 - 25 Yes 8 DAR2 > 55 Postgraduate Female LGU Leyte Catholic 21 - 25 Yes 9 Davao LGU 1 (2) > 55 Postgraduate Female LGU Davao Catholic 21 - 25 No 10 Davao NGO 1 (2) 46 - 55 University/College Male NGO National Catholic 21 - 25 Unassigned 11 Davao Private 1 (2) 46 - 55 University/College Female Private Davao Muslim 6 - 10 Unassigned 12 Davao Private 2 (2) 46 - 55 University/College Male Private Davao Catholic 16 - 20 Unassigned 13 Leyte LGU 1 (2) 46 - 55 University/College Female LGU Leyte Catholic 21 - 25 No 14 Leyte LGU 2 (2) 46 - 55 University/College Male LGU Leyte Catholic 16 - 20 No 15 Leyte LGU 3 (2) 26 - 35 University/College Female LGU Leyte Catholic 6 - 10 No 16 Leyte NGO 1 (2) > 55 University/College Male NGO Leyte Catholic 21 - 25 Yes 17 Leyte Private 1 (2) 36 - 45 University/College Female Private Leyte Catholic 11 - 15 No 18 Leyte Private 2 (2) < 25 University/College Female Private Leyte Catholic 0 - 1 No 19 Leyte Private 3 (2) 46 - 55 Postgraduate Male Private Leyte Catholic 11 - 15 No 20 MNGO1 36 - 45 University/College Male NGO West Mindanao Muslim 2 - 5 Yes 21 MNGO2 36 - 45 University/College Female NGO West Mindanao Catholic 2 - 5 Yes 22 ZNGO1 26 - 35 University/College Female NGO West Mindanao Catholic 2 - 5 Yes

SHF Focus Group Discussions (FGD) The FGD is an effective interview instrument that can bring SHFs together from similar backgrounds for an interactive discussion on the topic of interest. The aim of these FGDs were to delve more deeply into the concepts raised by the facilitators as well as include a new perspective from the SHFs. Selecting homogeneous participants is the foundation for creating an environment where the participants feel comfortable and willing to express openly their experiences, views and opinions (Hennink et al. 2011).

SHF FGD Method The third field trip was for Focus Group Discussions with 130 members from 16 agricultural clusters in April 2017 across the islands of Leyte and Samar between 3rd and 14th April 2017. The interview instrument for these FGDs was designed and influenced by the results of the first round of cluster facilitator interviews.

A local assistant firstly visited all the FGD sites and arranged the time and participants. Then the researcher together with a local moderator visited the sites at the predetermined time and undertook the FGD. The process was to create a forum where the SHFs were comfortable to discuss the issues with one another. Each FGD commenced with an informative interview style to gain specific facts, details, names, and contacts. Then an investigative style was employed to create the discussion and build on concepts from the facilitator interviews by asking ‘why’ specific things happened. The investigative style involved incremental steps starting with a broad single question and gradually focused through successive stages to understand the SHF perspectives on agricultural cluster sustainability.

All FGDs were conducted in the language of most comfort to the group; either one or a mix of Tagalog, Waray-Waray, or Cebuano. During the field trip and for all the FGDs, the researcher engaged a local University researcher conversant in these three languages to lead the FGDs following a semi-structured list of questions. The capacity to delve further with a new line of questions was limited by the skill of the local FGD interviewer. Training on conducting FGDs was undertaken prior to the first FGD. During the FGDs the study researcher sat next to the local interviewer and supported the process with limited language capacity and note sharing. Debriefing after each FGD discussed process issues, key data points that arose, and possible new questions for the next FGD to explore. The study team conducted a quick transcription and analysis prior to the next FGD.

The FGDs were digitally recorded, quickly transcribed and translated, then uploaded and when possible during the field trip, a brief analysis using the NVivo 12 Plus® qualitative computer software program was undertaken. This was not the orthodox GT method as the full transcription, translation, and analysis after each FGD was challenged by the limited time available. All the names and details of participants were coded in a separate book carried by the researcher during the field trip and after the trip locked in a secure cabinet. Following the field trip, the transcriptions and translations were all redone in detail and re-analysed.

To obtain a range of opinions and understanding of the ‘story’, the aim was a self-assessment from the FGDs on their cluster maturity using a scale of early, increasing, mature, declining, and collapsed, illustrated in Figure 7. These categories emerged from the analysis of the cluster facilitator interviews.

Cluster Activity Key

1 Starting 2 Increasing growth and activity 3 Mature/stable: no new activity 4 Declining activity 5 Collapse/Not operating

Figure 7: Cluster Maturity

SHF Agricultural Cluster FGD Profiles Five to fourteen participants were in each FGD: an average of 8.5 per FGD. The number of members in each cluster ranged from between 21 – 80 participants. Fifty-six percent of clusters had equal or more women than men as members.

The FGD travel route is mapped in Figure 8. Table 6 shows the names of the participating agricultural clusters, their self-assessed maturity level, number of cluster members (size), main production, and their locations.

Figure 8: The FGD Study Trip Map

Table 6: FGD participating Agriculture Clusters

Maturity Organization Brgy City Industry Latitude Longitude Province Size Level 1 APLAFA Association Unassigned Barugo Vegetables 11 16 25N 125 43 58E 5 Leyte 25 Arapison Manbon Cagsumji Arapison, Manbon, 2 St Margarita Irrigators - rice 21 02 22 N 124 40 32 E 1 Samar 42 Solsogon Irrigators Association Cagsumji, Salsogon Biasong Farmers Fisherfolks 3 Biasong San Isidro Vegetables 11 21 58 N 124 21 56 E 3 Leyte 21 Assocition 4 Bogo Farmers Association (BOFA) Bogo Maasin Rice and vegetables 10 09 19 N 124 51 12 E 2 Southern Leyte 26

5 Bontoc Rainfed Farmers Association Botoc Pinabacdao Rice 14 28 34 N 121 12 18 E 2 Western Samar 46 6 Cabalawan Farmers Association Cabalawan Tacloban Vegetables 11 18 09 N 124 57 13 E 4 Leyte 54 Cabintan Livelihood Community 7 Cabintan Ormoc Vegetables 11 04 29N 124 43 32E 2.7 Leyte 35 Assoc. (CALCOA) 8 Cacao Farmers Association Unassigned Santa Margarita Cacao 12 02 07 N 124 40 07 E 1 Samar 48 Cagsumji Canipulan Solsogon Cagsumje, Can- 9 Santa Margarita Rice 21 02 22 N 124 40 32 E 2.5 Samar 20 Farmers Association ipulan, Solsogon 10 Mambog Farmers Association 1 Mambog Pinabacdao Rice and vegetables 14 28 34 N 121 12 18 E 3 Western Samar 65 11 Mambog Farmers Association 2 Mambog Pinabacdao Rice 14 28 34 N 121 12 18 E 1 Western Samar 80 San Vincente United Farmers 12 San Vincente Ormoc Rice Unassigned Unassigned 1 Leyte 24 Association Sto. Nino Integrated Farmers 13 Sto. Nino Tacloban Vegetables 11 19 54 N 124 56 56 E 1 Leyte 29 Association Task Force Mapalad Farmers 14 Maslog Lawa-an Vegetables 11 07 34 N 125 20 00 E 5 East Samar 40 Association 15 Tigbawan Farmers Association Tigbawan Leyte Vegetables 11 23 15 N 124 27 15 N 2 Leyte 30 16 Tunga Venture Farmers Association San Rogue Tunga Vegetables 11 15 14 N 124 44 44 E 4 Leyte 36

Data Coding Process Constructivist GT is a fluid two-stage process of coding (Charmaz 2008); Initial Coding and Refocused Coding. Firstly, Initial Coding is the ‘grand tour’ used to look for insights and theoretical cues. The second stage of coding is known as Refocused Coding where recurring codes or codes that are of significance are identified. Memo writing is used in the second stage to analyse the codes and categories for relationships, as well as identify gaps, that progress toward the construction of theory.

The coding process was further broken into four stages. These were:

1. Codes were key data lines grouped together 2. Concepts were created from collections of codes of similar content 3. Categories were created from broad groups of similar Concepts 4. Theory was developed from the Categories

Using the NVivo 12 Plus® software, all transcripts were line-by-line coded and placed into the software nodes (concepts). Transcripts, codes and concepts were then analysed and compared initially using an axial coding process by creating a Conditional Matrix in Excel, and later fully undertaken within the software package as the researcher skills improved. Throughout the coding process, memos were created and utilized to store ideas that emerged during the analysis for later reference. Figure 9 shows the process of coding undertaken in this study.

Figure 9: The Coding Process Example

A ‘rich’ data set was collected of combined FGDs and interviews. A refocused coding was undertaken to identify re-occurring codes or those that were significant to this study. Through memo writing, the codes and categories were scrutinized for relationships, data gaps, and conceptual conjectures to interpret and develop the theory of sustainable SHF agricultural clusters.

Table 7 summarizes the link between the data collection process and the data coding components of this GT study. The results from facilitator interviews influenced the line of questioning of the SHF FGDs. Emerging from the data of facilitator interviews were the five Categories in Table 7 that align with the five capitals within the Sustainable Livelihoods Framework (DFID 1999) which is discussed further in chapter three.

Table 7: Components of GT Data Collection and Coding

Units of Analysis and Unit being Process and Components Data Collection characterized Instruments Cluster Facilitators (n = 22; representing and estimated 1,056 smallholder farmers) The Five Categories: From the data and literature: Human, Social, Physical, Financial, Natural Agricultural Cluster Members (n = 130; representing16 smallholder agricultural clusters) • Throughout the study use induction, deduction, and abduction to identify and evolve the study Agricultural • Immediate analysis and reflexivity clusters (sustainability) • Focused coding to develop Codes, Concepts and Categories • Memo writing to assist comparisons and understand relationships • Desk-top study between Categories • Survey, Interviews, and • Theoretical sampling by modifying questions in data collection to FGDs fill gaps • Cluster maturity levels • Theoretical saturation during data collection when nothing new is characterized heard from participants. Refocused coding of complete facilitator and SHF FGD data to confirm Categories and identify new Concepts. • Theory emerges: A substantive theory is developed from the related Categories

Research Ethics Ethical clearance was granted by the School of Agriculture and Food sciences (SAFs) Human Ethics Committee which reviewed the ethical issues relating to this research against national ethical policy and guidelines. A copy of the ethics approval letter, the Ethical Research Application Form, and participant Consent Forms are included in Appendix 1: Ethical Clearance and Consent Forms.

The Ethical Research Application Form contains a detailed list of ethical considerations specific for the researcher, Filipino facilitators and SHFs participating in this study.

All participants were provided with information on the study and prior to signing a consent form they were informed that participation was voluntary, they and their information could be withdrawn at any stage, and the confidentiality of data was a paramount concern of the researcher. All participants were provided with contact details of the researcher and assistants should they have any concerns or questions after the interviews or SHF FGDs. All participants were assigned codes that only the researcher had access. Codes were stored in a code book that was carried by the researcher during the field trip and later locked in a secure cabinet.

The researcher adhered to a process that complied with ethical principles of integrity, respect for persons, justice and beneficence. As the Philippines has no requirement for ethical clearance to conduct this survey, the enumerators were trained to ensure interviews and SHF FGDs were undertaken in a way that accords participants no less respect and protection than required under Australian ethical standards for research. The research standards adhered to the principles as they are set out in the Australian Code for the Responsible Conduct of Research (NHMRC 2007). Further, for the specific protection of humans as the subjects of research, the two documents which set out the principles that guided the ethics of this research are The National Statement on Ethical Conduct in Human Research (NHMRC 2007a) and also Values and Ethics – Guidelines for Ethical Conduct in Aboriginal and Torres Strait Islander Health Research (NHMRC 2003).

This researcher is aware of the need for research legality, morality and ethicality and ensured the research process did not breach any laws, researched participants were protected, informed and retain their right to privacy.

Summary

This chapter started with a discussion of the paradigm and selection of Constructivist GT methodology used for this study. This was followed by the data collection methods used and selection of participants and study area. The chapter finished by outlining the data coding process and how this linked closely with the data collection. Data collection process seeks to develop mutuality between the researcher and the participants followed by immediacy of data analysis which are characteristics of the Constructivist GT approach. This link between data collection and coding was illustrated in Table 7. The chapter concluded with the ethics considered and cleared through the SAFs Human Ethics Committee. The following chapters concentrate on the data and discussion of results.

Chapter Three: Framework

Introduction

This chapter is the initial review of data. The first data analysis of the facilitator interviews identified categories that were then compared to the literature. This approach of constant data review with the literature at any stage was suggested by Charmaz (2014). The data categories that emerged from this study were found to align closely with existing frameworks for SHF livelihoods and community development. This chapter discusses the data categories that emerged and existing frameworks, the Sustainable Livelihoods Framework (LF) and the Community Capitals Framework (CCF). Both frameworks use similar categories to understand the relationships for livelihood and community development. This similarity to the LF and CCF was used along with the data from the study to develop the framework on agricultural clusters. Chapters four to eight discuss each of the individual categories of the LF (Social, Human, Financial, Physical, Natural) based on the data that emerged and comparison with the literature. Chapter 9 consolidates the data and reviews to develop the new framework for agricultural cluster sustainability.

The facilitators were trained in either community development or an agricultural technology. From the data, it emerged each discipline used a different approach to facilitate agricultural clusters. The technologist took a deficit-based approach that focused on knowledge gaps to strengthen the cluster while the community developers took an asset-based approach that built on the existing strengths that was people-centric. The literature (Scoones 1998; Emery et al. 2013) described frameworks that illustrate each of these approaches that are reviewed in this chapter.

Table 8 below presents the five category headings that emerged from the data and matched the categories of the LF and CCF: financial, social, human, physical, and natural. In this study, the categories were developed from the identified factors under each category.

Table 8: Emerged Categories and Factors2

Asset-Based Development

One way to understand the challenging environment of SHFs and agricultural clusters is to map the system and group the findings into similar themes that can be analysed. As mentioned, the process of analysis for this study is constant comparison combined with a review of literature. During the initial coding it was apparent there was a distinct difference in approaches to cluster development by facilitators who were trained in either community development or agricultural technology, see Table 5. The agricultural technologists tended to look for a problem to solve with technical solutions, in taking a deficit-based approach, whereas the community developers focused on people and opportunities in an asset-based approach. The different approaches reviewed in the literature are summarized in Table 9. The facilitators recognized the importance of skills from both disciplines. For the purpose of this study into sustainable agricultural clusters, the community development asset-based approach is preferred with its focus on people and a community transformative capacity for change. This transformative capacity to change is based on the community assets that are either tangible or intangible, that are kept, developed, and improve the well-being and livelihoods of the community (Emery et al. 2006a).

The GT methodology is based around the data which in this study aligns with the asset-based approach. The natural process of SHF cluster members gathering to talk about their needs and solutions also reflects the people-centric asset-based approach.

2 Factors are sub-categories, composed of similar groups of codes from the interview and FGD transcripts 39

Table 9: Comparison between Traditional Needs/Deficit-Based and Asset-Based Approaches

Adapted from Hanna (2018)

Deficit-Based Asset-Based The Technologists The Community Developers Focus on community deficiencies and needs Focus on assets and strengths 1 (What's broken) (What's working)

2 Responding to problems with technical solutions Identifies opportunities and possible solutions

Support services determined outside the Support services determined inside the community 3 community (externally driven) (internally driven) Reliance on personal and community internal 4 Reliance on 'expert' external knowledge strengths Focus on sustainable solutions and developing 5 Focus on short-term solutions and fixing people individual potential Focus on solutions in programs implemented by a Focus on solutions in people implemented by the 6 service provider community

Moving the focus of development from individual SHFs to agricultural clusters places attention on the benefits of collective action. One of the earliest frameworks is Asset-Based Community Development (McKnight & Kretzmann 1993). The Livelihoods Framework (DFID 1999) is a people-centred approach widely used by development agencies with a holistic view that utilizes the community asset-base to develop livelihood strategies (De Stagé et al. 2002).

Sustainable Livelihoods Framework (LF)

The Department for International Development (DFID) developed the LF to illustrate the influences on poor rural livelihoods and assist with planning and evaluation of their development activities (DFID 1999; de Satge 2002; Hinshelwood 2003). The emphasis of the LF is on people, assets, and activities rather than the performance of a specific sector or industry (Ellis 1999). Within the framework are five capitals that comprise the Livelihood Assets. These capitals are human, social, financial, physical and natural. These capitals are vulnerable to perturbations and transformed by institutional structures and processes. The literature (Joyeeta et al. 2010; OECD 2014; The World Bank 2014) shows a range of applications of the Livelihood Assets in fields such as disaster risk reduction (DRR), post-disaster management, climate change resilience programs, and organizational change. This study retains the original people-centred emphasis but builds into the LF the specific sector of agricultural clusters as an enterprise directly linked to livelihood improvement.

Figure 10 illustrates the LF (DFID 1999), slightly adapted to highlight the dynamic area of agricultural clusters and to show the focal area of this study. Sitting within the LF is a pentagram of five Livelihood Assets. The balance and interactions between these five assets and relationship with transforming structures and perturbations are used to identify strength, weaknesses, opportunities, and threats to sustainability of livelihood programs. The LF embraces the activities and sources of income which contribute to the livelihood improvement.

Figure 10: Sustainable Livelihoods Framework

Community Capitals Framework (CCF)

The Community Capitals Framework (Flora et al. 2004) developed after the LF is also a holistic approach with a focus on the interaction of the various community capitals and their overall functioning of the community, shown in Figure 11. The capitals are defined as assets or resources that are ‘invested to create new resources’ (ibid, p9).

Flora et.al., 2014

Figure 11: Community Capitals Framework

The CCF is designed and tested as an asset-based approach to planning and monitoring change in communities (Emery et al. 2006b). CCF analyses community development through seven types of capital; social, human, cultural, natural, built, financial, and political. This system-level approach identifies the capitals, how they interact and the role they play in economic development (ibid). The CCF is also used to provide a framework to understand the impacts on communities of funded programs (Mattos 2015).

Choosing the LF

The LF and CCF are two similar asset-based frameworks. Both were designed to understand poverty, economic security, and the nexus with the environment and development. The main difference is the CCF has two extra Capitals for Culture and Politics that widen the focus of local context into the wider world (Gutierrez-Montes et al. 2009). Culture did not emerge from the initial data collection as a topic; however, values and attitudes are included under the Social Category. The agriculture cluster can be regarded as a source of Financial Capital under the CCF. The emergent data concepts aligned naturally under the LF that embraced the cluster as a farming enterprise more than a community development. Whilst either framework is relevant to this study, the LF framework was identified for the close alignment of category headings within this study GT data collection process. The LF was used to visualize the interactions and relationships between the categories that influence the development of an agricultural cluster through the process of data analysis.

This was considered a closer fit to fulfill the objectives of this study and a framework to strengthen and enhance for a systems-level understanding of SHF agricultural clusters in the southern Philippines.

LF Vulnerability Context

An issue with the LF is the difficulty of embracing all the multiple factors of SHFs within an integrated LF development approach (Johnston & Clark 1982; Carney 1998). Major influences on the sustainability of SHFs are captured in the Vulnerability Context of LF, shown in Figure 10. This sits outside the scope of the study but does influence the smallholder decision process and management of their livelihood assets. Emerging from the data was the influence of perturbations on smallholder clusters strategies, risk management, resilience, and interactions with their environment. This influence requires a brief discussion for the context of the smallholder environment to appreciate the responses emerging from the data.

Perturbations occur when order is thrown into disorder and confusion. An example is extreme weather, the Philippines has a high risk of typhoons, floods, inundation from sea-level rises, tsunamis, landslides and wildfires. Since 1990, the Global Facility for Disaster reduction and Recovery (GFDRR 2019) has recorded 565 natural disasters that cost the lives of 70,000 Filipinos and economic damage of $US23 billion. GFDRR (ibid) estimates 74% of the population is vulnerable with 60% of the land area vulnerable to a range of threats.

Perturbations described by facilitators and FGD participants were refined into three types (Hualda 2016). These are:

1. Shocks: Any sudden and unexpected event that can disrupt the order of the SHF’s life. Types of disruptions can include natural disasters such as typhoons, earthquakes, and storms. It can also include the sudden death or illness of a key person in the cluster organization. 2. Seasonality: Perturbations that from experience and previous observations are expected to occur at some point in time. Examples are the seasonality of wet and dry periods; and change in demand for certain commodities at a time of the year, i.e. Valentine’s Day flowers, or twelve round fruits for the Philippines New Year. 3. Trends and changes: These are perturbations that are happening, observable and have a degree of predictability depending on the phenomenon. Examples are the changes in consumer preferences; or an internal group relationship issue that left unmanaged can result in the decline of the cluster.

Figure 12 illustrates the three perturbations.

Figure 12: Perturbations

Batt et.al. (2011) listed constraints and perturbations they encountered with smallholder agricultural clusters during their study to transform individual Filipino SHFs into a collaborative marketing cluster. Table 10 summarizes the types of perturbations SHFs encounter, matched against identified constraints.

Table 10: Perturbations and Constraints

Type of Constraint Type of Perturbation

1 Extreme weather events Shock 2 Lack of knowledge Trends and changes Seasonality, Trends and 3 Lack of capital Changes Seasonality, Trends and 4 Market impediments Changes 5 Institutional impediments Trends and Changes 6 Poor infrastructure Trends and Changes Change of farming system 1 7 Trends and Changes (Diversification to develop multiple income streams) Change of farming system 2 8 (Complete system changes i.e. grazing to intensive Shock horticulture)

All agricultural clusters are subjected to perturbations at some stage in forms ranging from extreme weather, armed conflicts, market disruptions or internal or external relational issues. The way a cluster recovers is specific to the management of assets of the individual cluster. Emerging from the data was a clear co-dependence between the agricultural cluster and its wider community and its 44

extant environmental system; this co-dependence was confirmed in the literature (Yohe & Tol 2002; Smit & Pilifosova 2003). The multiple factors facing clusters and their co-dependence and integration into the wider community and environment makes every cluster unique.

The SHF survival mechanism to cope with perturbations, complexity, and uncertainty involves making small changes within current activities and knowledge where outcomes are predictable and losses are minimized (Castillo 1990). Coping in an agricultural cluster context can refer to goals and polices that do not change when errors are detected and corrected. In a process referred to as single loop learning (Senge 2006), the cluster’s knowledge base grows through activities without changing goals or policies. This suggests the SHFs bring their coping strategies into the agricultural cluster. A cluster with an external facilitator has the potential to challenge the coping strategy and bring about greater livelihood transformations.

Changing strategies in a cluster involves the consideration of the degree of uncertainty and its magnitude (Pelling 2011). Figure 13 shows the degree of uncertainty and magnitude of change that shapes smallholder’s strategies to face these changes. The three types of smallholder strategies are (Jacobs et al. 2015):

1. Coping strategy: Predictable and small changes. Incremental change that falls within existing knowledge, activities and ways of doing things. 2. Transition strategy: Medium uncertainty of a considerably large change. Coping strategies are replaced by new policies and activities and changes in the way of doing things. 3. Transformative strategy: Large and uncertain changes require plans, policies and activities that provide participants with confidence to manage the greater magnitude of change. In this study, transformative strategy is used to anticipate change whereas transformational strategy is a response to a change that has occurred. For the purpose of Figure 13 and Table 9 either definition can be used.

Figure 13: Types of Smallholder Strategies

Table 11 below expands on the strategies illustrated in Figure 13 above and aligns them with examples of constraints, perturbations, and strategies SHFs require.

Table 11: Constraints, perturbation, and adaptations

Type of Perturbation Type of Strategy Type of Constraint 1 Extreme weather events Shocks Resilience/Coping 2 Lack of knowledge Trends and changes Transition 3 Lack of capital Seasonality, Trends and Changes Resilience/Coping 4 Market impediments Seasonality, Trends and Changes Resilience/Coping 5 Institutional impediments Trends and Changes Transition 6 Poor infrastructure Trends and Changes Transition Change of farming system 7 (Diversification to develop Trends and Changes Transition multiple income streams) Change of farming system (Complete system change i.e. Transformation/Transformative 8 Shock grazing to intensive horticulture)

Summary 46

This chapter described the context for the development of the theoretical framework. Following the initial coding of facilitator interviews and mini review of the literature, the categories that emerged from the data aligned with the headings used in frameworks designed for community capitals and livelihood improvement (Scoones 1998; Hinshelwood 2003; Emery et al. 2013); these are the LF and the CCF. Whilst either framework is relevant to this study, the LF framework was identified for the close alignment of its Capital headings with the category headings from within this study. These categories are Social, Human, Natural, Financial, and Physical. As more data was analysed, the LF was used to visualize the interactions and relationships between these categories and how they influence the development of an agricultural cluster.

The data and mini review provided further context on the smallholder environment and their coping strategies they carry into a SHF agricultural cluster. Awareness of the SHF coping survival mechanism by the facilitators will assist creation of strategies to implement a transitional or transformational livelihood improvement.

Each of the following chapters is based on a category heading; Social, Human, Natural, Financial, and Physical. The concepts that align to these headings are described using the data that emerged and interwoven with literature reviews.

Chapter Four: Social Category

Introduction

The Constructivist GT approach allows for a constant review of literature at any stage of the research that augments the study decisions and creativity through reflexivity and self-reference examination. To capture the process of constant review, the next four chapters contain the analysed field data interwoven with a review of literature. Interweaving the literature review with emerged field data reflected the research process. Presenting this study in a story line was considered the best format that led the reader towards the theory and discussion of sustainable agricultural clusters in chapters’ nine to eleven.

Chapters four to eight analyse the data that emerged from interviews with facilitators and the SHF FGDs. Agricultural clusters are concerned with collective action to improve livelihoods by pooling some or all their resources and then managing the commons dilemma of individual member’s short- term interests that are at odds with the clusters long-term interests (Druzin 2016). Many of the emerging issues from the data related to the management of the cluster’s common’s dilemma and the long-term sustainability of the cluster.

Ostrom (1990) described three models used to describe the governance of commons; these are:

1. The Tragedy of Commons (Lloyd 1833; Gordon 1954; Hardin 1968)

‘Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons’ (Hardin 1968, pp. 1,244)

2. The Prisoner’s Dilemma Game (Dawes 1973) ‘The paradox that individually rational strategies lead to collectively irrational outcomes…’(Ostrom 1990, p. 5) Often viewed as the formalized version of Hardin’s The Tragedy of Commons (Ostrom 1990). This is a two-player conceptualized game where each player has a dominant strategy

for use of a common resource. When both players choose their independent dominant strategy based on their individual profit, the payoff will be their third best result. 3. The Logic of Collective Action (Olson 1965) ‘…unless the number of individuals is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational, self-interested individuals will not act to achieve their common or group interests’ (Olson 1965, p. 2)

These three models are closely related concepts (Ostrom 1990) that can be used to view the many social problems facing SHFs when they join an agricultural cluster and attempt to achieve benefits from collective action. Ostrom (1990) asserts that collective action theory is still evolving but challenged the idea that outcomes from the common’s dilemma do not always end in tragedy with examples of successful case studies.

This research analyses the emerged data to develop a framework that can lead to sustainable outcomes that Ostrom (1990) has shown is possible. The new framework will apply to agricultural clusters and aim to avoid the tragedies expressed by the three models above of Hardin (1968), Dawes (1973), and Olson (1965).

Chapters four to eight examine categories of common interest in collective action that lead towards a framework in the final chapters. The focus of this chapter is on the ‘Social’ category and captures the six Social Capital concepts (support networks, politics, religion, relationships, trust, values and attitudes) identified during initial coding during the facilitator interviews and confirmed in a refocused coding in the FGDs with SHFs. During the process, literature was constantly reviewed, and data re-analysed.

Social capital has a long history concerned with governance and community philosophical considerations that dates back to Aristotle (Bowles & Gintis 2002). In the late 20th Century the study of social capital gained popularity when it was recognized as an explanation of predictable irrational behaviour that did not exist within classical economics (Granovetter 1973; Appelbaum 2017) and ‘rational, self-interest individuals will not act to achieve common interests’ (Olson 1965, p. 2). This applies to agricultural clusters where decisions may appear irrational, but within the values of the smallholder cluster members with their specialist knowledge of their dynamic environment these decisions are more than likely very rational.

Social Capital was defined by Putnam (2001, p. 19) as the ‘connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them’. Putnam (ibid) took a positive view of Social Capital that brought benefits to manage threats of social

disorder through collective action and mutually supportive relations. Bourdieu (1983, p. 249) took a slightly different perspective and viewed Social Capital as relationships through which the possession of actual or potential resources aggregate for the benefit of those in the groups who then use Social Capital as an instrument of generational inequality in a complex theory that proved difficult to translate into policy (Smart 2018). An example is in social classes that retain privileges for themselves and their children across generations. This is a view shared with Sander (Sander 2015) who views Social Capital as bringing specific benefits to people associated with certain social network with his statement that Social Capital ‘creates value for people who are connected…’.

The view that Social Capital benefits certain groups (Bourdieu 1983; Sander 2015) can be applied to development of agricultural clusters that collectively seek advantage over market competitors and those excluded from the cluster. Fukuyama (2006) posits that an association, such as a cluster, can access powerful people to gain special favours and thereby distort democracy. An agricultural cluster in a development context can be regarded as striving to provide benefits to most people in a community with the least harm to those excluded.

The social structure of a cluster guides member actions through ‘shared norms, values and understanding that facilitate co-operation within or among groups’ (Keeley 2007, p. 103). The norms of the cluster attempt to limit negative or adverse actions and encourage positive activities that are reinforced by social support, honours and rewards and also limit or punish negative behaviour (Coleman 1988) and exclusion of outsiders (Portes 1998).

Another two components of the social structure within the cluster context that guides actions are the concepts of bonding social capital and bridging social capital (Gittell & Vidal 1998; Putnam 2001). Emery and Flora (2006b) describe these concepts as the ‘glue’ that makes ‘stuff’ happen in the following way:

1. Bonding (Becoming ‘Us’): The ties within the cluster, networks of trust and norms of reciprocity

2. Bridging (Brokering between ‘Them’): The loose ties that bridge the cluster to external organizations

Bonding and bridging are distinct forms of social capital, with bonding a required antecedent before bridging can be effectively developed (Bolin et al. 2004). Some authors (Szreter & Woolcock 2004; Schneider 2006) have divided Bridging to include the distinction of Linking Social Capital which refers to the relationships between people or institutions at different levels of gradients of

societal power. In the following discussion Linking is included within Bridging for simplicity and because dealing with the many gradient levels of relationships are the norm for cluster members. Bridging is required to connect the cluster and increase their social network and benefits of social capital. Groups that are strongly bonded without bridging risk isolation from the rest of society (Coleman 1988; Putnam 2001); such as criminal gangs and the militant terrorist groups that are common in the southern Philippines study area.

During the FGDs, the terms ‘Us’ that aligns with ‘bonding’ and ‘Them’ that aligns with ‘bridging’ emerged and were examined to identify who these terms referred and where the boundaries exist. This is discussed in the next section on Support Networks.

Table 12 is a list of the main concepts that emerged from the data in both the facilitator interviews and the FGDs. The corresponding percentages in the table were created from the number of times the interviewees raised a topic that could be assigned within a concept. This ratio also acts as an indicator of concept priorities between the facilitators and smallholder. These are perspectives of the facilitators and FGD farmer clusters on what they regarded as important on that day and time. The level of replication of this ratio is untested but potentially quite low.

Table 12: Social Capital Discussion Topics

(Ratio of transcripts mentioning the category/total number of transcripts)

Facilitator Transcript FGD Transcript Category Concepts Percent Concepts Percent Support Network 91 Support Network 100 Relationships 73 Relationships 50 Trust 55 Trust 25 Social Values 45 Values 0 Attitudes 95 Attitudes 0 Politics 41 Politics 6 Religion 23 Religion 31

It is surprising the SHFs did not raise politics more often as the Government ‘hand-outs’ and influence are a strong driver in the development of agricultural clusters. An explanation might be the farmers’ inability to influence the political landscape and therefore they preferred to discuss categories which they can control, such as their direct relationships and building support networks. The concepts and literature are next discussed individually and weaved into a single discussion to present an emerged ‘story’ of agricultural clusters in the southern Philippines. 51

Support Networks

Regarded as a good measure of strength for an organization’s social capital and vital for organization sustainability are support networks (Lee 2009; Sandín M. P. & Pavón 2011). The literature (Chamala S 1995; Bruderl & Preisendorfer 1998; Berdegué Sacristán 2001; Curtis et al. 2002) contains a wide range of studies showing the importance of support institutions for the sustainability of clusters and any type of association. Well managed collaborative action with cluster business partners can lead to the integration of business practices, and this integration has been cited as a key requirement for success (Ho et al. 2002; Kouvelis et al. 2006).

Sustainable development is the objective of programs involving SHFs and agricultural clusters. The activation, development and expansion of support networks and capacity to share norms and values across the network increases the potential for collective action and innovation that improves the probability of development and cluster sustainability (Keeley 2007).

Figure 14 is a representative diagram of the support network for an agricultural cluster to illustrate the facilitator’s role expressed during the interviews and their approach to cluster development.

Figure 14: Support network structure for an agriculture cluster

Facilitators indicated they have a ‘bridging’ role between the ‘Us’ group of agricultural cluster, family and Barangay community with ‘Them’, the external support network of service providers from the private, public or Non-Government Organization (NGO) sectors. The ‘Us’ group is composed of largely filial, extended family, or unrelated but close relationships.

Family are an important relationship for the cluster members with direct economic support, help with tasks, health care, personal care, and companionship. Facilitators recognized the importance of ‘family’ to the cluster performance and engaged this wider group in cluster social activities such as informal social events, cooking together, sharing meals, and spending their ‘free’ time in the community (DAR1, DAR2). Whilst family plays an important positive role, a family in crisis, can disable a member’s participation in the cluster by distracting or taking members away from the present needs of the cluster enterprise. Family is an integral player in an interdependent ‘Us’ system of cluster, family and community (Bubolz 2001), and essential for sustainable clusters.

The three key support sectors highlighted from the data are:

1. Local Government Units (LGU): These are local government agencies providing a range of services such as health, security, housing etc. They also provide agriculture services that includes technical and management advice and access to a range of Government and donor agriculture related programs. Facilitators from this sector generally offer technical advice. 2. Private sector: This is the sector the facilitators’ focus on ‘bridging’ the cluster to develop a commercial networks and routes to market for the smallholder produce. Facilitators from this sector offer training and knowledge in exchange for purchases of their products, such as seeds, fertilizer, chemicals or other production inputs (LeytePrivate3). In rare examples a buyer will invest in capacity building of the SHFs. A successful example was provided of an international mango buyer investing in a chemical bunker on Samal Island in the Davao region to support the local government control and oversight of the smallholder applications of agricultural chemicals to the mango crops (DavaoLGU1). Facilitators from this sector generally offer technical advice. 3. Non-Government Organizations (NGO): These organizations depend on sponsors, membership fees, and external funds to implement livelihood development projects that fit within their specific mandates (LeyteNGO1). Facilitators from this sector generally offer community development advice and link to other networks for technical inputs.

According to facilitators, sustainability of the agriculture cluster relies on their capacity to integrate the cluster across the support network and to develop the internal inclusiveness within the ‘Us’ group and leadership from within the cluster membership. An observation from the facilitator interviews was the integration across the support network that challenged the level of collaboration between private, NGO, and government sectors was limited. Facilitators employed within these sectors are competing for limited external funds creating an adversarial rather than collaborative

environment. The adversarial attitude can be explained in part by the observation of Fukuyama (2000, p. 8) who stated ‘one person’s civic engagement is another’s rent seeking’, that refers to the diversion of public resources to special interest groups, which has competitive access, resulting in adversarial implementation between organizations with the same mission. Some facilitators did actively pursue cross-sector collaboration whilst some expressed a territorial right to operate exclusively with the cluster they facilitated. The current environment does not promote facilitator cross-sector collaboration.

In both the FGDs and facilitator interviews the support service from LGUs was regarded as most important because they were permanent and local. Other project and service providers from the private and NGO sectors were regarded as transient and only present in the cluster locale in times when project funds were available, or their service and products were supported. This supports a position that any projects designed for SHFs should also include the local support institutions as project partners.

BoholNGO2 mentioned cluster member participation drops significantly after facilitation ends and the Local Government support is lacking:

‘…many projects collapse without the support of the LGU.’

Developing relationships with LGUs was described as an advantage in sustaining any cluster because there are a range of livelihood programs available to agricultural clusters that are ‘strong organizations’ (BoholNGO1). Private sector groups and NGOs were regarded by interviewees as transient organizations; operating in the area when project funds or potential profits were available, whereas the LGUs are permanent. Facilitators employed in the NGO and Private sectors also recognized the importance of the LGUs:

‘In the case of sustainability, I think you need to have in place the support of the Local Government Unit (LGU). It is really the LGU that will assist; at the end of the day ...need to have the assistance from the LGU to sustain our objective’ (BoholNGO1).

Jennings (2000), posits that the local support network is essential to increase the chances of a program’s sustainability. A World Bank survey of SHF projects (Cernea 1987), showed success of an association was linked to the capacity and involvement of the local institutions. The survey concluded that organizations with no links to local institutional development agencies were not sustainable.

Support agencies provide a range of services and benefits to agricultural clusters. The FGDs listed benefits as tangible assets they referred to as ‘dole-outs’ mainly from LGUs, which are farm production inputs such as planting material, fertilizer, seeds, tools, plastic drums, sprinkler cans, or machinery such as tractors, water pumps and irrigation pipes. These tangible inputs were highly regarded by the FGD participants and an overall impression was an expectation the LGUs would have these available at the start of each production season.

Accessing any of these benefits firstly requires the new cluster to become a registered trading association. Facilitators assist the new cluster through a complex registration process that requires legal, commerce skills and ‘plenty of time’ (BoholLGU2) as registering offices are not easy to access from the provincial rural communities. Registration is conducted by three Government agencies; Department of Labor and Employment (DOLE), Cooperatives Development Authority (CDA), and the Securities and Exchange Commission (SEC); these are detailed further in Appendix 10: Government agencies for cluster registration.

Many government support agencies experience funding challenges that limit their capacity as a service provider. In provincial areas with remote communities located in difficult terrain with poor communications these extension services are especially challenged. An example of a failed cluster attributed to poor public sector support was described in a case study by Hall (2009), regarding the Vijaya Association (Mango Exporter); Appendix 3: Failed cluster examples, case study #2. Rivera et al. (2001), in a worldwide review of public sector extension systems identified the following problems:

1. A high cost of servicing a large disparate group of SHFs, 2. Weak linkages between research centers, universities and the extension systems, and 3. Low motivation of the extension staff.

The list above are symptoms that express an inefficient service. The causes can be traced to poor policy, poor resourcing, and the failure of political and higher managerial oversight. This was observed as a problem that increased with the remoteness of a communities.

Emerged from the data was the equal importance of a service provider to support both technical and emotional care. This data raised a question of the potential for different types of support the current networks can provide that extend benefits further than only tangible production inputs. Barrera (1980), suggested support networks can be divided into three channels of support; these are emotional, instrumental, and informational. Since every cluster has a unique development need the

support network channels illustrated in Table 13 provides a simple framework to view smallholder needs to target support.

Table 13: Support Network Channels

Support Channels Attributes of needs and potential source (service entry point) (Needs)

1 Emotional a. Behavioral advice (Cluster members, religion) b. Kinship (Family)

a. Access to finance (Banks, financiers and informal lenders) Instrumental b. Buyers, suppliers and traders 2 (access to existing c. Access to information technology (mobile network, radio, tv, internet) systems) d. Health services (crucial for cluster sustainability with local clinics)

a. Technical production and postharvest advice (Universities, LGUs, Informational technical sales representatives) 3 (advice and options for b. Business and management advice innovation) c. Influencer (facilitator)

Adapted from Barrera (1980)

From the perspective of instrumental and informational support, Table 14 lists the types of interventions used to target and support agricultural clusters in various agricultural development programs aimed to improve production, marketing, technology transfer, or empowerment.

Table 14: Programs for agricultural clusters

Type of agricultural cluster for smallholder farmers Function of Cluster

Participatory Technology Development; Techno-Gabay Program Technology Transfer Participatory Development; Farmer Field Schools Production Collaborative Marketing Groups; Grower Associations; Cooperatives; Fairtrade and Ethical Trading Initiatives; Rural Agro-Enterprise Marketing Development; Learning Alliance; Enabling Rural Innovation; Farmer Business Schools

Participatory Extension Approaches; Landcare model; Community-based Empowerment Participatory Action Research Cooperatives; Grower Associations; Joint Ventures; Participatory Market Production and/or Chain Analysis Marketing Base of Pyramid (BOP); Multi-service

(Dy, 2009; Gálvez-Nogales, 2010; Murray-Prior, 2008; Proctor and Vorley, 2008; USAID, 2008)

The mandates of the service providers benefit from an entry point to a large group of rural beneficiaries that is provided by an agricultural cluster. Chamala (1995), listed other reasons clusters become a focus for service providers:

1. A cluster is easier to identify, locate, and contact than individuals 2. Clusters provide a forum for the delivery of information to many people 3. Clusters are part of the community and hence have implied accountability to their community 4. An organization with good leadership and some supporting facilitation from an external agency can empower and enable a community to organize and improve their condition. 5. The cluster can become a conduit for a SHF to access finance and other support services which are generally lacking in many communities in rural areas of developing countries to improve social inclusion. 6. In conflict areas, the independence of a cluster has been used as a communication bridge for peace building. Two of the FGD groups were composed of members who were returned ex- New People Army fighters and supported in farming by the local government (Mambog 1 and 2). In case studies from the UN (2009), agricultural cooperatives are shown to play an important role in post conflict development. Examples are from Sri Lanka and Nepal where agricultural cooperatives were the only organizations allowed to operate in the conflict zones.

From the facilitators and FGD data emerged a conclusion that quality is more important than size of the support network. Figure 15 shows how this conclusion was reached through a graph of the relationship between the self-assessed cluster maturity (Figure 7) and the number of support service providers the FGDs recognized as available to their cluster.

Figure 15: Number of support providers

Whilst the sample size is small, the graph indicates virtually no correlation exists between the number of support service providers and the clusters self-assessed maturity. This suggests the quality of the individual support provider is more important for sustainability.

This graph can be viewed another way with clusters expressing a more positive outlook for their growth potential (maturity level 1-3) had a higher number of service providers per cluster. The more pessimistic clusters (maturity 4-5) only had one or two service providers. This may indicate that a support organization that has high cluster visitation, no matter the quality, transfers optimism to SHFs with regards to the maturity and sustainability of their cluster.

The quality of support provided to clusters can vary by the target of the service and type. For example regarding target, the literature (Coleman J. 1988; Furstenberg F. F. 1996; Amato P. 1998) identifies support networks at the family level, at local and other community levels (Putnam R. D. et al. 1993; Kreuter et al. 1999), and networks at the level of nation states (Knack S. & Keefer P. 1997).

Local support is important for organization sustainability; however, the Wadhwa (2011) also suggests international networks introduce organizations into a global network that offers more innovations than those available from a local network. Innovation is the key for transformative change to occur. The capacity of a network to support an organization to innovate is a key driver for sustainability that is widely accepted by academics, industry, and government (Silvestre & Tirca 2018). The facilitators and FGDs identified from their network the LGUs as their key support provider. Given the remote locations of many clusters the challenges to establish national or international networks are difficult to overcome. This suggests that transformative strategies that require innovative changes illustrated in Figure 13 will be difficult to implement.

In the Philippines the conclusions from a review of the devolved public sector extension services suggested the following points for the consideration (Ordonez 2018): 1. LGUs retain their agricultural extension workers in their roles and not reassign them to other non-extension duties 2. Forge closer links to research institutions 3. Coordinate the local and international support networks.

Table 15 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on support networks.

Table 15: Support Network - Important for sustainability from refocused analysis

Initial coding Priority data analysis, brief literature review 1 Embed the agriculture cluster within the LGU administration √√√

2 Register the agriculture cluster √√√ Refocused coding detailed literature review, comparative analysis with data 3 Projects designed for smallholder farmers should include the local government units (LGU) as project partners √√√

4 LGUs support agricultural extension workers in their roles and not reassign them to other non-extension duties √√

5 Forge closer links to research institutions for adoption of innovations √√

6 Forge closer links with local and also international support networks √

7 Support networks require a good communications system for innovations to emerge √√

The Support Networks Channel, Table 22, is a simple tool to assist support providers identify priorities for 8 √ cluster development Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

All facilitators and FGDs valued their support networks, particularly LGUs, and a study by Ordonez (2018) confirmed the importance of quality local service with dedicated and well-supported staff. It is suggested (ibid) that projects designed for SHFs include the LGUs as project partners because organizations with no links to local institutional development agencies were not sustainable. Analysis of quality of individual service from support providers suggests this has greater importance for cluster sustainability than the number of providers visiting a cluster. It was observed the current competitive environment for funding of facilitators does not promote public, private, or NGO cross-sector collaboration.

The facilitators support the cluster to develop cohesion and ‘bonds’ within the group identified as ‘Us’ that extends to include the cluster member’s family and their village (barangay) community. Each cluster is unique as is their support network and the facilitators and clusters need the capacity to creatively adapt. Part of the adaption process is identifying the needs of the cluster and if the focus is on providing support that is emotional, instrumental, or informational. The larger transformational changes to a cluster involve innovations that are most likely to succeed with a strong support network that extends from local and national to the international level.

Politics

The means and ability to influence the behavior of others in a dynamic group setting will influence the sustainability of the cluster (Sova et al. 2013). This concept of power and influence is linked to leadership from within the cluster management and the Local Government Units (LGUs). The 59

importance of Social Capital for a cluster is the reduction in transaction costs when dealing with government and potential to distort democracy to gain favours (Fukuyama 2006).

The LGUs emerged from the data as the organizations the clusters regarded as their key and most influential partners. A study by Engle and Lemos (2010) confirmed that leadership can reside in external organizations; and this supports the FGDs that recognized influence of LGUs on their development through LGU leadership by a close association (Pilar Cluster).

Any new community-based project such as cluster development requires prior endorsement from the local barangay council (Sangguniang Barangay). Barangay councils are likely to have agricultural committees, especially in rural areas and they are an important influence on the cluster development. Figure 16 illustrates an example of a barangay council structure with the agricultural council listed as one of the barangay brigades.

Adapted from the Philippines Department of Interior and Local Government (2018)

Figure 16: Barangay structure

All facilitators acknowledged that working closely with the barangay leadership was essential to ensure their support for the cluster development. Official recognition allows the agricultural cluster

to become incorporated into the barangay council development strategy, influence decisions, and if the need arises, opportunities for barangay financial support for the cluster. Benefits included dole- outs, technical advisory support, access to livelihood projects, and submitting applications for public assets such as roads that improve market access and the sustainability of the cluster.

Facilitators with community development training emphasized the importance of embedding the agriculture cluster within the barangay council and community:

‘…because if we will not involve the community usually a program will fail...’ (BoholLGU1).

The clusters also benefit by increasing influence over the local administration:

‘…they can influence the barangay level and even the LGU for them to provide support in all their undertakings’ (BoholNGO1).

Being recognized within the barangay and municipal administrations allows the cluster to influence the regions development strategy (LeyteNGO1). A cluster embedded within the planning and administration of their LGU or barangay provides a level of insurance for the cluster against repercussions from changes in the local government (BoholNGO2), opposing political party alignments (DAR2), or imposition of unfair terms of business trade by an elected official (CDONGO1):

‘…you know the parties and politics…those who belong to the other group (political) might not be included…’ (BoholNGO1)

‘…politicians are a big factor in the development of clusters’ (CDONGO1)

Two successful examples of cluster embedded within the barangay and municipal systems are described in Appendix 2: Successful cluster examples; from Municipality of Pilar in case study #2 and Lake Cebu in case study #3. Case study #2 describes the 189 agricultural clusters directly supported by the LGU who provide advice and services that includes agricultural resource management, production advice monitoring, and land use planning (BoholNGO2, BoholLGU1, BoholLGU2).

Reasons for the clusters to collapse are generally specific and case-by-case; however, the literature (Milford 2004; Gonzalez & Nigh 2005; Murray-Prior 2008; World Economic Forum 2017) identifies the following key issues related to government influence and cluster collapse:

1. Inefficient government bureaucracy 2. Inadequate supply of infrastructure

3. An over-reliance on the government managers for ongoing leadership and direction 4. Poor commercial skills of the government installed leaders 5. Political priorities over business improvement 6. Cessation of support 7. Corruption.

Officials appointed to the Municipal Government and Barangay Council shown in Figure 16 are elected during national three-year election cycles and can only serve three consecutive terms. Whilst the policy on three-year cycles is designed to avoid political dynasties3 and the association between dynastic activities and corruption (Mendoza et al. 2013), there is also an alternative and potentially detrimental impact on clusters that accompany administrative replacements with changes in the LGU policy, projects, funding commitments and support services.

The existence of political dynasties, particularly in the provinces, complicates the relationship between the cluster and LGU administration. The business interests of political dynasties conflict with the business development of the clusters. For example, a municipal Mayor whose family business traded in a local vegetable commodity supply chain refused to endorse a third-party project aimed at improving the livelihoods of smallholder vegetable farmers because of the potential negative impact on his family trading business (CDONGO1). Abuse of power when an imbalance exists is recognized in seminal studies such as the Stanford Prison Study (Zimbardo 2008), and Milgram’s study on the dangers of uncritically accepting authority (Milgram 2009).

The three-year political cycle emerged from the data was the suggestion that three years for the life of project is the minimum for any effective development project. The short election cycle creates new project challenges when factoring scoping and initial project design. These new projects are at risk of being altered or cancelled with a change in administration. This is further complicated by the Constitution that does not allow the appointment of losing election candidates to any government post within one year after the election4. Whilst an understandable ruling to avoid corrupt or fraudulent behaviour, the downside is the loss of administrative history and justifications for decisions are lost during the transition. The result is a continuous review of project proposals,

3 Political dynasties: Defined as family units with members involved in politics; estimated to be between 30-40% of elected officials. The 1987 Constitution of the Philippines, Article II, Section 26, has a provision prohibiting political dynasties ‘as may be defined by law’; however, no law has been enacted.

4 1987 Philippine Constitution, Article 9(B), Section 6: “No candidate who has lost in any election, shall within one year after election, be appointed to any office in the government or any government-owned or controlled corporation or in any of its subsidiaries.” 62

government staff that require re-training, and re-establishment of networks. Implementation of field activities become delayed by bureaucracy.

From the perspective of the cluster’s community, any relationship between the cluster and LGU administration needs to avoid any explicit or implied political alignment. According to the facilitators interviewed, if the community view the cluster aligned with a political party then community distrust will grow (BoholNGO1, CDONGO1). The lack of community support can cause the project and cluster to fail. Diplomatic skills of leaders were regarded as an essential characteristic of a cluster leader to manage the politics of LGUs, community, and the cluster.

Figure 17 shows positions along a continuum between an apolitical low risk cluster with limited project development opportunities and a high-risk political cluster that faces projects coming and going with their political affiliates. The diagram shows a ‘zone of maximum benefit’ which refers to the position where the relationship between the cluster and the LGU is of minimal risk should the administration change and strong enough to maintain the benefits.

Figure 17: Finding the political and development balance

From the perspective of the LGU, there is recognition of the importance of agricultural development through a clustering system:

‘…our agriculture sector is the main source of income of our people’ (BoholLGU1).

The agricultural clusters and municipal government are both incentivized to continue this relationship as the cluster gets direct access to the LGU staff and the LGU gets direct feedback on local developments and issues. There is a downside if ongoing support creates expectations of the government that is hard to maintain. Commencing a new smallholder support project is generally

popular and a vote winner; however, withdrawing a support project is politically disastrous for an incumbent local Government (LeyteLGU1). Providing continuous assistance also creates undesirable dependency and entitlement responses from beneficiaries (Barrett & Maxwell 2005; Barrett 2006; Lentz & Barrett 2013). Table 16 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on politics.

Table 16: Politics - Important for sustainability from the refocused analysis

Initial coding Priority data analysis, brief literature review 1 Remain politically neutral √√√

2 Embed the agriculture cluster within the LGU administration √√√ Refocused coding detailed literature review, comparative analysis with data 3 Avoid over-reliance on government project managers for leadership directions √

4 Zero tolerance on fraudulent or corrupt behavior √√√

5 LGU process for project development and implementation protected against changes in political administration √√

6 A characteristic of a cluster leader is good understanding of local politics and diplomacy skills √√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The key points emerging are for clusters to embed within the LGUs but remain politically neutral while concurrently building a close and balanced relationship. This is challenging for clusters in remote provincial areas where political dynasties exist, and explicit loyalty is rewarded. A caution for LGUs is the level of support and ‘dole-outs’ that has potential if not managed carefully to create dependency and entitlement amongst the cluster members. Managing this relationship requires a cluster leadership with diplomatic and political skills, and a cluster system that is transparent with a zero tolerance for corrupt or fraudulent behaviour.

Religion

God and religion were frequently discussed in the interviews and FGDs. Religion represents important aspect of social capital (Sadłoń 2014) It provides the guidelines for connections among the cluster members and the way they bond, facilitates communication in a community across ethnic lines, and helps facilitate peace, security, and justice (Varshney 2015). Religion influences decisions and dominates many aspects of cluster member lives, and acts as the ‘glue’ to provide common rules for the bonding and bridging of collective action (TUVEFA, Biasong, ZNGO1). The shared values between those of the same religion instil trust, norms of reciprocity, respect, and rules of social engagement and cooperation that translated into activities that supersedes ethnicity.

Agriculture and religion are closely linked and progressed with an intertwined development since farming started with the domestication of wild animals and cultivation of wild plants at the beginning of the Neolithic period, around 10,200BC (Pouilloux 2019). Agriculture and religion have influenced each other from this lengthy period of integrated growth. Early famers unable to comprehend the environment turned to religion as a guide and contributed to economic development and livelihood improvements (Smith 1790; Sawkins et al. 1997; Iannaccone 1998; Weber 2002).

Over 200 years ago, Adam Smith (1790) noted that the moral structures of religion supported economic activity. There were strong incentives built into religion for individuals to follow the moral codes and thereby communicate their identity and commitment. Weber (2002), discussed how the Protestant religion was explicit in aligning economic behaviour to their religious moral codes. This was likely a very pragmatic position from the Church as the wealth of a religious community correlated with a wealth of the Church.

Similarly, one example of a cluster placing economic potential ahead of their religion was illustrated by a facilitator from western Mindanao (ZNGO1). A cluster leader with strong leadership skills was elected even though he came from a different and minority religion within the cluster. The facilitator regarded this as an unusual level of trust during a regional violent religious conflict. This example is discussed in Appendix 2: Successful cluster

Replicated studies show a correlation to trust exists between people holding the same values as their managers or leaders; and conversely there was distrust of managers who held dissimilar values (Siegrist & Cvetkovich 2000). Trust is discussed in a later part but here it can be summarized that common values within a cluster are often based on religious guidelines as a foundation for trust and trust in the cluster can lead to economic activity, innovation and development.

The discipline and motivational force instilled into the cluster through their faith was observed as a powerful influence that aligned to clusters doing well. Clusters with strong faith appeared to be financial stable and held a positive outlook (TUVEFA, Cabalawan). The ‘Fear of God’ factor was a strong motivational force:

'…because of the fear of the Lord in their heart, they will work ' (TUVEFA)

Economic behaviour is significantly enhanced with the creation of an individual’s internal moral enforcement mechanism for self-discipline, hard work, self-denial and planning for the future that are embedded religious ethics and codes (Iannaccone 1998).

The latter particularly will have a direct effect on labour and the quality of productivity (Millendorfer 1984; Hanssmann 2000). Other literature (Sawkins et al. 1997) shows a positive correlation between religion and education, health and incomes. These positive religious morals and ethics help improve good governance and reduce corruption, gambling and drinking alcohol that were issues raised by some facilitators and correlates with their strategy to implement a religious based clustering system (TUVEFA, Cabalawan, Davaoprivate2). For clusters in the southern Philippines, religious guidelines are not new, easy to implement, and both facilitators and cluster members already understand most of the rules.

Some of the facilitators openly used religion as a management tool to address the values and then motivate the SHF cluster members (DavaoPrivate2). Two authoritarian motivation examples are presented in Appendix 2: Successful cluster examples, case study #4. Some facilitators chose not to discuss religion and politics with their clusters to avoid divisions (DAR2).

Whilst a religious code for hard work and discipline drove the positive development of many communities, the downside is the authoritarian control over the faithful can be detrimental to innovation and scientific advancement. This could be a much greater factor in development if allowed to flourish. An example is found in the history of the Islamic Golden Age which is traditionally said to have begun in 800AD and ended in 1258AD (Abbas 2011). During this period, there was a great advancement in all the sciences, arts and culture. The end of this period of great advancement has been largely attributed to the influential writings of one man, Abu Hamid Muhammad al-Ghazali (Mokyr 2016). Al-Ghazali wrote of his belief that events were caused by the Will of God and his belief in the philosophical theory of occasionlism. Al-Ghazali’s writing contributions to mysticism made him “a key figure in the decline of Islamic science”(Mokyr 2016, p. 67), as religious education took precedent over the sciences.

Some writers argue that science and religion are separate non-overlapping magisterium; where science is the forum for facts and theory; and religion is for morals, values, and the ultimate meaning (Gould 1999); some argue that science is far better than religion to guide and determine moral principles (Kurtz 2003); and some argue that religion has no authority to claim leadership of values and ethics at all (Dawkins 2006). For the agricultural clusters in the southern Philippines the religious guidelines are known and easy to apply since over 80% of the population are Catholic (Uy 2013). Cluster facilitators currently have limited capacity to implement values and ethics from the sciences within the life of a project and religion is accessible instrument to instil discipline and work ethics into a new cluster. In more developed countries the influence of religion is challenged

and decreasing and developing countries are likely to follow a similar movement away from religion. Two of the FGDs illustrated an example of a discipline-based social structure as an alternative to religion (Mambog1, Mambog2). The cluster members were ex-New People Army fighters returned to farming and retaining the command structure of their terrorist brigade. This example of a secular authority system to instil discipline in the cluster is described in Appendix 2: Successful cluster examples; case study #4: authoritarian motivation.

Figure 18 illustrates a diagram that emerged from the data that compares the field observations of religious discipline with the self-assessed maturity levels from the cluster organizations. As a generalization, there is an appearance of correlation between a mature sustainable cluster and the level of sectarian discipline applied.

Figure 18: Discipline, religion and cluster maturity

Table 17 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on religion.

Table 17: Religion - Important for sustainability from refocused analysis

Initial coding Priority data analysis, brief literature review 1 Religion can provide rules for social engagement and be a strong motivational force √√√ Refocused coding detailed literature review, comparative analysis with data 2 Religion has a positive correlation with education, health, incomes and cluster maturity √√√

3 Social structure of religious communities can provide a safety net for disaster risk reduction √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The key points emerging are for clusters facilitators to recognize the benefits of a social structure that instils discipline and provides guidance and motivation. Religion is known and easily applied to a new cluster to provide rules for social engagement and the ‘glue’ for collective action. Cluster members holding similar values is the foundation for trust which can lead to innovation; however, without an appreciation of a non-overlapping magisterium between science and religion then potential for innovation could be reduced. The pragmatic approach by facilitators to instil discipline through the guidelines of religion into southern Philippine clusters is due to the lack of alternatives and capacity to implement secular approaches.

Relationships and Partners

Stringfellows (1997), suggested a lack of understanding of existing SHF relationships leads to a cluster failing. Senge (2006, p. 136), took a similar position and stated that ‘To empower people in an unaligned organization can be counterproductive’. Facilitators and the FGD participants highlighted the importance of the relationships they developed from cluster membership.

The data suggests this companionship operates as a motivational force by creating feelings of support amongst their peers (APLAFA, Tigbawan, and Cagsumji). Building cohesive relationships and creating peer pressure as a motivation for self-discipline was identified as necessary by both facilitators and the FGDs (APLAFA, DavaoPrivate1) and extended to the clusters selection of new members who do not disrupt current cluster relations (CNGO1).

Carron and Brawley (2000) support these views on the importance of cluster cohesion and the interpersonal attraction to a group that brings about commitment to a task. A group is in a state of cohesion when members possess bonds linking them to one another enabling them to work dynamically towards a goal or emotional need (ibid). When a cluster with cohesive relationships exists the measured benefits are a positive response in the group performance and improved

resilience (Dyaram & Kamalanabhan 2005). Cohesion also creates a group feedback loop that continuously strengthens and enhances performance (Beal et al. 2003). This is correlated to improved economic activity in agricultural enterprises (Johnson et al. 2002).

Figure 19 illustrates a graph from the FGDs data that shows a moderately strong correlation (r = - 0.54) between the average age of cluster members and the cluster maturity index.

Average age of cluster members (x axis) vs cluster maturity index (y axis) 6

5 Maturity 4 Linear (Maturity)

2 Correlation (r) = - 0.54 1

0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Figure 19: Cluster member Average Age versus Cluster Maturity (self-assessed)

This implies greater concentrations of younger members are involved in agricultural clusters that are struggling or since the maturity index is a self-assessment, they could be pessimistic. Older members are concentrated in clusters with greater optimism for growth and expansion. It could not be determined from the data if tangible and or intangible benefits were giving the elderly members greater optimism.

Other relationships were investigated, and these showed zero to very weak correlation, (0≤|r|≤0.2), and therefore were not graphed. These were cluster maturity versus number of cluster members, cluster maturity versus gender mix, cluster maturity versus age range (homogeneity), cluster maturity versus the number of support providers, and distance from the Provincial Capital versus the number of support providers. Webber and Labaste (2010) suggest exploiting cohesive relationships within the cluster can increase competitive advantage. Peer pressure can influence the way individual group members improve their own and collective skills (Triplett 1898). The exploitation of these relationships within the cluster develops competition out of the cluster member’s cooperative roots, described as “co-opetition” (Gálvez-Nogales 2010). This describes the competitive and co-operative nature of the relationships within the cluster and how these in turn can

develop the overall competitiveness of the cluster. An area for facilitators to exploit but also potentially divisive if implemented without due care.

Exploiting external network relationships by forming a business alliance with a suitable partner can dramatically change the sustainability and profitability of a cluster. Integration of supply chain activities and processes provides a competitive advantage (Dyer and Singh, 1998), and is a driver for collaboration (Hansen & Nohria 2004; Huxham & Vangen 2004). The activities and process that a cluster partnership can potentially benefit are with asset sharing, knowledge, capabilities, governance, and the integration of business practices (D. C. K. Ho, Au, and Newton, 2002; Kouvelis, Chambers, and Wang, 2006).

The partnering and relationship building process with external service providers was an activity that also improved personal social skills such as communication capacity, loss of shyness, and confidence (Mambog1, Cabintan, and APLAFA):

‘When (outsiders) started coming into the area to assist, we hide from them because they are strange to us, but now we are ok and not scared anymore.’(CALCOA)

The FGDs mentioned member ‘shyness’ as an issue when dealing with community outsiders, (Mambog1, Cabintan, APLAFA):

‘…we hide from them because they are strange to us…’ (CALCOA)

The shyness of cluster members combined with rural isolation, has the potential to create a need to belong to the ‘Us’ group that may not align with their individual values or beliefs. The group structure can create pressure towards uniformity, and individuals will remain silent when they hold a view that is not widely shared. This ‘spiral of silence’ (Noelle-Newmann 1993), is the aversion to voice a different opinion by cluster members in fear of their isolation or exclusion.

LeytePrivate1 commented on the importance of the farmer-to-farmer relationships because farmers are generally ashamed of their status. There is a social stigma that farming is a lowly occupation for the illiterate, uneducated and poverty stricken; and farmers themselves sense the discrimination.

Once the cluster of like-minded members has been established, the facilitators placed equal emphasis on training in social development skills and technical skills (BoholNGO1and2). This is approach aligns with the views of Stringfellow et al. (1997), and Senge (2006). The facilitators with community development backgrounds implement early in the cluster life training in social and relationship capacity:

‘…management relationships, conflict resolution….to sustain the organization’ (BoholNGO1). 70

In the previous Religion discussion, the benefits of an authoritarian structure were described that instilled discipline into the members of the cluster during their establishment. As the Philippines is considered a collectivistic culture where loyalty to the ‘group’ over-rides most other societal rules (Hofstede et al. 2010). The conclusion is an authoritarian discipline imposed on a cluster will be effective because of the collectivist culture and cluster member’s fear of isolation for non- conforming attitudes of ‘Us’ or opinions.

The importance of how external collaboration and relationships are established has received little attention in the literature to date (Noble 2002; Baxter 2014). Baxter (2010), suggests that the establishment of a relationship is context specific and the result of a complex interaction between establishment processes and their issues, leadership, drivers, and a range of other overlaying factors and modifiers. This suggests the ‘Us’ factors emerged from the data of values, trust and altruism, play an important part of the complex interactions. Figure 20 shows the Circumplex Model developed for mapping the relationships in a couple or family situations (Olson 2000).

Olson (2000, p. 148)

Figure 20: Circumplex Model: Cohesion and Relationships

An agricultural cluster faces similar issues of cohesion, adaptability, and communication. Within the model, the optimal area for functioning is the central part of the model where there is a balance (I-We) and where there is also a flexible-structured leadership balance. Beyond the boundaries of the inner circle are generally regarded as problematic for relationships (disengaged or enmeshed). Adaptability (flexibility) is related to leadership, roles and rules. It is also regarded as balanced in the central area of the model (structured and flexible). Olson regarded it was problematic in his study on families to function at the extremes (rigid and chaotic); and this could also apply to an agricultural cluster requiring the same type of leadership and cohesion.

Table 18 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on relationships and partners.

Table 18: Relationships and Partners - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review 1 Strong relationship between the agriculture cluster and facilitator √√√

2 Smallholder social skills development is required √ Refocused coding detailed literature review, comparative analysis with data 3 Strong cluster cohesion √√√

4 Facilitator capacity to build group cohesion and 'exploit' these relationships to improve cluster performance √√

5 Facilitator capacity to broker beneficial external relationships (knowledge, time, support) √√

6 Facilitating in a collectivist culture needs a sensitivity to an individual's 'spiral of silence' fear of isolation √ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The key points emerging are to establish strong cluster member cohesion that is the foundation of collective action. The companionship acts as a motivational force created by feelings of support from their peers that can also promote cooperation and competition within the membership. The importance of relationships extended to include the relationship between the facilitator and cluster members. Hofstede et al. (2010) indicates how the collectivist culture of the Philippines does provide a good foundation for collaborative activities but can also suppress dissenting opinions within cluster membership. The capacity of a facilitator to ‘exploit’ cohesion and broker external partnerships was also highlighted. The data suggested social skills improved through cluster member’s interactions and facilitators implemented social development training as an early training activity to support sustainability.

Trust

Trust is central to the concepts of bonding and bridging and aligned respectively as ascribed trust (bonding) and earned trust (bridging) (van Staveren & Knorringa 2007). McKnight and Chervany (1996) posit there is no universal agreement on a definition for trust. A definition from the business texts that is relatable to clusters and their operating environment is provided by Sako (1992):

‘…a state of mind, an expectation held by one trading partner about another that the other behaves or responds in a predictable and mutually acceptable manner’.

This describes predictable behavior and the faith in the reliability of this behavior in someone or of something.

Trust is the foundation of relationships, cohesion, and collective action, and is a fundamental social enabler that affects the lives of people in three main areas (Misztal 1996):

1. Making social lives more predictable, 2. Creating a sense of community, and the 3. Ease of people working together.

When trust exists then cooperative activities happen (Deutsch 1973; Arrow 1974; Gambetta 1988):

‘Trust is central to the process of achieving co-operative problem solving and constructive dialogue’ (Schurr & Ozanne 1985).

A functional relationship between the cluster and the facilitator is important for cluster sustainability. The trust of the cluster members for the facilitator can help overcome the ‘wait and see’ risk aversion attitude of the farmers (BoholNGO2). This general risk aversion of SHFs was confirmed by Castillo (1990). It is also beneficial for the facilitators to gain community trust and feedback on the general problems that impede the cluster development (DAR2). This is an inclusive approach to engage the cluster members, their families and community.

The members start with a 'trust bank' in other members and the administrators. If the 'trust bank' is eroded, the cluster will eventually collapse (Biasong, Ormoc). New members are required to display their ability and willingness to cooperate, share their unwritten rules on mutual beliefs, obligations, and perceptions, to avoid erosion of this ‘trust bank’ (Rousseau 1989; Natawidjaja et al. 2008).

Maintaining the trust bank is important highlighted by a facilitator:

‘…transparency…with good financial records, good financial management’ (DavaoPrivate1).

The importance of trust cannot be understated:

‘…once they lose the trust…wala na’ (nothing)….’Nothing will happen, and you’ll no longer be effective in that barangay…’ (DAR2)

When trust is established in a cluster the literature (Mishra 1996; Green & Keogh 2000; Johnson et al. 2002; Reininger et al. 2013) indicates a range of positive influences this imparts; such as the correlation with increased disaster preparedness, successful alliances, economic development, and importance during periods of uncertainty.

The analysed data indicates how difficult collective action becomes if mistrust exists:

'Once they did not trust the leaders, the groups didn't work' (DavaoPrivate1).

‘Mistrust, once introduced, sets off a vicious cycle. It makes success harder to obtain..’(Kanter 1994).

Two FGDs implied that maintaining a level of trust in the cluster was important and if this erodes, the cluster will collapse (Biasong, Ormoc), which is confirmed by the literature (Aldridge et al. 2002; Carroll & Stanfield 2003) that describes loss of trust leading to fostering behaviour that worsens economic performance, and dividing rather than uniting the cluster. This erosion of trust can occur with cluster members who contribute less than a fair share of the cost of production, referred to as free-riders (Ahuja 2000; Felzensztein 2008).

It was highlighted often by both the facilitators and FGDs that trust was an important consideration in the selection of a leader (CNGO1). Leaders are in a trusted position within the cluster because they are the link to the support networks that bring in market knowledge and contacts. This tempted some leaders to become traders, working for their own advantage at the expense of their cluster (DavaoNGO1). Once the leader pursues personal interests above the interests of the cluster then the cluster may collapse. 'Once they did not trust the leaders, the groups didn't work' (DavaoPrivate1).

Trust is also important in building the support network; that is bridging relationships. A cluster that is well administered is regarded by Government as a cluster that can be trusted; and this can lead to more projects and 'dole-outs' (Ormoc). Open and transparent information flow between supply chain partners also requires trust. The clusters supply chain partners generally require a degree of cooperation to be effective, requiring mutual commitment and trust to exist between organizations (Morgan & Hunt 1994).

FGD participants said they only want to join a cluster with people they know where a level of trust exists (Tigbawan). The facilitators supported this view and but also recognized the time for trust to develop:

‘…with humans it is hard…it is not a technology or building something, it is really unique in a particular way, it is a relationship, and building trust takes time…’ (DavaoNGO1).

One facilitator’s strategy for developing the trust with individual farmers was described as a long process that takes at least a month of home visits and plenty of informal interactions (BoholNGO1, CNGO2, and DAR2). The facilitators had no measurements of trust other than a subjective ‘feel’ for relationships within the cluster:

‘…you can really get the real sentiments of the farmers. Establishing a good rapport, a good relationship…’ (DavaoLGU1).

Trust is difficult to measure since it is subjective, complex, embedded in a mental process, and difficult to isolate from related factors (Castelfranchi & Falcone 2000; Cofta 2007). A simple guide for facilitators to understand trust in their cluster is to break trust into the three areas suggested in Table 19. Goodwill trust has the strongest impact on performance, promotion of operational effectiveness, and continuous improvement (Sako 1998; Green 2003).

Table 19: Types of Trust

Trust Type Description

1 Contractual Cluster members adhere to agreements and keep promises

2 Competence Cluster members have confidence that their fellow members will meet targets and obligations as distinct from just an intention to perform

3 Goodwill Cluster members go beyond formal agreements i.e. displaying greater fairness, equity, and the existence of reciprocation favors

Table 20 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on trust.

Table 20: Trust - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review 1 Allow time and careful management to develop trust, because without trust the cluster will fail. √√√ Refocused coding detailed literature review, comparative analysis with data 2 Supply chain partnerships need trust established for transparent information flow √√

3 Goodwill trust might be hard to achieve, but will ensure sustainability of the cluster √√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The key points emerging are the importance of trust for cohesion that acts as the foundation of collective action and relationships within the cluster and across their support network. The positive influence on the cluster when trust is established can improve economic performance and resilience of the cluster. Facilitators recognized that trust takes time to develop but do not have a way to measure types of trust or the progress of development.

Values and attitudes

Values and attitudes are combined here because values are what cluster members regard as important and their attitudes are the measurable outcome dependent variable showing how they act on these values. They are regarded as the rules and beliefs that govern attitudes and are a measure of the personal worth of something. Values are the fundamental principles and truths that serve as the foundation of a belief systems and chain of reasoning that influences attitudes (Fishbein & Ajzen 1975). These beliefs can be true or false (Dixon et al. 2015). Values and beliefs are displayed through attitudes in response to an event, person, place or thing in the past or present (Allport 1935) and influenced by an individual’s extant dynamic environment and gender, age, education, and nationality. Attitudes are displayed through words and behaviour and are the expression and application of a person’s values and beliefs (Anderson & De Silva 2009). These attitudes are also expressed as qualitative independent variables that influence dependent variables of behaviour and cognition (Smith et al. 1956; Katz 1960).

Values and attitudes were discussed by facilitators but not mentioned in any of the FGDs. In the FGDs, an attempt to steer the discussion to identify the values held by the cluster failed. Possibly, the discussion on ‘values/attitudes’ as a stand-alone topic was too abstract for the SHFs.

In the context of SHFs interviewed, values were established in the family and greatly influenced by the community, religion and social media. The facilitators interviewed mentioned their new cluster

strategy was to build cohesion and change values, attitudes and behaviour. Religious discipline was one of their ‘instruments’ to change values and attitudes. The facilitators also observed that attitudes and adoption of new ideas differed between ethnic groups and the further from a township it appeared that attitudes were more embedded and difficult to change. Facilitators suggested the lack of motivation was from smallholder’s current contentment and avoidance of stress that comes with change. They also noted that these behaviours and attitudes were changing with the influence of social media that provides a portal to a new world of consumerism.

One facilitators’ opinion was that values are being altered and changed by media, and especially from social media outlets that are becoming more accessible in rural communities. This opinion follows an observation that cluster members have an increase desire for consumer goods. Access to these goods in rural areas is difficult but the constant exposure to consumerism in the media, particularly by their children, is causing an imbalance in values, leading to stress:

‘…for a farmer who just wants to enjoy his life it is just too much (consumerism)…’ (LeytePrivate3).

Further, the facilitator questioned why Filipino SHFs were not more successful after decades of training; and suggested a core value did not exist:

‘…the heart or the desire to improve oneself…is not there.’ (LeytePrivate3)

This facilitator mentioned that farmers from northern Philippines in the Ilocos Region, are more motivated, impelled to succeed, diligent and self-motivated (LeytePrivate3). The facilitators also commented the more remote a community from urban centres it was less motivated. This latter observation may correlate with the availability of support services and accessibility to markets.

There was also the recognition that many new cluster members joined with an attitude of free riders; that is, joining to extract benefits rather than contribute (DAR2):

‘…they join any association; they’re expecting what the association can do for them; not expecting what they can do for the association.’ (LeyteLGU1).

The ‘free-rider’ problem and a presumption that individuals in a group with a common interest would voluntarily act to further those interests was challenged by Olson (1965) in the following quote:

‘unless the number of individuals is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational, self-interested individuals will not act to achieve their common or group interests’ (Olson 1965, p. 2) 77

Olson’s premise when applied to the cluster ‘free-rider’ problem suggests that a cluster member will still obtain benefits from the collective action once the produce is sold even without their contribution to production. Voluntary contribution and effort appeared as an issue in every cluster but was especially difficult for cluster leaders who make the greatest time and resource commitments.

Some of the facilitators even suggested that the biggest changes that can be made for livelihood improvement are not from technology adoption, but are with attitudes (LeyteLGU2):

‘…we have to change…and it is not technology’ (DavaoPrivate2).

One privately funded facilitator believes that many of the clusters have the capacity to buy the inputs themselves, but the farmer’s and the Government together have created this attitude of dependency and entitlement with expectations of free ‘dole-outs’ (DavaoPrivate2). Facilitators mentioned that the cluster has this attitude of not managing the farm as a business that needs to change (LeyteLGU3).

The facilitators prefer aid to be provided only if the SHFs also provide a counter-part in-kind or financial commitment. This is so farmers retain attitudes of self-discipline, sacrifice, diligence, and confidence. These attitudes are needed by the farmers to find opportunities and make decisions on their own. Creating a culture of receiving hand-outs was regarded as very damaging. The reasoning behind this attitude of reluctance to invest in farm improvements was suggested to be because of the lack of land ownership (LeyteLGU2). Most FGD participants were renting land under insecure tenure and expressed a reluctance to invest in the land because they feared the landowner taking back the land without compensating for the improvements (San Vincent), or their displacement from ongoing regional conflicts (MNGO2).

Land distribution commenced in 1988 under the Comprehensive Agrarian Reform Policy (CARP) and the CARP with reform (CARPER Law) in 2009. These policies have met strong resistance from vested interests within the ruling class (Meliczek n.d.) that contributes largely to the ongoing slow pace of land distribution. This is unfortunate as evidence suggests a country with high land inequality will have a lower long-term income growth rate and a slower pace of poverty reduction than a country with a more favourable land distribution (Balisacan 2007; Lawry et al. 2014; Roth & McCarthy 2014). Land for smallholder farmers is discussed further in Chapter 8 in the Land Access section.

An observation was made that sustainability was difficult for Filipino agricultural clusters because of an attitude of respect. The farmers will quietly respect the facilitator, follow their leadership, but won’t be internalizing. When the facilitator leaves, the leadership gap is created, discipline and motivation are eroded, and the organizational collapses (LeytePrivate3). This spiral of silence (Noelle-Newmann 1993), of the individual cluster member not to voice their opinion is likely to be out of respect, shyness, or desire to conform with the majority.

Facilitators used various terms, similes, and metaphors to describe the range of attitudes they encountered while working with clusters. Table 21 shows the more common terms encountered in the data transcripts that describe the attitudes facilitators encountered with clusters and SHFs.

Table 21: Facilitator’s Terms describing Attitudes

Attitude Meaning

Bayanihan The spirit of communal unity and effort and involves the barangay working together for an objective to improve the livelihood of an individual or the whole community. (Tagalog)

A Spanish term with a literal translation for burning of Cogon grass (Imperata cylindrical). A Ningas Cogon metaphor, this refers to situations where the cluster members are enthusiastic at the start of the

(Spanish) project and then the enthusiasm quickly dies out and stops. Particularly when ‘dole-outs’ have been provided as part of a new project (BoholNGO2).

Mañana A Spanish term literally meaning tomorrow or an unspecified time in the future. Facilitators use this as a metaphor to describe cluster members who are always delaying and procrastinating. (Spanish)

This translates to ‘copy-cat’ from Tagalog. The facilitators use this term to indicate SHFs who are Gaya-gaya not yet committed to change and have a ‘wait and see’ attitude before adopting the new

(Tagalog) technology. Also, refers to where one farmer might produce a successful crop and then everybody will copy and ruin the market niche with over-supply (DAR2).

Translates from Tagalog as something that is tiresome and laborious. A term used by facilitators Hago to describe the times when cluster members wouldn’t participate in an activity and lacked (Tagalog) motivation.

One issue which erodes any collective action is the problem of ‘free-riders’; when some members contribute less than a fair share of the cost of production (Castillo et al., 2003; Felzensztein, 2008; Free rider Reardon, Berdegué, Neven, and Natawidjaja, 2012). This negative participation attitude erodes social capital and the cluster could enter a path of collapse.

Facilitators building a cohesive cluster also need an awareness of Filipino general values. Hofstede et al. (2010), suggests there is a stronger collectivist cultural attribute of the Philippines compared to a higher level of individualistic cultural attributes of Anglo-Saxon cultures. Their study made further comparisons with other cultural values (ibid), and for Philippine culture, they identified the following:

1. A strong focus on tradition, 2. A strong sense of social obligations, 3. Importance on saving ‘face’, 4. Strongly adheres to protocols.

Philippine cluster members also have a stronger tendency to follow their facilitator or cluster leadership. Philippines culture has a high Power-Distance Index (PDI) which means for a clusters, individual members are more accepting of their subordinate positions than compared to cultures with a lower PDI (Hofstede et al. 2010). Good leadership in combination with a high PDI cluster is likely to improve sustainability.

Table 22 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on values and attitudes.

Table 22: Values and Attitudes - Important for sustainability based on refocused analysis

Initial coding Priority data analysis, brief literature review 1 Clusters must be managed with a business attitude. √√√

2 Avoid ‘free riders’ and a cluster’s dependence on ‘dole-outs’. √√√

3 Social media is an influence on the values of smallholders and changes in attitudes √√

4 Spiral of silence - is it shyness, respectfulness, or a desire to conform to the majority? √√ Refocused coding detailed literature review, comparative analysis with data 5 Facilitators should understand and mirror the values of cluster members to develop trust √√ Awareness of general Filipino values and importance of tradition, protocols, social obligations, and saving 6 √√ 'face'.

7 Good leadership with a high PDI cluster is a good combination √√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The key points to emerge are the facilitator agreement that improved attitudes brought more development than adoption of new technology. The importance of values was reflected in the cluster members attitudes and behaviour, such as the ‘free-riders’ attitude, dependency and

entitlement attitude for ‘dole-outs’, and attitudes around motivation and treating the cluster as a business. The facilitators mentioned that more remote the community the less motivated with attitudes that were difficult to change and difficulties with the ‘spiral of science’ where the individual cluster member will not voice an opinion that differs from the majority because of the desire to conform. Finally, the PDI of collectivist Filipino culture suggest clustering should succeed; however, good leadership is still required.

Summary

Emerged information from the interviews and discussions with facilitators and smallholder cluster members aligned with two main components of Social Capital: bonding and bridging. Facilitators explicitly identified the cluster bonding as critical and implemented activities to build trust and cohesion. None of the facilitators had a method for benchmarking cluster social development. The SHF FGDs identified and discussed the concepts within Social Capital that were important to them (support networks, politics, religion, relationships, trust, values and attitudes); however, there was no clear understanding from SHF FGDs how these concepts intra-related under Social Capital and inter-relate with other Capitals. Bonding and bridging are terms easily understood and the introduction of the other concepts within a cluster framework can build their Social Capital capacity; using as a template Figure 14: Support network structure for an agriculture cluster.

The literature (Coleman 1988; Putnam 2001) suggest that bonding is an antecedent to the important function and operation of bridging. The FGDs identified their cluster bonding ‘Us’ extended to their immediate families, also confirmed by Bubolz (2001), and sections of their community Barangay influential in the cluster management and efficient operations. ‘Them’ group were identified by the FGDs as organizations the cluster were bridging and necessary for development and sustainability; these included the LGU, traders, suppliers, and NGOs.

An observation regarding two clusters (Mambog 1 & Mambog 2) composed of returned New People Army (NPA) fighters highlighted components of bonding and bridging. During the FGDs, these two clusters were observed to have strong bonding, well-disciplined, and constantly deferred their answers to their cluster leader. This deference to the cluster leader who has minimal ‘bridging’ experience for all decisions, places the cluster at risk of isolation and marginalization from the rest of society without support for the opportunities that could accrue from strong bridging social capital.

Facilitators were trained in either community development or in agriculture production. None of the facilitators had formal training in both disciplines. All the facilitators regarded Social Capital

as complex and an important aspect for cluster development; one facilitator comment that summarized general sentiments was ‘clusters are more of a social problem than a technology problem’ (LeyteLGU2).

Whilst Social Capital was recognized by all facilitators as important, there appeared limited knowledge on recognizing the Social Capital needs of the cluster and then translating these observations into practical solutions. Many facilitators talked of sharing meals to build trust and ‘bonding’ with the cluster members (DAR) or others followed guidelines on value chain development for ‘bridging’ to improve market access opportunities (CDONGO1). The facilitators all recognized ‘Us’ and ‘Them’, but none showed specific plans to identify the cluster needs and activities to address the missing concepts of social capital that might improve their livelihoods.

One reason for the inability to recognize and implement changes is the inability to measure change effectively. There is no widely held consensus on how best to measure Social Capital. Bankston and Zhou (2002) posit that the difficulty in measuring arises because Social Capital is based on participation in groups with complex levels of individual and group analysis. Some of the measurements of Social Capital that have been applied include: Sociability (Foschi & Lauriola 2014), Name Generators (Marsden 1987), Social Capital Scales (Williams 2017), and Cohesion Measures (Overland 2018).

Table 23 consolidates the important concepts identified from the initial and refocused analysis and applies a subjective ranking of issues regarded as important for agricultural cluster sustainability. The priority ranking is on codes within the concepts.

Table 23: Ranking of social concepts for cluster sustainability

Concept Codes Priority Social Networks Embed the agriculture cluster within the LGU administration √√√ Social Networks Register the agriculture cluster √√√ Social Networks Projects designed for smallholder farmers should include the local government units (LGU) as project partners √√√ Politics Remain politically neutral √√√ Politics Embed the agriculture cluster within the LGU administration √√√ Politics Zero tolerance on fraudulent or corrupt behavior √√√ Religion Religion can provide rules for social engagement and be a strong motivational force √√√ Religion Religion has a positive correlation with education, health, incomes and cluster maturity √√√ Religion Social structure of religious communities can provide a safety net for disaster risk reduction √√√ Relationships Strong relationship between the agriculture cluster and facilitator √√√ Relationships Strong cluster cohesion √√√ Trust Allow time and careful management to develop trust, because without trust the cluster will fail. √√√ Values Clusters must be managed with a business attitude. √√√ Values Avoid ‘free riders’ and a cluster’s dependence on ‘dole-outs’. √√√ Social Networks LGUs support agricultural extension workers in their roles and not reassign them to other non-extension duties √√ Social Networks Forge closer links to research institutions for adoption of innovations √√ Social Networks Support networks require a good communications system for innovations to emerge √√ Politics LGU process for project development and implementation protected against changes in political administration √√ Politics A characteristic of a cluster leader is good understanding of local politics and diplomacy skills √√ Relationships Facilitator capacity to build group cohesion and 'exploit' these relationships to improve cluster performance √√ Relationships Facilitator capacity to broker beneficial external relationships (knowledge, time, support) √√ Trust Supply chain partnerships need trust established for transparent information flow √√ Trust Goodwill trust might be hard to achieve, but will ensure sustainability of the cluster √√ Values Social media is an influence on the values of smallholders and changes in attitudes √√ Values Spiral of silence - is it shyness, respectfulness, or a desire to conform to the majority? √√ Values Facilitators should understand and mirror the values of cluster members to develop trust √√ Values Awareness of general Filipino values and importance of tradition, protocols, social obligations, and saving 'face'. √√ Values Good leadership with a high PDI cluster is a good combination √√ Social Networks Forge closer links with local and also international support networks √ Social Networks The Support Networks Channel, Table 22, is a simple tool to assist support providers identify priorities for cluster development √ Politics Avoid over-reliance on government project managers for leadership directions √ Relationships Smallholder social skills development is required √ Relationships Facilitating in a collectivist culture needs a sensitivity to an individual's 'spiral of silence' fear of isolation √ This illustrates the specific issues that emerged from the data which require attention for a sustainable cluster. Trust must exist between the cluster members and the facilitator to break away from the attitude of ‘wait and see’ towards strategic business approaches and shared risk. Reinforcing religious discipline was mentioned as a successful strategy of facilitators to create the social interaction rules that develop trusting relationships. Critical to success was the support network that assisted the cluster with registration that allowed the cluster to operate as a business and apply for government projects and ‘dole-outs’. LGUs were regarded as the clusters main support agency. Embedding clusters within the LGU administration improves livelihood opportunities from LGU support services and protection against negative effects of political change in the local governance structure.

Social Capital depends on the cluster environment and the socio-economic dynamics of the community and is composed of a wide range of concepts. Emerging from the data were six of these concepts (support networks, politics, religion, relationships, trust, values and attitudes) that

facilitators and SHFs in FGDs self-identified as important. Every cluster observed was unique with Social Capital an important component for any sustainability framework.

Ostrom (1990) found the Common-Pooled Resources (CPR) and shared activities can be sustainable and is possible because locals often find problems to the commons problem themselves. For agricultural clusters in remote areas where Government support is limited because of difficult terrain or of high security risk, simple guidance for self-governance over resources and their collective action might suffice with the members collective restraint serving both the individual self-interests and the cluster-interests (Axelrod 1984). Facilitating accessible clusters can support self-governance utilizing the local network and norms that promote collaboration and protection of common resources with community-based rules and procedures.

Chapter Five: Human Category

Introduction

Human Capital within the Livelihoods Framework is an economic concept of an individual’s set of skills, such as education, knowledge, confidence and health. The development of Human Capital is predicated on the Social Capital relationships that is a resource to build skills and capacity (Machalek & Martin 2015). These intangible skills can create an economic value for the SHFs and their agricultural cluster. Emery and Flora (2006b), defined Human Capital as:

‘Human Capital refers to the skills, abilities, and personal characteristics of people that enable them to develop knowledge and access resources. - Education, jobs/wages, structured economy, opportunities, health - Leadership’s ability to focus on assets, inclusively, participation to proactively shape the future of the community’

As defined, Human Capital focusses on the development of knowledge which fits within the paradigm of Constructivism, the research framework of this study. Constructivism covers all theories of cognition that emphasize the active contribution of the subject through their experience and reflection towards the construction of their own understanding, knowledge and meaning (Honebein 1996; Kraschl 2013). Jean Piaget is regarded as leading the formalisation of the Constructivism with his theory of cognitive development (Dickson et al. 2016). Constructivism covers a range of epistemological views associated with cognition (Kraschl 2013), but is widely associated as a theory of education and Jean Piaget as the founder (Dickson et al. 2016).

In this chapter, Human Capital is a category heading and the codes that emerged from transcripts from both the FGDs and interviews are grouped into six concepts and used as discussion headings. The knowledge and skills of the SHFs to effectively implement organizational management and development within their agricultural cluster was the topic discussed by all the facilitators interviewed. The facilitator’s greatest impact on the cluster is in this area of cluster management training and improvement. Table 24 shows the percentage of times concepts aligned to Human Category were discussed by the facilitators and with the FGDs. Leadership, management, and management of members were the main topics extracted from the transcripts.

Table 24: Human Capital Discussion Topics

Facilitator Transcript FGD Transcript Category Concepts Percent Concepts Percent Leadership 55 Leadership 44 Ethnicity 32 Motivation 27 Human Management 100 Marketing 55 Empowerment 0 Empowerment 0 Membership 68 Membership 100 The SHFs did not mention empowerment. Empowerment is a term used by the development professionals to describe their farmer clients and therefore understandable that farmers would rarely use this term; however, it is included in the following discussion as it was implied in the transcripts through growth of SHF confidence. The concepts and literature aligned to the Human Category are next discussed individually and weaved into a single discussion to present an emerged ‘story’ of agricultural clusters in the southern Philippines.

Leadership

Leadership is a category under Human Capital because facilitators mentioned that all the elected SHF cluster leaders’ required capacity building in leadership skills (DAR). Cluster leadership refers to the roles of President, Vice-President, Secretary, and Treasurer who are generally elected from within the cluster membership (MNGO2). The influence of strong leadership was emphasized by both facilitators and the cluster members:

‘…the group that didn’t work…because of the leaders’ (DavaoPrivate1)

The ability to maintain a positive outlook was highly regarded leadership skill:

'…when a leader gets discouraged it affects the whole group' (ZNGO1)

Leadership is a critical success factor for sustainability and success of smallholder agricultural clusters (Concepcion et al. 2006; Mudiwa 2017) and is defined as:

‘... a process of social influence in which a person can enlist the aid and support of others in the accomplishment of a common task.’ (Chemers 1997).

FGD participants mentioned an ideal leader is one who can put the cluster ‘needs’ above their personal needs. Altruism and ‘leading by example’ attitudes were terms used in the data that suggest leaders motivated members and build their bonds required for a cluster to succeed:

‘… (leaders)…are not selfish and will work hard for the organization' (DAR2, APLAFA, Biasong).

Whilst the characteristics and qualities of a leader were not specific, interviewees readily talked about the problems that leaders were required to effectively manage. Many of these were unique problems to their specific cluster. The most common issues expressed as important characteristics were leadership skills to manage people and finances, altruistic behaviour, ability to motivate, and high levels of trust; and summed up as:

‘…maupay followers, maupay leaders’ - good leaders create good followers (TUVEFA).

From the data, these common issues were divided into four leadership characteristics of ‘skills’ that can be learnt and ‘attitudes’ that are more difficult to change:

1. People leadership (skill) 2. Financial leadership (skill) 3. Altruistic character (Chapter 4 Social Category, Values and Attitudes) 4. Trusting character (Chapter 4 Social Category, Trust)

Points 3 and 4 are the attitudes discussed in Chapter 4. The details that emerged from the data for points 1 and 2 are leadership skills that can be taught for people and financial leadership are discussed below.

People leadership refers to the capacity to manage the other cluster members. A cluster leader is generally untrained in organizational management and appointed democratically on the strength of their personality. As much as they 'desire to manage' they often don't have the 'capability' (DavaoLGU1). An unsupported cluster leadership can have their authority tested by members wanting to challenge the authority undermining the development of the cluster.

Facilitators suggested this was particularly the case during the initiation of a new project, where the limited capacity of the new cluster leadership’s skills can lead to their cluster member’s frustration and loss of trust (BoholNGO1and2). An inability of the leadership to manage these disgruntled members could lead to cluster failure (BoholNGO1).

Leadership motivational skills were regarded highly by FGD participants. Whilst individual leaders had different motivational styles, they generally led by example and were characterised by attitudes that were caring, encouraging, visible and accessible (Biasong, Tunga, APLAFA). Two ‘successful’ styles that motivated the cluster members for collective action were authoritarian that was built on pillars of religion and army command hierarchy.

The use of religion was used by both facilitators and cluster leaders (DavaoPrivate2, Tunga) to instilled discipline, work ethics, and rules on abstaining from negative influences such as alcohol and gambling. The facilitators mentioned they used a ‘Fear of God’ threat to instil changes in values and corresponding attitudes (DavaoPrivate2, APLAFA). This disciplined religious approach created the guidelines for social interaction, development of trust, optimism and commitment to livelihood improvement through collective action within the cluster members.

Another authoritarian approach was in use in the Mambog area of Samar where two clusters composed of members who were ex-New People Army fighters. These clusters structured their cluster along the same lines as the hierarchy of their past fighting unit. The cluster President was their ex-unit commander. During the FGD the group discipline, loyalty and deference to their cluster President was pervasive that made discussion difficult as participants continually deferred to their ‘commander’ and his opinion.

Both religion and army command systems for organizational structures created an authoritarian motivational style that gave an appearance of successful and sustainable clusters.

Financial leadership is the next skill that emerged from the data as a characteristic the cluster members desired from their leaders. Accessing credit from the cluster treasury, managing new project budgets, and general transparency of the clusters cash-flow and accounts were described as highly important for good cluster leader management (BoholNGO2). One common cluster practice was lending cluster funds to members on short-term loans. The transparency around the loans, particularly who gets the loans and the repayment schedules were raised by FGD participants as issues that required strong leadership and adherence to guidelines agreed by all cluster members (Tigbawan).

The facilitators suggested leader characteristics that will destroy a cluster include corrupt and unable to manage finances, poor communicators, lack of empathy and equity applying rules or when making decisions. Conflicts of interests and leaders personal ‘needs’ over the clusters development was mentioned as a direct cause of cluster failure:

‘…personal interests … not coinciding with the cluster’ (BoholNGO2),

Table 25 lists six universally shared conceptions of leadership from a worldwide study viewed across cultures as contributing to the effectiveness of leadership (GLOBE 2016).

Table 25: The Six Global Leadership Dimensions

House et al. (2004, p. 626)

Charismatic/Value-Based Team Oriented Self-Protective • Charismatic/Visionary • Team collaborative • Self-centred • Charismatic/Inspirational • Team integrative • Status conscious • Charismatic/Self-sacrificing • Diplomatic • Conflict inducer • Integrity • Malevolent** • Face saver • Decisive • Adm. competent • Procedural • Performance oriented Participative Humane Oriented Autonomous • Autocratic** • Modesty • Autonomous • Non-participative** • Humane oriented

These dimensions are the ways in which people worldwide distinguish between leaders who are effective and ineffective (House et al. 2004). The leadership characteristics identified in this study data fit within these leadership dimensions, and therefore, it is a framework to assist facilitators identify qualities of the leaders and characteristics extant within the cluster membership.

Facilitators were aware that good leadership can sustain the cluster many years after facilitation finished. One example is the Ned Lake Cebu Cluster, still operating after thirty years, which has continued due in large part to strong leadership (LeyteNGO1). This is example is described in Appendix 2: Successful cluster examples, case study #3.

Further study is required to determine if leaders need to consider the dynamics of collectivist cultural expectations (Hofstede et al. 2010), or these are minimised in a functioning results oriented cluster (Quinn Mills 2005). From the data, an example of a minority religion cluster member elected as leader suggests strong leadership characteristics take primacy over attitudes and beliefs, (ZNGO1), Appendix 2: case study #1. The facilitator regards this as unusual but still suggests the SHF are pragmatic with their livelihood development decisions with a willingness for results above religious concerns.

The data showed agricultural clusters in the Philippines vary in both size and maturity levels and these are continually changing in a dynamic environment. Leadership is also required to grow and change styles as the organization grows.

The Situational Leadership Model (SLM) illustrates the style of leadership required at different organization development stages (Hersey et al. 2008). The leadership style adjusts the mix of supportive or directive leadership as dictated by the needs of the development stage of the

organization. Figure 21 shows the SLM aligned with the stages of cluster maturity and the changing style of leadership required; Directive and Supportive.

Hersey and Blanchard (1969)

Figure 21: Situational Leadership Model and Cluster Maturity

Figure 22 further develops the SLM and cluster maturity by including the relationship-risk political model described in Chapter 5: Politics.

Hersey and Blanchard (1969)

Figure 22: Situational Leadership, Cluster Maturity and Political Relationships

These are placed side-by-side to show they are two leadership considerations that require different styles to effectively manage. The diagram shows a political ‘zone of maximum benefit’ which refers to the relationship being balanced, that is of minimal risk should the administration change and strong enough to maintain the benefits.

To reach the optimal balance of cohesion and flexibility, the style of leadership should also be considered. Figure 23 combines a three-dimensional view of the Circumplex Model (Figure 20), with the Situational Leadership Model (Figure 21).

Olson (2000) and Hersey and Blanchard (1969)

Figure 23: Combined - Circumplex model and Situational Leadership Model

This combined model shows unbalanced clusters require higher levels of task directive leadership. Clusters with good levels of cohesion have a lower need for task directive leadership. Leadership styles that provide higher levels of supportive and relationship behaviour management are needed at the mid-range types of clusters where there is reasonable competence and variable commitment within the cluster.

Table 26 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on leadership.

Table 26: Leadership - Important for sustainability based on refocused analysis

Initial coding Priority data analysis, brief literature review 1 Leaders with good management skills (finance, people, motivator, negotiator, altruism, trust). √√√ Refocused coding detailed literature review, comparative analysis with data 2 Leadership style changes through the clusters development stages √√

3 Situational Leadership Model and Circumplex Model assist in identifying leadership styles required √ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The data and the literature (Concepcion et al. 2006; Mudiwa 2017) concur that good leadership is critical for sustainable clusters. Both facilitators and cluster members suggested sustainable clusters required leaders with skills in managing people and finances and carry characteristics of altruism and trust. The data identified clusters at different levels of growth that links a conclusion by Hersey et al. (2008) with the suggestion for leadership style to change and align with the needs of these growth stages. This section combined the Circumplex and Situational Leadership Models to illustrate how cluster leaders are required to align their leadership style with the cluster growth and development.

Empowerment

One of the key benefits SHF clusters is the empowerment of members (IDH 2018). Facilitators emphasized empowerment of the individual members that influenced the cluster development. Some suggested the empowerment came from the organizational structure providing a forum for expression and confidence building (CNGO1, BoholNGO2):

‘…once they were organized, they have now the collective action to resolve what they felt was there problems and the voice to tap different institutions to support their present initiatives’ (BoholNGO1).

The literature (Rappaport 1984; Zimmerman 2000; Adams 2008) offers definitions of empowerment that focus on the building of individual capacity, taking control, and gaining greater access to resources. Empowerment in the context of agricultural clusters can be viewed as a process of creating opportunities, skills and choice that aims to eliminate the need for welfare. A very simple definition that embraces the concept of a ‘process’ is provided by Rappaport (1984):

‘Empowerment is viewed as a process: the mechanism by which people, organizations, and communities gain mastery over their lives’

Facilitators aimed to build confidence to empower the SHFs to deal with their external trading and support network to master their own lives:

’they should know what they want and how do they negotiate’ (DavaoNGO1)

‘…so that he or she won’t be dependent on the sponsor or donor or the project partner and be able to manage…’ (LeytePrivate1)

From the perspective of gender empowerment, the male and female participation across the agricultural clusters from the data collected was even. Fifty-five percent of the facilitators interviewed were women and 48% of the 135 cluster members were also women. Fifty-six percent of clusters had equal or more women to men as members. Women were observed to be distributed across the cluster job roles from leadership to field workers. This gave an impression that gender equity and empowerment in clusters was balanced.

Facilitator transcripts also imply empowerment embraces the development of individual personalities, particularly self-confidence. Zimmerman (2000), takes a psychological view of this individual development process in the following definition of empowerment that embraces the concept of self-efficacy:

‘...empowerment is a psychological process in which individuals think positively about their ability to make change and gain mastery over issues at individual and social levels...’

Self-efficacy is an individual’s self-belief in their ability to succeed and was often implied within the facilitator transcripts as the confidence they were trying to instil into individual cluster members. Individual’s with high self-efficacy are more likely to view difficult tasks as something to be mastered rather than avoided (Bandura 1977). The two definitions of empowerment and the concept of self-efficacy embrace the way the term ‘empowerment’ was being used by the facilitators in the agricultural clusters. Empowerment was being used as a term for a process of creating a forum for change for both the group and the individual where they can develop confidence to succeed.

The facilitators regarded empowered farmers as a group more resilient when confronted with difficult situations and where immediate recovery was the cluster responsibility:

‘…how they physically prepare for typhoon, what they will gather for three days without help, and how they will help others.’ (LeyteLGU2).

Senge (2006, p. 136) stated ‘To empower people in an unaligned organization can be counterproductive’. The facilitators interviewed did not have a structured approach towards 93

empowering clusters but were aware of the importance of the concept to sustain clusters. For empowerment to develop there requires a culture of trust within the organization to underpin three key structures (Blanchard et al. 1996) that encourage the individuals with the opportunity to utilise their knowledge and experience effectively; these are ensuring that:

1. Information is shared and accessible to everyone, 2. Encourage the creation of self-directed work teams that replace the old hierarchy, 3. Boundaries exist around activities and jobs for the creation of autonomy of the self-directed work teams

Collective activities can be used to develop empowered cluster members. Table 27 is an example for facilitators for a structured activity approach to develop empowerment that lead to specific outcomes. The initial coding identified cluster members’ social skills as a weakness. Table 27 combined with tools for the social skills development of cluster members discussed under the social category can create cohesion and empowerment to support cluster sustainability.

Table 27: Empowerment Model for Smallholder Clusters

Facilitator Cluster Member Organization Facilitate Role Change Agent Forum Provider Resource Provider Information Self-advocacy Autonomous work teams Extrinsic to Intrinsic Motivation Collective approach Leadership Training Supply Chain Activist Peer motivation Activity Values Training Effective and Efficient Production Evaluator Self-evaluator New Skills Advocates Self-efficacy Self-efficacy Supply Chain Partners Outcomes Experience and skills Supply Chain Power Better service

Table 28 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on empowerment. The data identified the limited social skills of cluster members, which was also discussed in the social capital sections. The facilitators spoke of benefits that an empowered cluster adds to sustainability; however, they did not have a structured approach to undertake the transformation with the cluster.

Table 28: Empowerment - Important for sustainability based on refocused analysis

Initial coding Priority data analysis, brief literature review 1 Develop social skills of individual cluster members. √√√ Refocused coding detailed literature review, comparative analysis with data 2 Facilitators required a structured approach to instil self-efficacy and empowerment in the cluster √√√

3 Ensure information transparency and sharing & create self-directed work teams with boundaries and autonomy √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Motivati on

As an area of study of cluster organization and organizational behaviour, motivation is one of the most important fields contributing to cluster sustainability. The initial coding indicated this importance; however, understanding the motivation of the SHFs was a difficult question for the facilitators interviewed. This poor understanding is because motivation is inferred through a person’s behaviour and difficulty to measure (Touré‐Tillery & Fishbach 2014).

Motivation is defined as:

‘… an internal drive that activates behaviour and gives it direction. …, concerned with the processes that describe why and how human behaviour is activated and directed’ (Romando 2007).

Motivation described by the facilitators is an external influence, whereas the definition from psychology refers to an internal drive. Psychologists tend to view motivation from the mind of the individual, and sociologists view how society functions for the individual interacting in clusters and small groups.

An observation by a facilitator (LeytePrivate3) was the different levels of motivation between Filipino indigenous groups. In his observation, the facilitator believes the high level of motivation within his ethnic group is trained into children from an early age. He views motivation as an external influence that activates the intrinsic factors that stay with the individual and reinforced by the ethnic culture.

The facilitator also commented on the lack of motivation in some SHFs:

‘…for a farmer who just wants to enjoy his life it is just too much…we are on a false belief that everybody would like to have a life just like we would…the heart or the desire to improve oneself…is not there.’ (LeytePrivate3)

A person who undertakes a task mainly due to a promise of a benefit upon completion is said to have an extrinsic motivation. In contrast, intrinsic motivation is when a person undertakes an activity because of personal enjoyment or pleasure. Intrinsic motivation is regarded as having a higher level of engagement, persistence, interest, excitement, confidence, creativity, and better conceptual learning (Vansteenkiste et al. 2006).

Some facilitators believed motivation was linked exclusively to consumerism (LeytePrivate3); that is, having access to social media, television, and radio creates the dream of a better life with the associated desire for more consumer goods. Many of the clusters are in remote locations with poor access to markets and their cash income is very small, using the ‘consumer dream’ for motivation is a strategy likely to end in disappointment and the collapse of the cluster:

Implied within this statement is a belief that SHFs are unwilling to expose themselves to the extra stress of improvement because they have a lack of interest and a level of comfort that is satisfactory. The quote from the facilitator is their observation that the farmer’s intrinsic goals of community and relationships are more valuable than extrinsic goals of financial success, appearance or popularity. It could be the farmer’s values of the extrinsic goals are associated with greater ill-being, stress and lower wellness (Ryan & Deci 2018). Within a cluster environment these values are the ‘free-riders’ that are required to either be changed or removed. A person not interested in an activity will have no intrinsic motivation; however, they might be motivated by an external influence such as the need to complete the harvest to get the payment reward. Motivation can therefore be assessed as an interaction between different perceptions of the extrinsic environment and intrinsic perceptions of the self (ibid).

The facilitators brought up the question of their frustration with decades of training SHFs with few successful examples. Facilitators generally referred to the economic irrational decisions by the farmers, such as the following comment:

‘...demonstrated how protected cropping structures can increase incomes ...the structures are built for them...get damaged...but farmers don’t rebuild...why? (LeyteLGU2)

The lack of motivation, such as to rebuild an asset after damage and operating the cluster as a business was not well understood by the facilitators. When asked their strategy to counter the lack

of motivation, the facilitators mentioned a need to frequently visit the cluster to monitor the cluster to ensure progress on agreed activities:

‘…nobody is pushing them…to help them, to support them, to motivate them...’ (DAR1)

This external facilitator ‘push’ influence gave the appearance of operating well during the life of the facilitated process. For sustainability, the cluster leadership is required to take on the role of motivator or transforming motivation into an intrinsic force.

During the FGD field trip two authoritarian extrinsic motivators were observed. The first was the use of religion, specifically the ‘Fear of God’ and the other was ex-New People Army fighters who maintained the same army unit hierarchy as a command structure within their cluster. Both versions correlated with clusters developing well. These two examples are discussed further in Appendix 2: Successful cluster examples, case study #4. This is like the extrinsic motivation strategy of the facilitators to maintain a constant visibility.

Table 29 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on motivation.

Table 29: Motivation - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review 1 Constant visibility and accessibility of leaders and facilitators to the cluster members √√ Refocused coding detailed literature review, comparative analysis with data 2 Facilitators capacity to manipulate extrinsic and intrinsic motivators √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The data identified the facilitator’s strategy for motivation was for constant visibility and presence. This is an extrinsic approach like the authoritarian approach of religion and the army hierarchy command. The facilitators understanding of the intrinsic factors of motivation could enhance the facilitators approach for sustainability. The intrinsic motivation factors move the discussion into the discipline of psychology that embraces quantification and positivistic methods which Charmaz (1996) argues can still captured under grounded theory methods. However, extending the discussion into psychology positivistic methods does not align with the Constructivist GT co- creation of data approach utilized for this study. Collective action for sustainable clusters requires motivation applied from the extrinsic forces of management, which have been described by the facilitators and SHFs.

Management

By 2015 the IDH Sustainable Trade Initiative had invested over $US70 million of public private partnership funds into SHF engagement models. In the management models they invested they concluded that managed professionally an agricultural cluster can significantly improve chances of success (IDH 2018). This IDH conclusion reflects the importance of professional management identified in this study as an important foundation for sustainability.

All the twenty-two facilitators interviewed correlated good management with successful agricultural clusters. It was a strategy of all facilitators to commence management capacity building from the time of initiation of the cluster and try to avoid the cluster collapse once they exit:

‘…because when the project ends, so the project also collapsed because the management disagreed with themselves’ (BoholNGO2).

When the term ‘good management’ was discussed, both facilitators and the FGDs initially related this term to financial management only, and the discussion then proceeded into this direction. The implication that ‘management is only finance’ reflects the SHFs’ particular interest in transparency of their investments and the many financial activities with concepts that may be difficult to comprehend. The facilitators introduced financial and other general management skills to the cluster.

Facilitators and cluster leaders have two key management designs: the cluster and the support network. Agricultural clusters working closely with supporting institutions are shown to be more innovative, and consequently more successful than firms operating in isolation (Anderson et al. 2004; Gálvez-Nogales 2010). The issue for cluster leaders is how to manage these organizational alliances and make them sustainable. The design and management of external alliances is closely linked to the management of group cohesion; which has also been shown to improve performance (Dyaram & Kamalanabhan 2005).

The cluster relations are the other design the managers are required to consider. Underpinning clustering in the southern Philippines is the collectivist culture and the concept of collective action. Well managed collective action can lead to the collaboration and integration of business practices, which is a key requirement for success (Ho et al. 2002; Kouvelis et al. 2006). The facilitators and cluster leaders manage the design of the cluster and the level of enterprise integration with both cluster members and the support networks. The collaboration design for a cluster can be anywhere

along a continuum between full integration of production and marketing, joint production only, joint marketing only, or versions with limits and boundaries on these types of integration.

Figure 24 illustrates the management relationships between the funding agencies through to the Local Government Units (LGU) and shows the importance of functional relationships between the cluster and the LGU. A new cluster strategy has improved potential for sustainability with a gradual integration into the LGU management system that offers more projects, investments, and services.

Figure 24: Management Map - Facilitators and their agency

Management of partnerships within the cluster and across external organizations embraces collaborative activities such as the sharing of assets, knowledge, capabilities and governance for participants to gain a competitive advantage (Dyer & Singh 1998). Facilitators used interchangeably the terms of collaboration, cooperation, and coordination for managing partnerships that are defined below (Foley 2006):

1. Cooperation: An informal relationship where the individual has a high level of autonomy, information is shared as needed, resources and rewards are separate. 2. Coordination: There is some planning and division of roles, resources are shared, and rewards are mutually acknowledged. 3. Collaboration: Commitments to a common mission, resources are pooled, and a degree of autonomy is relinquished within the collaborative structure. For this study Figure 25 illustrates the way these three partnership terms were defined and discussed with facilitators and cluster members. This serves to illustrate the alliance relationship that can exist within the cluster and understand the level of integration of members. This also applies to the alliances in the clusters external support network.

Figure 25: Three Alliance Relationships

Success of a cluster requires constant innovative management to succeed within the dynamic environment. As mentioned previously the cluster leadership is selected in a democratic process based more on popularity than management capacity to adapt to the dynamic environment and the growth of the cluster. A suggested approach is to breakdown the roles within the cluster. The facilitators and cluster members identified two roles: the workers and the leadership. Witte (1977) also described these two roles as the ‘worker-experts’ who undertake the detail of an activity, and the ‘power holders’ or leadership who promote, support, and manage the work of the ‘worker- experts’.

As the cluster grows there is a need for additional human resources. The model increases with the addition of a third team member, known as the ‘process promoter’, required to deal with the increasing complexity, communication needs, and the process management, and act as a link between all the organizational units involved (Hauschildt & Kirchmann 2001). The model can expand further with consideration of managing the support network (Goduscheit 2014).

The success of this model is the promotion and implementation of innovative practices in the cluster. This requires leaders to adjust their style and management design to align with the growth of the cluster.

Figure 26 illustrates the organizational structure that could be more effective with the subtle delineation of duties into the three roles: experts, processors, and power holders.

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Hauschildt and Kirchmann (2001) Figure 26: The Promoter Model for Management Development

For the model illustrated in Figure 26 to successfully promote innovative practices, Hofstede et al. (2010) suggests a cultural aspect of a low Power Distance Index (PDI) should exist between the cluster leaders and members for accessibility (Hofstede et al. 2010); which is not the context of the Philippines. This PDI suggests strong group cohesion but the potential for innovation is not high. Other studies suggest cultural aspects are minimized under a professional results oriented cluster leadership (Quinn Mills 2005). Therefore, the style of cluster management needs to be professional and adapt as the cluster grows through different stages.

The facilitators mentioned the life of project (LoP) as an important management influence on cluster sustainability. Transforming individual SHFs into collective action groups for livelihood improvements is a good investment for a donor; however, transformation takes time and commitment. The facilitators operated under various funding periods and discussed the different management and sustainability impacts on clusters of LoPs that ranged from one, three, and ten years.

A one year LoP is designed to create smallholder clusters specifically for production and technical assistance over one or two cropping cycles. The facilitators are then moved into a new location to create a new cluster. This quick LoP does provide adoption of new production techniques for the cluster; however, the facilitators said these clusters did not survive and SHFs reverted to working as individuals, and in some cases, back to their familiar methods. A facilitator in this system recognized that the LoP was too short for any meaningful changes to be implemented; particularly with the cluster and community development (LeytePrivate2). This short LoP is favoured by the private sector for product adoption through the introduction of new techniques and provision of facilitators providing advice and creating brand loyalty. 101

Three year LoP was observed as the most popular interval for facilitated cluster projects during the data collection. This interval can initiate and consolidate the cluster organization leadership and group cohesion as well as implement capacity building activities, innovations, and strengthen processes. The time to develop social and human category for sustainable change is limited but does provide the time to expand and strengthen the support network for sustainability.

Ten year LoPs is regarded as more a program of multiple projects with no end point. It was not a single funding donor over the LoP, but a range of donors targeting specific needs identified by the cluster and the supporting LGU. Cluster sustainability was achieved with integration into the LGU system that provided guaranteed funding and opportunities for ‘other’ projects. This is described in the BAFTEX example in Appendix 2: Successful cluster examples.

Figure 27 illustrates a model of the way the program approach operates with multiple donors and organizations aligned towards a common goal.

Goduscheit (2014) Figure 27: Inter-Organizational Relationship Promoter Model

There are some practical management considerations for dividing labour between the four promoter roles within a smallholder cluster (experts, power, process, relationships) regarding the small cluster size and available skills. A sustainable cluster may grow to a point where these new roles are

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essential. The point for facilitators is their awareness of cluster growth requires change in management strategies.

Table 30 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on management.

Table 30: Management - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review 1 Life of project should be longer than three years. √√

2 Management training is required √√√

3 Embed clusters into the LGU √√√ Refocused coding detailed literature review, comparative analysis with data 4 Facilitators develop an exit strategy that includes ongoing support for cluster management √√√

5 Design activities around the type of relationship alliances: coordination, cooperation, or collaboration √√

Innovation requires a low PDI, but successful cohesion requires a high PDI; therefore, the management style 6 √√ needs to change with the growth of the cluster

7 Professional result oriented management can minimize cultural aspects √√√ 8 Clusters members need roles and activities with clear boundaries (The Promoter Model) √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Emerging from the data was the universal message that good cluster management was essential for sustainability. The literature (Witte 1977; Dyer & Singh 1998; Kouvelis et al. 2006) defined the roles of management and boundaries, and Quinn Mills (2005) indicates that professional structures can minimize any cultural aspects. Awareness of facilitators that management strategies need to adapt as the cluster grows to include the extra staff that can manage specific roles in leadership, worker, promoter, and relationships. Hofstede et al. (2010) suggests the high Power-Distance Index (PDI) of the collectivist Philippine culture indicates potential for implementing cluster discipline; however, it does suggest less likelihood of innovation occurring.

The other key management points towards facilitated cluster projects should aim towards a longer- term program approach to allow time for social changes to occur. Embedding the cluster within the LGU will aid sustainability as will management training for the cluster leaders as an ongoing capacity building activity. Table 30 also includes a column of subjective ranking for each of the identified key sustainability points. Three ticks are regarded by the researcher as the most important.

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Marketing

A lack of intervention in developing market linkages was regarded as the failure for poverty reduction investments in the Philippines (PhilDHRRA 2008). Improving the market ‘literacy’ of SHF has the potential to improve productivity and create unique and independent market positions (Albu & Griffith 2005; Connell & Pathammavong 2005; OECD 2008; Carroll et al. 2012). The resultant integration of the cluster into the supply chain will bring livelihood benefits for SHFs (Gálvez-Nogales 2010). Viatte et al. (2009) suggests that linking farmers to markets should receive the same facilitation attention as interventions to improve production. Improved market access for SHFs improves confidence (World Bank 2008), reduces risks (Shepherd 2007), and can encourage the adoption of technologies for more efficient and effective food production systems (World Bank 2008; Bernard & Spielman 2009; Viatte et al. 2009).

One driver to join a cluster for many Filipino SHFs mentioned during the FGDs is to overcome the adversarial trading terms they face as individual farmers. Consequently, some agricultural clusters were designed as solely collective marketing groups (CMG). In the Philippines an estimated 60% of the farms are under 1ha (PSA 2012) and the benefit of agricultural clustering is achieving an economy of scale from the volume of produce harvested from multiple farmers, referred to as ‘agglomeration economics’ (Monteiro et al. 2011). This consolidation of produce improves the bargaining power of the SHFs and reduces transaction costs and a market competitive advantage that an individual would be unable to achieve (Mentzer et al. 2001; Muncker 2002). The SHFs are aware of their marketing knowledge limitations and that their ignorance is costly:

‘The problem is we don’t know how to market it’ (Biasong)

‘I am learning … from nursery to planting to fermenting to drying to marketing….and market together' (CacaoFarmersAssoc)

SHF FGD participants mentioned that joining the cluster gave them confidence to ‘take a chance’ with the support of the other cluster members. As an individual SHF lacked support and limited access to information there exists a high level of uncertainty in every decision. This uncertainty can be quantified and expressed as a probability after joining a cluster and the group defines and shares the decision in their terms as risk (Hofstede et al. 2010). The tendency for a cluster to engage in higher risk activities above those of the individual member is ‘group polarization’ (Aronson 2010) and over-rides the individual members shyness and minority opinions (Noelle-Newmann 1993).

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Land access and arrangements are important and managed by clusters in different ways. The interviewed clusters required members to have access to land, either title or rental. Cluster members retain rights to their own working land and join the cluster for joint marketing and better access to resources, such as seed, fertiliser or labour. Some clusters such as the CALCOA cluster farm common land they rent, the association takes the risk by paying individual’s labour costs for farm work, the produce is marketed as a group, and profits are shared. Individual members still farm their own individual lots. Another example is the CocoaFarmersAssoc who took a collective approach for more planting material through development of a joint nursery and a single member's cocoa fermentary and dryer to improve efficiency, product uniformity and lower costs. This cluster membership process allows the individual to manage their own land, tenure and risks but also participate in higher risk cluster activities with potential for greater benefits.

Supply chains in the southern Philippines are generally adversarial with no binding or sought-after formal or informal relationships with little sharing of information or the existence of trust (KIT 2006). All the actors in the chain are more interested in maximizing their short-term ‘wins’ rather than manage the ups and downs of an equitable long-term relationship with other chain actors. The southern Philippines is dominated by these traditional and adversarial supply chains (Murray-Prior 2008). These adversarial supply chains continue to exist within an informal business environment that is characterised by poor enforcement of contracts, arbitrary enforcement systems, difficulty access to formal finance, moneylenders with high interest rates, no worker rights or consumer protection, and corruption (UNDP, 2004). The progression of global market liberalization is also bringing market opportunities closer to remote producers and also a consumer expectation of local produce standards that meet international levels (Johnson & Berdegué 2004). The GoP introduced the Competition Act of 2015 (RA 10667) and the more vigorous application of this Act designed to eradicate dominant supply chain positions and unfair trade practices could address these market failures (Briones et al. 2017).

As clusters operate on a low wage structure competing against the low cost structures of the global conventional farming system is difficult (De Schutter 2009). Some facilitators look for market opportunities such as a comparative advantage or opportunities for value adding to improve the offer from the cluster (DavaoGO1), and a market niche to remain sustainable and competitive. Finding this comparative advantage is very difficult for SHFs as they tend to specialise in commodities which are lower value niche products (Gálvez-Nogales 2010). Facilitators mentioned their market research entails constant repeat visits into the markets taking notice of changes and looking for opportunities (DavaoNGO1). 105

Access to market information is difficult for SMF in the Philippines where chains are governed by consolidators and traders in this traditional adversarial system (Concepcion et al. 2011; Notarte 2011). Nonetheless, the value of traders and consolidators in the supply chain is often misunderstood, and agricultural cluster groups often have an incorrect self-belief they can undertake their own marketing activities more effectively than traders (Batt 2008; Murray-Prior 2008; Bhaskaran & Gligorovska 2009). Effectively linking farmers to markets is an issue attracting a lot of attention from development specialists.

One area mentioned by facilitators that is attracting donor attention are farmer certification schemes for fresh vegetables. These schemes such as organics, Good Agricultural Production (GAP), and other ‘unseen’ food safety standards (Concepcion et al. 2011) are intangible and elusive concepts for the majority of consumers and rarely receive a premium in the rural local markets. Without a financial reward these systems are difficult to implement (ibid).

The initial coding of facilitator interviews described smallholder’s disconnection from markets. This information initiated a closer look at the data to ascertain if a relationship between distances to market relates to the cluster maturity. Figure 28 presents a graph of fourteen agricultural clusters involved in the survey and their distance from the Provincial Capital.

Figure 28: Distance (km) versus Cluster Maturity (self-assessed)

Even though the graph shows a weak correlation (r=0.24), this may still indicate a group optimism exists the closer the cluster is to the market. It is recognised that the sample size (n=14) is very small to draw any definitive conclusion.

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Table 31 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on marketing.

Table 31: Marketing - Important for sustainability based on refocused analysis

Initial coding Priority data analysis, brief literature review 1 Market training is required √√ Refocused coding detailed literature review, comparative analysis with data 2 Develop Value Chain Approaches (VCA) √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Emerging from the data was the need for agricultural cluster members to undertake market training. A suggested market training is on Value Chain Analysis approaches since this links well with agricultural clustering (USAID 2008). Appendix 4: Checklist for Market Training, provides a checklist of topics for market training sourced from various authors (Bernard et al., 2010; Shepherd, 2007; Batt et al., 2011). Various studies conclude the benefits of market knowledge and closer integration of the cluster with the supply chain.

Facilitators

Facilitators are recognized as key personal for the transition of individual SHFs into groups for collective action and livelihood improvement. They are included in the category of Human Capital because they are educators and improve the cluster member’s set of skills. It is recognised that a professionally managed and led agricultural cluster has the potential for greatest impact on smallholder livelihoods (IHD, 2017). Facilitators are engaged to initiate and build the new agriculture cluster. Delivery of capacity building to an agricultural cluster through facilitation is a high cost per farmer but an essential service for sustainability.

The data showed facilitators were trained either in community development or agricultural technology. It emerged that capacity in both disciplines is required. The interviewed facilitators all could describe the methods of implementing participatory development tailored for their clusters, but it was not apparent if their approaches could be linked back to constructivist learning. There are seven pedagogical goals of constructivist learning environments for project designers that are useful references for facilitators when developing their theory of change and implementation activities. These seven goals are (Cunningham et al. 1993; Knuth & Cunningham 1993):

1. Provide experience with the knowledge of the construction process

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2. Provide experience in the appreciation for multiple perspectives 3. Embed learning in realistic and relevant contexts 4. Encourage ownership and voice in the learning process 5. Embed learning in social experience 6. Encourage the use of multiple modes of representation 7. Encourage self-awareness of the knowledge construction process

Honebein (1996) discusses the process of implementation of these goals into a constructivist learning environment.

Facilitator employer organizations also mentioned facilitator social skills were a priority when they were selected. One private sector organization manager mentioned they observed a higher failure rate from male facilitators liaising with clusters and therefore only employed female facilitators (LeytePrivate3).

The service delivery models encountered during the data collection were from Government agency, NGO, or a private organization. All three of these service providers created the agricultural cluster as the forum for information transfer that progressed into joint production or marketing activities. NGOs were funded externally, while the Government agencies and private sector used their own funds or operated in an alliance with an external funder to deliver capacity building services.

Many of the facilitators were underfunded to effectively operate. A facilitator mentioned that to undertake the facilitation role their personal finances were often expended due to a limited operating budget. They were required to use their own motorcycle or rented transport to get to the clusters. One facilitator used their own motorcycle and fuel to undertake regular visits to 21 clusters (BoholNGO2). This was an expensive undertaking to meet their job performance indicators.

The capacity of facilitators to manage the cluster training and development and always keep the training programs relevant and interesting was a topic that frequently appeared in the transcripts (CNGO1). Farmers are not used to collective approaches and training is undertaken in a range of topics identified by the group:

‘…collective planting, program planting, harvesting …in a program manner, and marketing together it’s really organizing them…’ (LeyteNGO1).

Due to the breadth of specialized topics the facilitators are often providing training in areas beyond their capacity and not tailored to include principles of adult education. Six of the twenty-two

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facilitators have undergraduate training in community development and mentioned their struggles with technical training in agricultural production and business enterprise development. Conversely, other facilitators with formal training in technical areas of agricultural production mentioned their problems with understanding issues related to community development, socialization and the psychology of groups. All the facilitators were college graduates and wanted more opportunities for personal development in subjects beneficial to the needs of the agricultural clusters.

Some facilitators actively sought external assistance to train clusters and saw their role as identifying the needs of the cluster, building collective awareness and action, and linking them with the appropriate agency that can fulfill their training needs:

‘…it is not that we will necessarily answer their needs what we are trying to do is to link them with the appropriate trade and the institution that would somehow answer their needs.’ (BoholNGO1)

A facilitator frustrated by the current system of operations mentioned that the stress and responsibility placed on facilitators to manage clusters was such a problem that it discouraged new facilitators from joining their ranks. Particularly when funding agencies view the facilitation process for only quick technical interventions in a deficit-based approach rather than socialization and collective action working on strengths in an asset-based approach:

‘…no one wants to pay, and now we’re into the second phase I’m hesitant to take the project; it’s tiresome and frustrating although the purpose is very good…’ (LeyteLGU2)

Facilitators managed clusters with smallholder members from a range of ethnic groups. Apart from understanding the different values and attitudes their biggest issue was language barriers:

‘I cannot communicate well with them and transfer the ideas… they are Waray and I cannot speak fluently Waray…’ (LeytePrivate2)

This was also an issue working with Indigenous People, such as the Bla’an Tribe in South Cotabato, with a unique language that also posed a challenge (CNGO1).

Figure 29 illustrates the management processes and considerations facing facilitators. The facilitator’s role is to manage the development of the cluster and ensure the cluster leaders can take over the cluster management within the life of the project is a challenge:

‘…they will be able to stand on their own’ (DAR1)

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Figure 29: Management Process for Facilitators

Even though they faced many management challenges the facilitators were positive about their occupation and roles they played in improvement of livelihoods:

‘I am convinced by constant accompany hand-holding with smallholder farmers with outsider facilitator must be maintained otherwise farmer groups can be deviated.’ (LeyteNGO1).

Table 32 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on facilitators. Emerging from the data was the need for greater support for facilitators. The facilitators could also benefit from a more structure approach to develop the clusters.

Table 32: Facilitation - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review 1 Facilitators require greater levels of support and resources √√ Refocused coding detailed literature review, comparative analysis with data 2 Facilitators require skills in both community development and agricultural technology √√√

3 Facilitators open access to more extension services as the cluster progresses √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Summary

This chapter conclusion combines the initial coding and refocused coding sections. Emerging from the data was the need for good leaders with good management skills. Human Capital is in a 110

dynamic relationship with Social Capital that is illustrated in Figure 30. This model has emerged from the data and shows the connection and relationships that facilitators should consider when implementing new cluster activities or strategies for sustainability. Group 2 is labelled as ‘modifiers’ that translate the Group 1 cognitive concepts into the actions of Group 3, labelled ‘Capacity’. The implication for the cluster facilitator who acts as the bridge to external partners is to possess a capability to broker unique relationships through an understanding of the ‘Us’ factors that are overlayed with ‘modifiers’ and ‘capacity’; and also recognise the dynamic, emotional and multidimensional nature of cohesion (Carron & Brawley 2000).

Figure 30: Human Capital relationship to Social Capital

Figure 31 aggregates previously discussed models into a single illustration to show the relationships that exist.

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Olson (2000), Hersey and Blanchard (1969), and Sako (1998) Figure 31: Social and Human Category Cluster Development Model

The diagram has evolved from the foundation of Circumplex Model of group cohesion and relationships and then combined with the Situational Leadership Model to illustrate the change in leadership style that is required for different types of group relationships and behaviours. The aim of combining both Models is to show that clusters are dynamic and leadership styles should change

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to suit. Leadership style is an important consideration as it changes in response to the changes in the group cohesion.

Underpinning the understanding of values and attitudes is the Functional Attitudes Theory that acts as a methodical process to determine attitudes and how they can be reinforced. Modifiers in Figure 31 refer to the variables of perturbations and influences affecting the cluster development. The list of modifiers relates only to the Social Capital aspects.

Different levels of trust exist within individuals at the different stages of cluster development and at any point in time. The model shows trust levels change as the clusters move from unbalanced to balanced. As the cluster becomes more balanced, the way trust is managed also changes. As the number of members with high trust in the organization increase the leaders increase delegation of tasks and members will respond further with higher levels of goodwill; that is, they will do more than expected.

Table 33 consolidates the important concepts identified from the initial and refocused analysis and applies a subjective ranking of issues regarded as important for agricultural cluster sustainability. The priority ranking is on codes within the concepts.

Table 33: Ranking of human concepts for sustainable clusters

Concept Codes Priority Leadership Leaders with good management skills (finance, people, motivator, negotiator, altruism, trust). √√√ Empowerment Develop social skills of individual cluster members. √√√ Empowerment Facilitators required a structured approach to instil self-efficacy and empowerment in the cluster √√√ Empowerment Ensure information transparency and sharing & create self-directed work teams with boundaries and autonomy √√√ Motivation Facilitators capacity to manipulate extrinsic and intrinsic motivators √√√ Management Management training is required √√√ Management Embed clusters into the LGU √√√ Management Facilitators develop an exit strategy that includes ongoing support for cluster management √√√ Management Professional result oriented management can minimize cultural aspects √√√ Management Clusters members need roles and activities with clear boundaries (The Promoter Model) √√√ Marketing Develop Value Chain Approaches (VCA) √√√ Facilitation Facilitators require skills in both community development and agricultural technology √√√ Facilitation Facilitators open access to more extension services as the cluster progresses √√√ Leadership Leadership style changes through the clusters development stages √√ Motivation Constant visibility and accessibility of leaders and facilitators to the cluster members √√ Management Life of project should be longer than three years. √√ Management Design activities around the type of relationship alliances: coordination, cooperation, or collaboration √√ Innovation requires a low PDI, but successful cohesion requires a high PDI; therefore, the management style needs to change with Management √√ the growth of the cluster Marketing Market training is required √√ Facilitation Facilitators require greater levels of support and resources √√ Leadership Situational Leadership Model and Circumplex Model assist in identifying leadership styles required √ This illustrates the specific issues that emerged from the data which require attention for a sustainable cluster. The need for smallholder cluster member’s management and marketing training was raised during the facilitator interviews and later observed in the FGDs the SHFs limited

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capacity in these two disciplines. An obstacle to transformation expected from any training are the smallholder limited social skills, particularly shyness towards anyone not from their community. The support from the LGUs was highly regarded by both FGDs and facilitators as the organization with ongoing local presence to support the cluster sustainability. Facilitators are a bridge between the cluster and LGU, and other external support groups; however, the impression was facilitators struggled with limited resources, project timelines, and their own support requirements. The rankings suggest capacity building in management, marketing, and social skills development of cluster members will support sustainability of the cluster.

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Chapter Six: Natural Category

Introduction

Natural Capital within the Sustainable Livelihood Framework (LF) refers to the natural environment where the agricultural cluster exists and the value that this ecosystem can yield for the agricultural cluster into the future. The development of Human Capital is predicated on the Social Capital relationships that are a resource to build skills and capacity (Machalek & Martin 2015). Natural Capital links to Human Capital through the development of knowledge of natural resources and Social Capital through the collective governance of these resources.

Agricultural clusters are concerned with collective action to improve livelihoods by pooling some or all their resources and then managing the commons dilemma of individual member’s short-term interests that are at odds with the clusters long-term interests (Druzin 2016). Many of the emerging issues from the data related to the management of the cluster’s common’s dilemma and the long- term sustainability of the cluster. The governance of the cluster natural resources, such as water and forests resources, relates to the social category discussion in chapter four. Understanding and developing knowledge of these resources’ links to the discussion on human category in chapter five. In chapter two, the three models5 of closely related concepts for managing commons (Ostrom 1990) are used to view the many social problems facing SHFs when they join a cluster and undertake collective action to improve their livelihoods. Collective action necessitates the partial loss of independence and the sharing of resources. The governance and management of natural resources is the subject of this chapter.

Natural Capital is the stock of natural assets that includes soil, water, air and all living things that provide the inputs and environmental services for economic production (OECD 2005; World Forum on Natural Capital 2019). Natural Capital in relation to agricultural clusters refers to the natural environment in which the cluster operates; either privately owned or commons. The inherent uncertainty managing natural resource systems is a result of the array of issues to understand and a paucity of intellectual tools (Ostrom 1990). Like the problem of cluster ‘free-riders’, where members

5 The Tragedy of Commons (Hardin, 1968), The Prisoner’s Dilemma (Dawes, 1973), and The Logic of Collective Action (Olson, 1965) 115

believe they benefit from collective action without their contribution, Hardin (1968) described the degradation of the environment when many individuals use a common resource. Managing collective action of cluster ‘free-riders’ and natural resources is further complicated by the evolving threats from climate change that increases the level of unpredictability of agricultural production.

In this chapter, Natural Capital is a category heading and the codes that emerged from transcripts from both the FGDs and interviews are grouped into four concepts and used as discussion headings.

Table 34 shows the percentage of times concepts aligned to Natural Category were discussed by the facilitators and with the FGDs. Water, Pests and Diseases, Land and Weather were the main topics extracted from the transcripts. The focus by SHF was on immediate and tangible issues such as lack of water, pests and diseases and typhoons. Facilitators chose to talk more on intangible topics such as Climate Change and environment concerns.

Table 34: Natural Capital Discussion Topics

(Transcripts mentioning the category/total number of transcripts as a percent)

Facilitator Transcript FGD Transcript Percent Percent Category Concepts Concepts Environment 18 Environment 0 Land 5 Land 0 Natural Pests and Diseases 0 Pests and Diseases 6 Typhoons 0 Typhoons 6 Water 9 Water 44

Figure 32 separates the topics raised by the facilitators and SHF to illustrate the difference between the immediate livelihood issues of the SHF compared to the facilitators who spoke more about long-term changes and threats on the horizon.

Figure 32: Facilitators and FGD topics

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Water was an issue discussed by both groups. The southern Philippines was amid an El Niño- Southern Oscillation (ENSO) climatic dry event during the field data collection. A common topic by both groups was the current lack of water and then too much during the reverse El Niña event. This does illustrate the value of facilitators introduction of important ideas into communities but also a possible disconnect to the immediate livelihood issues faced by SHF.

In 2017, 15,000 scientists signed a publication for the Alliance of World Scientists as a warning of the impacts of human activities on global climate and the environment. The key message in the warning was for institutions and governments to shift development focus away from environmentally destructive economic growth policies towards an economy with greater focus on conservation and sustainable human activities (Ripple et al. 2018). The United Nations Sustainability Development Goals (SDG) complements this alert from the Alliance of World Scientists by recognising the responsible management of fragile and limited natural resources is required for resilient and sustainable development (UN 2019). This SDG emphasises the risks of Climate Change on livelihoods requires a global strategic direction for development that is not based solely around economic growth, but balanced with the environment to ensure sustainable development against the threats of Climate Change on Food and Nutrition Security (FS&FNS) and the further degradation of the ecosystem.

In the Philippines, under Executive Order No. 192, the government agency with the primary responsibility for the management of the country’s natural resources is the Department of Environment and Natural Resources (DENR). It is an enormous challenge to protect and ensure sustainable practices over the natural resources in an Anthropocene epoch6 facing challenges of climate change, FS&FNS, protection of the environment and biodiversity in the face of a rapidly increasing population. The challenge for the DENR is managing the fragile interaction between humans and the environment as the population is currently over 100 million and is increasing at 1.72% per annum (POPCOM 2019).

Awareness campaigns communicating these environmental issues reaching into remote rural communities need to be packaged in a meaningful way for the SHFs to comprehend. The immediate coping strategy of SHFs is focussed on tangible daily issues that include pests and diseases, access water, and extremes in the weather. The link of the farmers to their environment is strong but their understanding of the threats was observed to be weak:

6 The Anthropocene Epoch is an accepted concept for the geological period that commenced with significant human impact on the Earth’s geology and climate. 117

‘…willingness to protect our environment, that should be our responsibility, we don’t think only about our income.’ (CALCOA)

Water

The timing of the interviews and FGDs was during an El Niño Southern Oscillation (ENSO) event with an extended dry period. The lack of irrigation water was at the forefront in the facilitator interviews and SHF concerns in all the FGDs. Too much, too little, or at the wrong time was the common thread when water was raised. Except for rice growers who clustered themselves into an irrigator’s association to manage a collective water pumping system, all the remaining clusters relied on rainfall for their crops. Not having access to an irrigation scheme forced most of FGD clusters into carting water. This was a challenging task during dry hot weather to the distant water source and the extra challenge for clusters situated in hilly terrain.

Most SHF in the Philippines have no irrigation systems and rely on rain for production. In the 2015 to 2016 cropping season there was a below-normal precipitation that effected millions of Filipino SHFs. The ENSO dry events have become longer episodes (GFDRR 2019) disrupting the volume of agricultural production, incomes, affordability of food, nutrition, dietary diversity, and livelihoods (FAO et al. 2018).

The FGD participants commented the usual predicable climate characterised by distinct wet and dry seasons were increasingly unpredictable. The SHFs noticed an increase in both the frequency and length of dry periods with delays in the start of the wet season. The traditional calendar-based planting schedules according to the FGDs was now flexible and based around actual rainfall events. Managing rainwater catchment and storage was discussed by FGDs as an adaptation response to the changing weather system:

‘…if the rain is heavy, after two weeks the creek will already have no water.’ (Bontoc Farmers’ Association)

Water quality is also a major issue facing the Philippines. Fifty-eight percent of the groundwater is contaminated and only one third of river systems are suitable for potable water (ADB 2009). The polluted water system resulted from the lack of a coherent and enforced environmental policy (ibid).

The FGDs appreciated the cluster as a forum to discuss and share solutions for common water problems. The cluster also offered a conduit to apply government support such as grants to install

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water pumps, alternative irrigation systems, water pumps, and growing drought resilient crops (APLAFA, Cabalawan, Bogo Maasin):

‘…major concern here is the watering system …because it is quite far.’ (APLAFA)

The Bogo Maasin cluster were considering a complete change of cropping systems and drought tolerant crops or varieties to manage the change in weather patterns. This transformational change in response to the new weather system was still only at a planning stage but indicated the benefit of a cluster to support SHF investment into higher risk for higher reward activities. This transformational change could also include building the cluster awareness of other environment issues with direction towards empowered community-based resource managers.

Table 35 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on water.

Table 35: Water - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review Clustering allows smallholders to share risk when a transformation activity is implemented during difficult 1 √√ periods 2 Clustering provides a support system during difficult periods √√√ Refocused coding detailed literature review, comparative analysis with data 3 The cluster provides a forum to discuss innovations √√√

4 Cluster become community-based resource managers of their water √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The SHFs expressed appreciation of their clusters as a support group during the difficult water shortage period and a group approach to find solutions. Clusters under greatest stress were planning for transformational changes to meet current and future threats.

Pest and Diseases

FGDs mentioned their observation of changes in the local flora and fauna, an erosion of the local ecosystem and biodiversity, and an increase in intensity and range of different pests and diseases. Both existing pest and diseases were becoming more voracious or new incursions of exotic pests and diseases were causing the noticeable damage. Like to the water issues, the benefit of clustering

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provides a forum for SHFs to discuss these problems with their peers, share experience and develop solutions.

Cavicchioli et al. (2019) supports this observation that Climate Change exacerbates the impact of pathogens. Extreme weather conditions stress the native flora and fauna reducing their natural defence systems, resulting in the increase incidence of disease. As temperatures increase plant pests move into higher elevation or previously cooler environments where natural predators do not exist allowing these pests to focus energy on rapid reproduction and supported by their voracious feeding on unprotected plants and animals (UNEP 2014). The increase movement of humans carries many of these pathogens to new sites (Cavicchioli et al. 2019). These human activities also increase the potential of zoonotic diseases and other endemics entering and debilitating rural communities. The 2019 measles outbreak in the Pacific region is a recent example of unvaccinated poor rural communities greatly affected by this outbreak.

SHFs mentioned the knowledge to manage these incursions was lacking:

‘…to control the pests, but we cannot handle how.’ (Sto. Niño)

‘These pests. There’s so much problem…existing even before, but not in economic level. But now because it is favourable for certain pests, it has become a problem because the environment is very suitable for certain pests.’ (CALCOA)

Facilitators only trained in community development expressed their need for agronomic and livestock production knowledge to become more effective in facilitation of the cluster needs with pests and diseases management. The FGDs recognised the value of training in pest and disease management and referred to peer farmers as their contacts when required:

‘He knows about the diseases because he’s gone to trainings.’ (San Isidro)

Table 36 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on pests and diseases.

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Table 36: Pests and Diseases: Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Clustering allows smallholders to share knowledge to deal with the changing environment. √√√

Refocused coding detailed literature review, comparative analysis with data Clusters could be utilised as local biosecurity units to observe, manage, and contain zoonotic and other pest and 2 √√ diseases Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

A key benefit of clustering was the creation of a forum to share problems, experience and solutions to manage pest and diseases. Mentioned in the discussion on water was the potential to create clusters as community-based resource managers. An agricultural cluster part of the local environment and managing resources well can sustain a cluster enterprise. Clusters acting as local resource managers are also part of a biosecurity network that observes and reports incursions of pests and diseases to mobilise a rapid response eradication program. This useful function could be a source of extra funding, training, and increase the member’s knowledge of local resources and land stewardship that will improve their cluster sustainability.

Land

Land in this study refers to land management and stewardship that provides food and nutrition security (FS&FNS) in balance with protection of the ecosystem. There is an observed reluctance of SHFs’ and clusters to invest in land-use systems because of their lack of land-ownership. Most SHF FGD participants were tenant farmers and not interested in sustainability or an integrated land- use system to protect their environment and FS&FNS. Their concerns were immediate and related to concerns with food and income. The SHF reluctance to invest was based on a fear of the landowner taking back the land without compensating for the improvements or a threat of displacement from ongoing conflicts. The literature (Lawry et al. 2014; Roth & McCarthy 2014) confirms that SHFs are more inclined to make productive farm investments with secure land tenure. Land tenure and investment correlates to land stewardship (Rana 2018); and productivity of smallholder agriculture depends on the services from a well-functioning ecosystem (IFAD 2013).

Land tenure is recognised in the GoP’s Department of Agrarian Reform Certificate of Land Ownership, a program intended to provide security for vulnerable poor has restrictions on resale that acts as a disincentive for investment in land development or any regional land-use system.

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Given the right to sell and the recognised coping strategy of immediacy of SHFs, the result is the likely sale of their land thereby defeating the purpose of the government land reform program.

An example of this short-term attitude are clusters that rented a plot of land for joint production and marketing (Cagsumji, CALCOA). The cluster did not invest in any irrigation, Landcare or improvements since these would revert to the landowner at the end of the contract.

Land management is a critical issue for the Philippines and agricultural clusters could become part of the solution. Forty-two percent of land in the Philippines is estimated as agricultural and the increasing population is downward pressure on the ratio of arable land/person, 0.054% in 2016 (World Bank Group 2019). FS&FNS is threatened as this ratio declines.

Managing the interaction between working agricultural lands and their local ecosystem also affects sustainability. A functional ecosystem provides a rich source of compost leaf litter for soil amendment, shade and wind protection for animals, and in some unique areas the forests provide potential ecotourism opportunities. For the rural communities the forests provide a source of food, wood-products, medicines, firewood, construction materials, and a cultural heritage (CBD 2019b). The forests protect the plant and animal genetic resources with unknown future benefits and acts as a buffer against pests and diseases (FAO 1993).

Philippine forests are currently estimated to be only 27% of total land area (IndexMundi 2015). Deforestation of mountainsides have increased the number of flash floods and landslides with the destruction of lowland farming communities (PAGASA 2019). The unregulated deforestation in northern Mindanao is blamed for recurrent flood damage to agricultural land and submerged cities (Ramos 2019). A brief history of Philippine forest and land management is described in Appendix 7. The FAO (1993) state that rural people are aware of the value of forests but lack assistance to manage this resource as they are pressured by other concerns and constraints.

Management of the Philippines unique biodiversity was not raised as a topic by facilitators or SHFs; however, the Philippines is one of the seventeen countries identified as the most biodiversity-rich countries of the world (WCMC 2014) that harbour the majority of the Earth’s species and a high number of endemic species. It is also recognised as one of the world’s thirty-six biodiversity hotspots; that is, biologically rich terrestrial regions under threat (Conservation International 2019). This is a resource to manage alongside the agricultural working lands needed for FS&FNS.

SHF FGDs mentioned the community-based resource management initiative under the Department of Environment and Natural Resources (DENR) called Integrated Social Forestry Programs

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(MNGO2). This program identifies Indigenous People (IP) and their ancestral domain areas. Through awareness and capacity building it allows the IPs to manage their forests. This serves a dual role of firstly, preventing non-IPs from making land grabs for ancestral land, and secondly, places forest management in the hands of the community. In western Mindanao where land disputes can be violent (MNGO2) certainty over land and forest ownership and the right to farm is a trail towards peace.

The facilitators had limited capacity to support development of land-use management frameworks. The facilitators were either specialists in community development or specialists in a crop production system. By their own admission, they recognised their limitations but were restricted by the boundaries of their current projects that did not include land-use management plans. There was also an observed lack of awareness in the FGDs of the benefits for the cluster of resource management. Building awareness and transforming the agricultural working land to incorporate more community-based resource management and adoption of agroforestry requires external assistance to ensure correct implementation and no economic disadvantage for SHFs.

Table 37 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on land.

Table 37: Land - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Smallholder investment in development follows from land ownership √√

2 Land-use plans can support cluster resilience, but will not occur without land ownership √√√ Refocused coding detailed literature review, comparative analysis with data 3 Clusters are land stewards and community-based resource managers √√√

4 Secure tenure incentivises farm investment and land stewardship √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The facilitators, SHF and reviewed literature (Balisacan 2007; Lawry et al. 2014; Roth & McCarthy 2014) concurred that investment in developing land occurs when tenure is secured. There was a lack of appreciation of the importance of the local ecosystem to agricultural production as no land- use plans were in place. This interaction between humans and their ecosystem at the local level does support community and cluster sustainability. This is an area that needs investment to support facilitators to link into ecosystem and biodiversity programs. Donor organisations could also

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expand their facilitation project terms to include integrated farming and ecosystem land-use management.

Weather

Livelihoods of SHF are threatened by any imbalance of the triple challenge between FS&FNS, climate adaptation and the ecosystem. Climate and weather were a major topic raised by both facilitators and SHFs. In the Philippines economic losses from damage in the agricultural sector averages USD477 million each year (FAO 2015). This was 25% of the national budget allocated to the agricultural sector in 2014 (ibid). These are mainly climate-induced natural disasters that effect the most vulnerable Filipino SHF (WFP 2015). This vulnerable group are estimated at 13 million flood-insecure people and 14 million already undernourished and food insecure (FAO et al. 2018). The SHF FGD participants during an ENSO dry event had their agricultural-based livelihoods linked to the vagaries of the weather.

The FGDs mentioned typhoons, high wind and intense rainfall events as a direct threat to their production systems that cause flooding, water logging, erosion and direct damage to crops. The facilitators did not mention typhoons specifically; however, they did refer to climate change in general terms in relation to unexpected weather conditions.

Investing time and resources into building resilient farming practices to manage unpredictable events was not the immediate concern of the SHFs struggling with immediate cash flow, nutrition and FS&FNS problems. These natural disasters maybe unpredictable, but they are common:

‘I can say that adaptation is slow; we introduced a climate facility, so by knowing the weather forecast they can use varieties that goes with this kind of weather, …’ (Leyte LGU2)

‘I don’t think the farmers are diligent enough to recover.’ (Davao LGU1)

Weather related disasters are common in the Philippines with an average of twenty cyclonic events yearly; however, it was observed that the SHFs and facilitators only mentioned typhoons as past events and in general terms (Tigbawan, Leyte-Leyte). This was surprising as essential preparedness and risk reduction strategies did not appear in the transcripts; and this follows the impression of SHFs ‘cope’ on short-term strategies. For sustainability, facilitators could look at plans that extends the term of these strategies.

Extreme weather events are likely to become more extreme according to a joint agency report (FAO et al. 2018) that highlighted climate, poverty, and hunger are inter-related issues in the Philippines. Philippine agriculture is reliant on rainfall and agricultural crops are sensitive to temperature

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variability. An added complication was identified by Crost et al. (2018) who correlated higher rainfall with an increase in civil conflicts. The Philippine Government provides immediate benefits through a range of services and ‘hand-outs’ to the rural population. This has created a level of entitlement and expectation in some communities and government not meeting these expectations translated into increased support for local anti-government insurgent groups (Crost et al. 2018). IPCC (2014), states there is a ‘high degree of confidence’ climate change will exacerbate rural poverty following a negative impact on rice production and a general increase in food prices. As the threat of climate change and extreme weather events increase, the potential threat for ongoing civil conflict in the Philippines will continue to challenge the government’s attempts to bring peace and security to the region.

The SHF FGDs also mentioned an increase in membership requests following a disaster. An interesting correlation exists between the rise in support for terrorists and cluster membership requests. This could be explained as a survival mechanism that it is safer in a group than alone.

Table 38 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on weather.

Table 38: Weather - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Implementation of medium and long-term strategies √√

2 Adoption of disaster risk reduction strategies √√ Refocused coding detailed literature review, comparative analysis with data 3 Peace and security is linked to efficient and effective government services √√√

4 Climate-induced natural disasters are expected and disaster risk resilience strategies developed √√√ Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

It was noticed that facilitators operate within the bounds of their project terms which focussed on improving production, marketing and cluster management. The concepts raised related to natural resource management, climate adaptation, and ecosystems are generally outside the bounds of their projects. It is recommended to revisit the projects to include strategies for climate adaptation and adoption of disaster risk reduction preparations.

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Summary

The general paucity of data on natural resource management from both facilitators and SHFs suggests a lack of awareness and appreciation of natural resources for livelihoods and farm production. A possible explanation is facilitators constrained by specific project commitments to grow cluster production within the boundaries of the working lands and the SHFs tendency to regard the natural resources as ‘not my problem’ and managed by the barangay council. This indicates both the facilitators and SHFs are possibly not aware of the important link that a well- functioning ecosystem has for productivity. For SHFs protecting the local biodiversity contributes to the protection of the ecosystem from changes brought on by climate, extreme weather, and water pollution. Increasing awareness of biodiversity in the Philippines faces obstacles that limit the capacity to manage these challenges. These limitations include poverty, poor health care, illiteracy, poor access to resource information and technology, weak institutions and infrastructures, and low investment and management capabilities (IPCC 2014).

From the perspective of the facilitators, whilst they do have a greater appreciation of natural resources, biodiversity, and climate change threats; it was apparent that managing the conceptual framework for an integrated land-use plan that required a multi-discipline approach was too complex. The facilitators interviewed trained in a single discipline, either community development or a specific food production technology, understandably struggle with facilitating their immediate task of cluster food production and marketing activities without an added complexity of expanding into natural resource management where support and resources are limited. Natural resource management requires an integrated plan that goes well beyond the facilitated boundaries of the agricultural cluster. This also requires skills on taking stock and inventory of the resources, ability to analyse the interactions between the resources, capacity to create a Land Use Plan to ensure protection of these resources and food production is secure and sustainable, and build the awareness of the cluster and community for community-based resource management. This is extra work not covered under the facilitator’s project job description and from the donor perspective this requires considerable extra resources and funding.

According to the Convention on Biological Diversity (CBD 2019a), there is a need to build capacity and increase awareness to promote responsible action. An agricultural cluster could be a vehicle to implement actions and transform the way land is utilised. The inherent uncertainty and unpredictability of the interaction between people and nature is an evolving area of study. Valuation of the natural resources is no longer solely about price systems but also about the

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identification of social and ecosystem processes and how they influence each other. This is an area where there is a current paucity of data. The agricultural clusters could serve as the entry point for collecting and analysing data and testing implementation strategies for FS&FNS within a Land Use management plan.

Table 39 consolidates the important concepts identified from the initial and refocused analysis and applies a subjective ranking of issues regarded as important for agricultural cluster sustainability.

Table 39: Ranking of natural concepts for sustainable clusters

Concept Codes Priority Water Clustering provides a support system during difficult periods √√√ Water The cluster provides a forum to discuss innovations √√√ Water Cluster become community-based resource managers of their water √√√ Pests&Diseases Clustering allows smallholders to share knowledge to deal with the changing environment. √√√ Land Land-use plans can support cluster resilience, but will not occur without land ownership √√√ Land Clusters are land stewards and community-based resource managers √√√ Land Secure tenure incentivises farm investment and land stewardship √√√ Weather Peace and security is linked to efficient and effective government services √√√ Weather Climate-induced natural disasters are expected and disaster risk resilience strategies developed √√√ Water Clustering allows smallholders to share risk when a transformation activity is implemented during difficult periods √√ Pests&Diseases Clusters could be utilised as local biosecurity units to observe, manage, and contain zoonotic and other pest and diseases √√ Land Smallholder investment in development follows from land ownership √√ Weather Implementation of medium and long-term strategies √√ Weather Adoption of disaster risk reduction strategies √√ The rankings suggest the importance of a cluster as a support system and forum for discussion. The knowledge on integrated land-use and environment protection was limited; however, the clustering system is an opportunity to develop community-based resource managers to protect the local resources and biodiversity. Highlighted through the transcripts was the benefit of clustering for risk sharing, knowledge sharing, and collective action support during difficult periods. The need for SHFs to develop long-term strategies that incorporate disaster risk reduction and a regional land-use plan has potential to improve sustainability and livelihoods. Implementing this type of planning requires extra resources and support for facilitators to appreciate the local human and natural environment interaction. The successful implementation of these transformational changes relies on land ownership to encourage smallholder investment in local development.

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Chapter Seven: Financial Category

Introduction

Financial Capital in the context of SHFs is their ability to access economic resources, such as incomes and assets, which can be traded and sold to generate cash to fund their activities. The development of Human Capital is predicated on the Social Capital relationships that are a resource to build skills and capacity (Machalek & Martin 2015). Financial Capital links to Human Capital through the development of knowledge of finances, and to Social Capital through the collective management of the cluster finances.

Financial Capital is defined as:

‘Financial Capital measures the monetary resources available to invest in the community to support and enhance businesses, charities, and local foundations. It measures financial resources and the capacity for future investment. It can be measured at the collective level (local government, PGS/clusters, aggregate of individuals) and individual level (residents, taxpayers, businesses, non- profits)’, (Emery & Flora 2006a).

During the researchers recent community development project in Nadroumai, Fiji, a comment from a local community leader placed financial capital in perspective when she mentioned that at the start of the project the community only wanted the cash, but after they got to know and learn they realized they were ‘already sleeping on the cash’ (Mateboto 2019).

Agricultural clusters through collective action can improve financial returns. Batt (2013) undertook an economic impact assessment of 29 smallholder agricultural clusters in the southern Philippines and compared incomes of cluster farmers to non-cluster farmers that showed those participating in clusters had an 18% higher income.

Ultimately, to achieve this goal of financial improvement, an agricultural cluster requires the conditions in place for collective action to occur. Collaborative commitment by the SHFs; depends on trust which means making pledges, such as committing funds and in-kind contributions; and taking hostages, such as penalties, which act as proxies of trust and are essential for a sense of fair dealing. (Foley, 2006). Van Zomeren et. al. (2004) supports Foley (2006) with research that

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suggests commitment to collective action becomes stronger when group members are willing to make an economic investment into the group. Within the Focus Group Discussions with SHF cluster members, to ascertain their level of commitment to the cluster, questions were asked on their membership fee, financial obligation, and their level of care for the reputation and future of the cluster. If members care about their cluster, then it’s expected they will be committed.

One of the focus groups did mention their hopes to achieve financial independence with more power to negotiate better trade deals for both inputs and sales (Tigbawan); however, the group recognized their knowledge and financial limitations which makes achieving this goal difficult without LGU or a facilitating project support.

Table 40 is a list of the main concepts that emerged from the data in both the facilitator interviews and the FGDs.

Table 40: Financial Capital Discussion Topics

(Transcripts mentioning the category/total number of transcripts as a percent)

Facilitator Transcript FGD Transcript Percent Percent Category Concepts Concepts Access to Finance 20 Access to Finance 23 Importance of Finance 16 Insurance 5 Income 25 Income 23 Financial Repayments 36 Repayments 31 Transparency 16 Market 20 Government Aid 6 Government Aid 12 NGO/Private Aid 2 NGO/Private Aid 5

The corresponding percentages in the table were each created from the number of times the interviewees raised a topic that could be assigned within a category and then converted to a percent. This ratio is useful as a comparison between the transcripts of interviews and FGDs to check the category priorities between the facilitators and smallholder. How often a concept is raised within a category provides a comparison of perspectives between the facilitators and farmers. These views of agricultural clusters are issues that are important on that day and time of the interview. The level of replication of this ratio is untested and likely to be quite low.

The key topics raised related to the difficulties of accessing finance and generating income. SHF also raised challenges with market arrangements where they are ‘price takers’ and an imbalanced power structure existed. As clusters often rely on support from LGUs, the topic of finance from

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Government Aid and the Government crop insurance schemes was raised. Insurance is a separate category because it opens a discussion on the justification for Government insurance support and how this support was an influence on the cluster cropping decisions when it came to a choice of growing crops that were covered by insurance that guarantee an income in the event of a crop failure.

Access to Finance

Accessing finance or credit is essential for farmers to enable the purchase of season cropping inputs such as seeds, fertilizers, chemicals, harvest aides, labour and other materials. Many SHFs are renting small parcels of land that is their main or sole source of family income. A vulnerable group that can fall into abject poverty without external assistance in the event of perturbations. SHFs rely on credit for both personal family needs as well as their farming enterprise.

Accessing credit to improve their financial situation is a strong motivation for SHFs to join an agricultural cluster (LeytePrivate1, Mambog1). SHFs awareness of their limitations is a driver to join a cluster:

‘…I joined the association because I cannot sustain my rice field inputs.’ (Bontoc Farmers Association)

The benefit of a cluster is the critical mass it provides that gives the lender confidence in an organization strength and sustainability. Studies show a correlation between the size of an organization and ability to access credit (WorldBank 2002). The general conflicting objectives between the bank and cluster is a nexus that requires a good relationship. Banks are risk averse and clusters take on collaborative risks to introduce innovations (Nadvi & Barrientos 2004).

In the Philippines, thirty percent of the total rural credit is provided by the formal banking and financial sector and the remaining 70% is from informal credit providers (Aquino et al. 2014). The overall level of lending to the agricultural sector in the Philippines is small and SHFs are among the least served by the financial sector with loans to only 5% of farmers. These loans are generally small amounts on short-terms with high interest rates ranging between 24-40% (WorldBank 2011).

The formal banking and financial sector have intentionally avoided extending their much-needed services to the rural and farm-based areas because of the perception of high-risk clients with fragile cash-flows (DAR and Landbank, 2008). The Philippine Government recognises the rural credit problem and has implemented several policies to improve smallholder’s access to credit. Most recent is the Agri-Agra Reform Credit Act of 2009 that stipulates all banking institutions set aside

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25% of their total loanable funds for agriculture and fisheries credit. This includes cooperatives and associations regardless of capitalisation (Section 5, Agri-Agra Act 2009). In 2019, the 25% target is debated as too difficult to meet, with banks preferring to pay the penalties for non-compliance than forced into high risk loans to the rural sector (Vidal 2019). From the perspective of the lenders, the risk of default from crop failure and delinquency rates, lack of collateral, the small individual loans and small return on investment, and the organizational cost to provide service for these small loans, is a barrier and a risk (Owusu-Antwi & Antwi 2010).

For bankers, agriculture is a high risk in the Philippines with crop failure and missed repayments common. Figure 33 illustrates the high risk, high cost, and lending considerations for banks to assess a line of credit for SHFs.

(DAR & Landbank 2008)

Figure 33: Financial environment of smallholder farmers

The formal banking sector is difficult for the many individual SHFs on rented lands with no collateral, low literacy and financial skills, and faced and an imposing bank administration. Once they have a loan the interest rates can be very high with bank repayments often not aligned to the harvest income periods:

‘…higher interest rate at the start could go up as high as 36% per annum…’ (DavaoNGO1)

The SHFs have few options as ‘price-takers and need to access the credit at the given rates or seek out alternative finance providers from the informal sector.

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The informal banking sector is more accessible for Filipino SHFs; however, the interest rates are even higher than the formal banking sector (BoholNGO1). In rural areas, such as the Province of Maguindanao, one source of finance are traders who provide the only source of finance for SHFs. In this province, the traders will lend money at the start of the season on condition that all produce is coursed through the traders after harvest. This forward contracting guarantees a market for the SHFs; however, since the trader has close to a monopoly with ultimate governance in the supply chain, the SHFs have little market power and are ‘price-takers’ determined by the trader (MNGO1):

‘…it seems that we are the one giving the traders their business to become rich…yet we have no choice, since we have no other source of capital.’ (Mambog2)

The challenges of SHFs to access finance in the rural regions provides an opportunity for alternative credit suppliers that potentially leaves the SHFs vulnerable to exploitation (Owusu-Antwi & Antwi 2010). Informal financiers provide accessible credit to SHFs to assist with farm input requirements and also immediate cash needs for food, education and health care (Llanto 2005). The sources of loans are from family, neighbours, and the local small general stores termed ‘sari-sari’. These informal credit entities offer fast processing, less paperwork, and lower collateral requirement; however, they charge between 3-6% per month. More predatory lenders known as ‘bombay’ or ‘five-sixers’, charge daily rates of up to 20%-30% (Mambog2). The variation in interest rates correlates to the loan urgency, remoteness, and accessibility of the area (WorldBank 2011).

From the perspective of the informal financiers, whilst sharing the same risk concerns as the formal sector, lending to SHFs is regarded as a long-term investment with an opportunity to lock a family into long-term repayments. These terms were described by rice farmers unable to access cash financing but had to trade their bagged milled rice for equivalent bags of fertilizer from the local trader (Bogo Maasin). Whilst the retail price of milled rice is higher than the fertilizer, the farmers’ inability to obtain cash financing at the start of the season to purchase fertilizer leaves them with no option but to accept these unfavourable trading terms:

'…we need to credit 1 sack of fertilizer to pay 1 sack of milled rice’ (Bogo Maasin)

Or in another area the cost was higher costing two rice sacks for one bag of fertilizer:

‘…you will pay for that (one sack or fertilizer), two sacks of rice …’ (Mambog2)

Crop failures result in SHFs caught in a debt-trap and forced into a disadvantageous trading situation to service their debts:

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‘Commonly in Maguindanao the traders are the only source of finance for smallholder farmers …so you give me money and for my product and after the harvest our produce goes back to the trader … the common problem of the farmers is failures…’ (MNGO1)

When the crop failures occur in regions where traders act as financiers, they will lock the SHFs into a long-term arrangement to supply their produce to service the debt:

‘Our credit was doubled in that situation, because the financier won’t take cash, but only rice or any product.’ (Bogo Maasin)

Governance of the farm credit system exists in only a few individuals aware of the gross margin of production and how to access a greater share of the SHF profits:

‘…as far as production is concerned before harvest, they (farmers) have no money, borrow money and then they harvest (and nothing left). The price of the money is controlled by the financiers.’ (LeyteLGU1)

This market failure in the banking sector is recognized by the Government who have constructed a range of schemes to assist SHFs accessing finance; some of these were discussed by the farmers and outlined in Appendix 6: Access to finance – challenge for smallholders. A common Government intervention is for a registered cluster association to have access to an establishment grant that is managed by the association to purchase needed assets, seasonal farming materials, or establish low or no-interest loans to cluster members (BoholLGU2). Some clusters have used these grants to purchase farm equipment, such as a thresher, that is rented to generate further income for their cluster (Bontoc).

Several agricultural clusters have managed to build capital within their association to use in an association lending scheme for members (Mambog1). This allows members to access low or interest free loans:

'If I borrow money from others, then I have interest. But in our association, we don’t have…’ (San Vincent)

The downside of the cluster lending system is the level of non-repayments that are a source of stress for many clusters with some collapsing (Bohol LGU2). Members with debts to their cluster have been known to disappear to avoid the repayments (BoholNGO1):

‘…members just borrow then they do not pay back…. (BoholNGO2)

The Local Government Units also aid in various forms of soft-loans or materials to agricultural clusters in emergency situations following droughts, floods or cyclones (BoholNGO1). The 133

Department of Agriculture (DA) is also known for assisting with marketing of the cluster produce; in one case of sweet corn, the DA acted as the agent for the cluster, taking all they could supply and managing the sale in the local market (Bogo Maasin).

Whilst farmers do operate in a high-risk environment, many of the SHFs in the FGDs diversified their income taking on off-farm jobs such as labourers, carpenters, and jeepney or tricycle drivers (Reyes 1991; Rapsomanikis 2015). It was raised in many discussions that the household income was a family approach involving wives and children. Therefore, it is possible for these family units to take out a loan and afford to pay regular amortizations (DAR and Landbank, 2008).

Table 41 is a refocused analysis of the data following the initial coding and review of literature. Emerging from the data were three business models already being used by some clusters to reduce their financial exposure and level of risk.

Table 41: Smallholder business models to reduce financial risks Based on a refocused data analysis Cluster business Description model Unlike a merchant, the agent does not buy the produce, but manages the relationships, paperwork, Cluster-Agency information flow, and finance. As banking loans can charge very high interest rates, the opportunity 1 relationship with exists for an agent to organize cheaper loans and then manage the sale of product for a flat fee for trader service. The farmer sells the crop well before harvest. Whilst this does bring financial security benefits for the farmer, it can also raise other problems. An example of the type of problems is in industries such as mangoes, where pre-selling the harvest to a contractor months even before flowering, results in the 2 Forward contracting contractor driven towards maximum profits from the orchard in that season does not manage the orchard for long-term sustainable productivity. The result is orchard productivity will decline from yearly forward contracts with little orchard care (DavaoLGU1) Cluster members have the potential to create an internal financing system where members deposit a portion of their revenue into an account that can be used either for cluster purchases or loans to 3 Cluster self-financing individual members (BoholNGO2, Batt et al., 2011). This also extends to Bayanihan system of cluster members jointly contributing to finance and activity or purchase of an asset (Cagsumji CSFA). Table 41 mentions cluster self-financing as a business model to reduce the financial exposure of cluster members. Well managed lending schemes can work; however, the facilitators interviewed did mention this service if poorly managed can lead to the collapse a cluster (Appendix 3: Failed cluster examples, case study #3). FGD participants from a cluster with a lending scheme were positive about their service:

‘…the association can easily loan in small interest. We are glad because other loan is 5-6 (20%) and in the bank is 15%.’ (Tigbawan).

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Another business strategy is to build strong relations with the clusters support network. The Asian Productivity Organization, 2007, listed four reasons why linking an agriculture cluster into a value chain increases the likelihood of receiving finance (APO 2007):

1. Increased supplier business with the cluster improves confidence of investors, 2. Improved confidence in ability to meet repayments, 3. Lower transaction costs, and 4. Reduction in income variability and improved confidence as a borrower.

Table 42 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on access to finance. The key points emerging are the need for a good relationship with the financier and an ability to negotiate good loan terms. The literature (WorldBank 2002; Owusu-Antwi & Antwi 2010) confirmed rural areas lacked formal financial services and relied on the informal sector with high interest rates. A refocused coding identified some clusters testing alternative business models to reduce their exposure and financial risks. Appendix 6: Access to finance – challenge for smallholders, is a list of general issues emerging from the data on the difficulties of access to finance for SHFs.

Table 42: Access to Finance - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Good relationship with financier (formal or informal lender) √√√

2 Clusters can be a source of low interest loans (if well managed) √√ Refocused coding detailed literature review, comparative analysis with data 3 Consider alternative cluster business models to reduce financial risks (agency, self-financing, forward contracting) √√√

4 Link the cluster into a value chain arrangement √√√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Gove rnment Finance

Professionally managed agricultural clusters can have great impact on farm profitability; however, these clusters need small, high-impact funding for their capacity building and expansion (IHD, 2017). Government farm financing has both positive and negative development affects requiring careful consideration prior to implementation. Income transfers are one example of a government initiative that can reduce chronic poverty (Devereux 2002), but can also have little impact on

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smallholder activity (Sinyolo et al. 2016), and potential to create an undesirable dependency and entitlement in the recipients (Barrett & Maxwell 2005; Barrett 2006; Lentz & Barrett 2013).

LGUs can occasionally provide start-up capital for agricultural clusters in their managed region under government programs that arise. The cluster leadership to date have used these funds as lending mechanisms for members and for essential assets, such as nursery, irrigation, and farm equipment. The LGUs transfer a lump sum to the cluster to manage as a member’s low interest lending service. Facilitators mentioned the range of benefits this service was for the members; however, the groups also mentioned the high level of lending cooperatives collapsing due to non- repayment of loans (BoholLGU1, BoholLGU2):

‘…members just borrow then they do not pay back…. (BoholNGO2)

The literature (Barrett 2006; Lentz & Barrett 2013) suggests this LGU lending program may also have a negative influence on developing rural financial services. The fund ‘glut’ and temporary nature of the project can discourage the private sector from entry and the development of security processes to protect their investments in the high-risk farm-sector. For sustainability of the financial sector, any high-impact government or donor funds into the credit market need to be sensitive to a regions financial long-term development (DAR and Landbank, 2008). For the credit markets to develop into a sustainable and viable service for the rural sector, government and donors should not intrude unless the program supports the formal financial sector development, or a serious market failure exists. At the very least government and donor organizations designing projects should ideally separate the technical assistance from the lending of funds.

Before any grower association can be the recipient of a range of grants or projects from the Government the clusters are required to be registered through either the Department of Labor and Employment (DOLE), Securities Exchange Commission (SEC), or the Cooperative Development Authority (CDA) (CDA 2017a). Farmer members of a registered association can access Government benefits. The cluster registration certificate is also essential for opening a bank account as well as providing the legal right to write official receipts. Without an ability to write official receipts, clusters are unable to trade with large organizations, such as supermarkets and rural suppliers. This limits their trading to ‘neighbourhood’ businesses that operate outside the Government’s tax and revenue system. Some unregistered clusters have managed to work around this obstacle by forging a link to a registered cluster who for a fee manage their receipts and tax obligations (Bogo Maasin).

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In Sto. Niño, Leyte, there are many farmer groups but only one registered. This one registered group has been the recipient of a range of farming inputs under Government programs (Sto. Niño) attracting interest from other SHFs. Any new Government project awarded to a cluster can increase the requests for new memberships:

‘…membership grew from 15 to 46…’ (Bontoc FA)

If a cluster collapses and LGU programs are still running, new clusters register usually composed of the same members drawn from recently collapsed groups (Tigbawan) to keep accessing the government benefits and be free of administrative obligations of the collapsed cluster.

Table 43 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on government finance.

Table 43: Government Aid - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Registered agricultural clusters have access to government programs and support services √√√

Refocused coding detailed literature review, comparative analysis with data

2 Start-up capital for cluster lending services can be sourced from some LGUs √√

3 Separate technical interventions and financial interventions (latter being private sector led) √√

4 Avoid undesirable dependency and entitlement towards government or donor financial services √√

5 Cluster lending is a secondary service with primary focus on production and marketing √√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

The data confirmed the importance of an agricultural cluster registering through one of the government agencies to be able to access government support programs. The literature (Devereux 2002; IDH 2018) confirms the importance of targeted government funding but provides caution as this can deter private sector financial services entering the region. For cluster sustainability, a relationship with the formal banking sector is preferred. Where the government provides financing, avoiding entitlement and dependency is important as well as ensuring the finance programs are separate from the technical programs. If a cluster engages in its own lending service, this needs to be professionally managed and only as a secondary service of the clusters production and marketing activities.

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Insurance

Crop insurance can provide a safety net and provide funds to cover the production costs for a following season after a perturbation. Fifty percent of Filipino SHFs are ‘sometimes poor’ when unable to recover losses from a perturbation (PIDS 2016). The decision for a cluster is to assess the cost-benefit of insurance compared to investment in resilient production.

The SHFs interviewed were all reliant on financiers to purchase inputs at the start of a cropping season. The combination of unpredictable extreme weather conditions and current farming practices make farm financing a high-risk endeavour which was reflected in the high interest rates from both the formal and informal lending sectors. If SHFs default on a payment from a crop failure the interest repayment rates increase, or in one case double (Bogo Maasin). This pushes the SHFs further into debt. Some of the financers forego the cash repayment and accept the farm produce that they will then trade at terms beneficial to themselves until the smallholder debts are repaid (Bogo Maasin).

The Philippine Government recognizing the problem with accessing credit and high risk of farming have implemented a farm insurance scheme that targets SHFs. The Department of Agriculture administers the Philippine Crop Insurance Corporation (PCIC) which some SHFs have been able to access following a crop failure:

‘…farmers have been able to claim the damages from the PCIC (crop insurance) …’ (BoholNGO1)

There is debate on the role of government in support for risk management instruments such as government funded agricultural insurance. The Philippine Government spends well over Php1 billion/year on their insurance programs implemented by the PCIC (PIDS 2016). For now, while it remains a free crop insurance service it is recommended for agricultural clusters. This program is regarded as underfunded and lacks evidence of net social benefits (Mamhot et al. 2012). The general problem with any government insurance service is that it deters the private sector from developing products tailored to the smallholder customer needs (McConchie 2017). A change of government may regard the PCIC as costly and cancel the program to follow the lead of some other countries that leave crop insurance to the private sector.

Successful producers will develop strategies which are defensive, focused, and resilient to perturbations with strategies which embrace risk and make most of opportunities. Uncertainty can provide innovative producers with opportunities to create upside risk. An example of managing upside risks and opportunities is the tomato farmers in the southern Municipality of Claveria in

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Misamis Oriental. The tomato farmers plant excess production to take advantage of the market opportunity that arises if the tomato production in the northern island of Luzon is destroyed by cyclonic weather. Given that the Philippines suffers an average of 20 cyclones per year, the Claveria farmers believe the reward risk for the extra cost to their production will reap financial benefits when their northern fellow tomato growers have their crops storm damaged. This is an example of managing risk through market knowledge.

Table 44 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on insurance. Crop insurance can protect vulnerable households from sliding into poverty and should be considered as a business practice, especially in the Philippines where perturbations and shocks are frequent. The debate on government involvement in the insurance market is outside the boundaries of this study; however, while the PCIC provides free crop insurance the clusters are recommended to avail the service.

Table 44: Insurance - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Cover risk of crop failure by registering for insurance through the freely available PCIC system √√√

Refocused coding detailed literature review, comparative analysis with data

2 PCIC crop insurance is recommended while it is free. √√√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Repayments

Emerged from the data were stories of a range of problems regarding repayment of debts. Donors have programs offering grants without repayments but requiring acquittals. It was observed during the FGDs that both repayments and acquittals were often disregarded and viewed as an entitlement (BoholNGO2). The literature (Barrett & Maxwell 2005; Barrett 2006; Lentz & Barrett 2013) confirmed the problem of government programs that develop an undesirable dependency and entitlement.

The FGD participants mentioned that access to finance was a major concern, however, only 5% of the Filipino SHFs access formal and informal credit services (WorldBank 2011). This borrowing estimate appears low, and with the large informal financial sector operating between and within families, barangay, bombay, sari-sari and others; a true estimate is likely much higher but difficult

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to quantify. The conclusion from the data and literature (J-PAL 2018) suggests that either access to finance is difficult, or credit is not the primary constraint of clusters and SHFs. A facilitator considered the latter as the real situation. His opinion was SHFs do not treat the farm as a business enterprise and lack the financial understanding to borrow and invest correctly; and further, ‘they do not need the access to credit’, if they treat the farm as a business (CDONGO1).

Many interviewees in the FGDs were renting land and had no collateral on loans, hence repayments were cash or their produce. The following is a list of smallholder’s comments on issues and concerns with repayments that emerged from the transcripts:

Government loans: When the cluster defaults on repayments through poor practices the Government support to the cluster ceases (Tigbawan). In some interviews, it was apparent the interviewees regard the LGU as incorrect to withdraw support over their debts, particularly with government funded projects. ‘…farmers are not paying because they saying it is a government project and government money.’ (BoholNGO2)

Member death: Cluster member’s loans upon death are absorbed by the cluster group rather than force the deceased family to repay. This is regarded as a risk of the cluster; but can place the cluster finances under strain if the unpaid loan is large (Tigbawan). Informal Loans: The local informal lenders (Bombay, Sari Sari stores) have high interest rates (20%) and in some cases repayments commence the day after the loan agreement (Mambog2). The other large informal micro-lending occurs between family and neighbours with a wide range of tailored lending conditions. Produce not cash: In the case of a cluster defaulting on a repayment, the informal financier/trader can insist on a repayment of the farm produce on terms beneficial to the lender, rather than cash. The SHFs are aware of the financial loss they make under these trading terms; however, their lack of negotiating strength and preference to work their farms rather than deal with traders and finance problems, results in quick acceptance of these new terms (Mambog2). The use of barter costs with produce rather than cash was a system used by one of the clusters to pay for outside labour and equipment rental in their rice production cluster. Bartering allows the cluster to bypass the process of accessing cash credit and avoid problems with repayments:

‘…every harvest for 100 sacks of harvest, 10 sacks will go to the labour, 5 for the operator and 5 for the thresher rentals.’ (Service Provider Association)

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Whilst farmers do operate in a high-risk environment, many of the SHFs in the FGDs diversified their income by taking off-farm jobs such as labourers, carpenters, and jeepney or tricycle drivers. It was raised in many discussions that the household income was a family approach involving wives and children. Therefore, it is possible for these family units to take out a loan and afford to pay regular amortizations (DAR and Landbank, 2008).

Table 45 lists the factors influencing the repayment of smallholder farmers and a reference link. From the list the items raised in the SHF FGDs were nature and timeliness of loans, alignment of cropping cycle to the repayment schedules, and farmers with resources to sell will decrease defaults.

Table 45: Factors influencing smallholder repayments

Factors influencing repayment Reference

1 Nature of the loan (Okorie 1986)

2 Timeliness of the loan (Okorie 1986)

3 Number of credit officer site-visits (Okorie 1986)

4 Profitability of the loan fund investment (Okorie 1986)

5 Level of off-farm income decreases default (Kemaw et al. 2017)

6 Farmers with resources to sell will decrease default, i.e. crops or livestock (Kemaw et al. 2017)

7 Amount of contact with extension services decreases default (Kemaw et al. 2017)

8 Alignment of loan repayments to the cropping income cycle will decrease defaults (Njeru 2018)

Table 46 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on repayments. The repayment problems might be lessened if the need for credit is first quantified and then developed around the clusters investment type and capacity to meet repayments. Mentioned in other sections was the problem of growing dependency and entitlement of finance recipients that must be contained, along with a need for financial management training.

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Table 46: Repayment - important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Clusters require financial management training √√√

Refocused coding detailed literature review, comparative analysis with data

2 Ask ' does the cluster need access to credit'? √√√

3 Ensure the line of credit aligns with the cluster requirements, i.e. loan nature, time, support, type of investment. √√√

4 Avoid undesirable dependency and entitlement towards financial services and deliquency payments √√√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Summary

The facilitators interviewed all emphasised the importance of capacity building in financial management required to develop a sustainable agricultural cluster. The SHF FGDs suggested a key reason SHFs joined clusters was for economic benefits, but few SHF had financial skills:

‘…farmers look at financial opportunities first’ (DAR1)

This chapter conclusion combines the initial coding and refocused coding sections. It is an assumption of cluster practitioners and donors that the main driver for SHFs is their aspirations for an improved financial situation. This certainly seems to be a driver to a point. Where that point lies resides in the individual situation of each member and their immediate family. A facilitator commented that the first driver was FS&FNS and a ‘full stomach’ for members (BoholNGO1). Once that was achieved, the smallholder’s interests were for knowledge in farming technology and the social interaction with their fellow SHFs. This was highlighted by a comment from a group leader following final facilitation that they had not realized they were ‘already sleeping on the cash’. Some facilitators only organized training in finances after the food was secured and the concepts under social and human categories were addressed (BoholNGO1).

Cluster training in financial management was a theme that emerged from the data. Numerous studies show a correlation between knowledge of finance and economic growth (Barro 1992; Saba et al. 2012). Another important link is with social capital and capacity to reduce transactional costs, such as expense of searching, negotiating and monitoring new deals (Ghoshal and Moran 1996; Williamson 1979). Additionally, Kim and Surroca (2009), showed lenders and borrowers belonging to similar cohorts along the social responsibility dimension obtained significant

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reductions on lending rates and favourable loan conditions. Sustainability of clusters improves as social, human and financial capital are linked and grow concurrently (Tunji-Olayeni et al. 2018).

Table 47 consolidates the important concepts identified from the initial and refocused analysis and applies a subjective ranking of issues regarded as important for agricultural cluster sustainability. The priority ranking is on codes within the concepts.

Table 47: Ranking of financial concepts for sustainable clusters

Concept Codes Priority Access to Finance Good relationship with financier (formal or informal lender) √√√ Access to Finance Consider alternative cluster business models to reduce financial risks (agency, self-financing, forward contracting) √√√ Access to Finance Link the cluster into a value chain arrangement √√√ Government Aid Registered agricultural clusters have access to government programs and support services √√√ Insurance Cover risk of crop failure by registering for insurance through the freely available PCIC system √√√ Insurance PCIC crop insurance is recommended while it is free. √√√ Repayment Clusters require financial management training √√√ Repayment Ask ' does the cluster need access to credit'? √√√ Repayment Ensure the line of credit aligns with the cluster requirements, i.e. loan nature, time, support, type of investment. √√√ Repayment Avoid undesirable dependency and entitlement towards financial services and deliquency payments √√√ Access to Finance Clusters can be a source of low interest loans (if well managed) √√ Government Aid Start-up capital for cluster lending services can be sourced from some LGUs √√ Government Aid Separate technical interventions and financial interventions (latter being private sector led) √√ Government Aid Avoid undesirable dependency and entitlement towards government or donor financial services √√ Government Aid Cluster lending is a secondary service with primary focus on production and marketing √√ This illustrates the specific issues that emerged from the data which require attention for a sustainable cluster. Within the current rural environment of difficult access to credit, and high interest rates, the potential for agricultural clusters to implement a lending service exists; however, this service is fraught with potential problems and must be well-managed. The financial literacy levels of SHFs was limited, repayment obligations did not appear strong, confidence to negotiate a financial difficulty was lacking, and it was observed that some SHF viewed agricultural clusters as a place of employment or social gathering rather than a collective action business enterprise. The conclusion is that financial training may benefit from concurrent training in values and attitudes. The rankings suggest that a question needs to be asked regarding the need for clusters to access to finance, timeliness and the intention. This implies that financial management capacity building may also help sustain the clusters.

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Chapter Eight: Physical Category

Introduction

Physical Capital for an agricultural cluster refers to access to machinery, buildings, computers, and other fixed assets created by humans, that can be used in production activities over many years. The Physical Capital is predicated on development of Human Capital to build the skills to create and manage the assets. The Physical and Human Capitals are reliant on the Social Capital relationships that are a resource to build these skills and capacity (Machalek & Martin 2015). Physical Capital links to Human Capital through the development of knowledge of assets and Social Capital through the collective management of these assets.

In this context, communities gain a sense of place and satisfaction through their buildings, roads, and bridges. The physical asset can be sold or inherited by heirs.

Table 48 presents a list of the main concepts that emerged from the data in both the facilitator interviews and the FGDs.

Table 48: Physical Capital Discussion Topics (Transcripts mentioning the category/total number of transcripts as a percent)

Facilitator Transcript FGD Transcript Percent Percent Category Concept Concept Land access 72 Land access 19 Physical Equipment 14 Equipment 94 Structures 18 Structures 25

The corresponding percentage in the table was created from the number of times the interviewees raised a topic that could be assigned within a concept, and then converted to a percentage. These are perspectives of the facilitators and FGD farmer clusters on what they regarded as important on that day and time. The level of replication of this ratio is untested and potentially quite low. The SHFs show a much higher interest in discussing equipment and structures (buildings) which reflects their focus on daily production issues.

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Land Access

SHF’s individual ownership titles for agricultural working land is crucial for the farmer’s commitment to investing in the land development. The SHFs, particularly the indigenous people, view land as part of their culture, tradition, guardianship, and the place where their ancestors ‘spirits’ still live (MNGO2). The State tends to view land from a legal perspective as a tradeable commodity. The consequent land disputes are frequent and drawn out legal processes.

Even transfer of property titles is a lengthy process. The GoP’s Land Registration Authority states that property title transfers average a three month processing period; however, examples of periods taking longer than two years are not uncommon (Oakeshott 2019). This drawn-out process for landownership decisions are an obstacle to investment and the creation of a regional land-use system to manage the threats of Climate Change on food and nutritional security (FS&FNS), biodiversity and the ecosystem.

Smallholder’s reluctance to invest in farm improvements was due to land ownership issues (LeyteLGU2) and complexity of their tenancy arrangements. Identifying the ‘real’ landowner in some areas is complex due to land access arrangements and was explained by a bemused Government facilitator:

‘the real status, the tentorial status is difficult…first there is the tenet or the owner…sometimes the tenet will rent their land, but not their land really, to someone to till the land for the tenant and the owner…and the one who rents the land is not the one who does the work, he hires another person…you can’t even identify who’s who….so who is the farmer then?’ (LeyteLGU2).

The range of tenancy agreements include sharecropping, harvest shares, or land managed with the sole objective to prevent ‘squatters’ entering and making ownership claims:

‘… (landowners)… just take some (harvest share) and the owner wants that his land is clean.’ (Sto. Niño)

Most FGD participants were renting land under insecure tenure and expressed a reluctance to invest in the land because they feared the landowner taking back the land without compensating for the improvements (San Vincent), or their displacement from ongoing regional conflicts (MNGO2). The literature (Lawry et al. 2014; Roth & McCarthy 2014) confirms that SHFs are more inclined to make productive farm investments with secure land tenure. Land ownership and ongoing investment in improvements is therefore crucial for sustainable development of smallholder agricultural clusters.

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Many of the SHF FGD participants were Indigenous People (IPs) without secure tenure over their land. The Spanish colonialists introduced the Regalian Doctrine of State in 1863 (Pulhin & Dizon 2006) that placed all Philippine land and forests under State ownership. Traditional forest and land rights was returned to IPs in 1997 by the Indigenous People’s Right Act (IPRA Law). Indigenous People (IPs) could be recognised under ancestral domain and apply for ownership and land titles. This new law cancelled the Regalian Doctrine of State; however, the disputes on ownership are long and drawn out processes. An example is the SHF IPs from a Cabalawan association who have a decade’s long land titles dispute based on their rights of ancestral domain. They mentioned they are viewed as ‘occupiers’ of vacant land and subjected to thuggish and violent actions from the property title holder while the dispute is under assessment.

The other government policy initiative is the Comprehensive Agrarian Reform Law (RA 6657) of 1988. This law developed into a program to redistribute 5.37 million hectares to 2.6 million farmers. The SHFs who benefited from this program to secure tenure, showed increases in corn and rice harvests, and average yields for all crops improved relative to national averages (Monsod & Piza 2014). This supports the opening paragraph that SHFs with secure tenure invest in their land development.

The literature (Fabella 2013; Fermin 2013) reveals a debate on the efficiency of this system that distributes small parcels of land with title restrictions on sale and rent. However, this is a unique situation of many SHFs on small parcels of land that cannot be sold and provides the base for agriculture clustering ‘agglomeration economics’ (Monteiro et al. 2011) in a collective action approach. While the government continues to support agrarian reform programs (Fabella 2013; Monsod & Piza 2014), the extension of these programs to include agricultural clusters would be welcomed.

Table 49 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on land access.

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Table 49: Land Access - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Smallholder farmer land ownership √√√

Refocused coding detailed literature review, comparative analysis with data

2 Government Comprehensive Agrarian Reform Program indirectly supports clustering √√

3 Secure land tenure can increase harvest yields √√√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

In Table 49, point 2 in the refocused coding ‘Government Comprehensive Agrarian Reform Program’ refers to the Government land redistribution program, the Comprehensive Agrarian Reform (CARP) that was initiated in 1988. The FGDs, facilitators and the literature (Balisacan 2007; Lawry et al. 2014; Roth & McCarthy 2014) indicate the importance of land ownership to improve production and income because the SHFs were reluctant to invest in infrastructure development without property titles. The implementation of the CARP, and later 2009 CARPER Law, was regarded by the SHFs as too slow. CARP is given two ticks indicating the importance of land distribution; however, the program implementation and SHFs long-term investment of effort for land ownership did not align with their short-term ‘coping strategy’ to deal with their immediate survival problems (Castillo 1990).

Production Equipment (mobile)

Production equipment has been separated into mobile and immobile discussion parts. Mobile refers to tools, equipment, and mobile machinery for production and marketing that can easily be moved to another area or factor of production. Immobile refers to the structures and buildings that are built for purpose but with effort re-engineered into new production and marketing activities.

The Philippine’s agriculture sector lags the rest of the region in uptake of mechanization. Table 50 list a comparison of the amount of horsepower per hectare from other countries in the region.

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Table 50: Mechanization in the Philippines - country comparison (horsepower/ha)

Horsepower/ha Philippines 0.42 Vietnam 1 China 5 Japan 7 Source: TJD (2011)

SHFs require tools and equipment to sustain and develop their working land; however, the uptake of agricultural mechanization in the Philippines faces obstacles such as high cost of acquisition, small fragmented farms, cheap and abundant labor, sloping farmlands, and poor mechanical support systems (Elepaño et al. 2009). The opportunity for improvements in efficient and effective production from mechanization are possible only if the equipment has a strategic value and operated and maintained within the cluster system. Evaluating the need of expensive equipment procurement involves consideration of the right equipment at the right time, the capacity to manage and maintain the equipment, and availability of trained operators. The lack of equipment and trained operators was a frustration mentioned by both SHFs and facilitators:

‘…because it’s a shame for example if we have the avenue to negotiate export market, but when the exporter came and inspect the area, we don't have the basic requirements like packing shed for example, so it’s useless.’ (DavaoLGU1)

The initial coding highlighted cheap and abundant labor which objected to mechanization. One Facilitator commented that cluster spirit of working together outweighed the potential economic gains from mechanization. A traditional economist would describe this as an irrational behaviour; however, the rural and remote group priority for survival requires the cluster to exist in cohesion with their functional within a general ‘coping’ strategy to remain in harmony and sustainable. Therefore, the decision of SHFs is quite rational:

‘We introduced this mechanization to the group but its bounced back because they said they can still find workers to do the job … so they don't want mechanization...because when its manual labour, everyone is happy.’ (LeyteLGU2)

Receiving equipment and fixed assets can boost the cluster’s production efficiency and morale; however, these assets all come with a management and maintenance responsibility. The Bogo Maasin cluster realized this maintenance and management reality after receiving a new donor

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provided tractor and thresher:

‘…we have availed machineries, tractor and thresher, who managed the machineries?’ (Bogo Maasin)

This management question is one best answered by the project designers, if the capacity to manage the equipment exists, and as one Facilitator posits, before donating an expensive tractor:

‘…do you have the land to till, do you have an operator, but do you also have the gasoline?’ (DavaoNGO1)

Information, Communication and Technology (ICT) was not raised during the interviews and FGDs. All facilitators had mobile phones and mentioned that cell coverage in some areas was not available. Not all the SHFs had mobile phones and access to the internet was usually a single household in their community. The observation was there appeared little current interest in fast access to a greater volume of information and a lack of awareness of potential benefits.

Table 51 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on equipment.

Table 51: Equipment - Important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Capital assets need trained operators and a budget to operate and cover maintenance √√√

2 Capital assets must fall within the cluster development strategy √√ Refocused coding detailed literature review, comparative analysis with data Added value from an equipment investment requires careful planning to match needs with the ability to operate 3 √√√ and maintain the equipment

4 Value in ICT - communications and internet? √√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Highlighted through the transcripts was for investments in equipment needed to align with the cluster strategy and to their existing capacity to be operated and maintained. If these assets are supplied through grant programs, they need to also budget for maintenance and training. The value of ICT was not determined but expected to play a significant role as mobile networks improve services to rural areas.

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Structures (immobile)

Rural infrastructure provides communities with a sense of place and satisfaction through their buildings, roads, bridges. These facilities also create income-generating opportunities through irrigation infrastructure, storage, and connectivity to markets, and public utilities such as water and electricity. Inadequate agricultural infrastructure acts as a significant constraint to growth (Llanto 2012).

The initial coding suggested that assets were often not following a strategic investment based on needs of the cluster aligned to their operating environment. Facilitators and FGDs mentioned infrastructure grants were not always targeting the needs of the farming community:

‘…there are a lot of white elephants around.’ (DavaoNGO1)

An example of this arose in a facilitator interview regarding a local rice storage shed, known as a ‘bodega’:

They (the cluster) said they don’t have a bodega... and (donor) provided a bodega...but it’s not used by the cluster... just imagine the government paid for that building and it’s now used by private traders (LeyteLGU2)

Also, assets not correctly designed for their purpose:

‘…the protected cropping structures they really need to have drip irrigation.’ (LeyteLGU3)

Any new asset needs maintenance that a cluster should include and enforce in a management budget:

‘…for the maintenance, they put 20% of profits aside for the maintenance of the structures….’ (LeyteLGU3)

The Philippine’s National Irrigation Administration (NIA) is another option for cluster equipment, specifically for irrigation and pumping. Like other agencies, set-up with good intentions and in normal circumstances function well; however, in crisis times they tend to be overwhelmed. One facilitator mentioned during the current drought the local clusters needed water pumps for their wells and irrigation pipes.

In the ENSO period, the FGDs were all experiencing drought and requested water pumps from the NIA. The NIA, during this dry period were clearly overwhelmed from the demand:

‘…I'm trying, to follow up the NIA irrigation office but until now ...nothing. So, I understand the drought they cannot get everywhere…’ (BoholLGU2)

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Long-term planning is needed to forecast the cluster needs, especially as ENSO and other weather perturbations are regular events for clusters to manage.

The literature (Kataria et al. 2012) describes how physical capital in agriculture can be divided into three main groups of drivers that are influenced by both firm strategies and subjective beliefs:

1. Expected profit 2. Expected societal benefits and costs 3. Expected private non-pecuniary benefits and costs

These three groups are drivers of investment are illustrated in Figure 34. The three investment groups, the drivers of investment, are influenced at the cluster-level and society-level. Both cluster and society have regulations, values and norms that influence the group of subjective beliefs in the centre of the diagram. The SHF cluster members lacking research capacity or access to information will make decisions based on their beliefs in these four areas.

Kataria et al. (2012) Figure 34: Financial environment of smallholder farmers

Table 52 summarises the key points that emerged from the data and the reviewed literature referenced for this section discussion on structures. Highlighted through the transcripts was the

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need for physical capital structure investments to be based on their strategic needs and within the cluster’s strategic development plan. This was particularly the case for structural assets for disaster risk reduction. This includes the capacity of the cluster to operate and maintain the structure profitably.

Table 52: Structures - important for sustainability based on the refocused analysis

Initial coding Priority data analysis, brief literature review

1 Strategies required to manage assets needed for disaster risk reduction √√√

2 Ensure assets are properly designed to fit within the cluster strategic development plan √√√ Refocused coding detailed literature review, comparative analysis with data Physical capital investments quantify the expected profits, social benefits and costs, and non-pecuniary benefits 3 √√√ and costs

4 Attach management and operation training with physical capital investments to upskill cluster members √√

Regarding Priority column: This is a subjective measure where 3 ticks are regarded by the researcher as the most important

Summary

Physical capital not only provides a sense of place and fixtures for income generation, but the literature (Shobe et al. 2017) also recognizes individuals without assets regard themselves as more food insecure. Security of land tenure and land ownership emerged from the data as crucial for SHFs before they will invest in developing their own lands which was shown to lead to higher production yields. This was confirmed within the literature (Monsod & Piza 2014) with examples of harvest yields increasing following transfer of titles to SHFs. Interpreting the data suggests more care is needed in planning physical capital investments for both immobile structures and mobile equipment.

Local Government Units (LGUs) were generally responsive to the needs of their local farming community and with available funds provided support for working capital items such as seed, fertilizer, watering cans, hand tools and occasionally larger assets such as tractors, threshers and infrastructure. A registered cluster can apply for these assets and other opportunities for training. International donor organizations were also a source of capital when new projects were implemented. In areas where multiple projects were implemented an apparent lack of coordination between donors provided SHFs the opportunity to select projects that provide the best fixed asset investments.

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Table 53 consolidates the important concepts identified from the initial and refocused analysis and applies a subjective ranking of issues regarded as important for agricultural cluster sustainability.

Table 53: Ranking of physical concepts for sustainable clusters

Concept Codes Priority Land Access Smallholder farmer land ownership √√√ Land Access Secure land tenure can increase harvest yields √√√ Equipment Capital assets need trained operators and a budget to operate and cover maintenance √√√ Added value from an equipment investment requires careful planning to match needs with the ability to operate and Equipment √√√ maintain the equipment Structures Strategies required to manage assets needed for disaster risk reduction √√√ Structures Ensure assets are properly designed to fit within the cluster strategic development plan √√√ Structures Physical capital investments quantify the expected profits, social benefits and costs, and non-pecuniary benefits and costs √√√ Equipment Capital assets must fall within the cluster development strategy √√ Equipment Value in ICT - communications and internet? √√ Structures Attach management and operation training with physical capital investments to upskill cluster members √√ Land Access Government Comprehensive Agrarian Reform Program indirectly supports clustering √ The priority ranking is on codes within the concepts. This illustrates the specific issues that emerged from the data which require attention for a sustainable cluster. The rankings suggest secure land tenure is crucial for SHFs to invest time and money into development that can lead to higher harvest yields. Investment in fixed mobile and immobile assets indicates from the data to be sometimes non-strategic and unaligned with the development needs of the cluster. Assets are required but need trained operators and budget support for maintenance if offered as a donor grant. Financial management and strategic investment and procurement capacity building can assist overcoming these development problems.

This concludes the data analysis chapters four to eight. It is clear from the data the importance of social capital and how it predicates the other capital areas in the collectivist nature of the smallholder clusters. Social cohesion and the capacity to cooperate for the long-term interests of the cluster is a theme that has emerged as a critical challenge in all categories for sustainability to be achieved.

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Chapter Nine: Theory and Model

Introduction

Chapter nine brings together the results from the chapters’ four to eight that covered the categories of social, human, natural, financial, and physical. The chapter commences with a description of the point of sustainability that agriculture clusters are seeking through a balanced relationship of the categories within their unique environments. This is followed by revisiting the cluster maturity diagram and adapting it using observations from the field and information from the literature. This diagram is enhanced to illustrate the influence of spiralling on growth and collapse of clusters as well as the recurrent nature of growth, collapse, restructure and rebuild that clusters encounter in their lifecycle. A large section of this chapter is devoted to the alignment of suggested development activities with the cluster growth stages that can be used as a practical tool to guide the facilitation process. This is not intended to be prescriptive as it was clear during the data collection process that every individual cluster was unique, and the creative skills of facilitators was required to maximize capacity building of clusters. The chapter ends with a description of the Sustainable Agriculture Cluster Framework (SACF) that brings together all the concepts and categories into a framework. The Constructivist Grounded Theory methodology proceeded through five stages of data lines, codes, concepts, and categories resulting in the SAC Framework to describe agricultural clusters in the southern Philippines.

Category relationships

To understand the relationships between the categories it is necessary to first look at the endpoint of how sustainability of clusters is assessed and then look at the attribution of the categories and their relationships. The point of sustainability for agricultural clusters in the southern Philippines is illustrated in Figure 35.

Figure 35: Point of sustainability of agricultural clusters 154

This point occurs when the local conditions, the cluster strategy, and the balanced five categories are all in equilibrium. The balanced five categories refer to factors7 within the categories in balance and across category balance. The previous chapters on each of the categories described the conditions and policies that influence the category development. The point of sustainability will occur when the cluster members start benefiting from improvements.

The relationship strength, quality and influence between the five categories can be quantified and qualified at the factor level. Each factor contributes to a balanced category. The ‘Physical’ category is an example where secure land tenure for SHFs will encourage investment into mobile and immobile assets to improve production efficiency and effectiveness. These assets contribute to higher yields, lower costs of production, increase profits and livelihood improvements. Figure 36 illustrates examples of the factor relationships that exist within each category. There is also between category stimuli that influence development.

Figure 36: Relationships within and across categories

The relationship and influence between the categories is explained by the work from Emery and Flora (2006a), who developed the factor of ‘spiralling up’ to show the importance of social capital as a foundation and ‘glue’ for attracting the other capitals. They described how increasing one capital can draw-in and concurrently develop the other categories and factors through the flow of assets from one capital to another, Source: Emery and Flora (2006a)

Figure 37.

7 The practical elements of the categories described by facilitators and SHFs 155

Source: Emery and Flora (2006a)

Figure 37: Spiralling Capital Assets

Their conclusion was capacity cannot be measured by increases in the individual capitals but measured by the flow of assets between categories. This spiralling was observed in the field where well-managed clusters (Human category) attracted higher levels of support from their network (Social category). Regarding this as a flow implies the depletion of one and the increase in the other. Rather than a flow, it appears to be magnetism. This brings the categories and factors closer and attracting new and external components into the factors and thereby enhancing and strengthening the spiral.

Spiralling recognizes that an analysis of only one part of cluster sustainability will not explain the whole system. Non-linear relationships exist where individual components are dynamic and affected by multiple interactions and feedback loops. An extra effect of an active cluster that is spiralling-up are benefits for the cluster’s community that comes from spill-over interest from support agencies (Batt et al. 2011). This occurs as the current support agencies develop trusting relationships with the cluster that underpins a confidence to engage with the community (Emery & Flora 2006b).

Developing a cluster through a socially informed analysis of development interventions referred to as institutional bricolage was studied by Cleaver (2002) and is similar concept to Spiralling.

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Institutional bricolage suggests clusters members will shape and reshape their organisational arrangements depending on available resources and their unique needs. The available resources identified for development of the cluster are attracted by spiralling and shaped by the members, their circumstances, and what they perceive as reasonable and legitimate.

The Cluster Maturity Framework revisited

During the FGDs the Cluster Maturity Framework was shown to participants for a self-assessment of their cluster growth and activity. This framework is slightly modified in Figure 38 to show an extra line of growth, labelled ‘3+’ to capture new strategies, policies and activities of the cluster as it restructures to develop towards a new level.

Figure 38: Cluster Maturity Framework revisited

The clusters go through a cycle of building, decline, collapsing, restructure, and rebuild. The decline phase can be minimised by implementing new strategies and activities that boost the cluster growth and prevent a collapse. These growth and collapse phases are not linear but linked to the spiralling-up and spiralling-down. The categories influence the growth and decline as illustrated in Figure 39.

Figure 39: Cluster Maturity and Spiralling

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The ideal cluster continues a repeated upwards trajectory building and spiralling-up. Those that collapse find categories disintegrate following a spiralling-down trajectory, but with a new strategy and an intervention to restructure, the cluster rebuilds on a new trajectory. Noticed in the field were clusters that remained at the same maturity level for an extended period (Bogo Maasin). It appeared that some clusters could retain a buoyancy during a phase of growth or decline where they did not move.

Cluster Activities aligned to Cluster Maturity

Understanding the stage of a cluster maturity and their growth or decline trajectory provides a useful cluster insight for facilitators on the type of training and activities to provide. The facilitators followed their own organisation guidelines for cluster development and processes. These documents were generally generic guidelines that allowed for the facilitator’s creativity to tailor unique development processes based on the needs of the cluster (CRS-Philippines 2007; CRS & RII-CIAT. 2007). SHF FGDs commented that maintaining relevance of training was important which places greater autonomy onto the facilitators to identify the cluster needs and align these to suitable capacity building and training activities.

During the field data collection, the facilitators and SHF FGDs were asked about the type of training they needed and received. This information was collated and aligned to the five stages in the Cluster Maturity Framework (CMF) to guide the activities to meet the needs of the developing cluster. Table 54 to Table 57 are examples of the training activities that are aligned to each of the maturity levels. This is offered as a practical tool to implement activities following the quick assessment of cluster maturity to enable the cluster to continue development. These tables that list activities aligned to cluster growth stages are presented in the following pages.

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Stage 1 of the Cluster Maturity is the initiation and start of the cluster. Table 54 lists activities that align to a new agriculture cluster at inception or early stages of development. The factors that facilitators suggested to focus are on developing cohesion and discipline within the group, supporting the leadership, understand markets and financial needs, secure land tenure for the cluster members, and establish a forum to share knowledge on pests and diseases, resources and environment. The capacity building activities aligned to these factors focus on social skills development and financial management.

Table 54: Cluster Maturity Stage 1 - sustainability activities and capacity development

Maturity Cluster Organisation Agricultural Cluster Capacity Development to Category Concept Sustainability Questions & Activites for Development Stage Level Characteristics Introduce Networks Register the cluster as a business Networks Embedd the cluster within the Barangay and LGU administrative system Politics Zero tolerance on fraudulent or corrupt behavior

Politics Avoid over-reliance on government project managers for leadership directions

Religion can provide rules for social engagement and be a strong motivational Religion force

Social Relationships Establish strong relationship between the agriculture cluster and facilitator Relationships Establish strong cluster cohesion

Relationships Smallholder social skills development is required Trust Allow time and careful management to develop trust Values Clusters must be managed with a business attitude. Awareness of general Filipino values and importance of tradition, protocols, Values social obligations, and saving 'face'. New association of Elect leaders with good management skills (finance, people, motivator, 1. Social skills development; Leadership individual farmers, negotiator, altruism, trust). 2. Conflict resolution training; unbalanced category Facilitators required a structured approach to instil self-efficacy and 3. Self-discipline capacity level (social, human, Empowerment development (New 1 Starting empowerment in the cluster financial, natural, guidelines or supplement Ensure information transparency and sharing & create self-directed work teams physical) and their Human Empowerment existing religious doctrines); with boundaries and autonomy coresponding concept 4. Financial management Motivation Facilitators capacity to manipulate extrinsic and intrinsic motivators level issues. training Constant visibility and accessibility of leaders and facilitators to the cluster Motivation member Marketing Initiate Value Chain Approaches (VCA) Access to Finance Establish good relationship with financier (formal or informal lender) Consider alternative cluster business models to reduce financial risks (agency, Access to Finance self-financing, forward contracting) Access to Finance Clusters can be a source of low interest loans (if well managed) Cover risk of crop failure by registering for insurance through the freely available Insurance PCIC system Financial Repayment Clusters require financial management training Repayment Ask ' does the cluster need access to credit'? Ensure the line of credit aligns with the cluster requirements, i.e. loan nature, Repayment time, support, type of investment. Separate technical interventions and financial interventions (latter being private Government Aid sector led) Physical Land Access Smallholder farmer land ownership and security of tenure is crucial Encourage cluster members to share knowledge to deal with the changing Natural Pests&Diseases environment.

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Stage 2 of Cluster Maturity is a phase of increasing activity and growth. Table 55 lists activities that align to a cluster in the early growth stage where new strategies, policies and activities are implemented. This is a time when values and attitudes are tested within the cluster and ‘bridging’ is required to the support networks. Facilitators mentioned that management needs support to ensure efficient and effective operational capacity. This is a stage where new investments occurred and care is required to match the cluster needs with the investment which was illustrated in Figure 34. This is a stage where spiralling up occurs when the social categories are balanced, and optimism exists within the support networks. The SHF FGDs specifically mentioned technical crop production training is required at this stage. Clusters did not undertake resource management; however, as the results have shown that a well-managed ecosystem can benefit food and nutritional security (FS&FNS) and livelihood improvements. This is the stage engagement with resource management agencies and biosecurity agencies should occur to develop integrated Land-Use Plans.

Table 55: Cluster Maturity Stage 2 - sustainability activities and capacity development

Maturity Cluster Organisation Agricultural Cluster Capacity Development to Category Concept Sustainability Questions & Activites for Development Stage Level Characteristics Introduce Networks Involve the LGU as partners in new projects Networks Communications Plan development Politics Remain politically neutral Values Avoid ‘free riders’ and a cluster’s dependence on ‘dole-outs’. Social Supply chain partnerships need trust established for transparent information Trust flow Spiral of silence - is it shyness, respectfulness, or a desire to conform to the Values majority? Marketing Ongoing Value Chain Analysis Management Management training is required Facilitators develop an exit strategy that includes ongoing support for cluster Management management Management Professional result oriented management can minimize cultural aspects 5. Technical training for Clusters members need roles and activities with clear boundaries (The Promoter specific crop production; 6. Management Model) Value Chain Analysis 7. Management Life of project should be longer than three years. Management training 8. Human Design activities around the type of relationship alliances: coordination, Resource management Management cooperation, or collaboration training and Land-Use Facilitators require skills in both community development and agricultural Planning. 9. Disaster Risk Spiraling upward growth Facilitation technology Reduction (DRR) strategy with established policies Increasing Growth Facilitation Facilitators open access to more extension services as the cluster progresses development 10. Clusters 2 and activities and a and Activity Leadership Leadership style changes through the clusters development stages build biosecurity capacity (as developing support Constant visibility and accessibility of leaders and facilitators to the cluster part of DRR). 11. Adapatation network Motivation member to climate change strategy Avoid undesirable dependency and entitlement towards financial services and 12. Finance and Investment Repayment deliquency payments Planning 13. Avoid undesirable dependency and entitlement towards government or donor Communications Plan 14. Financial Government Aid financial services Operational capacity buidling Cluster lending is a secondary service with primary focus on production and for new structures and Government Aid marketing equipment Added value from an equipment investment requires careful consideration of Equipment cluster needs with the ability to operate and maintain the equipment Physical Ensure assets are properly designed to fit within the cluster strategic Structures development plan; and quantify the expected profits, social benefits and costs, and non-pecuniary benefits and costs Water Clusters become community-based resource managers Land Land-use plans can support cluster resilience and resource management Climate-induced natural disasters are expected and disaster risk reduction Weather Natural strategy developed Weather Develop long-term strategies for adaptation to climate change Clusters could be utilised as local biosecurity units to observe, manage, and Pests&Diseases contain zoonotic and other pest and diseases

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Stage 3 of Cluster Maturity is the mature stage or the peak where new strategies and policies are required to continue growth. Table 56 lists activities that align to a cluster that has reached Level 3. This stage is regarded as stagnating with no new activities and members are coping. The current cluster capacity and learning comes from knowledge developed from current activities. This level requires a new strategy, new policies, and new activities to take a step upward. Ignoring the need for a new management plan, financial plan, marketing plan, and new direction, the cluster membership will decline, and the cluster will commence spiralling downwards.

Table 56: Cluster Maturity Stage 3 - sustainability activities and capacity development

Maturity Cluster Organisation Agricultural Cluster Capacity Development to Category Concept Sustainability Questions & Activites for Development Stage Level Characteristics Introduce Networks Forge closer links to research institutions for adoption of innovations Organisational growth in Facilitator capacity to build group cohesion and 'exploit' these relationships to Mature/Stable - social and human capital Realtionships improve cluster performance 'coping strategy'; from the knowledge Social Facilitator capacity to broker beneficial external relationships (knowledge, time, Renewal and re- gained from ongoing Relationships support) 15. Develop new engineering required activities; no new Networks Forge closer links with local and also international support networks management strategy, Implement new strategey, policies or 3 Marketing New Value Chain Analysis (new markets, products, relationships, efficiency) policies and activities; 16. strategies, policies activities. Resilience is a Human General Review concepts and develop new management strategy, policies and activities New financial plan; 17. New and activities. Grow response reaction to Financial General Review concepts and link a new financial plan into the new strategy Value Chain Analysis the membership change rather than Physical General Review concepts and requirement for new asset investments with new strategies. planned and strategic Land Review and up-grade Land-Use Plans Spiralling upwards . risk reduction. Growth Natural Weather Review and up-grade strategy for climate change adaptation is stalled. Weather Review and up-grade the Disaster Risk Reduction strategy

Stage 4 and 5 of Cluster Maturity refers to a cluster in decline or collapsed. Table 57 lists activities that align to clusters that are declining or collapsed. A Stage 4 cluster spiralling downwards with fewer activities and projects with declining membership and no strategy for generational change can be resurrected with a review and implementation of new activities. The facilitator and cluster members may decide the cluster has served its purpose and be closed. If it is decided to resurrect the cluster the activities and capacity development strategies outlined in Stage 3 can be implemented.

For a Stage 5 cluster where members have dispersed and operational activities have ceased, then resurrection or not is a decision for facilitators and participants. If it is determined that the cluster can still serve a purpose and the collapse was due to a fixable level of factors or relationships between factors, then the facilitator takes this new group back to Stage 1 activities and capacity development.

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Table 57: Cluster Maturity Stage 4 and 5 - sustainability activities and capacity development

Maturity Cluster Organisation Agricultural Cluster Capacity Development to Category Concept Sustainability Questions & Activites for Development Stage Level Characteristics Introduce Spiraling downward. Social Declining membership, Human declining activities, loss Has the cluster served its 4 Declining activity Financial Review concepts Same as Stage 3 of projects and Physical purpose and be closed? contracts, and no Natural strategy for generational Social No longer operating, no Human Collapse/not activities, members Should the cluster be 5 Financial Review concepts Identify why collapse occurred operating dispersed, accounts resurrected? Physical closed, cluster dissolved. Natural The above tables were collated from facilitator interviews, SHF FGDs, and referenced to literature with the intention to act as a guide for facilitators and organisations to further develop and tailor towards the unique needs of the clusters they manage. The purpose of presenting these tables in this study was to highlight that capacity building of the cluster is aligned to their changing development needs. Whilst providing a structure the intention is not to be prescriptive but rather to encourage the facilitator’s autonomy, experience and creativity to build on the available strengths, assets and resources for cluster development and livelihood improvement.

The cluster growth stages are aligned with capacity building activities described in the tables that are enhanced by spiralling that attracts resources and benefits. This provides a practical approach for facilitators to develop their clusters. The introduction to this study identified the Sustainable Livelihoods Framework (LF) that illustrated the influences acting on poor rural livelihoods and assisted planning and evaluation of development activities. The LF uses five capital assets to assess livelihoods that aligned with the five emergent categories reviewed in this study. The next step is to integrate the categories into the LF to strengthen the framework to illustrate the influences on agricultural clusters in the southern Philippines.

The Sustainable Agriculture Cluster Framework (SACF)

The Department for International Development (DFID) developed the Sustainable Livelihoods Framework (LF) to illustrate the influences on poor rural livelihoods and assist with planning and evaluation of their development activities (DFID 1999; de Satge 2002; Hinshelwood 2003). Sitting within the LF is a pentagram of five Livelihood Assets: Social, Financial, Human, Natural, and Physical Capitals. The balance and interactions between these assets and their relationship with transforming structures and perturbations are used to identify strength, weaknesses, opportunities, and threats to sustainability of livelihood programs.

There is a need for a framework that captures the interactions and relationships that a cluster encounters because the GoP ongoing redistribution of small-parcels of land to millions of SHFs

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(Monsod & Piza 2014) increases the need to understand the factors for sustaining these SHFs and ensure the land transfers are a success. The high failure rate of clusters in the Philippines (Briones 2003) but the promotion of clustering for rural livelihood development indicates GoP policy makers and their agencies are struggling to appreciate the complexity of cluster interactions and relationships.

The LF is a good model but has limitations as a practical tool that can be applied in situations such as southern Philippine agricultural clusters. The LF was designed as a generic illustration that embraced the activities and sources of income which contribute to livelihood improvement using models from India and sub-Sahara Africa; therefore, as a model for smallholder development outside of these regions is contentious (Bryceson & Bank 2001).

The emphasis of the LF in its original form is on people, assets, and activities that contribute to livelihood improvement rather than the performance of a specific sector or industry (Ellis 1999). The agricultural clusters in the southern Philippines exist in a complex environment that limits opportunities for development and is characterized by frequent natural disasters, armed conflicts, adversarial supply chains, poor infrastructure and services, and the SHFs are ‘predictably irrational in ways that defy economic theory’ (Appelbaum 2017).

This study showed that every agricultural cluster differed from the next in structure and extant environment. A new framework needs to capture these cluster relationships in this dynamic environment. It should be a tool that can identify the strengths and weaknesses of a cluster and provide a level of prediction on the impact of various interventions. The results of this study are incorporated into the LF to strengthen and enhance the framework to function as an instrument for an improved understanding of agricultural clusters in the southern Philippines. This new framework illustrates the conceptual understanding of the conditions, assumptions, and limitations within which the agriculture clusters operate.

The new Sustainable Agriculture Cluster Framework (SACF) is illustrated in Figure 40. Whereas the LF is focused on the influences on poor rural livelihoods, the SACF is focused on categories that support sustainable agricultural clusters.

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Figure 40: Sustainable Agriculture Cluster Framework (SACF)

The SACF illustrates the five Livelihood Categories that are Social, Human, Financial, Physical, and Natural. The agricultural cluster at the centre of the Livelihood Categories is founded within the five categories and the relationship between them. This relationship is illustrated by the spiralling that can contribute to either growth or collapse.

The vulnerability context lists the perturbations that are both internal and external alterations to the functioning of the agricultural cluster. Perturbations are stresses on clusters that influence development but also act to identify the strengths, weaknesses and processes that exist in the cluster and can guide the interventions for livelihood improvements.

Transforming structures and processes are feedback loops influencing the agricultural clusters operating environment through policies and rules. It was mentioned in the results that cluster sustainability is enhanced by embedding within the LGU to influence policy decisions to minimize damage and maximize benefits.

The five categories are built on the factors that emerged from the data. These factors are the building blocks of the categories. The factors build the categories which build the agricultural cluster. Understanding the factors and how they feed into the central pentagon develops knowledge on the cluster strengths and weaknesses and is illustrated in Figure 41.

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Figure 41: Sustainable Agriculture Cluster Framework (SACF) - Factor Level

The SACF-Factor Level diagram focuses on the Livelihood Categories and adds further detail on the building blocks of each category. These factors emerged from the data of interviews with facilitators and SHF FGDs in the southern Philippines field sites.

The SACF is designed to overcome the limitations of the LF when applied to agricultural clusters by strengthening the framework with the factors that emerged from the data. The vast volume of data that can be built into the SACF is filtered for background noise and prioritized to support the five Livelihood Categories. The SACF is a practical framework for cluster facilitators to manage data, identify cluster activities, and a tool to understand the potential mode of action of policies within the transforming structures, and the interventions from policy makers, donors, and other service agencies. The mode of action of perturbations can also be observed and predicted within the vulnerability context that shock and transform the cluster. The strengths and weaknesses of a cluster are understood by interrogating the factors and the insights formed from the qualitative and quantitative data that goes into building a SACF for a specific cluster. The framework is an instrument to plan and describe the range of factors and the spiralling influence for cluster development and sustainability by developing strategies and measuring outcomes. Table 58 summarizes the benefits of the SACF.

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Table 58: Benefits of SACF

∙ Includes qualitative and quantitative data ∙ Filters the background noise 1 Cluster categories and concepts ∙ Prioritises concepts under the five Livelihood categories ∙ Additional concepts can be added to tailor SACF to a situation ∙ Supports interrogation of category relationships 2 Relationship between categories ∙ Predicts mode of spiraling for development ∙ Illustrates the balance between categories ∙ Supports identification of cluster strengths and weaknesses ∙ Interrogates the balance or imbalance between categories 3 Analysis ∙ Potential to model the mode of action of interventions ∙ Identifies the needed strategies and measurable outcomes ∙ SAC Frameworks can be compared to understand a regional-level clustering issues ∙ Identifies the perturbations 4 External Influences ∙ Identifies the policies, laws, transforming structures ∙ Predicts mode of action of interventions ∙ Provides insights into progress of behavioural changes 5 Interventions ∙ Assist planning of new project activities and time frames ∙ Identifies the cluster 'real' needs rather than presumed Summary

This chapter commenced with a diagram and explanation of the point of sustainability of an agricultural cluster. The cluster is influenced by local conditions and the cluster policies, strategies and activities that are developed in response to these local conditions. Sustainability is then attributed to maintaining a balance between the five categories identified in the study: human, social, financial, physical and natural.

The relationship between the categories was observed in the field where clusters with strong social capital attracted higher levels of support from their networks. The research by Emery and Flora (2006a) confirmed this observation and described it as spiralling. The social capital develops and attracts other resources that build and develop the organization. The spiralling concept was inserted into the cluster maturity diagram to illustrate the different growth stages of a cluster. This included the spiralling growth and spiral collapse. The cluster develops along a path of growth, maturity, collapse, restructure and rebuild, and growth again. The maturity-level of the cluster was assessed with the Cluster Maturity Framework (CMF).

The next step was to identify activities that aligned to the different cluster stages of the CMF and support sustainability. These activities are listed and provided as a practical reference for cluster facilitators to implement and develop further.

The final part of the chapter presented the Sustainable Agricultural Cluster Framework (SACF). This framework adapted the Sustainable Livelihoods Framework (LF) and the body of knowledge

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around livelihoods to focus on agricultural clusters. Figure 42 illustrates the steps undertaken to reach the emergent theory, the SAC Framework. Using the emergent data, the following Constructivist Grounded Theory process was followed.

SAC Data Lines Codes Concepts Categories Framework

Figure 42: Steps to develop the SAC Framework

The LF provides a good illustration of livelihoods but has limitations as a practical tool that can be applied in situations such as southern Philippine agricultural clusters. Following the Constructivist Grounded Theory process the SAC Framework was build up from the codes, factors and categories.

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Chapter Ten: Discussion

Introduction

This chapter interprets the results presented in the preceding chapter’s four to nine. This follows on from chapter nine which collated results into the emergent Sustainable Agricultural Cluster Framework (SACF) and aligned development activities to the cluster maturity. The chapter commences with a discussion of the answers to the research questions and the interpretation of the results and emergent framework. This includes highlighting some of the unexpected results that are linked to the research questions and the contribution this study makes to the body of knowledge on agricultural clusters in the southern Philippines. The chapter concludes with a discussion on the challenges and limitations of this study.

Answering the Research Questions

1. What conditions can improve agricultural cluster sustainability?

Whilst there are general conditions that are managed across the life of an organization influencing sustainability, there are also some specific conditions that were identified and align to the stage of maturity of the cluster. This study identified the different stages of maturity of an agricultural cluster that correlated with new challenges for the organization that required specific capacity to overcome. Table 59 is a list that summarizes the key issues that emerged from the data and the literature review for around cluster failure. This table is compiled and synthesized from the data and literature reviews presented for the five categories in chapters’ four to eight.

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Table 59: Reasons for an agricultural cluster to fail

Categories Reasons to fail Lack of trust and transparency, Poor relationships and factional infighting; Lack of trust between leaders and members; Not meeting initial cluster member expectations; Weak links to support services and the Local Government Unit; Lack of support services; Family, cluster or community calamity; Lack of social cohesion (social relations, task relations, perceived unity, emotions, Social diversity); Members believe they’re more important than other members; Aligned to a political party not in power; Fraudulent or corrupt behaviour; Poor relationship with facilitator; No cluster discipline; No trust; ‘Free-riders’, Attitude of entitlement and dependence from Government; ‘Spiral of silence’; Poor social skills and an inability to build and negotiate with support services. Lack of infrastructure (roads, telecommunications, packing shed, transport, postharvest facilities, mechanisation); distance to markets (accessing input supplies and sale of produce); Investment in Physical capital assets not aligned to the cluster development goals; Assets are not serviced, maintained or repaired. High cost and resource allocation to comply with alternative food system certification (i.e. Rainforest Alliance, organics etc.); weather (drought, storms, floods, high winds, temperature-too Natural hot or cold); biosecurity (pest and disease); natural disasters, landscape (steep and sloping lands), soils (Degradation and loss of fertility), access to water, Poor government response following perturbations leading to increase security concerns.

Poor leadership and management; Cluster can lose objectivity from control by the better educated, governments or other self interest groups; Corruption; Mismanagement; Poor coordination of cluster Human activities; Inability to enforce contracts (i.e. pole-vaulting – a term used for trading outside of the contract); Farmers lack knowledge and capacity to undertake specific activities – procurement, marketing and sales, post-harvest, quality assurance, production, contracts and negotiations.

No access to finance; Finance inappropriate for the cluster needs; Insufficient capital for operations; Repayment problems; High transactions costs; High compliance and auditing costs; Breakdown of internal cluster lending scheme; Delayed payments from buyers; Problems with free-riders, pole- Finance vaulters, horizons, risk portfolio; Lack of investment; ; Delayed payments from the institutional buyers; Loss of focus on cluster as a business enterprise; Attitude of entitlement and dependency towards government services.

Included in Table 59 are the general conditions that lead to failed clusters. These general conditions occur at any cluster maturity stage and are identified as problems related to:

1. Free riders: Cluster members who utilized the cluster resources and services without making a fair contribution towards the cluster development. 2. Horizon: Similar attitude issue as the free riders; horizon problem refers to the lack of working capital due to cluster member’s reluctance to contribute. 3. Leadership: Cluster members who are better educated, wealthier, or larger producers who agitated for greater management control and undermined the cluster’s democratic process. 4. Cohesion and risk sharing: Cluster members have different attitudes to risk management that raised tensions during the decision process

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The other conditions are generic but anchored within the factors illustrated in the SAC Framework. SHF lose their independence when they join a cluster and their attitudes need to shift into a paradigm of collective action. Hofstede et al. (2010) suggests the Philippines’ collectivist culture supports a collective action approach, but poor leadership and mismanagement can erode trust and send the clusters on a trajectory of collapse. The set of reasons for cluster failure presented Table 59 includes this loss of farmer independence, and problems with collective approaches that include corruption, poor management, insufficient capital, marketing issues, poor leadership and facilitation, lack of trust, and poor access to finance. The clusters also face difficulties with high levels of illiteracy, ill health, poor support networks, remoteness and poverty. Any one or a combination of these factors can lead to an agricultural cluster failing.

The facilitators identified cluster members limited social skills as a reason for cluster failure. The facilitators highlighted the importance of early social skills training after cluster inception to introduce topics such as conflict resolution, values and self-discipline. These were introduced early to every new cluster to encourage sharing of information and open discussion between members in anticipation that problems and solutions would be shared. Cluster members who benefit from the association are those with social skills and equipped to lead the cluster. Altruism and respect for the commons dilemma by these cluster leaders is required for sustainability.

Table 60 is a list that summarizes the key issues that emerged from the data and the literature review for cluster success. This table is compiled and synthesized from the data and literature reviews presented for the five categories in chapters’ four to eight.

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Table 60: Conditions that improve agriculture cluster sustainability

Category Conditions that improve cluster sustainability Embed the cluster within the Local Government Units (LGU); Register the cluster; Include the LGU in all new projects; Build a forum to access member skills, networks and resource; Create cooperative competition Social between cluster members; Strengthen and enhance the support network; A cohesive cluster will ‘spiral-up’ and attracts other beneficial development resources; Discipline and commitment of members; Trust and transparency of management; Politically neutral. New mobile and immobile investments properly designed to fit within the cluster strategic goals with a Physical realistic budget to purchase and maintain Clusters are land stewards and community-based resource managers guided by agreed Land-Use Plans for more efficient resource use and conservation of ecosystems; Improved biosecurity and biodiversity Natural protection by integrating into the government LGUs as early warning of any ecosystem threats and change; Disaster Risk Reduction (DRR) strategies planned and implemented. Professional leadership that adapts to cluster growth or perturbations; The cluster is a forum for transparent and open knowledge sharing leading to innovation, risk sharing, and adoption of ideas; Value chain approaches implemented for grower-marketer-retailer collaboration; Branding and image creation; Improved Human market access; Knowledge of postharvest (grading, packing, processing, value-adding); Knowledge of pest, diseases, IPM, ICM, and GAP; Fast access to market information; Innovation; Empowered members and cluster leaders. Professional financial management; Forum to share risk and uncertainty; Provides ‘agglomeration’ economies of scale; Potential to lower the cost of inputs and services; Indirect access to subsidised inputs Financial (from donor assistance programs); Access to finance through the cluster organisation; Good relationships with financiers; Crop insurance; Line of credit aligned with cluster requirements.

The list of success factors highlight that a sustainable agricultural cluster is professionally managed, cohesive and disciplined. This internal strength of the cluster attracts other resources and services to spiral-up development.

2. How can complex agricultural cluster data be effectively utilized and transformed into a planning instrument to benefit the sustainability of SHFs in the southern Philippines?

The objective of the study was to understand an asset-based approach that could be applied to a ‘grass-roots’ agricultural cluster organization that provides leadership for livelihood improvement for cluster members and family they can sustain at their local level. The Sustainable Agriculture Cluster Framework (SACF) was developed from the results of the study and illustrates the conditions for sustainable clusters and the influences on the cluster from perturbations, policies and laws. The SACF is a framework designed to illustrate the conceptual understanding of the conditions, assumptions, and limitations within which the agriculture clusters operate in the southern Philippines. It is a practical tool that can identify the strengths and weaknesses of a cluster and provide a level of prediction on the impact of various interventions.

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The SACF is not a model of the dynamic and complex environment of the agricultural clusters. It is limited to providing a useful understanding of the interactions and influences rather than an exact mode of action of these influences that a model could provide. The framework is preferred in this context as every cluster and their environment is unique with multiple variables of objective and subjective data resulting in a model becoming imprecise. The framework provides the flexibility to add, subtract or provide emphasis to variables as required for each situation.

The building blocks of the SACF are the twenty-three factors and five categories. Balancing these categories and factors and building capacity of cluster members will improve sustainability of clusters. The factors identified in this study were collated and included into the existing Sustainable Livelihood Framework (LF) to provide a framework with a focus on agricultural clusters in the southern Philippines. The benefit of the SACF is the visual representation of the cluster environment that assists the identification of strengths and weaknesses, development of strategies, and prediction of outcomes from any intervention. There is a lot of data to collect to build a rigorous framework and it is the quality of the data input that is reflected in the quality of the framework’s application.

The twenty-three factors are the data level entry points that are grouped and analysed into categories within the SACF. All the factors and categories are referred to as Livelihood Categories that influence each other, illustrated in Figure 41 SACF-Factor Level. This builds into the SACF illustrated in Figure 40 to show the perturbations and transforming structures and processes that influence these Livelihood Categories.

The research question delves into how the data can be effectively utilized into a planning instrument to improve the SHF cluster sustainability. During the data collection, SHF FGDs were asked to self-assess their cluster maturity on a five-point scale. Following an analysis of data, a correlation was identified between the cluster maturity stages and the cluster’s obstacles to growth. This was broken down into the stage of cluster maturity, categories and factors and aligned with the type of capacity development activities to introduce; Table 54 to Table 57. These tables are intended as guidelines for facilitators to translate the data collected into practical activities that support the sustainability and growth of a cluster. Since every cluster and their environments are unique these tables can be adjusted to suit the situation. The effectiveness of the interventions identified from the tables relies on the data collected, interpretation, and translation into cluster activities.

The flexibility is required because unexpected results will arise. During this study an unexpected result was the lack of resource management understanding and capacity building within the clusters

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and the facilitators. Working agricultural land for food production has a close interaction with the natural environment and resources. It is not only the efficient use of natural resources that is important but also maintaining a balanced interaction between the working lands and the ecosystem is critical for food and nutritional security (FS&FNS). SHF and clusters need to manage their interaction with the natural environment to ensure their sustainability. Land-Use Plans that incorporate efficient use of resources for working lands to manage and conserve the ecosystem will strengthen the cluster. The process of developing Land-Use Plans promotes land stewardship and conservation of the local biodiversity. It also provides a process for managing early warning systems for biosecurity and ecosystem changes. The SHF clusters daily working and observing the land are the most appropriate organisation to engage as resource, biosecurity, and biodiversity managers. Their observations provide important planning information for government agencies. This feedback system builds a closer relationship between the cluster and the government and supports the important activity of bridging closer relationships with Local Government Units. Sustainability of agricultural clusters is not sought through any political movement of associationalism that seeks to move society affairs to associations. All facilitators and cluster FGDs actively sought close relationships with their local government. Unlike associationalism, agricultural clusters within this study valued the efforts of their local government and held no desire or intent to usurp these roles.

Another unexpected observation was the importance to sustainability of cluster member discipline. The clusters that self-assessed their maturity to be on a growth phase expressed a positive outlook and all had a disciplined approach based on either religion or an army-command structure. The latter was ex-terrorist New People Army fighters returned to their farms to operate as a collective. The clusters with religious leadership said it was the fear of God that motivated the members. The army-command clusters appeared to have a respectful fear of their leaders that kept them motivated. Collective action requires discipline and is particularly important during the early stages when the members are not familiar with the overall structure and objectives. Whilst it is questionable if religion and army command hierarchy has sustainability, the observations were that both systems successfully developed new clusters and were available, understood, and easy to implement into cluster in the southern Philippines. As the clusters mature, the leadership and discipline approach should change to a secular business management format that delegates tasks and responsibility and bringing a focus on the farming enterprise.

The focus on farming as an enterprise was also a revelation in this study. SHF FGDs frequently mentioned their problems with access to finance. One facilitator mentioned the SHF did not treat 173

farming as a business enterprise and carried an entitled dependency for government ‘dole-outs’. Too often the government ‘dole-outs’ and asset grants were not aligned to the development needs of the locale. Discussions with SHFs and the facilitators revealed investment decisions were not often planned and more often opportunist situations that arose with a new donor project. The results indicated clusters would benefit from financial management training that included access to finance and investment capital that includes modules on the nature of the loans, timeliness, and repayments.

SHF behaviour change towards investment and farming as a business enterprise takes time to build capacity and alter the attitude of ‘coping’ with small risks for small changes where gains are largely predictable, and losses are not devastating. Larger gains involving transformational change will only occur when the cluster members are confident the risks can be managed. This takes time and it emerged that both facilitators and SHFs concurred three-year project terms were generally too short for transformational activities and behavioural changes. This suggests an opportunity for donor economic rationalists to embrace the qualitative measures of cluster development and longer timeframes for transformational change.

Hofstede et al. (2010) identified the Philippines as a culture with a strong collectivist culture that was observed in the SHF FGDs. This has been quantified with a Power-Distance Index (PDI) which means for a Philippine cluster individual member, they are more accepting of their subordinate positions than compared to cultures. This is good for cluster cohesion but suppresses new ideas and innovation. This attitude referred to as the ‘spiral of silence’ was observed during the field work when SHF FGD participants were reluctant to express opinions to avoid being regarded as different or outcast from the cluster. The implications are that cohesive clusters are possible within the Filipino cultural context; however, innovation requires trust and good leadership to develop within these Filipino clusters.

Contribution to the established body-of-knowledge

The story of SHFs and agricultural clusters that emerged from the data contributes new and confirms existing knowledge and understanding of collective action for sustainable clusters in the southern Philippines. This study explores the factors and characteristics for sustainability of SHF’s collective action to realize benefits that include livelihood improvement, developing FS&FNS, healthy communities, increasing income, strengthening biosecurity and enhancing ecosystem management of their local environments.

The study shows the important role of agricultural cluster facilitators. Generally, poorly funded and operating in remote locations the expectations on facilitators to deliver on livelihood development

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goals is challenging even when provided adequate levels of support. Reversing the high failure rates and improving sustainability requires facilitators with management skills to develop strategies and systems, technical skills to improve production, and social skills to develop cohesion. They also need skills to negotiate with a range of external service providers. No facilitator interviewed had all these skills and they were either from a technical production background or community development discipline. Both groups recognised their own limitations and the need for both disciplines for cluster development. Figure 29 in chapter five was created by combining data from the facilitator interviews to illustrate the management process facilitators follow in building a sustainable cluster. Delivery of capacity building to an agricultural cluster through facilitation is a high cost per farmer without extra resource costs. Support to fill these facilitator capacity deficits was therefore rarely available with the constraints on budget and the remote cluster locations.

Facilitators agreed with the literature (Keeley 2007) that sustainability of the cluster required harmonious relationships and the sharing of norms and values across their network to increase the potential for collective action and innovation. The facilitators’ focus was on developing cohesion within the ‘Us’ group (APLAFA, DavaoPrivate1, CNGO1) which extended beyond the cluster members and included the cluster member’s filial, extended family, unrelated close relationships, and the village council. The facilitators role as creating cohesion agreed with the literature (Senge 2006) that an attempt to empower people in an unaligned organisation is counterproductive.

This ‘Us’ group provides the SHF with economic support, health and general care. The community barangay generally has an agricultural brigade providing a range of financial and project support. Projects will fail without involvement of the community (BoholLGU1). Developing the ‘Us’ group is important for sustainability that was confirmed by the facilitators (DAR1, DAR2). This development involves establishing trust and intrinsic motivation in cluster members together with a cluster leadership that develops and changes as the cluster matures, which is difficult even for professional management.

An interesting correlation that took the average age of clusters and their opinions showed the older farmers said they were building their cluster and were optimistic while younger members viewed their clusters as in decline or collapsing appearing more pessimistic. This is an interesting management issue to ensure the young and older members share the same view of the reality of their cluster development.

The importance of trust for collective action to occur was confirmed in the literature (Deutsch 1973; Arrow 1974; Schurr & Ozanne 1985; Gambetta 1988) and by facilitators for overcoming risk

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aversion, the ‘wait and see’ attitude, and without trust nothing would happen (DAR2). The SHF specifically mention financial trust within the ‘Us’ group that if broken quickly erodes the cluster trust bank. The difficulty for facilitators and leaders was measuring trust. The researcher suggests a simple method of identifying trust into either contractual, competence, or goodwill to assist leaders and facilitators develop cohesion and relationships for collective action.

The facilitators next objective was to develop a bridge between the ‘Us’ group with ‘Them’, who are the external support network of service providers from the private, public or Non-Government Organization (NGO) sectors. The important traders who linked the cluster to the markets were in some areas predatory and adversarial in their negotiations and used the power imbalance to manipulate purchase prices. In this environment there is no opportunity for facilitators to change attitudes beyond their ‘Us’ group and can only look for alternative routes to markets. Figure 30 in chapter five was created from the data to show how the ‘Us’ group is in a dynamic relationship with modifiers that influence their values and relationships and effecting their capacity and outcomes. Building the capacity and empowerment of the ‘Us’ group is a process to address the imbalanced trading environment. This is linked into the SACF under the human category motivation factor.

Linked to the skills of the facilitators is the general leadership of the cluster selected from the cluster members. SHF lack the management skills and do require mentoring in this important role. Figure 31 combined data from the study with reviewed literature to illustrate how cluster leadership should evolve as the cluster and cluster members develop. These figures help build the capacity of facilitators and contribute to the sustainability of a cluster.

Support networks are important for the organization leadership and cluster sustainability (Lee 2009; Sandín M. P. & Pavón 2011). Well managed collaborative action with cluster business partners can lead to the integration of business practices, and the success of the cluster is linked to the capacity and involvement of local institutions (Cernea 1987; Ho et al. 2002; Kouvelis et al. 2006). The capacity and quality of partners was identified in this study as important through a self-assessment survey during the SHF FGDs. Clusters close to a city had access to more service providers; however, a self-assessment by cluster members showed the cluster development was correlated to quality of the service and not the number of available providers, shown in Figure 15.

Within the group of service providers, the LGUs were regarded as the key partners since they are local and permanent organizations. This was confirmed in the literature (Jennings 2000), and also by facilitators and SHF FGDs (BoholNGO1, DAR1, DAR2). Emerging from the data was the difficulty facilitators and clusters have managing the degree of integration with their LGU. The

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local politics in the southern Philippines is challenging for a local organisation. A cluster aligned to the wrong local party administration could fail (BoholNGO1, CDONGO1) as local LGU support is withdrawn. The researcher recommends clusters operate at a political ‘zone of maximum benefit’, shown in Figure 18. This zone sits between the apolitical low risk point of no LGU support and the high-risk politically activity extreme where support could be in the form of ‘bouquets or brickbats’ depending on the political party in local administration. The cluster sustainability will be served best by positioning themselves between these two extreme points.

Building an innovative cluster requires the cluster members to participate and share knowledge and experience. The Philippines is recognised as a collectivist culture where loyalty to the ‘group’ over- rides most other societal rules (Hofstede et al. 2010). This collectivist cultural characteristic supports the benefits that can be realized from collective action through agricultural clusters. To be successful a cohesive group is required and The Circumplex Model that maps family relationships (Olson 2000) was adapted to illustrate cohesion, adaptability and communication within a cluster, shown in Figure 20.

Leadership was emphasized by both facilitators and SHFs as important for sustainability. The leadership style needs to change as the cluster develops. The Situation Leadership Model, shown in Figure 22, illustrated the style of leadership required at different organization development stages (Hersey et al. 2008) and was merged with the Circumplex Model, shown in Figure 20. The combined model illustrated how unbalanced clusters require higher levels of task directive leadership. When cluster members reach a reasonable level of competence the leadership style should provide higher levels of supportive and relationship behaviour management.

The facilitators worked with clusters over a short project period, generally from six months to three years. The challenge is to create a functioning sustainable cluster within the short project period with a group of SHFs who are independent, lack management skills, low literacy, and who joined the cluster only for free ‘dole-outs’ and other project giveaways.

If the cluster lacks a natural strong leadership (LeytePrivate3), then facilitators look to impose an authoritarian management style for external motivation and discipline on the cluster members to achieve the project objectives (DavaoPrivate2). Whilst rigidity can instil discipline into the cluster members and force collective action, a rigid structure can lead to problems by contributing to the ‘spiral of shyness’ that creates an aversion to voice different opinions from a fear of leading to isolation or exclusion that stifles freedom of expression and innovation (Noelle-Newmann 1993; Olson 2000). The cluster members expressed their shyness (CALCOA) as well as facilitators who

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recognise the problem and implement training in relationship and social skills development. The Philippine collectivist culture with a high Power-Distance Index means individual members are more accepting of subordinate roles than compared to other cultures (Hofstede et al. 2010). Good leadership in combination with a high PDI cluster is likely to improve sustainability. Facilitators viewed an authoritarian secular or sectarian discipline as useful during the early establishment of a cluster as a quick management structure for project activity implementation to meet their project or donor milestones.

Religious discipline from a fear of God (TUVEFA) and the structure hierarchy of ex-fighters from the New People’s Army terrorist group (Mambog 1 & 2) offered management models for the facilitators to implement as a guide to motivate cluster members (DavaoPrivate2). Implementing a secular or sectarian discipline on clusters with good leadership is intended to improve poor attitudes, change values, and motivate the members. This management view of the facilitators is reasonable given the urgency to instil discipline early and the literature (Sawkins et al. 1997; Iannaccone 1998) confirmed a positive correlation exists between religion and the creation of an individual’s internal moral enforcement mechanism for self-discipline, hard work, self-denial and planning for the future that are embedded religious ethics and codes. This study confirms the discipline from the ex-terrorist hierarchy is like the religious discipline and achieves similar outcomes for the cluster. This is a reasonable approach for facilitators to implement a quick management system at cluster inception; however, the study created a combined Circumplex- Situational Leadership Model shown in Figure 23 that indicates when cluster members reach a reasonable level of competence the leadership style should provide higher levels of supportive and relationship behaviour management.

The facilitators described motivation as a problem that was not well understood but damaging to sustainability without strong leadership to ensure members contribute to the cluster development (LeyteLGU2, DAR1). Motivation is an interaction between the perceptions of the extrinsic environment and intrinsic perceptions of the self (Ryan & Deci 2018). An illustration adapted for clusters is shown in Figure 24. This diagram offers a tool for facilitators and cluster leaders to understand motivation of their cluster members. The extrinsic motivators and directive leadership may not be enough to influence the socio-cultural modifiers that act on the individual’s motivation that requires more supportive styles.

A cluster that is cohesive improves the probability of successful collective action, innovation and cluster sustainability (Keeley 2007). Financial management benefits from the SHFs willingness to

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take greater investment risks for transformational change by risk-sharing with other cluster members. This study showed the benefits of a lending system managed by the cluster that was also a key reason for a cluster collapse if mismanaged. Accessing finance through the formal banking sector is difficult for SHFs and a high lending risk for banks. Creating of a lending system through the cluster treasury does give easier access to funds but the study showed lending risks remained.

Collective production and marketing allows for the consolidation of produce that improves the bargaining power of the SHFs, reduces transaction costs, and improves competitive advantage of the cluster that an individual SHF is unable to achieve (Mentzer et al. 2001; Muncker 2002). The SHFs were aware of their marketing knowledge limitations and that their ignorance is costly (Biasong). Facilitators with agricultural technical training lead seasonal training modules for the farmers to improve production and marketing. Facilitators from community development disciplines sought external trainers to conduct similar modules. The facilitators confirmed the difficulty to find sustainable market niche for cluster products (DavaoNGO1) because of the low value commodities that clusters generally specialise (Gálvez-Nogales 2010).

Frequently mentioned by both facilitators and SHF FGDs were the new project ‘dole-outs’ that motivated the SHFs to join a cluster. Dole-outs can be beneficial and damaging. They are beneficial from a deficit-based approach by supplying a development need but also damaging from an asset-based approach that is people-centric and builds on the strengths of existing assets. Providing continuous assistance creates undesirable dependency and entitlement (Barrett & Maxwell 2005; Barrett 2006; Lentz & Barrett 2013) which facilitators tried to counter with asset- based approaches that develop the farming enterprise (CDOPrivate1, LeytePrivate3). Tailored dole-outs are still needed to support individual cluster strategies.

In summary, this study confirmed the following is important for sustainable agricultural clusters:

1. Quality of facilitators and service providers 2. Group cohesion and other factors for strong social categories 3. Creation of market access and trading options 4. Local support networks 5. Ongoing technical production and marketing capacity building

This study identified the following as new knowledge on agricultural clusters:

1. In the absence of strong leadership, introduce a management system that instils discipline on cluster members during the initial stages of the cluster development

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2. Leadership moves from directive to supportive as the cluster members grow into their roles and responsibilities 3. Facilitator process diagram (Figure 29) 4. Cluster ‘Us’ group includes family, close community, and Barangay Council (Figure 14) 5. Interface between the cluster and local politics ‘zone of maximum benefit’ (Figure 17) 6. Simple measure of trust divided into contractual, competence, and goodwill to gauge trust- level change within a cluster (incorporated into Figure 31) 7. Combined models of Circumplex and Situational Leadership to illustrate the changing style of leadership required at the different growth stages of the cluster (Figure 34) 8. Cluster Maturity Framework (Figure 38) 9. Sustainable Agricultural Cluster Framework (Figure 40)

Research Quality

A standard quantitative study views the world as made of observable facts and measured from a perspective of positivism or a scientific paradigm using a mathematical process to express the final result in statistical terms (Charles 1995) which is used to evaluate the quality of the research. To evaluate a theory in constructivist qualitative research requires a different approach. In this study, the evaluation of the quality of the resulting theoretical framework is based on a criterion developed by Charmaz (2006). This criterion has four main components of credibility, originality, resonance, and usefulness.

1. Credibility requires the research to sustain claims with range, depth, and volume of data. This data can then be assessed by experts in the area of SHF development and agricultural clusters for independent opinions on these statements. However, in a Constructivist GT approach, the researcher’s constructed image of reality (Charmaz 2000) has the potential for the same data set to have different interpretations (Greckhamer & Koro-Ljungberg 2005). Therefore, the credibility of the study relates to transferability of the researcher’s interpretation amongst peers within the sphere of SHF agricultural cluster research (Lincoln et al. 2011). There is also the potential for the researcher to ‘force’ the data or data interpretations using the Constructivist GT methods where a mutuality with the research participants creates possible researcher influence (Charmaz 2006). In this study, the researcher managed this tension with reflexivity, abduction, induction, deduction, and constant comparisons to interpret the theoretical framework presented in chapter nine.

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2. Originality requires the researcher to provide new factors or categories that give new insights and interpretations which give the work relevance. In this study a range of new factors were identified that were used to create a framework for agricultural clusters. 3. Resonance refers to the categories in the study reflecting the experience of the participants with reasonable explanations. Resonance also identifies the relationships and connections between the individual SHF, clusters and support networks which was important to recognize in the development of the framework. 4. Usefulness refers to the utility of the results in daily life. In this study the theoretical framework on agricultural clusters has direct application towards the planning, design and evaluation of agricultural clusters. The interpretation of the data and the resulting theoretical framework add to knowledge and stimulate recommendations for new research outlined in chapter eleven.

Limitations

The first limitation of this study related the collection of data from the field visits that curbed the opportunity to pilot test the questions, research methods and framework. The field data collection was constrained by time, budget, security and language barriers. This study was self-funded while the study researcher was in full-time employment. Time and travel expenses were managed within a limited budget and availability of leave from full-time work for both the study researcher and the research team engaged during the collection of SHF FGD field data. Security within the southern Philippines placed a limit on time in any one location and the range of site visits to exclude conflict areas. Limited language skills required the study researcher to rely on the research assistants during the SHF FGDs for translations and briefings. The process was slowed further by the extra step of translation of transcripts before coding could commence. The facilitator interviews and SHF FGDs did overcome these challenges and reach a point of saturation during the allowable timeframe and budget.

The issue of time created a further limitation with the development of trust during the interviews and SHF FGDs. In the SHF FGDs this was overcome by creating a relaxed environment within a comfortable space and supply of soft drinks, snacks. The local research assistants were also valuable and encouraged open conversation.

A second limitation was the coding was undertaken by one individual, the study researcher. There was a lot of transcripts to code and multiple coders would have assisted meeting the analysis deadlines but would also create an issue with inter-coder reliability.

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Thirdly, the difficulty managing and analysing the data systematically and avoid being overwhelmed. Diverging and tangents were a constant threat during data analysis rather than convergence of the data into the single theoretical framework. Lacking the quantitative gauges, the parsimony of the framework is threatened under a rich volume of data and requires peer reviewing and further testing.

Finally, every cluster in the southern Philippines examined in this study was unique. The SACF was developed to be a flexible framework to assist in understanding the influences and vulnerabilities of any of these unique clusters. Application of the SACF outside of the southern Philippines should proceed with care. Building a cluster framework that is germane to other regions using the Constructivist Grounded Theory approach will be time consuming, involves a large volume of data containing a lot of background noise, knowing when the categories are saturated is difficult, and requires a high level of experience with SHFs from the researcher to identify category relationships and links.

This study is one interpretation of the data from which a theoretical framework developed. Ideally, the assumptions and theory should be validated in a focus group composed of experts in the field of agricultural clusters (Charmaz 2006) and the new frameworks field tested.

Summary

The increase in SHFs with secure tenure on small land packages is driving the need for collective action of SHF that benefit their livelihoods and ensures their sustainability on the land for national FS&FNS. This chapter answered the two research questions on the conditions that can improve agricultural cluster sustainability and managing the high volumes of data. The study has identified conditions that lead to both cluster failure and cluster success. This information guided the development of the Sustainable Agricultural Cluster Framework (SACF) and the aligned cluster maturity activities.

The study identified that successful clusters have strong social category factors. Relationships are a critical factor to manage the commons dilemma and the balance between self-interests and long- term best interests of the cluster. The factors within the social category underpin and attract other categories and factors; shown by Emery and Flora’s Spiralling (2006a) that support cluster sustainability. To achieve an effective and efficient collective action approach requires solidarity and cohesion of cluster members. Three models that describe the commons dilemma8 highlight the

8 The Tragedy of the Commons (Hardin, 1968), The Prisoner’s Dilemma Game (Dawes, 1973), The Logic of Collective Action (Olson, 1965) 182

‘paradox that individually rational strategies lead to collective irrational outcomes’ (Ostrom, 1990, p5). The decisions of cluster members are ‘predictably irrational in ways that defy economic theory’ (Appelbaum, 2017). This emerged from a SHF FGD repeatedly, but one statement from a SHF summarized sentiments that some decisions were not based on neoclassical economic theory when discussing the price efficiency from machinery:

‘they don't want mechanization...because when its manual labour, everyone is happy.’ (LeyteLGU2)

The statement above from LeyteLGU may be a deflection to justify avoidance from the difficult reality of a shared investment and management of self-interest. The statement still suggests relationships and community harmony are important considerations in the agricultural cluster’s decision process to ensure that inclusion and collaboration thrive.

In chapter four the SHF FGDs described the cluster, family and close community as ‘Us’ and everything outside as ‘Them’. This aligned with the bonding social capital and bridging/linking social capital (Gittell & Vidal 1998; Putnam 2001), and which bonding and cluster cohesion is regarded as the antecedent to bridging and linking social capital (Coleman 1988; Putnam 2001). Facilitators were all conscious to develop bonding social capital as an initial activity.

The cognitive and structural factors of social category proved difficult to distinguish, measure and appropriate towards cluster sustainability. Structural factors were the social network, politics and religion. The cognitive factors refer to more intangible factors such as trust, values and attitudes which are difficult to measure and assess.

The development of Human Capital is predicated on the Social Capital relationships that is a resource to build skills and capacity (Machalek & Martin 2015). The Physical, Natural, and Financial Capitals are associated with skills, knowledge and capacity development activities that contribute to Human Capital. These Capitals link to the Social Capital which assesses the capacity for collective management and governance of all the Capitals common’s dilemma.

Some of the unexpected findings were highlighted that included the need for upskilling in resource management, the importance and different approaches of implementing cluster discipline, and the behavioural change required by SHFs to treat the cluster as an enterprise that requires longer facilitation time to be effective. The chapter ended with a discussion of the limitations of the study that covered the challenges of data collection, analysis, and the chosen methodology which confines the results to the SHFs operating in clusters in the southern Philippines.

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Chapter Eleven: Conclusion

Conclusion

The broad objective of this study was to understand why agriculture clusters experience a high failure rate in the southern Philippines and what conditions make them sustainable. During the data collection phase of this study, the participating facilitators and SHFs gave a universal endorsement for SHF collective action through agricultural clusters and the benefits this brings to their livelihoods.

Agricultural clusters are a unique type of worker cooperative where the management is democratically elected by the members. Most of the clusters share members equipment, finances, land and time. They do not jointly own anything which makes it easy for members to leave or disband the cluster completely. From the study, it emerged that some clusters were not economically viable, but members still met regularly and supported the cluster. This suggests clusters are somewhere between a cooperative for economic benefit and a collective for social support or other common interests.

The ‘agglomeration’ economic benefit for SHFs to join a cluster drives government policy and support programs for facilitated agricultural clusters. The facilitators and SHFs mentioned financial improvement and access to finance as a benefit and main consideration for joining a cluster. However, the decisions are not based on neoclassical economic theory of their present conditions but instead a considered balance between slow emergent properties that affect attitudes, culture, environment, livelihoods and other emergent dynamics that are captured within the five categories of this study; social, human, financial, physical, and natural. The challenge for SHF is filtering the background noise and prioritizing the data needed for their decisions. This is the same challenge for any researcher studying SHF agricultural clusters.

Government support for the SHFs and sustainable agricultural clusters is important for FS&FNS, management of biodiversity, biosecurity, local resources and stability of rural communities. SHF agricultural clusters are embedded within the environment and local culture and the factors for sustaining clusters is reflected in the twenty-three factors identified in this study. Strengthening and enhancing the integration of the cluster within their environment will improve sustainability. For the policy makers and donors there is potential to create a level of entitlement and expectation in some communities if programs are overly generous and raise expectations. An inability to meet

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these expectations was shown in the southern Philippines to translate into increase support for local anti-government insurgent groups that destabilise the area and obstruct development.

The terrorist groups offer an alternative governance hierarchy that is structured, authoritarian, and easy to understand. The SHF clusters composed of ex-terrorist members and which retained the authoritarian structure instilled a discipline and motivation on the cluster members that supports sustainability. Similarly, other clusters using religious discipline to motivate appeared sustainable in their early stages of development. Authoritarian motivation for collective action through religion or ex-terrorist command structure are systems existing within the area and easily adopted by cluster leaders. Cluster members do accept these authoritarian structures. Philippines culture has a high Power-Distance Index (PDI) which means for each cluster, individual members are more accepting of their subordinate positions than compared to cultures with a lower PDI. Sustainability of these systems as the cluster develops is questionable. The cluster capacity changes over time and the neutrality of cluster leadership on religious or political matters gains more prominence both internally and externally. Political neutrality was highlighted by cluster members as important in regions where family dynasties control the local administration. Good leadership is required to manage these political and external relationships and can adapt and grow as the cluster capacity develops.

The Philippines has the seventh fastest rate of global deforestation due to the encroachment of human activity into the natural environment. The conversion of forests into agricultural land and the greater intensification of production has the potential for the gradual erosion of the ecosystem and local biodiversity. This is a major threat to the unique biodiverse ecosystems in the Philippines. Climate Change is also threatening both the ecosystem and food and nutritional security (FS&FNS). The increase production to meet the FS&FNS will increase CO2 emissions that will disrupt the weather and damage production. This Catch-22 situation largely effects the most vulnerable and poor SHF households.

One facilitator interviewed expressed frustration that after decades of farmer field schools and capacity training on the same subjects the SHFs were not changing practices or improving their livelihoods. He believed the SHFs lacked motivation with a work ethic. He believed this was an innate cultural trait facilitators cannot change. While there is an indication that different Indigenous People (IP) cultural groups displayed different attitudes towards their production activities, this study concluded that it was an over simplification to focus on an innate attitude. Support networks can create attitudes of entitlement and dependency if not balanced with activities ensuring

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ownership and responsibility rests with the SHFs. The SHFs ‘coping’ strategy is a risk averse response to cope through difficult times and rebuild after setbacks. Coping involves investing in small risks for small changes where gains are largely predictable, and losses are not devastating. This reflects the SHFs poor and vulnerable status. Transformational change of a SHFs farming enterprise involves higher risks that could result in a loss of their only income source devastating the livelihoods of their whole family. To overcome SHF risk aversion and their coping strategies, implementation of transformational changes requires a program to share the investment risk between the donors and SHF. The risk level for SHFs needs to fall within their coping level. The lack of land ownership suppresses individual investment adding to lack of motivation to develop. Therefore, a general statement that SHFs will not change because of poor attitude is not correct and solutions are possible with a good understanding of the individual SHF and their cluster.

This study highlighted the enormous volume of data on individual agricultural clusters that could be collected given unlimited resources. The challenge for researchers with limited resources is to organise and prioritise this volume of data into a useful management tool. To meet the data challenge, I designed the study to take two perspectives of agricultural clusters to understand the key factors for cluster sustainability. The first was from the cluster facilitators in the southern Philippines who provided both general and specific insights across multiple clusters. The second perspective was from the agricultural cluster members who provided insights into their own unique conditions. This generated a rich source of data that that was compared and analysed using a coding hierachy that stepwise grouped the codes and eventuated in five categories.

The twenty-two facilitator interviews and the sixteen SHF FGDs produced a rich data set. After the background noise was filtered out, twenty-three key factors that aligned under five categories were identified. The emerged data evolved into the Sustainable Agricultural Cluster Framework (SACF) that now provides a level of prediction for facilitators and policy makers when making decisions on agricultural clusters.

The evolution of the SACF originated from the Sustainable Livelihoods Framework (LF) which was identified as a framework that could be adapted to illustrate the influences on SHFs. The new agricultural cluster framework replaced the LF Livelihood Assets with the SACF Livelihood Categories which are developed and supported by qualitative and quantitative data input into the factors. The SACF is flexible and factors can be added, strengthened or enhanced to build a more robust framework to describe specific situations.

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The SACF is a practical framework for cluster facilitators to manage data, identify cluster activities, and a tool to understand the potential mode of action of policies within the transforming structures, and the interventions from policy makers, donors, and other service agencies. The mode of action of perturbations can also be observed and predicted within the vulnerability context that shock and transform the cluster. The strengths and weaknesses of a cluster are understood by interrogating the factors and the insights formed from the qualitative and quantitative data that goes into building a SACF for a specific cluster. The framework is an instrument to plan and describe the range of factors and the spiralling influence for cluster development and sustainability.

Those who need to understand the sustainability of agricultural clusters are increasing. Government continues their policy of land distribution to smallholder farmers requiring policies are in place to ensure FS&FNS, biodiversity, strengthen biosecurity and other support services are available to SHF land beneficiaries. Other groups needing to understand clusters are donors, private sector agriculture companies and service providers who can invest in clusters as a vehicle for information dissemination and food system transformation, environmental groups concerned with the interface between working lands and natural ecosystem, and the SHF who want to make the right decisions for the improving livelihoods of their family and community. SHFs are vulnerable and face limited opportunities for livelihood improvement but perform an important national FS&FNS functions. The SHF local food systems is people centric and can adapt to threats and perturbations and continue to supply food and support rural livelihoods. The capital intensive global conventional food system built around cost efficiencies will not adapt to threats such as Climate Change as quickly as the SHFs, but both systems are needed to ensure national FS&FNS.

The SHFs are best placed to be the stewards of the land and provide the stabalizing force to maintain food productivity balanced against the destabalising forces in the ecosystem that maintain diversity and opportunity. The clusters for food production and the interaction with the environment requires management that grows with the cluster and retains flexibility to be adaptive and experimentive. This will improve the likelihood of livelihood improvement and sustainability of SHF agricultural clusters.

Recommendations

The primary recommendation from this study is the utilization of the Sustainable Agriculture Cluster Framework (SACF) as an instrument to support the sustainability of agricultural clusters in the southern Philippines.

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The study identified that facilitators were crucial for identification of transformational change and implementation with SHF clusters. Many of the facilitators were poorly funded with limited support and resources. Consideration for improved conditions for this hard-working group would be welcomed since they are crucial to successful and sustainable clusters.

Further research can strengthen and enhance the SACF and the cluster maturity activities as practical tools for smallholder agricultural cluster development by undertaking the following studies:

1. Undertake an in-depth case study over a greater time period of identified successful and failing clusters to understand their spiralling trajectories, interactions of variables, and clusters decisions that are made within the SACF. 2. Study the relationship and influence occurring between the factors and categories for development of the SACF and ‘spiralling up’. 3. Investigate the influence of cluster social capital on decisions and the relationship to institutional bricolage and spiralling for development interventions. 4. Pilot a replication of a government FS&FNS model in Brazil. In this model, SHFs act as suppliers of food directly into nutrition and supplementary government feeding programs and thereby achieving a convergence of agriculture, FS&FNS, and nutrition.

Final Word

The SACF is a framework that provides insights that can guide the planning and development of the clustering in an original approach for the southern Philippines agricultural sector. The framework aligns with intervention activities in the Cluster Maturity tool to create a practical instrument for cluster development. Both the SACF and its practical application are original. The Constructivist Grounded Theory is also an original methodology implemented in the southern Philippines for research into SHF agricultural clusters.

Future of farming in the Philippines will be challenging. The facilitators and SHFs expressed concern with access to water, fertilizer and access to working lands were threatened by changes in weather, pests and diseases. Poverty and the pressure to ensure food and nutritional security encroaches on the forests and threatens the unique biodiversity of the Philippines. Cluster members have a unique understanding of their local environment and building on this existing knowledge to recognize the benefits of natural resources for food production and environmental trade-offs will improve cluster sustainability. More can be done with a wider brief for facilitators to promote

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biodiversity, biosecurity, land stewardship, and an integrated approach to agricultural land and resource management that extends beyond the boundaries of the SHFs working land.

The solution for the future of secure food systems will involve functional SHF agricultural clusters of various sizes and concentrations interspersed with conventional farming systems across the landscape. The SHF local food system and the global conventional system both should be supported for national FS&FNS and managing the human-environment interaction. This will provide a resilient system for food production and ecosystem management

Practical solutions are still evolving to the three Anthropocene challenges of FS&FNS, adapting to climate change, and protecting the ecosystem. Agricultural clusters are one part of the solution in the southern Philippines with potential application in other countries to address these challenges.

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Glossary

AC Agricultural Cluster A mini village 'drop-off' centres or consolidation areas. Also used and termed as a trading Bagsakan post in some areas

A village. A local unit of government structure; all municipalities and cities are composed of Barangay barangays. These can be further broken down into smaller housing groups called Sitio.

Bayanihan The spirit of unity and joint effort for the benefit of the community Bodega Storage room, warehouse Bolantero Farmer/retailer Bombay Informal financier providing credit to individuals Bukag Circular baskets made of indigenous materials such as rattan and bamboo Carenderia Small eatery CARP Comprehensive Agrarian Reform Program CCF Community Capitals Framework CMF Cluster Maturity Framework Compradors Buying agents CPR Common-Pool Resources interchangeable term with the common’s dilemma DA Philippine Department of Agriculture DENR Philippine Department of Environment and Natural Resources DFAT Australian Department of Foreign Affairs and Trade DFID Department for International Development (UK) Dicer/daiser Derived from the word 'merchandiser'. A middleman. dole outs Free tangible agricultural inputs provided to farmers by LGUs (fertiliser, seed, tools etc) DRR Disaster Risk Reduction Dumdum Farmers who assisted during planting are given priority to help harvesting ENSO El Niño - Southern Oscillation Index FGD Focus Group Discussion five-sixers Unofficial money lender with daily interest rates of 20-30% Free Rider A worker does not contribute an equal effort in the belief the collective action will occur Problem without their contribution FS&FNS Food Security and Food Nutritional Security GAP Good Agricultural Practices Gaya Copying GDP Gross Domestic Product GoP Government of the Philippines GT Grounded Theory Gulay Vegetables Habal-habal Motorcycle with extended seat hired to carry passengers or produce Hago Tiresome A system in which farmers display their vegetables by the roadside with intent to sell to Hapit-hapit passing traders (viajeros) or other passing buyers. Seasonal farm workers; performing farm labour either as an individual, group or family in Hurnal other farms Indigenous People Known as 'Lumads' in Cebuano language. Thirteen ethnic groups are currently recognised. (IPs)

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Karyador People who transport vegetables on horses' backs LF Livelihood Framework (refers to the DFID Sustainable Livelihoods Framework - SLF) LGU Local Government Unit LoP Life of Project Lumads The Austronesian indigenous ethnic groups in the southern Philippines Mañana Always delaying MAO Municipal Agricultural Office NGO Non-Government Organisation NIA Philippine National Irrigation Authority Ningas kogan Initially enthusiastic then stops NPA New People Army Buying at the farm-gate all the produce that will be sorted and graded by the buyer. Can also Pakyaw refer to providing a service on a 'piece-work' basis. Palay Rice PAO Provincial Agricultural Office PCIC Philippine Crop Insurance Corporation PDI Power-Distance Index PNP Philippine National Police Pole Vaulting A term used for trading outside of the contract R&D Research and Development Reseco Percentage deductions due to shrinkage in weight, wilting, and trimming of leafy vegetables SACF Sustainable Agricultural Cluster Framework SAFs School of Agriculture and Food sciences at UQ Sangguniang Barangay Council Barangay Sari-sari A small local retailer store that also provides miro-financing to local customers. SHF Smallholder Farmers SLF Sustainable Livelihoods Framework SLM Situational Leadership Model Suki Favoured treatment of buyers or sellers Tabo Peak market days A small 'irregular' spot-trader or agent earning a small commission for vegetables sold to a permanent trader. The term refers to the literal act of the agent touching the crates or sacks of Touch-move produce loaded onto horseback or habal-habal, as a way of claiming authority between the farmer and permanent trader/buyer. UQ University of Queensland Vaijeros Wholesaler/transporter VSU Visayas State University A small type of trader engaged in buying small quantities of vegetables for purpose of Warik-warik retailing in the nearby public markets. Also referred to as striker and commonly travel with the vaijeros.

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Appendices

Appendix 1: Ethical Clearance and Consent Forms

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School of Agriculture and Food Sciences

Ethical Research Application Form

Project title: Smallholder Agriculture Clusters

Location of research Start/ Finish February 2016 – May (e.g. institutions, Philippines date of data 2016 communities) collection

Researcher John Oakeshott Student No. s4225107 Email Contact details Phone [email protected] Fax of investigator +63 917 704 4441 (which is connected to work email: [email protected]) Degree PhD enrolled Dr Gomathy Palaniappan (Principal) Advisor/s Dr Les Baxter (Associate) Prof Helen Ross (Associate) Contact details Email principal Phone Fax [email protected] Advisor Answer all of the following questions INTRODUCTION 1. Provide a brief description of your research (what you will do, with whom, where et cetera) (At least 200 words please) This study will investigate smallholder farmer agricultural clusters in the Philippines. This study will add to the body of knowledge within the Theory of Collective Action, which provides the principles that guide the smallholders to achieve their common goals. These agricultural clusters have long been utilized by Government and other development agencies to access a large group and provide livelihood improvements. The agricultural clusters have a large failure rate. The assumption is that the Government and other agencies have the right strategy of engagement, but the success or failure of clusters can be related to how the cluster farming members respond, adapt and draw on their resources and supporting network to become a competitive supplier in their unique and dynamic environments. This research aims to examine the successful and failing agricultural clusters to develop a ‘tool’ for facilitators to use for early identification of priority areas to focus to create sustainable clusters. The survey is in three parts: PART 1: Facilitators Interviews 1 - . I will interview approximately 30 facilitators of agricultural clusters to arrive at a point of expected repetition of data. Cluster facilitators from three southern

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Philippines regions will be interviewed (Mindanao, Leyte, Bohol). These cluster facilitators work in the NGO, public and private sectors. Criteria for selection will be ten facilitators from each region; and within these regions, at least three (3) facilitators each from the public, private and NGO sectors. The responses from these interviews will have two functions. Firstly the responses will be used to verify the more detailed smallholder farmer questionnaire which has been developed from the literature; and secondly, to understand the background, training, and capacity of the facilitators and their views of social cohesion. PART 2: This survey will interview 250 members from a range of agricultural clusters using local interviewers (myself and interviewers) and utilize a digital data collection application (Magpi®). The questions will be mainly answered on a Likert Scale. The number of respondents and use of the Likert Scale are necessary for analysis using the PLS-SEM software. The interviewees are smallholder farmers who are members of an agricultural cluster living in rural regions of the Philippines (mainly in Mindanao, Leyte and Bohol). The cluster facilitators are involved with more than one cluster association, and the facilitators will be asked to identify and interview cluster members who belong to clusters at different maturity stages (new, growing, mature, declining, and non-functioning). The results (anonymous and respecting confidentiality) will be used to inform the facilitator and members of a newly formed (in Jan 2016) cocoa agricultural cluster in Davao del Norte. This cluster will be a case study for interventions based on the survey outputs. RECRUITMENT 2a. Who are the participants (research subjects)? (For example, occupation, age range, gender, male/female ratio if applicable) Participants: • PART 1: Agricultural cluster facilitators (both private and public sector) • PART 2: Filipino smallholder farmers who are members of an agricultural cluster • Male and female • 20 – 70 years old (average age of Filipino farmers is 57 years old) 2b. How will you contact your participants? (For example, through another organisation, random contact at shopping centre etc) I am currently employed by the Australian Centre for International Agricultural Research (ACIAR) in the role of the ACIAR Philippines Horticulture Manager. I have been living in the southern Philippines for the past seven years and have developed many contacts in the agricultural sector who can suggest interviewers, that is, assistance in selecting neutral people who have no risk of role relationship with the interviewees. I will utilize a contact within the Philippines Department of Agriculture – Agriculture Training Institute (ATI) and the Provincial Agricultural Office of Davao del Norte (PAGRO). These two particular contacts work with many agricultural clusters and have agreed to assist with cluster contacts (interviewers and interviewees) where required. Participants will be contacted through my own network, ATI, PAGRO, and through other organisations that facilitate agricultural clusters, such as: 1. Public sector: Department of Agriculture (Office of the Provincial Agriculturalist in Davao del Norte and Davao del Sur) and Universities (University of Philippines Mindanao, Visayas State University). 2. Non-Government Organisations: Landcare Foundation of the Philippines Inc., Catholic Relief Services, Winrock, ACDI-VOCA. 3. Private sector: East West Seeds; Kennemer Foods International The criteria for selection will be ten (10) facilitators from each region (Mindanao, Bohol, Leyte); and within these regions, at least three (3) facilitators each from the public, private and NGO sectors. 2c. Does recruitment include disclosure of personal information (for example, mailing list, names, contact details, et cetera.) from another party or organisation to the researchers? X No If YES, please provide details. Note: disclosure of personal information from another party or organisation to the researchers, even if merely for the purpose of seeking initial expression of interest in the project, must be authorised by each individual to whom the information relates (unless it is a completely public database with unrestricted access). For example, an

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organisation must not give the researchers a mailing list of members or clients who might be potential participants for the project, unless those people have previously authorised such use and disclosure of their information to other parties. 2d. “Gatekeeper” Approvals Are gatekeeper approval/s required for the research? X No : Official letters are not required, verbal consent only is sufficient A “gatekeeper” or “permission-giver” is a person authorised to write a Letter of Authority and Recognition from an organisation of any type involved with the research, which gives permission to the researcher for access to the population under the “gatekeeper’s” or “permission-giver’s” authority. For example, if you wish to access staff from a private organisation, then gatekeeper approval will usually be required from senior personnel or an appropriate manager who is able to grant such access to approach that organisation’s staff in recruitment. If YES, who are the gatekeeper/s and how will their approvals be sought and obtained? (If gatekeeper approval/s has/have already been obtained, then please attach a copy.) ETHICAL CONSIDERTIONS 3. Provide a summary of the ethical aspects in this project. (List possible issues here and remember to include privacy, confidentiality, informed consent and withdrawal issues.) 1. Privacy: maintain the domain where participants are entitled to be free from the scrutiny of others 2. Confidentiality: The survey focus is on the shared workplace in the cluster and the bonding relationships. Special care is required to safeguard all information received to ensure participants’ information is protected from others, and they don’t face retribution from colleagues. It is the obligation of the researcher not to use survey data for any purpose other than which it was given. 3. Informed consent and withdrawal issues from the survey participants: The concept of consent is related to the right of privacy. The ethical aspect is ensuring the participants understand they can exercise control over their information by consenting to, or withholding consent for the collection, use and disclosure of their information. 4. Consent from the Cluster Leaders: The cluster leader is an elected position and it is necessary to have their verbal consent before undertaking the survey. The consent will also give credibility for the informed consent process with the cluster members. 5. Consent from the Barangay Captain: This is a formally elected position within the village (barangay). It will be necessary to meet the Captain and have a verbal consent from the Captain to enter the village and undertake surveys. This also gives credibility for the informed consent process with individual members. 6. Inconvenience: Giving up time to participate in the survey. 7. Unrealistic expectations from participants on the benefits of the research 8. Trust and voluntary participation: socioeconomic background, gender, age, and education reinforce differences in the relative power experienced by individuals during the consent discussion. 9. Maintain sensitivity to cultural and social differences 10. Language: Misunderstandings and miscommunication about the elements of informed consent is more likely to occur when the translated consent document is required. 11. Observe professional standards in the management and conduct of the research at all stages 12. Provide appropriate access to study data, research findings and methods 13. Maintain a high level of quality control as a duty of respect to the participants 14. Capacity of enumerators to conduct the survey and ensure research is undertaken in a 231

way that accords participants no less respect and protection than required under the National Statement on Ethical Conduct in Human Research 15. Remuneration to the interviewee participants. It is a common practice when visiting a barangay and asking for someone’s favour to remunerate them with a small snack and juice as recompense for their time. This can build trust and a relaxed forum for the interviewees; and is not at a level that would constitute undue inducement to agree to participate. 16. Recruitment of participants: Ensuring a selection process that is technically rigorous as well as being justifiably fair to any of the participants and non-participants. This research will be undertaken in the central and southern Philippines. This research is lawful in the Philippines and there are no Philippine’s ethics approval process required. 1. Provide a summary of methods that will be developed to address each of the ethical concerns identified in 3. above. (That is, list your solutions to the issues raised under question 3.) 1. Privacy: Initially, the interviewers will be trained on the importance of respecting and maintaining privacy of the participants. During and after the survey, participants are entitled to be free from the scrutiny of others. The collected participant’s information will be stored, and secure from scrutiny by anyone other than the researcher. 2. Confidentiality: The researcher’s obligation is to safeguard entrusted information with security that covers physical, administrative, and technical safeguards. Data collected in Part 1 is qualitative and entered the notebook of myself, the primary researcher. Data collected in Part 2 is via an online digital data application. Physical security: PART 1 data is collated in a notebook with a code assigned to each interviewee. The code for each code is stored in a separate notebook. PART 2: collected information is only accessible to the researcher in a password protected area of the digital website. Once the survey is completed, the online site will be shut down, and the information downloaded onto a disk drive and stored in a secure and locked area of the researcher’s office, away from public access. Administrative security: this refers to the organisational rules and their enforcement on who has access to the personal information about the participants. Interviewers will be instructed on the importance of all the ethical requirements, their compliance, and not discussing any interview content with anyone. Interviewers will hand-over all their survey data and materials to the researcher. Only the researcher will have access to the raw data which will be coded for analysis ensuring the privacy of the survey participants. Direct identifiers will be removed from the information and replaced with a code which is retained by the researcher - a list that links participant’s names with their code names. This list and matching codes will be stored with the original information and only accessible by the researcher. Technical safeguards: The computer being used has Australian Government approved firewalls and antivirus software installed. Raw data is stored in an external hard drive kept in a locked fireproof cabinet. There is no foreseeable reason for disclosure or secondary use of the participant’s original information. 3. Informed consent and withdrawal from the survey: To ensure the interviewees understand the purpose of the survey before they sign the consent form, the interviewers will be trained on the purpose of the survey, and understanding and conveying that participation is voluntary, the necessity to obtain a signed informed consent form, and if the interviewees feel uncomfortable then they are allowed to withdraw from the survey without issue and their data must be immediately destroyed. 4. Consent from the Cluster Leaders: The facilitators and/or researcher of the cluster will 232

discuss the survey with the cluster leader and gain a verbal consent to proceed. Without this verbal consent the survey will not proceed. 5. Consent from the Barangay Captain: The facilitators and/or researcher of the cluster will discuss the survey with the Barangay Captain and gain a verbal consent to proceed. Without this verbal consent the survey will not proceed. 6. Inconvenience: Giving up time to participate in the survey. Interviews will be undertaken at a time that is most suitable to the participants to minimise the inconvenience. 7. Unrealistic expectations from participants on the benefits of the research: Managing expectations will be through the training of the interviewers to ensure they can convey the objectives of the research verbally and with the written consent form. 8. Trust and voluntary participation: socioeconomic background, gender, age, and education reinforce differences in the relative power experienced by individuals during the consent discussion. With advice and guidance from local rural research colleagues (ATI, PAGRO, UPMin), a locally engaged interviewer be selected and trained to respect and relate closely with the interviewee to minimise the differences in developing trust and ensuring voluntary participation. 9. Maintain sensitivity to cultural and social differences: Ensure the interviews are conducted with the knowledge and verbal permission from the Captain and Cluster Leader. Section 8a3 outlines the need for an awareness of possible religious issues. 10. Language: Misunderstandings and miscommunication about the elements of informed consent is more likely to occur when the translated consent document is required. To minimise this issue, the consent form has been translated by a native speaker into Bisayan and Tagalog; these are the most widely spoken languages in the geographic region of the survey, and its likely most interviewees will be bilingual in these two languages. Utilising the language skills of local interviewers will also minimise misunderstandings. 11. Observe professional standards: in the management and conduct of the research at all stages 12. Provide appropriate access to a summary of the study results: Feedback is an important part of the survey lifecycle. Participants will be given the researchers contact details to contact should they wish to obtain a summary of the results. 13. Maintain a high level of quality control: Adherence to an administrative and management process that protects the privacy of individuals 14. Capacity of enumerators: The capacity of the locally engaged interviewers will vary, but after training they should understand the objectives of the survey and the need to be respectful towards the community and participants. As the Philippines has no requirement for ethical clearance to conduct the survey, the enumerators will be trained to ensure research is undertaken in a way that accords participants no less respect and protection than required under the National Statement on Ethical Conduct in Human Research. 15. Avoiding researcher and research harm: Academic and institutional affiliations have been established to assist when required and provide guidance on any local issues that arise related to this survey. These affiliations are listed under Section 8a3. 16. Remuneration to survey participants: Financial remuneration is not required; however, I will in accordance with local custom when visiting a village for a survey, reward participants with a snack meal (food and juice beverage). 17. Recruitment of participants: The choice of participants to be interviewed will follow a 233

selection process that involves the geographic region, the maturity of the agricultural cluster, and if it facilitated by a sector from private, public or NGO. Advice on the target individual within this process will be sought from local contacts in the Agricultural Training Institute, Provincial Agricultural Office, and Universities (Visayas State University and University of the Philippines Mindanao). INFORMED PARTICIPATION 5. How will informed consent be obtained from participants? Verbally (for non-literate participants, show how you will record their verbal consent below) X In writing (detail below and include consent form with application) Other (be specific) PRIVACY 6. Researchers must ensure that all data, particularly data containing personal information (i.e. information that can identify the person), are secure both at the point of storage and during transit. Researchers must be aware of relevant legislation and guidelines governing privacy: Information Privacy Act (Qld) 2009, Privacy Act (Cth) 1988, and Guidelines under S95 and S95A of the Privacy Act (Cth). 6a. Will participants be identified in your collected raw data? Identified by name X Identified by a code (detail your procedure below) Anonymous A separate code book is kept with codes that relates a number to the interview notes/survey form 6b. Will participants be identified in the stored data Identified by name X Identified by a code Anonymous 6c. Will participants be identified in the contents of your report Identified by name Identified by organisation name Identified by code, or a general description (e.g. male farmer) X Anonymous 6d. Where will data be stored (for example, UQ office of researcher, a secure fieldwork location), and what measures will be taken to ensure security of data (for example, locked filing cabinets, computer hard-drive protected by password/encryption/de-identification of data, et cetera)? The researcher maintains a home office in the fieldwork location: Davao City, Philippines. The data will be stored on a password protected external hard-drive and locked in a filing cabinet. 6f. Will data be stored on, or taken to, premises other than secure UQ premises (for example, researcher’s home, a fieldwork location)? X Yes No If YES, then what measures will be taken to ensure security of data at these premises? The researcher maintains a home office in the fieldwork location: Davao City, Philippines. The data will be stored on a password protected external hard-drive and locked in a filing cabinet. 6g. Will persons other than staff of the research team have access to the data? X Yes No If YES, then please specify these persons, state why these persons have access, and what provisions are in place to ensure the confidentiality of data by these persons. In the field, the raw data will be kept in a locked backpack; until back at the office, the raw data will be stored in a locked cabinet. The code book will be carried separately by the researcher in a small sling bag – and will never be removed in the field (this sling bag also carries personal items such as wallet, IDs etc). If I am unable to travel into a certain area (e.g. security issues),

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then the interviewer will be undertaking the same process of using a lockable backpack and carrying a separate codebook. FEEDBACK 7. Give specific details of whether and/or how feedback will be available to participants. X Feedback via report Via special publication X Via visit Via conference Via video/audio X Other (e.g. via gatekeeper) via the agricultural cluster facilitators (esp. in remote/insecure regions where personal visit is not possible). I have created a webpage to post a summary of results and other agricultural cluster information (address: google.com/+John Oakeshott). As this links closely with research by ACIAR, they may also consider allowing a blog entry on their site. No feedback will be provided (Give justification) SPECIFIC ISSUES 8. Does the project involve any of the following issues? 8a. Special Groups Certain groups require specific ethical considerations. Researchers must take special care to protect the interests of these groups if they are in any way involved in the project. Those groups include: pregnant women and the foetus, children and young people; people in dependent or unequal relationships; people highly dependent on medical care; people with cognitive impairment, intellectual disability, or mental illness; people involved in illegal activities; Aboriginal and Torres Strait Islander peoples; people in other countries; other cultural and ethnic groups. In preparing your research project and application for ethical clearance, you should investigate thoroughly, through consultation with your Advisors, colleagues in your school and other professional groups/organizations, how these special groups may or may not be represented in your research and if participation in this research could have a negative impact on members of any of these groups. 8a1. Aboriginal and Torres Strait Islanders Group Specify the level of participation that Indigenous Australians will have in this research (as members of the research team, or as members of the group to be researched): Please note: If indigenous participants are the focus of your project, please contact the School ethics committee chair for advice prior to completing the application. Ethics review may need to be performed by the UQ central ethics committee. no participation some participation possible or likely focus of the research X

Please explain your choice: If Indigenous Australians may be involved (2nd or 3rd response box above), what strategies will be used to address their needs and interests? Please specify your strategies: Have you consulted anyone with knowledge to provide guidance? Who? 8a2. People in Australia belonging to other cultural or ethnic groups Are there any ethical considerations that may arise as a result of collection from other cultural or ethnic groups in Australia? (For example, are there any particular customs, practices, or conditions which should be taken into account?) Yes X No If YES, please provide details: Have you consulted anyone with knowledge to provide guidance? Who? 235

8a3. People in overseas countries Does your project involve data collection in an overseas country? X Yes No If YES, what ethical considerations may arise as a result of such data collection, which are different from those arising from data collection in a general Australian context? (For example, are there any particular local laws, customs, practices, or conditions which should be taken into account?) Members of agricultural clusters are generally familiar with survey interviews. Some of the specific issues which may arise are: 1. Illiterate participants: Best if we can identify participants who can understand a written consent form; however in the case of an illiterate participant then the interviewer will need to convey in the local dialect the objectives of the research, obtain a verbal consent, and ensure respect and privacy of the participant is maintained. Interviewers will read out the script, ensure the person understands and agrees, and then signs the consent form. 2. Non-English-speaking backgrounds: Using locally engaged interviewers and consent forms in written in the local dialect. It is recognised that translations can be misunderstood, so interviewers will be trained to convey the project research objectives in the local dialect. 3. Security of interviewers and researcher: In some of the more distant and remote rural communities’ access is a problem. Interviews can only be undertaken during the daylight hours and for security reasons interviewers will be required to be back in a secure accommodation by nightfall (i.e. no travel after 6pm). Arriving at the community and undertaking the interview before departing may limit the available interview time and inconvenience the participant. If this situation arises, calling ahead and explaining to the Barangay Captain or the Cluster Leader the situation and expected transportation issues will be communicated. 4. Physical accessibility to the community – poor roads: This is a common problem and causes delayed arrival time for the interviews. Communicating with the participants well ahead regarding this issue will be undertaken. 5. Barangay festivals: Avoid undertaking interviews during any village celebrations 6. Religion: 80% of the Philippines population is estimated to be Catholic. For the Catholic communities - avoid interviews on Sunday, religious festivals, births, marriages, and funerals (particularly the 10 days leading to the interment). Mindanao has 10-20% population of that are Muslim: It’s unlikely we’ll interview a cluster participant from a Muslim community, however in the event that this does occur then it will be important to observe the local culture of respect to women by not offering to hand-shake, no touching, and avoiding direct prolonged eye contact. The surveys will be finished before Ramadan commences on 6 June 2016. My in-laws are Filipino Muslim and if we do encounter a Muslim community, I will ask one of my in-laws to be present. The other religious group likely to be encountered are the Seventh Day Adventists: for this group we need to avoid interviews on a Saturday. Communicating with the Cluster Leaders well in advance can prepare the interviewers for religious related issues they may encounter. 7. High respect for elders: Showing respect through actions and language 8. Power-Distance Index (PDI): This refers to the subordinates in an organisation, family or group and their willingness to follow directions of their seniors. In the Philippines the PDI is high. For the researcher and interviewers showing due respect to the cluster organisation and community leaders are important. 9. Saving ‘face’: Filipino’s are very traditional with a strong focus on past and present conditions. This includes the concept of ‘face’, that is, to avoid humiliation or embarrassment, maintain dignity and preserve reputation. It is important to be sensitive and aware of ‘face’ and communicate closely with the locally engaged interviewer. 10. The WEF Global Gender Gap Report 2015 ranks the Philippines 9th out of 145 countries within its score of how well a country leverages their female talent pool. Australia is ranked lower at 24th. The researcher recognises this equality may not translate into rural communities far from the 236

progressive urban environment. If a female cluster member from one of these communities is included for interview, to ensure there is no misunderstanding, the locally engaged interviewer (Filipino) will undertake the role of the chief interviewer. 11. Not giving the exact answer: Some participants have a distrust of outsiders and will protect their secrecy by giving false answers. Therefore, a local interviewer is used who has no difficult power or professional relationship with the interviewee (i.e. such as an agricultural department employee). 12. Not having the complete data: Some participants will save ‘face’ by answering all questions even when they don’t know the real answer. 13. Availability: Even calling ahead and making appointments for interviews can be fruitless – the participants will not attend the meeting/interview. Filipino’s are culturally focussed on the present and past rather than a more future and forward aspect that is within Western cultures. For this reason, the immediacy of the present and a last-minute appointment may take precedent over a longer term appointment made by the interviewers. There is no solution to this other than to communicate regularly and hope they will keep the appointment; and accept this cultural difference should they not attend. 14. Negative attitude: They don’t like participating in interviews or surveys. Many participants have been subjected to surveys that haven’t eventuated in any benefits or projects. Managing expectations of this survey, offering food and soft drink, and showing respect, are some of the ways to gain the trust of the participants and bring forth a more positive attitude. Have you consulted anyone with knowledge to provide guidance? Who? The points in Section 8a3 were discussed with the Provincial Agriculturalist of Davao del Norte, Dr Ana Notarte. Her staff have undertaken many surveys with smallholder farmers and communities in her Province and Nationwide. All these issues have been discussed at length with the groups below over the years. In one instance in 2012, I gave a presentation on ‘Australia-Philippine cultural differences in project management’ to the Philippine Government Agency, DOST-PCAARRD at a workshop in 2012. • Personal experience of 15 years working in northern Asia (and currently residing and in my seventh year in the Philippines) • University of Philippines Mindanao: The issues have been discussed with the staff who undertake surveys for business management and community development • Visayas State University: Issues have been discussed with a local who will undertake the surveys in that region • Dept of Science and Technology – Philippine Council for Agriculture, Aquatic, Natural Resources Research and Development (DOST-PCAARRD) • Agricultural cluster facilitators • Provincial Agricultural Office of Davao del Norte 8a4.Other Special Groups Participant involvement by any “Vulnerable Groups” (for example, abused, children, et cetera). Does your project involve any of the other special groups? Yes X No If YES, please answer the following: Specify the group/s: What is the level of their participation: a. some participation possible or likely b. focus of the research What strategies will be used to address their needs and interests – please specify? Have you consulted anyone with knowledge to provide guidance? Who? RISK 9. Indicate what you think the level of risk is for prospective participants against the scale below and provide a brief justification for your assessment.

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Extreme risk High risk Some risk X Minimal risk No foreseeable added risk above the risks of everyday life Provide a brief justification of your assessment (a few sentences) Leaking of data and getting into the wrong hands. Some of the survey questions are concerned with trust and leadership within the cluster. It could cause embarrassment to the individual interviewee and the cluster leader if a negative response is leaked. Training the interviewers to protect the information and ensure privacy is respected is an important activity undertaken prior to the interviews. Have you also attached? If ‘no’ briefly give reason 1. Informed Consent Form X Yes No 2. Research Information Sheet for Participants X Yes No 3. Inquiry Instrument (e.g. Sample questionnaire) X Yes No Statement of Investigator I have reviewed the University’s policy and guidelines on ethical research Yes In designing this research, I have paid particular attention to the ethical issues relevant to: • the methods and protocols to be used for this research Yes • the questionnaire/s to be used for this research Yes • the interview questions to be used for this research Yes • the process of obtaining informed consent from participants Yes • the procedure for maintaining confidentiality and protecting privacy Yes • the approach to providing feedback to participants Yes • other matters relevant to the ethical conduct of this research No Specify I confirm that the proposed research meets the ethical requirements of the University of Queensland and that I have fully considered all foreseeable ethical ramifications of my research both intended and unintended. Signature of investigator: Date: 31 January 2016 Statement of Principal Advisor I have reviewed • the University’s policy and guidelines on ethical research Yes • the methods and protocols to be used for this research Yes • the questionnaire/s to be used for this research Yes • the interview questions to be used for this research Yes • the process of obtaining informed consent from participants Yes • the procedure for maintaining confidentiality and protecting privacy Yes • the approach to providing feedback to participants Yes • other matters relevant to the ethical conduct of this research No Specify I confirm that the proposed research meets the ethical requirements of the University of Queensland and that this application adequately describes actual and potential ethical issues that might arise and how it is planned to address these issues.

Signature of Advisor: Date: 3/02/2016 hics Committee Review 238

Research Project Information and Informed Consent Sheet (PART 1)

Project Title: Sustainable Smallholder Farming Clusters in the Philippines

This is part of a University of Queensland (Australia) study being undertaken by doctoral candidate, John Oakeshott. The purpose of this study is to investigate the factors that influence the sustainability of smallholder farming clusters. The study is examining the ability within the cluster you facilitate to overcome setbacks and problems (i.e. bad weather, poor harvest, poor market prices etc.). The interviewer will ask you questions asking your opinion and impressions. There are no right or wrong answer, and no technical or difficult questions. You are being invited to participate in this semi-structured interview because you are a facilitator of an agricultural cluster. The interview should be completed with the assistance of an enumerator in 30 min (approx.). If you are not sure of the meaning of any questions, please ask your enumerator to elaborate. We do not anticipate any risks from your involvement in this interview. Study information and everything you say is confidential. Your privacy and confidentiality will be protected by replacing your name with a code. Your information is stored in a locked cabinet in the office of John Oakeshott. The analysed data and final report will be used for scholarly purposes only, and your details will be anonymous. Your participation is voluntary in this survey and you may withdraw at any time. If you withdraw after commencing your interview or survey, your data will be destroyed and not used in the study. There is no penalty or disadvantage to you if you wish to withdraw from the interview. If you have any questions concerning your participation in this project, please contact: John Oakeshott Email: [email protected] Mobile/Cell: 0917 704 4441 Skype: jok.oakeshott In June 2016, a summary of the results will be posted into this website address: google.com/+JohnOakeshott. This study adheres to the Guidelines of the ethical review process of The University of Queensland. While you are free to discuss your participation in this study with the researcher, John Oakeshott (contactable on 0917 704 4441), if you would like to speak to an officer of the University not involved in the study, you may contact Keryn Eaton (ph. +61 7 5460 1691) or E: [email protected] Please circle one: I would like / would not like my name acknowledged in the acknowledgements page of reports Please sign below if you agree to participate in this study. Signing indicates that: 1. You have understood the above information 2. You voluntarily agree to participate 3. You are at least 18 years of age

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Printed Name Signature Date

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Research Project Information and Informed Consent Sheet (PART 2) Project Title: Sustainable Smallholder Farming Clusters in the Philippines This is part of a University of Queensland (Australia) study being undertaken by doctoral candidate, John Oakeshott. The purpose of this study is to investigate the factors that influence the sustainability of smallholder farming clusters. The study is examining the ability within your agricultural cluster to overcome setbacks and problems (i.e. bad weather, poor harvest, poor market prices etc.). The interviewer will ask you questions asking your opinion and impressions. There are no right or wrong answer, and no technical or difficult questions. You are being invited to participate in this study because you are a member of an agricultural cluster. The survey questionnaire is 100 questions and should be completed with the assistance of an enumerator in 30 min (approx.). If you are not sure of the meaning of any questions, please ask your enumerator to elaborate. We do not anticipate any risks from your involvement in this interview. Study information and everything you say is confidential. Your privacy and confidentiality will be protected by replacing your name with a code. Your information is stored in a locked cabinet in the office of John Oakeshott. The analysed data and final report will be used for scholarly purposes only, and your details will be anonymous. Your participation is voluntary in this survey and you may withdraw at any time. If you withdraw after commencing your interview, your data will be destroyed and not used in the study. There is no penalty or disadvantage to you if you wish to withdraw from the interview. If you have any questions concerning your participation in this project, please contact: John Oakeshott Email: [email protected] Mobile/Cell: 0917 704 4441 Skype: jok.oakeshott In June 2016, a summary of the results will be posted into this website address: google.com/+JohnOakeshott. This study adheres to the Guidelines of the ethical review process of The University of Queensland. While you are free to discuss your participation in this study with the researcher, John Oakeshott (contactable on 0917 704 4441), if you would like to speak to an officer of the University not involved in the study, you may contact Keryn Eaton (ph. +61 7 5460 1691) or E: [email protected] Please circle one: I would like / would not like my name acknowledged in the acknowledgements page of reports Please sign below if you agree to participate in this study. Signing indicates that: 19 / 23 1. You have understood the above information 2. You voluntarily agree to participate 3. You are at least 18 years of age

Printed Name

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Appendix 2: Successful cluster examples

Case study #1 Importance of Trust: A facilitator from the conflict area in western Mindanao described how trust can cross religious boundaries, even in times of conflict (ZNGO1). This facilitator manages a cluster of mixed religious membership, with sixteen Christian and four Muslim members. The cluster undertook a democratic election and chose their new leader from the minority Muslim membership:

'…because they believe that person can help and has the capacity and capability potential' (ZNGO1).

This is particularly interesting since the clusters in the conflict regions of western Mindanao area are usually a homogeneous religious cluster, wary of other religious groups, and facilitators and cluster managers will use religion as a strategy for group cohesion and motivation. It is therefore unusual for a Christian dominated group to elect a Muslim to be their leader. Apart from the leader having the desired ‘general’ characteristics of skills (financial and people management) and attitude (altruism and trust), there is also the additional leader skill required in the conflict zones for security ‘awareness’. The leader needs to have the capability to broker and negotiate peace and order with the violent groups operating in their regions (MNGO1). This is an example of a cluster successfully developing when members focussed on skills and attitudes needed for their development rather than along strict colours of religion.

Case study #2: Importance of LGU support: Three facilitator interviews (BoholLGU1and2; BoholNGO1) were conducted at the Municipality of Pilar on the island of Bohol. This site is an example of how the support from the LGU can improve the sustainability of a cluster and impact on many smallholders’ livelihoods. The Pilar Dam Project was instigated by the LGU and has now been operating for nearly a decade. This agriculture program was implemented across the entire Municipality; and to operate the program, households were organized into clusters. Across the Municipality, 189 clusters were created composed of 25 households each. Each of these clusters then selected a coordinator, known as the Barangay Farming Technician (BAFTEX), who was provided a small stipend from the Municipality budget via the local Barangay Council (village) to assist the group in land-care, and agricultural resource development and management. This involved creation of backyard gardens with a minimum of four kinds of fruit trees and five kinds of vegetables, which the BAFTEX supervises, monitors, and reports back to the Municipality. The whole program commences with a Farmer Field School with each cluster once a week for three

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months. The BAFTEX coordinators meet monthly with their Barangay Council and LGU to ensure a feedback loop and problems are quickly addressed.

This unique BAFTEX system was modelled from the existing health care system that has been implemented across the Philippines. Implementing a similar system across the rural community of Pilar is an attempt of the LGU to directly improve livelihoods and the nutritional health of their constituents, and because of the importance of agriculture:

‘…our agriculture sector is the main source of income of our people’ (BoholLGU1).

The benefit of clustering to the Municipality is the direct access to information on their community needs through the BAFTEX network. The members of clusters are also benefitting from the creation of a BAFTEX extension officer and their direct access to the Municipal administrators because once they are organized their ‘voices’ can be heard within the LGU:

‘…they can influence the barangay level and even the LGU for them to provide support in all their undertakings’ (BoholNGO1).

Case study #3: Embedded in the LGU: A cluster near Lake Cebu in Mindanao has survived without facilitation for over 10 years (LeyteNGO1). Their success has been in part attributed to the cluster leaders who pursued election onto the council. This move ensured they had direct influence on administrative decisions and provided the cluster with protection when the administration changed under new political leaders.

Case study #4: Authoritarian motivation: The facilitators described two other motivational strategies they observed and used in their management of clusters. Firstly, religion was used by both facilitators and cluster leaders (DavaoPrivate2, Tunga). Religious discipline of work ethic and abstinence of use of alcohol and gambling were disciplined into the cluster members by utilizing the wrath and ‘fear of God’ strategy (DavaoPrivate2, APLAFA). Rightly or wrongly, as far as creating a sustainable cluster, this disciplined religious approach did appear to motivate and created trust, optimism and commitment within the cluster members. A second motivation approach was also an extrinsic strategy to enforce cluster discipline. Two clusters of ex-New People Army9 fighters who had structured their cluster along the same lines as their past fighting unit (Mambog1, Mambog2). The cluster President was their ex-unit commander. During the FGD, the group discipline, loyalty and deference to their cluster President was pervasive. Like the ‘fear of God’ management style;

9 Recognized both domestically and internationally as a Maoist terrorist organization operating in pockets across the Philippines 242

these ‘ex-fighter unit’ organizational structures can also create sustainable clusters; however, they require members to have an unquestioning level of faith and trust, optimism and commitment to their leaders or their God.

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Appendix 3: Failed cluster examples

Case #1: Single issue cluster: An example of a cluster initiated for a specific ‘single-issue’ purpose was the San Juanico Farmers’ Cooperative, which is no longer functioning. This Cooperative was a smallholder farmers’ collective action for land rights to regain land taken ‘illegally’ under previous administrations. Smallholder farmers had the opportunity under the Common Agrarian Reform Policy (CARP) for land restitution. The process required administration and clerical support for the farmers to make a submission to the Department of Agrarian Reform (DAR) who issues the Certificates of Landownership Award (CLOA). The forms, paperwork, time, negotiations, legal and accounting specialists were not skills smallholder farmers carried; so, they formed the Cooperative to as the enabling organization to access these skills from external agencies. This required the Cooperative to become registered. Following the success of their land rights campaign and awarding of CLOA, the Cooperative became inactive.

Case #2: Vijaya Association (Mango exporter): Hall (2009), described the failure of the Vijaya Association (Mango Exporter) that was attributed to public sector refusal of support. The Vijaya Association couldn’t access public sector technical expertise that had become ‘locked-up’ behind bureaucracy. The expertise of public sector scientists and extension officers required by the Vijaya Association were unable to work with the private sector. Vijaya also lacked the in-house technical and managerial expertise to overcome its problems and the Vijaya Association collapsed.

All blame for the collapse of Vijaya shouldn’t be placed on the poorly funded and under-resourced public sector support agencies. Rivera et al. (2001) identified in a worldwide review of extension systems the problems facing public sector providers. Problems included the high cost of servicing a large disparate group of smallholder farmers, weak linkages between research centers, universities and the extension systems, and low motivation of the extension staff. These are symptoms that express an inefficient service, whereas the root-causes can be traced to poor policy, resourcing, and failure in the political and higher managerial oversight. This is particularly the case in a region that is developing, overpopulated and lacking funds.

Case #3: Lending clusters: Facilitator interviews mentioned clusters that attempted to become a low interest financial service to members often collapsed because of delinquencies and repayment issues. They recommend clusters remain focused on production and marketing activities with lending a professionally managed secondary service. ‘…most of the cooperatives collapse indulge in lending services because members just borrow then they do not pay back.’ (BoholNGO2)

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Appendix 4: Checklist for Market Training

1. Transport and logistics 2. Better access to market information; and being able to match customer needs with this information by providing: a. Quality product with specified characteristics (plant varieties etc.) b. Product range and variety - fresh c. Reliable and consistent supply d. Recognized quality assurance system e. Register as a business (a requirement to engage directly with institutional buyers, food service sector etc.) 3. Product range to meet demand – value added 4. Strengthen relations with downstream supply chain actors a. Understanding and trust has the potential to translate into benefits

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Appendix 5: Facilitation

The transcripts raised general questions on facilitation and improvements. Comments and recommendations are:

i. The facilitators are required to understand and train the cluster members. The range of topics they’re required to master is extensive and more personal study and training opportunities would be welcomed ii. The facilitators frequently referred to a lack of operating funds and how they often used their personal salary for cluster activities. Suggest a ‘realistic’ operating budget is allocated for facilitators to cover operating expenses (travel, accommodation, food). iii. The facilitators frequently referred to a lack of operating funds for cluster training activities. Suggest a budget is allocated for facilitators to cover the costs of training activities. iv. Facilitator organizations should operate clusters as an integrated program rather than as ‘stand-alone’ individual projects. The program approach should be flexible to sharing training resources, information, and equipment. v. Funding agencies should reconsider their cluster investment as a long-term investment. The observation from the transcripts is the current investments with a Life of Project term less than 3 years are inadequate for meaningful change.

vi. The individual skills of facilitators tended to divide between agricultural technicians and those with community development background. Both areas of skills are required for a good facilitator. The capacity and skills of the facilitator need to align with the needs of the cluster members; that is, some clusters will require greater technical support and others may require socialization support. vii. For the once independent farmer, the collaborative approach is a major paradigm shift; and the shift needs to be well managed and be given time to succeed. The time requirement is also a consideration for the funding agencies. viii. There are some practical management considerations for dividing labour between the four promoter roles within a smallholder cluster, shown in Figure 26; however, it is still recommended that facilitators recognize these promoter roles and activities in the early stages of the cluster development as areas of activities needing attention.

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Appendix 6: Access to finance – challenge for smallholders

Based on emerged data and available literature.

1. The high transaction cost for banks to service rural areas is an obstacle for a bank to have a physical presence – banks have 34% of their physical presence in the National Capital Region where 13% of the population resides. 2. Rural banks and cooperatives do serve poorer rural borrowers; however, many are weak, and have limited ability to achieve scale which can also put deposits at risk. 3. The Philippines has 13.3 ATMs per 100,000 people. This is the lowest in SE Asia. 4. Small business requires 309% the value of the loan in collateral. This is twice the SE Asian average. 5. Commercial and rural banks prefer to make salary loans, which has a lower risk. However, smallholder farmers with irregular incomes cannot access these loans. 6. High interest rates. Prime bank clients can obtain short term loans at 9%; however rural banks and certain categories of microfinance have interest rates ranging between 24-40%. 7. Processing times in the formal banking sector for loans is very slow (5-35 days); when there is competition from the informal sector (pawnbroker, financiers, traders) which can provide the same day approval. 8. Repayments do not align with cropping and farm-gate sale cycles. 9. High risk of default from crop failure and ensuing delinquency rates, 10. The small individual loans to smallholders have a small return on investment for the banks 11. There is a high organizational cost to provide service for these small loans

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Appendix 7: History of Access to Forest and Land in the Philippines

The following period discussions are taken from Pulhin and Dizon (2006), in their article on Politics of Tenure Reform in the Philippine Forest Land.

Colonial Period (up to 1946): Traditional land ownership rights were discarded during this period under the Spanish Regalian Doctrine, which dictates all land is owned to the State. In 1863, the Inspecion General de Montes, was the bureaucracy that governed the forests and granted a few privileged individuals propriety rights for forest use. This allowed the conversion of lowland forests into working lands for agriculture. In 1898, the United States controlled the Philippines and continued the Regalian Doctrine over forests with the Organic Act 1902; and later within the 1935 Constitution. These laws worked against customary ownership and allowed the privileged few to exploit the forest lands for logging and agriculture leading to severe deforestation.

Post-colonial exploitation (1946-1970s): Destructive forestry increased during this period following Philippine independence. The new government continued to support the Regalian Doctrine of State Ownership of all classified forestlands within the 1973 and later the 1983 Constitutions. Deforestation peaked under the Marcos dictatorship in the period of 1965 to 1986.

Local Participation in forest management (1980s to the present): As the Marcos regime faced increasing rural political opposition and unrest, the State in an effort control the political turmoil gave support to the Integrated Social Forestry Program (ISFP), 1982. Whilst a State saw benefits as a counterinsurgency strategy, the program was originally designed to combat deforestation, fight poverty, and rehabilitate degraded forest environs (Bello et al. 1982).

Traditional forest and land rights were empowered in 1997 by the Indigenous People’s Right Act (IPRA Law). Indigenous People (IPs) could be recognised under ancestral domain and apply for ownership and land titles. This new law cancelled the Regalian Doctrine of State. Further policies are being developed that are inclusive around community-based resource management (Ramos 1993).

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Appendix 8: Shifts in Paradigms of Smallholder Research and Development

Decade Ideas and Strategies of Smallholder Research (Paradigm Shifts) Dual economy model - modern farming systems will take over the smallholders; 1950s-1960s Smallholders viewed as lazy peasants practicing backward agriculture Green Revolution; Recognition of the growth role and economic leadership of 1960s-1970s agriculture; Agricultural Extension; Technology Transfer; Smallholders viewed as rational peasants Green Revolution (continues); State led agricultural policies and credit; Rural 1970s-1980s growth linkages; Integrated rural development Structural adjustment; Access to markets; Retreat of the States in agricultural development; Rise of Non-Government Organizations in agricultural development; 1980s-1990s Rapid Rural Appraisal (RRA); Farming Systems Research (FSR); Food security and famine analysis; Rural development - viewed as a process not a product; Women in Development (WID); Poverty Alleviation Access to credit and microfinancing; Participatory Rural Appraisal (PRA); Actor- 1990s-2000s orientated research and development; Stakeholder analysis; Rural safety nets; Gender and development (GAD); Environment and sustainability; Poverty reduction Sustainable livelihoods; Good governance; Decentralisation; Critique of 2000s - participation; sector-wide approaches; Social protection; Poverty eradication, value chains The significant changes in smallholder research ideas and strategies were atomized and evolved into several strands and further into researchable areas. Four key research areas are:

1. Farmer Systems Research (FSR): This developed from the Green Revolution which emphasized a mono-crop farm system (mainly rice and wheat) but didn’t address the difficulties for smallholder farmers in resource-poor and risk-prone environments (Chambers et al. 1989). 2. Indigenous Technical Knowledge (ITK): This approach acknowledges the ability of the smallholders to contribute to problem solving through their expert understanding of their local environments (Richards 1985) 3. Rapid Rural Appraisal (RRA): In the 1980s RRA was developed as a smallholder participatory approach and this evolved into Participatory Rural Appraisal (PRA) and then during the 1990s evolved further into Participatory Learning and Action (PLA) (Chambers 1997). These approaches recognized the process of change the smallholders were undertaking along with their differing understanding and perspectives, and the uniqueness of the local and individual experience (Booth 1994). This evolved into an “actor-oriented” emphasis in policy and rural development (Long & Long 1992). This has atomized further into various research approaches, with one notable approach being

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the emphasis of gender in research to recognize the different experiences of men and women. 4. Sustainable Livelihoods Approach (SLA): This is an approach that embraces the many factors making rural families vulnerable and the multiple realities of rural poverty (Chambers 1983). It is an approach that differs slightly from ‘smallholders first’ by recognizing that farming, particularly in South Asia and sub-Sahara Africa on average contributes 40-60% of income and is increasing with continued sub-division of land at inheritance. The SLA embraces the other activities and sources of income which contribute to livelihood improvement. However, the Philippines doesn’t follow the smallholder farming inheritance model of India or sub-Sahara Africa, and therefore, as a generic model for smallholder development outside of these regions is contentious (Bryceson & Bank 2001). Also, it is proving difficult to embrace all the multiple realities and factors of rural poverty within an integrated SLA development approach (Johnston & Clark 1982; Carney 1998).

The research and development programs for smallholder farmers have also shifted from solely production to include understanding policy, the business environment, markets (Albu & Griffith 2005), postharvest, and the process of participation and empowerment.

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Appendix 9: Agri-Food clusters in the Philippines

Cluster developed around a Company and its commodity Company Island Group Commodity Services within the cluster

Del Monte Pacific Limited Mindanao Pineapples (23,000ha) Farm inputs & service providers

Dole Food Corp (Itochu) Mindanao Pineapples Contract grower

Tissue culture labs carton plants Stanflico fertilisers Lapanday aircraft sprayers Sumitomo Fruits Mindanao Banana (cavendish) truckers Tadeco port services Unifrutti shipping lines banana chips (saba variety processing) Cluster developed around a regional commodity Region Island Group Commodity Services within the cluster North Cotabato 24 primary processors Basilan Mindanao Rubber Cup lump (reprocessed for export) Zamboanga-Sibugay Crumb rubber (processing) Agusan del Sur Mindanao Palm oil (>50,000ha) Two mills and refinery Sultan Kudarat-Maguindanao Davao-General Santos Mindanao Coconut Growing and processing Cagayan-Iligan Luzon Growing and 9 sugar mills refineries alcohol distilleries Negros Occidental Visayas Sugar (180,000ha) biomass power plants fertiliser farm mechanisation transport mango, jackfruit, guybano etc Cebu Visayas Dried food products seaweed carageena

Source: Roland Dy (Dy 2014)

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Appendix 10: Government agencies for cluster registration

The agencies which can register an association are discussed and compared below.

Cooperative Development Authority (CDA)

Embedded into the Philippine Constitution of 1987, under Republic Act No. 6939 Section 15 Article XII, is the creation of an agency to promote the viability and growth of cooperatives as instruments for equity, social justice and economic development. The Cooperative Development Authority (CDA) is the lead government agency mandated under the Republic Act No. 9520 (Philippine Cooperative Code of 2008). It is the only government agency that registers cooperatives.(CDA 2017c).

The mission of the agency is to be proactive and responsive in advancing and sustaining the growth of the cooperative sector that brings society benefits. The vision is to create the equitable distribution of wealth, expand socio-economic opportunities, and help bring about conditions to overcome poverty and strengthen the middle class in the Philippines (CDA 2017a; Wikipilipinas 2017). One of the ways the Philippine Government has invoked this policy is to grant cooperatives the privilege to be exempt from tax.

As of 31 December 2015, there were 25,610 registered cooperatives (CDA 2017b).

Department of Labor and Employment (DOLE)

Under the Presidential Decree (PD) No. 442 of the Labor Code of the Philippines, the Department of Labor and Employment (DOLE) is mandated to process the application for registration of labour organizations for them to acquire legal personality. This Code is designed for registration of worker’s associations organized for the mutual aid and protection of its members or for other legitimate purposes; and this ruling excludes labour unions organized for the purpose of collective bargaining (DOLE 2017a).

As of September 2013, there were 33,522 Workers’ Associations registered with 1,429,966 members (DOLE 2017b).

Securities and Exchange Commission (SEC)

The SEC is the government agency responsible for securities laws and regulating the securities industry in the Philippines. The commission has the jurisdiction and supervision over all corporations, partnerships or association who are grantees of primary franchises and or a license or permit by the Government. Individual members of associations registered with SEC can also join 252

and be members of other Associations. Being a member of more than one association is not allowed under the DOLE registration.

Department of Trade and Industry (DTI)

The DTI registers businesses that are for sole proprietor, which is a type that is owned and managed by a single individual. The DTI is the Philippine government agency that governs the registration of business names in the Philippines. If the business is a sole proprietor, the DTI registered business name is required to be able to obtain the business registration at the Mayor’s Office and the Bureau of Internal Revenue (BIR), however for corporations and partnerships, registration with SEC is sufficient for their trade name (Abrugar 2017).

Department of Social Welfare and Development (DSWD)

Organizations required to register with the DWSD are identified as Social Welfare Development Agencies (SWDA) that are Non-Government Organizations (NGO) providing supportive activities for the welfare and development of the disadvantaged sectors. As an agricultural cluster is a private organization for business and profit the DSWD is not the appropriate agency to seek their organization registration. NGOs registered under the DSWD are eligible to bid for Government projects which could then bring livelihood benefits to an agricultural cluster.

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Appendix 11: Why and When We Cooperate?

Throughout the literature, there are many authors agreeing that a group of individuals acting together for a common end, that is cooperating, is a socially optimal strategy. Cooperation appears in evolution as a survival mechanism among and across species, so it is literally within our genetic makeup to cooperate. Charles Darwin (1859) suggested group selection was also occurring within his observations for his popular theory of natural selection of individuals in the survival of the fittest. This apparent altruistic behaviour was clarified by Richard Dawkins (1989) in his theory of the selfish gene. Dawkins posits that a gene mutation will cause an individual to not cooperate if they can ‘survive’ better by defecting from the group.

Gillinson (2004), summarized three theories that could explain why cooperation was being observed in evolution:

1. Kin Selection: This is a gene view towards immortality; cooperation with those who carry a similar genetic make-up is in the individual’s best survival interests. 2. Group Selection: The concept of society as a ‘superorganism’ that is far more than the sum of its parts, can be traced back as a political thought from Rousseau (1989) and Hegel (1807). It is not only philosophers, but also biologists who posit that the benefits of competitive advantage at the group level that can outweigh the individual ‘selfish gene’ benefits (Sober & Wilson 1998). Sober and Wilson have shown group selection for altruistic behaviour (i.e. Trematode parasite). This has been supported by Boehm (2000) suggesting that groups can identify altruistic behaviour and individuals seek groups that are cooperative. 3. Reciprocity: This refers to cooperation based on reciprocity, or Tit-for Tat, which combines game theory and biology and has been described as the most successful strategy in evolution (Axelrod and Hamilton, 1981). This theory describes that organisms cooperate with organisms known be nice; and not with those that have defected in the past. Dugatkin and Alfieri (1991) claims his data with guppies shows the TFT strategy.

The strategies in evolution to survive have embraced cooperation across many species. These benefits from biology have been further studied by sociologist to explore the reasons for human cooperation. One distinction the literature makes in the definition of cooperation is whether it is voluntary or coerced. There are a number of scenarios where voluntary cooperation exists; it can be

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motivated by goodwill, threat of sanction from society or their community, or the hope and incentive of a financial gain (Gillinson 2004).

Coercion on the other hand, requires a greater degree of management and control to enforce cooperation. Coercion has two main limitations; firstly, there is no asymmetry of information because the ‘enforcer’ will always be at a disadvantage. Secondly, the ‘enforcer’ will become susceptible to corruption because of the lack of asymmetric information and poor transparency (Gillinson 2004). This has relevance in the way agricultural clusters are established because the sustainability of the cluster may be compromised should they be formed and managed under coercion; this is not uncommon in a situation of development projects which are operating under strict deadlines. As an example, the success of voluntary collective action was also revealed in a study by Fehr et al. (2002) who showed that incentive contracts reduced overall levels of cooperation compared to contracts without incentives. Olson (1965), suggested that ‘selective incentives can induce cooperation; however, this is not counter to the position of Fehr et. al. (2002). This shows that forcing people to work together by coercion or incentive contracts is not as successful as voluntary collective action. This was further shown and discussed by Grootaert (2001) in a study of water projects in Least Developed Countries showed that voluntary collective action was more effective than Government controlled projects. The reasons for the success of voluntary collective action in the water projects were attributed to:

1. Local people know what works in their community. It’s not just the knowledge of the natural environment, but also the social aspects of community hierarchy and norms that need to be navigated for a successful project outcome. 2. Ownership of the project by the community enhances their commitment. 3. Trust is required in any voluntary situation and has the benefit of reducing the transaction costs to the co-operators i.e., less time, money, and emotion spent monitoring relationships.

In the example above, the Government water projects were cooperation through coercion and would have also faced problems the moral hazard (Rasmusen 2001). The moral hazard problem is when workers will try to do as little as possible if they know they can get away with it. This moral hazard problem is similar to the ‘free rider’ problem that occurs in a voluntary situation; that is where a worker will not contribute an equal effort in the belief the collective action will occur without their contribution (Olson 1965). Taking an evolutionary perspective again, both the free rider and moral hazard problems can be explained as a means of conserving energy. Trying to collaborate can use energy and resources which an individual wants to conserve for survival fitness; but this must be 255

balanced against the socially optimal benefits of group membership and the risk of tit-for-tat or even expulsion from the group. Sociologists have demonstrated this ‘problem’ of collective action in games, such as the ‘Prisoner Dilemma’. This is a simple game where two criminals caught on suspicion of a crime can choose to either cooperate with each other to minimize both their lengths of incarceration; or individually choose to defect and implicate the other and thus serve no jail in reward as a police informant. The optimal outcome is for the two criminals to cooperate; however this tension between the collective interests and the individual interests is the fundamental problem of collective action (Gillinson 2004) and therefore the criminals may defect and not cooperate to satisfy their own individual benefit. This suggests that collective action will only occur if specific conditions exist (Olson 1965).

In summary, we cooperate because it is an evolutionary survival technique of our selfish genes that has been selected as a beneficial strategy both within and across species. The group survival technique is based on looking after those who we are closely related and is managed by a ‘tit-for- tat’ strategy which can reward or punish group members to maintain the group competitive advantage. The tension existing between collective and individual interests and understanding and encourage the specific conditions for collective action to occur is the ‘problem’ facing agricultural clusters.

When do we cooperate?

Studies have identified a range of reasons to explain why people cooperate (Olson 1965; Ostrom 1990; Schlozman 1995; Balland & Platteau 1996; Cornes & Sandler 1996). These are the reasons, and these can be applied to an agricultural cluster:

1. Coercion 2. Inducements (the value of the inducement or membership is higher than the cost of exclusion) 3. Mobilised against a collective bad (and lesser cooperation for a collective good) 4. Friendship and solidary benefits from like-minded people; and this common understanding leads to a shared image of actions and activities and develops trust. 5. Representing a professional interest 6. Civic gratification 7. Comprehending the message (a higher level of collective action participation correlates to levels of education).

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8. Time and accessibility (this are the researcher’s observation. Involvement in collective action requires the participant to give up their time and be able to access the movements messages and other participants) 9. Salience (something that is part of their lives and valued highly) 10. Cost of exclusion: An expectation that members add a positive value and are not ‘free- riders’. 11. Dispute resolution: The cluster has mechanisms in place for fair and equitable dispute resolution 12. Status: The cluster members care about their reputation 13. Membership: Must be voluntary; that is, the benefits from being a cluster member must outweigh the costs of membership. The philosopher Victor Frankl (1959) said that group membership is one of the activities which bring positive life purpose and meaning. This allows the individual to choose their attitude to the circumstances, which leads to the development of empowerment. Studies have shown that membership of a cluster is not based solely on tangible rewards; but there is also an emotional factor, the need to belong to improve the welfare of family and community which is the driver for membership (Macapagal & Nayal 1994; Schmid & Soroko 1998). Robison and Siles (1998) support these studies when they said that one of the reasons an individual will join an organization is a need for validation i.e. personal recognition.

Agricultural activity and the act of organizing famers into clusters is highly suitable for collective action. According to Ostrom (1990) and Balland and Platteau (1996) the resource at the focus of the collective action also requires certain characteristics. These are: 1. Feasible improvement: Creating an agricultural cluster when the farming as an enterprise for individuals is failing may not be sustainable even with collective action. 2. Indicators: It is relatively easy to collect indicators of the condition of farming 3. Predictability: The flow of materials, information, finances, and productivity is relatively predictable 4. Spatial extent: The total system is of a manageable size so that cluster members can obtain accurate knowledge of their internal operations and external relationships. 5. Costs of exclusion: The cost of excluding anyone from the resources must be high.

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