Boom, Bust, and Readjustment

Boom

In the mid-1960s, most observers agreed that the Benguet vegetable industry would continue to thrive. The Philippine economy was expanding, vegetable consumption was increasing, and the escalating American presence in Vietnam presented a new market. In 1964, the Mountain Province Development Authority (MPDA), an agency patterned after the TVA (Fry 1983: 228), inaugurated its development program by declaring that vegetable production had not yet reached half of its potential. The MPDA leaders held up Benguet, with its market gardens, mines, lumber mills, and hydroelectric dams, as a model of economic growth for the rest of the Cordillera (MPDA 1964:5).

Because farm expansion was still thwarted by the scarcity of capital, development agents turned to new sources of funding. MPDA planners looked to government functionaries (especially those with the Development Bank of the Philippines) to facilitate new bank loans. As with other Benguet economic schemes, the goal was not merely to assist farmers but also to displace the Chinese, thus "nationalizing" the industry (Baguio Midland Courier , Oct. 9, 1966). In the late 1960s, many Buguias farmers were financing garden expansion through bank loans. Although collateral was necessary, a land claim—through title or tax declaration—proved sufficient. This prompted a minor land rush, as gardeners hurried to declare the remaining open lands in order to qualify for loans.

Development authorities also encouraged the forming of local credit unions, and by 1969 mutual loan associations emerged in both Buguias and Bad-ayan. Official rules limited loans to two times the amount of an individual's savings, and placed a cap of 3 percent on monthly interest payments. Through the early 1970s, these two credit unions operated successfully.

Bust

But the optimism of the late 1960s vanished rapidly in the early 1970s as the vegetable industry suffered two destructive blows: the imposition of martial law in 1972, and the energy crisis of

1973. Soon after assuming dictatorial powers, Ferdinand Marcos attacked Benguet's political leaders and seized the local news media. When oil prices skyrocketed the following year, the Manila government used its new powers to "guide" the country's agriculture through the crisis. Unfortunately for Benguet, it considered vegetable growing an expendable luxury. Fertilizer was now scarce, and authorities earmarked the available supplies for lowland rice and corn, attempting even to prevent delivery to the highlands (Baguio Midland Courier Nov. 25, 1973). The official view was that the world now faced a food crisis, and that the Benguet people should respond by cultivating sweet potatoes and other staples (Baguio Midland Courier Sept. 29, 1974).

The Benguet farmers, of course, continued to grow vegetables. Desperate for fertilizer, they soon resorted to extralegal methods of procurement. The leaders of the Buguias Credit Union were at one point arrested after returning from the lowlands with a truckload of ammonium sulfate; political opponents of the co-op leaders had evidently informed the local military.

The vegetable industry languished through 1974 and 1975. The state eventually allowed fertilizer sales, but supplies remained inadequate. Moreover, fewer persons in the cash-strapped Philippines could now afford temperate produce. On November 2, 1975, the Baguio Midland Courier reported that massive quantities of Buguias vegetables were rotting in the fields. Although many farmers blamed the industry's middlemen, some community leaders began to attribute their dilemma to state policy and international oilmarket manipulations. Local government suffered too; by August 1975, the Benguet treasury had lost some 1,000,000 pesos of tax revenue (Baguio Midland Courier Aug. 29, 1975).

The vegetable industry also had to endure "crony capitalism," Marcos's practice of helping companies that supported his regime at the expense of businesses owned by individuals perceived as enemies. Thus the Philippine Planters Company, a quasicooperative that both manufactured and distributed agricultural inputs, nearly expired when it was ordered to deliver supplies below cost. The main beneficiary was the rival Philippine Phosphate Company, owned by a friend of the president.

The state did not entirely abandon the vegetable industry, however, and as the food scare abated it again devised new credit

schemes. Development authorities futilely attempted to revive the marketing cooperatives, but most farmers now regarded any government meddling with suspicion. Once again, economic planners looked to bank loans. In 1974 the Development Bank of the Philippines put forward a new scheme by which groups of five farm families could receive credit in common, each household acting as a guarantor for the others (Baguio Midland Courier Sept. 22, 1974). And in 1976, the same bank established a branch in Abatan, further facilitating credit procurement in Buguias (Baguio Midland Courier Nov. 30, 1976).

But all such loan programs eventually failed. Even after the vegetable industry partially recovered, few farmers could pay their interest charges. When the banks threatened foreclosures, gardeners lobbied successfully for easier terms (Baguio Midland Courier Aug. 2, 1976). But this only delayed the reckoning; by the late 1970s, some 59 percent of loans to Benguet farmers were delinquent (Buasen 1981:22).

Ultimately, the inability of the Benguet farmers to repay their loans proved disastrous only for the lending institutions. Despite their powers of foreclosure, the banks could not recoup their losses. For delinquent loans secured with titled property, a bank theoretically could sell the land after the borrower had failed for a given period to make payments. In the resulting auctions, however, no one would offer adequate bids; in essence, the growers maintained solidarity against the outside financiers. Land titles thus passed to the banks as "acquired assets," but as assets of no utility. The banks could only hope that the original owner would eventually want to regain the title, necessary if he or she were to sell the parcel legally. But even here the borrowers held the advantage, since the original loans had been greatly devalued by inflation. The banks lobbied for a retroactive inflation index, but with no success.

By the end of the 1970s, official lending institutions refused to extend new credit to the average Benguet farmer, a person now considered an unacceptable risk. Wealthy growers still managed to qualify, but sometimes even they would first have to bribe the responsible loan officer.

The other new font of capital, the local credit unions, have had mixed histories. A few co-ops, notably Bad-ayan's, have continued to thrive, helping local farmers expand their fields and weather un-

favorable markets. The Buguias Central Credit Union, however, crumbled in the mid-1970s. Some former members allege that its officials were too lax and disregarded loan regulations. By the 1980s, capital in Buguias was again scarce, and wealthy farmers and traders again reclaimed the financial structure of the local vegetable industry.

Readjustments

By the late 1970s the Benguet vegetable industry had only partly recovered. Input costs remained stubbornly high relative to the price of vegetables. Moreover, the entire Philippine economy had stagnated, and the market for temperate produce no longer expanded at its previous pace. Growers lived on thinner profits, and suffered losing seasons more frequently.

But a series of agricultural innovations ameliorated the beleaguered vegetable economy. In Buguias, several new crops, notably beets and summer squash, provided some farmers with healthy gains for a few seasons. Beet culture diffused in the late 1970s after a dealer discovered a small but unfilled culinary niche in the festive dishes of the Chinese New Year. Beets brought jackpot harvests for the early adopters, and they came to be the favored crop for a number of fields along Asinan ("salt") Creek that are too saltimpregnated for other vegetables. Summer squash first appeared in Buguias fields after a Chinese wholesaler advised a local dealer of a potential market. Growers soon discovered in squash an ideal crop for the warm months; planted in the early dry season it yields abundant fruit by March. Once the heavy rains arrive, however, the vines wither from fungus infestations. But zucchini squash remains a seasonally important crop in Buguias. Other nearby vegetable districts do not produce it; higher elevation areas, such as Lo-o and the Mountain Trail, are too cold, and farmers in Kabayan (according to Buguias sources) simply do not realize the value of this crop.

Improvements in irrigation technology overshadowed the introduction of new vegetables. In the late 1970s, Benguet farmers discovered that they could efficiently transport water in garden hoses or PVC (polyvinyl chloride) pipes, and that they could use water pressure to power simple sprinklers, known as rainbirds. A rain-

bird can effectively irrigate any field, regardless of slope. Although expensive to install, sprinkler systems offered overwhelming advantages, and within a few years they had been adopted by a large majority of farmers in Buguias and neighboring villages.

As gardeners adopted rainbirds, the available water supply effectively doubled, for in the old ditch delivery systems as much as half of the flow had been lost through seepage and evaporation. Furthermore, the rainbird's gentle sprinkling was found to be more effective than flooding and discouraging to a variety of pests as well. (This same period marked the spread of thrips, small insects troublesome during the dry season but sparing crops that are regularly sprinkled.) Its greatest advantage, however, was in allowing sloped fields to be cultivated year-round; this significantly increased the annual harvests of most growers. As a result, cropping schedules became more flexible, and water conflicts diminished for a period.

Not all Benguet farmers benefited from the rainbird revolution. Many poor growers could not afford hoses, while most farms along the Mountain Trail simply lack water during the dry season. In several favored Mountain Trail locales springs allow some irrigation, but even with rainbird delivery the water supply along the ridge is presently insufficient and is rapidly declining.

Transformation of the Vegetable Trade

Vegetable traders also changed their practices after the economic crisis. In the mid-1970s, the large-scale traders essentially abandoned Buguias. They continued to buy and sell vegetables in Trinidad, but now they purchased from small dealers rather than from individual growers. Russell (1983:93) argues that the introduction of light utility vehicles allowed a new group of small-scale traders to insert themselves between growers and wealthy dealers. As these small traders struggled among themselves, long-term dealer-farmer obligations gave way to more competitive bidding. The large traders then found it more profitable, and less risky, to retreat to Trinidad where they could remain one step removed from the vegetable growers.

Although this scenario partly accounts for the transformation

of trade in Buguias, it must also be noted that the large-scale traders' abandonment of Buguias coincided with the rise of the New People's Army in the local hinterlands. Local interpretations of this timing vary considerably; while some claim that the wealthy capitalists feared imposition of a "revolutionary tax," others argue that the two developments were coincidental.

In any case, by the mid-1980s, a new and diverse system of vegetable trading had emerged in the upper Agno Valley. To this date, the large agribusinesses of northern Buguias municipality continue to transport produce in large trucks, but for the most part they haul only what they grow on their own farms. In Buguias Village, however, almost all vegetables are now carried in light utility vehicles. Of the twelve such trucks present in the village in 1986, five were owned by full-time traders, the others by farmers who transported their own crops and, for a small fee, those of their neighbors. These part-time traders increasingly sell their produce not in Baguio but rather along the Mountain Trail. Tagalog traders, recognizing the trend, now drive up the highway to flag down passing trucks, hoping to haggle a better deal from the road-weary farmers than would be possible in Baguio.

The five full-time vegetable dealers of Buguias presently operate on a local scale and drive small vehicles, but otherwise their practices mirror those of the large-scale traders of the precrisis days. Farmers often sell to the highest bidder, but many are again in debt to, and thus tied to, a specific trader. In some respects farmer-dealer obligations were strengthened in the mid-1980s when traders began to sell rice. They can undersell (or, as is more usual, "underlend") store owners, both because they subsidize their own transport costs (it is inefficient not to carry a backload), and because they do not pay as much tax as a store proprietor. As this has deprived shopkeepers of their most profitable commerce, many now devote most of their time to their own fields, opening their businesses for only a few hours a day.

Despite the adverse economic climate, an ambitious and resourceful individual may still prosper in the vegetable trade. At present, one dealer in particular runs a thriving business, and he may well reach the position of baknang in the space of a few years. This man had been an ordinary farmer when an injury forced him to seek another line of work. Beginning as a commissioner (pur-

chaser) for another trader, he soon graduated to full partner. Not long afterward he bought his own small truck (soon to be joined by a second) and established an independent business. Some observers have attributed his initial success to a simple but clever (and exhausting) tactic: he would tour the Baguio market each evening to discover which vegetables were short, rush back to Buguias to secure a supply, and then return to Baguio in time for the next day's sales.

The Precarious State of the Vegetable Industry

Just as the vegetable industry began to recover from the debacle of the mid-1970s, it received another blow: the assassination of Benigno Aquino in 1983 and the attendant round of inflation and economic decline. Once again, the prices of agricultural chemicals, fuel, and consumer goods increased faster than did those of vegetables. Rice especially escalated in cost, and by 1985 many families could scarcely afford their staple food.

The Buguias people had long since adjusted to an inflationary environment by such means as tying salda mortgages to the price of hogs. But inflation eroded their living standards nonetheless. This is evident by viewing wages in swine equivalents. In 1970, thirty ten-hour days brought in enough money to purchase a large hog (at 10 pesos a day for labor, 300 pesos for the animal); by 1985, nearly twice as many days (fifty-seven) were required to obtain the same hog (at 35 pesos a day for labor, 2,000 pesos for the animal). Fuel provides another index of decline. In the late 1960s, most households living in the village center cooked with kerosene or liquid petroleum gas; by the mid-1980s, the majority had returned to wood, an increasingly scarce and expensive commodity itself.

The current economic standing of Benguet's commercial vegetable farmers vis-à-vis other Igorots who have retained subsistence agriculture is another question, and one on which evidence is mixed. Although market gardeners undoubtedly enjoyed greater prosperity prior to the early 1970s, several scholars claim that they are losing ground to, and may well have been surpassed by, subsistence growers. Carol DeRaedt (personal communication) argues that while vegetable farmers are often perceived as wealthy, mostly

because they handle large sums of money and often own vehicles, this is, in fact, belied by their hopeless debt and ever-declining returns. An anonymous contributor to the First Cordillera MultiSectoral Congress (Cordillera Consultative Committee 1984:167) states this in more certain terms: "[The Benguet vegetable farmers] have become poor relatives to their sisters and brothers who have not adopted cash crop agriculture."

Other evidence suggests that such pronouncements are premature. Beyond doubt, all Buguias residents prefer to risk market participation rather than return to subsistence. Elders remember the prewar days as a time of hardship, for which they voice little nostalgia. Indeed, several elderly individuals refused even to discuss the prewar days, saying simply, "Life was bad—we only ate sweet potatoes." Furthermore, communities previously excluded from market participation for lack of infrastructure have readily adopted commercial growing—even if it entails sharecropping—as soon as road access is gained. Of course, one may argue that local people suffer false perceptions here, but I would prefer to trust their judgments. After all, they have in many circumstances proved themselves keen observers of economic opportunity.

In any case, even if Benguet vegetable growers remain the envy of their subsistence-farming neighbors, the good times will not necessarily persist. Many seemingly intractable problems confront the commercial economy. Most of these are environmental, and will be discussed at length in the following pages. But one specifically economic threat is worth considering briefly here: the growth of a competing temperate vegetable industry in central Luzon.

A good measure of state-supported research has recently been directed toward breeding cultivars that can tolerate the lowland climate, at least during the low-sun season. Some success has been achieved with cabbage and cauliflower. Not only does this contribute to a potential oversupply, but the generally inferior lowland vegetables are often intentionally mislabeled as "Baguio produce," undercutting the market for the genuine product. More significant, perhaps, is the emerging vegetable center of Tagaytay, a few hours drive south of Manila (see Figoy 1984:37). Here a cool ridge top blessed with excellent highway connections to the capital offers an ideal environment for temperate crops. But the Philippine economy

is not expanding quickly enough to absorb the increased supply, and the Benguet farmers may well suffer as a consequence. Despite both declining living standards and the precarious state of the entire industry, the growing of vegetables still presents a strong lure. Many farmers can easily weather economic turmoil and change. In frontier zones, new opportunities for accumulation continually emerge, drawing ever more villages into the commercial network. But the biggest attraction is the jackpot. As long as it is still possible for a lucky farmer to realize great profits on a single crop, few will resist the temptations of the vegetable economy. But as the local population quickly expands, the possibility of a major jackpot harvest will be open to ever fewer farmers.