Analysis of “One-Town One-Product” Model as a Tool for Poverty Alleviation in Sultan Kudarat, Philippines

Poverty has been one of the major considerations in the government’s blueprint for the course of investment priorities in the Philippines. In the annual Investment Priorities Plan (IPP) of the Philippines, the government has concentrated on the sectors that were enumerated in the Medium-Term Philippine Development Plan (MTPDP) 2004-2010 Under the different administrations, the government has shown its aim to lower the poverty level through the periodic development plans. It was only in the 1987-1992 Development Plan, however, when poverty target was included. The 1999-2004 MTPDP further included the regional target plans. The 2001-2004 MTPDP, on the other hand, did not take into account the poverty reduction levels. Poverty was extensively pointed as prevalent in the rural areas in the MTPDP 2004-2010. To address this, the plan intended to develop at least two million hectares of agribusiness land within the six-year period to generate two million jobs and to increase availability of food at reasonable prices (MTPDP 2004-2010). In Mindanao, the island with the highest number of poor provinces, nine commodities are prioritized for development to alleviate poverty. Commodity road maps have been crafted for these commodities which aim to facilitate the achievement of the following goals of the Agricultural Fisheries Modernization Act (AFMA): food security, poverty alleviation, social equity, global competitiveness, and resource sustainability. These were also aimed to create one million jobs in the rural sector. The product-specific program in line with this is the “One-Town, One-Product” or OTOP which was patterned after the “One Product, One Village” model in Japan. One of these commodities is oil palm. This paper highlights oil palm as an example to illustrate the impact of its promotion on poverty level. It concentrates on Sultan Kudarat as one of the provinces in Mindanao which was found to be the eight poorest province in the country in 2000 from the 38th rank in 1997. Oil palm is the commodity considered in Sultan Kudarat’s OTOP. The paper generally aims to assess the impact of this product to the intended beneficiaries in terms of poverty level. Secondary data were used for the analyses. These data were sourced from various literatures and agencies. Primary data were gathered through interviews with 87 oil palm growers and other key actors in the oil palm industry using semi-structured questionnaires. The results show that many small-scale farmers benefit from oil palm growing. About 56% of the respondents have farms area of 5 ha or less. Other related study, however, suggests that farm experience and farm size are significantly related to monthly income. It is ascertained that there is a need for technical assistance and sourcing of finance in their operations since farming activities are restricted and return on investment is not immediate.