Social Capital, Ethnicity and Decision-Making in the Philippine Vegetable Market

The paper tackles the issue of social capital as observed in several ethnically bonded groups of agricultural rural communities in the mountainous regions of northern Philippines. In the first part of the paper, the social capital of indigenous farmers and traders are measured. Findings show that there are six components underlying social capital in the region: informal networks, core trust, institutional trust, poverty perception, common goals and life satisfaction. In addition, tests provide evidence that social capital in Benguet is influenced in varying degrees, by gender, education, religion, age and ethnicity. Comparing municipal social capital indices with the aggregate mean, overall social capital among agricultural communities in northern Philippines were found to be low. In the second part of the paper, the determinants influencing farmers' decision to do business with certain trader types was tested. Results show that farmers' decision-making was influenced by their inherent social capital; meaning, farmers with high social capital approach decision-making differently than farmers with low social capital. Empirical tests showed that farmers in the high social capital group were better-off than farmers in the low social capital group. Further analysis showed that the respondents' ethnic affiliation and level of institutional trust have the same influence among farmers in terms of selecting transacting partners.