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Buffalo Bonanza
ADB Review [ April-May 2006 ]

An ADB-assisted project for rural communities is significantly increasing, if not doubling, farmers’ income

By Ian Gill,
Former Principal External Relations Specialist

CASH CARABAO Erning Ramos began selling carabao milk as a sideline, and it is now a major source of income

Talavera District, Nueva Ecija

Ernesto “Erning” Ramos, one of 12 children of a rice farmer, dropped out of school after sixth grade because funds were short. Now, at 52, he’s also a farmer and has five children—but he’s sending them all to school.

His eldest daughter, Mayeth, 25, is a treasurer in a local cooperative after graduating from college in computer science.

One reason Mr. Ramos is able to give his children an education is that he is making a handy profit from what started as a sideline a few years ago—selling carabao (water buffalo) milk.

A WORKER in the milk processing plant churns out milk candy

Mr. Ramos is one of about 1,000 farmers in this district of Nueva Ecija province, a few hours’ drive north of Manila. They are taking part in an Asian Development Bank (ADB)-assisted Agrarian Reform Communities project to help farmers boost their often unpredictable and insufficient income from the land.

Standing next to a tethered carabao, Mr. Ramos says he obtained his first buffalo in 1999 and now has six. By selling milk from a single carabao to a local cooperative, he can earn P35,000 ($685) in 7 months. That is almost as much as he makes from the two rice crops he harvests each year on his 3-hectare farm.

Such livelihood projects—ADB is financing schemes for 165 similar communities countrywide—are helping break a vicious cycle in the Philppine government’s land reform program.

“Many farmers who receive land under the program frequently mismanage the land through lack of skills and technology. They borrow money using the land as collateral and often end up losing the land,” says Bobur Alimov, an ADB project economist. “Earning this extra income can break the cycle.”

HEALTHY INVESTMENTS Farmers dry their rice harvests on the roads; hog-raising is another income-boosting activity in Talavera

In a wider context, a recent ADB study shows that poverty results from being deprived of essential assets, including education, drinking water, credit, housing, and land. “Our project is designed to give the rural poor access to some of these assets, and to leverage the intrinsic enthusiasm and entrepreneurial capability of Filipinos,” says Tom Crouch, Country Director of ADB’s Philippines Country Office.

In Talavera district, cooperatives typically collect 1,200–1,500 liters of carabao milk a day, paying farmers between P250 ($4.90) and P500 ($9.80).

In turn, the cooperatives sell 80% of the raw milk to big processors in Bulacan, Subic, and Metro Manila. Much of the rest is processed at a local plant, where women in white masks sit in a sterilized room churning out products such as flavored milk (chocolate and lacto juice), pastillas de leche (milk candy), and white cheese.

Formed in May 2002, the local federation of cooperatives racked up a net profit of P517,000 ($9,942) in 2003 and P302,000 ($5,800) in 2004, says federation chairman Jaime Ramos. It is a far cry from the days when farmers sold milk on their own in the local market. “There were so many small sellers and the return was low—and carabao milk is perishable,” notes Mr. Ramos.

This growing business—and other activities under the project including hograising and growing off-season vegetables such as bittergourd, eggplant, and tomatoes —have more than doubled the yearly income of the average Talavera farmer to P70,000 ($1,373) in 2005 from P30,000 ($577) in 2002.

One major component here is a new 7-kilometer road linking the countryside with the town. Such access roads boost farmers’ incomes by reducing the need for middlemen and by providing better access to inputs, such as seeds and fertilizers, as well as markets. “This used to be a dirt road, and some farmers hired a pushcart to take their produce to market,” says Joyce Ramones, project manager for the Department of Agrarian Reform. The road was finished in 2004.

A goal of the project is for local farmers to make enough money from carabao milk in 3–5 years’ time so that they will be able to save their farm income.

For Erning Ramos, the future may already be here. He used to borrow money, he says, but he has repaid his debts, owns a motorcycle taxi, and is educating his children.

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