Rural poverty and environmental degradation in the Philippines: A system dynamics approach

Poverty among the small cultivators in the Philippines remains widespread despite a general increase in per capita income during the last three decades. At the same time, the degradation of agricultural land resources, as sources of daily subsistence for the rural workers, is progressing. Past policy studies on the alleviation of rural poverty in the developing countries have centered on the issue of increasing food production and expanding economic growth but gave little attention to the issue of constraints imposed by degradation of agricultural land resources. Only in recent years have there been increasing focus on the relationship between rural poverty and environmental degradation. Inquiry is, however, often done by simplistic one way causal relationships which, although often illuminating, does not provide a comprehensive understanding of the different interacting processes that create rural poverty and land degradation. Thus, policies ensuing from such analyses provide only short-term gains without effecting lasting improvement in the living conditions of the small cultivators. This dissertation examines the complex interrelationships between rural poverty and land degradation and attempts to explain the inefficacy of broad development programs implemented in alleviating rural poverty and reversing deterioration of land resources. The study uses the case of the Philippines for empirical validation. The analysis employs computer simulation experiments with a system dynamics model of a developing economy consisting of an agricultural sector whose microstructure incorporates processes influencing: agricultural production; disbursement of income; changes in the quality of agricultural land resources; demographic behavior; and rural-urban transfer of real and monetary resources. The system dynamics model used in this study extends the wage and income distribution model of Saeed (1988) by adding to it decision structures concerning changes in the quality of agricultural land resources and rural-urban interaction. The study concludes that development programs advancing growth in agricultural production and providing technological, organizational, and financial assistance to target poor groups would not deliver long-term improvement in the economic conditions of the poor peasants unless distribution of land is altered. Similarly, policies promoting land improvement and conservation measures in an economic environment where land ownership remains skewed do not produce lasting betterment of agricultural land quality. It has been shown that a policy, which discourages the separation of land ownership from cultivatorship by imposing a tax on income accrued from absentee ownership, is therefore very critical in promoting land ownership among small cultivators and changing unequal land and income distribution. However, in order to sustain the improvement in the economic and environmental conditions of the small cultivators, this policy of taxing rent income must be complemented by policies that: (1) promote increases in agricultural production; (2) provide technological, organizational, and financial assistance to the small farmers; and (3) promote land improvement measures