• Text By: Evan Tan
  • Photo By: Cropital

Clicks That Cultivate

"If you are a landless farmer, we can fund you without the need for a collateral."

At first glance, the Philippines looks like a good place to be a farmer. The Southeast Asian archipelago of more than 7,000 islands is a country brimming with natural resources. Globally, it is one of the largest exporters of bananas, pineapples, and coconut oil – bounties produced from about a third of its land meant for farming. Coupled with a young labour force of mostly able-bodied men and women aged between 25 and 34 years old, the potential to grow the agricultural sector and its workers seems promising.

But in reality, the agricultural sector is not a major contributor of the country’s economic growth. In fact, agricultural output fell in 2016, with almost a five percent decline in the crops subsector.

From storms which regularly pummel the country to widespread government corruption, the difficulties facing the ordinary farmer discourage many from tilling the soil. Because of this, a food security crisis looms ahead, made worse by the younger generation’s refusal to take up agricultural work and leaving an ageing breed to work the land. The average age of a Filipino farmer is 57, and the agricultural sector only employs 27 percent of the workforce. Also, about two in five farmers remain poor.

24-year-old Ruel Amparo is no stranger to some of these problems. As the founder of Cropital – a crowdfunding platform that helps finance farmers – he understands the plight of many agricultural workers when it comes to funding their farms, and how they often fall prey to usurious lenders who take advantage of the farmers’ lack of financial know-how, coupled with desperation to support their business.

Cropital’s website lists 21 farms that have been fully-funded – proof of concept that it can empower private individuals to do something for the agricultural sector by helping them to offer direct financial assistance to farmers.

Ruel tells Catalyst Asia why he decided to take on the challenge of fixing the agricultural industry, what he thinks the government and the private sector could do together, and how he aims to uplift the life of the ordinary Filipino farmer.

The Cropital team

Can farmers apply to enter Cropital? What is the vetting process like?
Yes, we encourage farmers to apply. There are basic requirements that they need to meet, and we consciously made the requirements accessible and easy for them. First, they need to have certification from community leaders that they are really farmers and residents of the area, and that they are authorised to use the land that they are renting. If they owned the land, then they need to have the land title. For some crops, like rice, the farm has to be irrigated. We also do client investigation – there are certain traits and characters that we look into. If the farmers pass our investigations, they can get funded.

What achievements are you most proud of since you began Cropital?
The most measurable one was the ability of Cropital to fund farmers. When we started, we raised 400,000 pesos (about 10,600 Singapore dollars) in three days. Now, we can raise a million pesos in two hours. There are still a lot of people wanting to invest in farmers. Our palay (rice) farmers from Bulacan are a good example. They are the ones who have been with us the longest – almost two years now – and we are seeing progress.

The first progress is in their finances. We were able to provide the rice farmers with low-cost funding, unlike their previous funding sources. Aside from savings, we also gave them additional sources of revenue through our partner institutions, like backyard piggeries. We are seeing changes in the farmers’ mindsets and practices in order to improve their productivity and yield. We also provide crop insurance as additional backup in case things happen unexpectedly.

Farmers are among the poorest workers in the country, and most of them do not even own the lands they farm. How can Cropital empower the landless agricultural workers?
The point of view of financing for a majority of the farmers is that they can only get funding from banks, cooperatives or other microfinancing institutions if they have a land title as collateral. For those leasing the land, they most probably cannot get funding.

For Cropital, having a low barrier to entry makes it non-discriminatory for landless farmers. What do I mean by this? As mentioned, one of the requirements we ask for is proof of authorisation to use the land. If you are a landless farmer, we can fund you without the need for a collateral. We feel that the government can do more by making things more effective so that more farmers can get their own lands from the agrarian reform policies.

Do you think Cropital somehow relieves the government of its responsibility to fight for the farmers it should be serving?
Yes, in the sense that some of the things that we are providing the farmers, like training, assistance in processing crop insurance and so on, are things that should be done by the government and therefore can be considered as overlaps. If the government is not effectively doing some of those things, it would be great if private organisations can fulfil those aspects. If we expect the government to solve everything, it will take some time. Private individuals or companies can hasten the process, and make the farmers’ lives easier.

The farmers helped by Cropital has seen marked improvements in their finances.

How do you earn money and sustain your organisation?
Cropital is a for-profit enterprise. We have transaction charges for users wanting to invest in the farmer. We share a percentage of the farmer’s net profit at the end of the harvest, or the interest rate paid by the farmer at the end of the cycle.

Do you ensure that the farmers you enable secure their future with proper wealth planning, and do you have measures to empower them to think on a more long-term basis?
Our partners conduct two types of training for the farmers. One is more on the technical and production side, while the other is on business and personal life improvement. For the latter, we teach the farmers to record their expenses and income, understand the meaning of savings, and prepare them to think a bit more long-term. We conduct several meetings with the farmers each month, where we empower them to document the things they are doing to understand how much they are really earning. During those sessions, they can share their concerns about money or family, and get insights from the facilitator as well as other farmers.

What changes do you envision for the agricultural industry in the Philippines?
Right now, the farmers are at a disadvantage, as there are a lot of individuals and private groups that are benefitting more from the agricultural sector than the farmers who are working the hardest. One change we want to happen is for the farmers to harness most of the benefits. This could happen by cutting out the middlemen or easing access to funding.

As for short-term goals, the most important one for me is the quality of impact we are providing the community. Once we have attained the quality we want, we want to scale it up. That is our long-term goal.

We want everyone to be involved and share both the struggles and the good things that are in the agricultural sector. We believe that through Cropital, everyone who has access to the Internet could feel closer to the farmers.

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