FACTORS AFFECTING THE POVERTY LEVEL OF PALAY FARMER-HOUSEHOLDS IN

CALAUAN, LAGUNA

Palay farmers are among the poor in the country’s basic sectors posting a poverty incidence
of 34.3% (PSA, 2017). Poor is defined as those individuals or families who have income below
the poverty threshold to meet one's basic food and non-food requirements. According to the
Municipal Agriculture Office of Calauan Laguna, palay farming is one of the major sources of
income in their municipality. However, some palay farmer-households in Calauan are considerably
poor as they do not have their own land, have low capital to purchase inputs and realize low income
from palay farming (MAO, 2018).
To further examine the situation, Oriel (2019) determined the factors affecting the poverty
level of palay farmer-households in Calauan, Laguna. Based on the results, it showed that age of
household head, mean age of household members, and mean years of formal schooling of
household members were the variables that were found to positively affect the poverty level of
palay farmer-households while years in palay farming, farm size, and savings were found to
negatively affect the poverty level of palay farmer-households at 1%, 5%, and 10% probability
level (Table 1).
As age of household increases by one year, the probability of becoming poor increases by
4.9 percent, which is contrary to the hypothesis that age of household head is negatively related to
the probability of being poor. This can be associated with the lack of job of the older household
heads other than palay farming thus they cannot generate additional income. On the other hand, as
the mean age of household members increases by one year, the probability of becoming poor
increases by 1.8 percent, which is also contrary to the hypothesis that a household with older
household members is less likely to become poor. Since household heads were already old, their
spouse was already old too who do not have a job or other source of income aside palay farming.
As mean years of formal schooling of household members increases by one year, the probability
of becoming poor increases by 10.5 percent, which is also contrary to the hypothesis that a
household with higher mean years of formal schooling of household members is less likely to
become poor. This can be attributed to the higher education expenses of a household with
household members that are still studying especially those in college level. At the same time, those
who are still studying do not generate income yet.
On the other hand, as years in palay farming increase by one year, the probability of
becoming poor decreases by 3.9 percent. This can be explained by the proper management of
resources and wider knowledge on farm practices of more experienced farmers which help them
to reduce their losses so as to get higher palay farm cash income. Moreover, as farm size increases
by one hectare, the probability of becoming poor decreases by more than 100 percent. Since palay
production has a large contribution to the cash income of a household, larger farm size means
larger income and thus leads to lower poverty level. Lastly, as savings increases by one peso, the
probability of becoming poor decreases by more than 100 percent Savings, therefore, all important
for poverty alleviation.
Based on the result of the study, a palay farmer-household with older household head, older
household members, more household members that are still studying, lower palay farming
experience, and lower are more likely to become poor.
Table 1. Results of the logistic regression analysis showing the factors affecting the
poverty level of the 87 palay farmer-households in Calauan, Laguna, 2018
ITEM PARA- COEFFI- P- STD. MARGINAL
METER CIENT VALUE ERROR EFFECT
Constant α -6.838 0.231 5.711 -
Age of household head β1 0.197 0.032 0.092 0.049
Sex of household head β12 1.655 0.422 2.061 0.369
Years of formal
schooling of the β3 -0.304 0.293 0.289 -0.076
household head
Years in palay farming β4 -0.154 0.025 0.069 -0.039
Household size β5 1.031 0.132 0.685 0.257
Farm size β6 -7.316 0.004 2.544 -1.825
Tenure status β7 0.093 0.942 1.262 0.023
Mean age of household
β8 0.071 0.079 0.040 0.018
member
Percentage of male in the
β9 0.013 0.610 0.025 0.003
household
Mean years of formal
schooling of household β10 0.419 0.094 0.250 0.105
members
Percentage of household
members engaged in β11 0.020 0.150 0.014 0.005
palay farming
Savings β12 -0.00004 0.003 0.00001 -2.611

Number of observation 87
2
LR chi (12) 81.31
2
Prob > chi 0.0000
2
Pseudo R 69.34%
Source: Author’s estimates, 2018