Agro-enterprise helps boost farmers’ income in provinces

CEBU, Philippines —  An agro-enterprise project supported by the International Fund for Agricultural Development (IFAD) has beefed up “value chain” opportunities for Filipino farmers in 21 poverty-stricken provinces, linking them to markets, credit, training, and technology.

In a webinar hosted by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), the Department of Trade and Industry (DTI) reported that a project called “RAPID” or Rural Agro Enterprise Partnership for Inclusive Development and Growth has been helping raise income for small farmers and unemployed rural women.

The concept of RAPID is first to organize farmers into bigger groups as there is strength in number and in organization.  Then, they are provided with all the business support they need in order to succeed.

“There was sustained growth of agri-based MSMEs (micro small medium enterprises) with strong backward linkages to farmers.  The project generates employment and livelihood opportunities,” said Mysol Booc Carcueva, RAPID national value chain officer told the SEARCA webinar.

The webinar is part of SEARCA’s SOLVE (SEARCA Online Learning and Virtual Engagement) series in support of its five-year thrust toward Accelerating Transformation through Agricultural Innovation (ATTAIN).

According to Carcueva the RAPID project has so far helped 78,000 farming households increase their income by 60 percent. This increase in household income is attributed to increase in production due to rehabilitation and expansion of farm production areas.

The farmers also reduced transaction costs from consolidation of produce, creating economies of scale.  There was better quality produce from improved production and post harvest technologies that raised prices of the farm goods.  The households also earned dividends from cooperatives, she said.

RAPID generated 31,000 direct jobs and 155,0000 indirect jobs.  A total of 1,050 micro small and medium enterprises (MSMEs) increased their sales by 100 percent.

As an “anchor firm,”  or a market to purchase the farmers’ produce is vital to an enterprise’s survival, coffee farmers in Bukidnon have so far formalized their supply agreement to Nestle.

Likewise, Cacao farmers have formalized their supply agreement with Kennemer International which supplies cacao products to global brand Hershey’s.  Coffee farmers are able to sustain their sale of specialty coffee to Gourmet Farms and roasted coffee to Equilibrium Intertrade Corp.

RAPID also links organized farmers to a Financial Service Provider or FSP. That includes Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP), rural banks, and other small banks.

DTI which runs RAPID has entered in a memorandum of agreement (MOA) with Department of Interior and Local Government (DILG).  This is to facilitate the construction of roads, bridges, and needed infrastructure to support delivery of produce from farms to market.

 RAPID operates in seven regions including the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), Region 7 (Cebu, Bohol, Siquijor, Negros), 8 (Samar, Leyte, Biliran), 9 (Zamboanga provinces), 10 (Bukidnon, Camiguin, Lanao del Norte, and Misamis provinces), 11 (Davao provinces), and 12 (South Cotabato, Sultan Kudarat, Saranggani, Gen Santos). Its focus crops are coconut, coffee, and cacao.

There are now more than 500 coffee farmers whose produce are consolidated via the Bayanihan Millennium Multi Purpose Cooperative.  They are clustered based on their location—Nabaliwa, Mendis, Poblacion, Concepcion, Lantawon.

Cacao farmers in the Davao provinces were assisted in acquiring post harvest facilities through RAPID’s matching grant in accordance to markets’ standards.  They were given support in farm expansion and rehabilitation. The project gave farmers training in entrepreneurship.

The cacao farmers, totalling around 2,900,  were also linked to domestic markets—Nutrarich, Rosarios Delicacies, Cacao de Davao, MS3, CSI, AECMPC, and Malagos Chocolate

RAPID has enabled farmers’ organizations (FO) to hurdle many kinds of difficulties in upscaling.

FOs that cannot provide counterpart financing are rather asked to provide non-cash counterpart such as labor, existing facilities, and assets.  They are trained in preparing their own farm plans, business plans, business proposals and in managing their enterprise. They are also assisted in reconstructing historical financial statements, she explained.

RAPID helps maximize the interbank arrangements of government financial institutions (DBP, LBP) with other small banks to facilitate credit and matching grants.

“Technical assistance to Financial Service Providers and assessing their capability for designing value chain financing schemes are pursued to make them more accessible to project beneficiaries. The project focuses on sectors where investments matter.  Partnerships should have a clear business case model with profitable returns,” added Carcueva.