Today is: Fri, May 24, 2013
New breed of Mindanao grower-entrepreneurs masters the supply chain
KORONADAL, South Cotabato ,Philippines – Associations of growers in Mindanao are becoming increasingly competitive in the expanding fruit and vegetable supply chain by adopting a farsighted, corporate approach towards production and marketing.
These market-savvy groups include smallhold farmers with limited production areas, such as the Dynamic Vegetable Growers Association based in Tagum, Davao del Norte.
Dynamic, which was formed in 2005, currently has 130 shareholder-members with a production area totalling 105 hectares, as well as 200 affiliate growers with about 200 hectares.
Despite its relatively small size, Dynamic directly delivers an average of eight to 10 metric tons of assorted quality vegetables weekly, all year round to clients ranging from an international chain hotel and the penitentiary system, to wholesalers in the Visayas region.
“Farmers can become entrepreneurs themselves,” said the group’s president, Ray Acain.
Another group the South Cotabato Banana Creations Inc. (SCBCI), has evolved in five years from a informal alliance of smallhold farmers selling to wet-market traders, into a seasoned corporation that grows, consolidates and markets a variety of vegetables for high-end supermarket clients.
Bernadette de Jesus, co-founder and corporate secretary of SCBCI, wryly admits that the group’s name no longer quite fits its profile.
“We started out just like other farmers, selling saba bananas to local traders. But they would dictate the terms, and take their time to pay us,” she said. “So we thought of dealing directly with the market ourselves, and started figuring out what fruit and vegetable products would sell best.”
SCBCI established itself as a produce concessionaire in a mall in nearby General Santos City. Today, the company procures and retails up to five metric tons of about 70 varieties of fruit and vegetables weekly, through outlets in four high-end mall supermarkets.
The group has remained relatively compact throughout its existence. Currently it has 15 active members with a total growing area of 40 hectares, and 15 affiliate growers, according to SCBCI co-founder and treasurer Victoria Motril. Its largest farm is eight hectares.
Dynamic and SCBCI credit the US Agency for International Development (USAID) for giving them technical assistance at critical junctures in their development.
USAID works with growers’ associations, farm cooperatives, including cooperatives composed of former combatants of the Moro National Liberation Front, industry councils, and other business support organizations to strengthen the competitiveness of Mindanao’s agriculture sector.
Through its Growth with Equity in Mindanao (GEM) program, which is implemented under the oversight of the Mindanao Development Authority, USAID provided Dynamic and SCBCI with training and on-site technical advice to improve production quality and post-harvest handling, as well as marketing support.
USAID partnered with local government units, the Department of Agriculture (DA) and other agencies in order to maximize this assistance.
A crucial step for both growers’ groups was learning to diversify and to create economies of scale.
“Our problem at first was that we could not consistently provide the volumes required by our clients,” said De Jesus.
USAID provided training in the practice of commodity clustering, in which groups of farmers focus on cultivating a specific commodity according to strict protocols, following delivery schedules and volume specifications agreed upon by both growers and clients.
“In this way, we can regularly deliver products of consistently good quality to our clients,” said Motril.
“We also help each group of farmers select a second commodity for intercropping,” said Acain. “This diversification provides a safety net.”
Acain laments the fact that there are still smallhold farmers in Mindanao who would go hungry if they didn’t hire themselves out as laborers, in addition to working their land.
This doesn’t have to be the case, he said.
“If production and distribution are planned and handled well, vegetables can bring in a big return on investment,” Acain noted.