PBSP pushes inclusive business to help Mindanao catch up

Source: Philippine Business for Social Progress

President Benigno Aquino III found a formidable ally in Philippine Business for Social Progress (PBSP) which promotes its Inclusive Business Imperative (IBI) campaign to reinforce his inclusive growth agenda.

During PBSP’s Mindanao Membership Meeting (MaMM) and Inclusive Agribusiness Launch last September 8 at the SMX Convention Center in Davao, the President urged businessmen to invest more in Mindanao, citing the region’s great potential in agriculture.

Aquino lauded PBSP for being the pioneer organization to initiate corporate social responsibility in the country. He underscored the invaluable role of the private sector not only in income generation but also as a partner of the government in promoting development.

“PBSP worked on a very realistic premise—that the success of business could not be divorced from the development of the communities in which they operate,” said the President in his speech during the MaMM.

The affair turned out to be a homecoming of sorts for Aquino whose first job was as an assistant to the executive director at PBSP.

PBSP was founded in December 1970 by 50 Filipino businessmen who vowed to help in social development by devoting a percentage of their annual profits for use by the organization to implement projects that help the poor. Now, PBSP is promoting IBI as a bolder move in engaging businesses in socio-economic development.

“Instead of viewing communities as mere locations for factories or markets for their products, PBSP and its partners sought to develop those communities into partners towards development,” Aquino said.

Inclusive Business is a core business activity within a company’s business strategy that incorporates the poor within the company’s value chain as suppliers, consumers, and distributors or as employees, in such a way that it creates shared value. Inclusive businesses achieve commercial financial returns, while addressing systematic problems of poverty and inclusive growth.

PBSP’s Mindanao Regional Committee headed by its chair, Mr. Paul G. Dominguez, and Mindanao Development Authority (MinDA) chair, Secretary Luwalhati Antonino signed a Memorandum of Understanding and together launched the Mindanao Inclusive Agribusiness Program to continue the private-public sectors partnership in community development.

“We see this as an opportunity for promoting inclusive growth in the countryside, particularly in Mindanao,” said Dominguez.

The goal of the program is to increase production, generate income and increase job opportunities, focusing on the region’s high value crops like coffee, cacao, palm oil, rubber, corn and seaweeds.

Aquino is confident that the program will help Mindanao which had been left behind in terms of economic growth, to catch up.

“The Mindanao Inclusive Agribusiness Program comes at an opportune time, as we seek to transform Mindanao from the Land of Promise to the Land of Promises Fulfilled,” he said.

At present, some companies are taking the lead in adopting Inclusive Business in Mindanao, with the help of PBSP. Among them are Nestle Philippines, Bali Oil Palm Produce Corporation and Kennemer Foods International.

The NESCAFE Plan is a global initiative by Nestle that promotes coffee farming as a more profitable and sustainable livelihood for many coffee-dependent communities. It has two programs in the Philippines: The Agronomy program and the Farmer Connect.
The Agronomy program aims to equip local farmers with the best available technologies and techniques to help them increase their harvest. The Farmer Connect, on the other hand, is a direct-buying system that encourages small farmers and small-scale intermediaries to sell their product directly to Nestle.

“We’ve opened the buying stations throughout the country. We have nine at the moment, and we have plans to open more so the farmer can then bring their crops to the buying stations. They would get paid on the day and on the world market price for coffee,” explained John Martin Miller, chairman and CEO of Nestle Philippines

In the Philippines, Nestle is the biggest buyer of Robusta coffee, which is the main ingredient needed to produce Nescafe. Now, 30 percent of its Robusta coffee comes from the local farmers. Nestle hopes to increase it to 75 percent by 2020.

Bali Oil Palm Produce Corporation invests on Palm oil production in Mindanao. It taps poor farmers as contract growers.

In the next five years, Bali Oil is aiming to develop contract growers in Region 10 with a minimum target collection of 45,000 hectares. In Bukidnon, it bats for a minimum target collection of 15,000 hectares while 30,000 hectares is expected in Misamis Oriental.

“To uplift the lives of poor farmers, we believe that we should have a holistic and integrated approach where all stakeholders participate in the program that promotes inclusive growth for farmers,” said Manuel G. Boniao, chairman of Bali Oil Palm Produce Corporation.

Kennemer Foods International Inc. (KFI) is a small-to-medium enterprise focused on the buying, processing and exporting of high quality cacao beans to global confectionaries such as Mars.

The company, which currently sources its fresh cacao beans from smallholder farmers, runs programs that provide support to farmers such as cacao seedlings, agri-technology and farming training, ongoing mentorship and supervision, post-harvest assistance, guaranteed sale and financing assistance programs.

“The benefits are significant for all partners. For us, it means that we can scale up our production, and if we continue on this pace, it means we can establish a cacao manufacturing plant,” said Simon Bakker, CEO and president, Kennemer Foods International.

President Aquino also emphasized in his speech the advantage of bringing the public and private sector together to create a positive output.
“If the public and private sectors remain committed to the same vision and if we maintain the synergy and trust that we have so far harnessed to bring about positive results, we can look forward to a Mindanao that will serve as a true convergence point of trade and opportunity, not only for the Philippines but also for our region,” said President Aquino.

Coops unite in multi-million investment in cacao farming

Source: Source: Province of CEBU Official Website

Coop Sugbo Coalition, an alliance of three local cooperatives, plans to transform Cebu into a top­producing cacao province.

At least 500,000 seedlings of cacao were planted in Lamac, Pinamungajan covering about 500 hectares (ha) of land.

The Lamac Multi­Purpose Cooperative also targeted additional 700 ha. of farm lands to be planted with cacao.

Another 200 ha. of cacao plantations are to be set up by Sibonga Multi­ Purpose Cooperative and Compostela Market Vendors Cooperative (Comavenco) within the year.

The investment is in collaboration with Landbank of the Philippines, which shelled out a start­up capital of Php 65 million loan for the industry.

Kennemer Foods International, Inc. (KFI), a producer and marketer of foods and agricultural products, is the “assured market” of the cooperatives.

“We are very serious about this because we want the farmers to be very productive,” said Representative Cresente Paez of Coop­National Confederation of Cooperatives (Coop­Natcco) party­list.

Paez, who convened the group, said the business venture should increase Cebu’s agricultural production with focus on cacao.

He said the Department of Environment and Natural Resources (DENR) had already subsidized cacao farming in its National Greening Program. He, however, appealed that they must be given good variety of inputs so that the farmers’ efforts will not be wasted.

KFI Agri­Credit Head Virginio Jamon said Kennemer is in the business of buying dried fermented cacao beans. “At the moment there are no quality dried fermented beans. That is why we partnered with cooperatives to ensure that there will be such kind of products in the future,” he said.

Jamon informed that the world needs at least one million metric tons of cacao beans but the country is only producing 6,000 to 8,000 metric tons.

He added that Cebu also is a market of cacao as there are existing small cacao processing facilities here. “They can even produce chocolates but they get their source from Davao,” he said.

KFI needs at least 2,000 ha. of cacao plantation in Cebu.

Bon Alivio of Comavenco said most of the farmers were not aware of the benefits of the cacao industry. He hoped that once they will see the result of their program, more farmers will help address the demand.
He explained that cacao is no different from planting other commodities. What is only needed, he said, is the attitude of the farmers.

The three cooperatives were the pioneering groups that have invested in cacao farming.

Alivio also asked the participation of Philippine Coconut Authority, Department of Agriculture and DENR to join the multipartite agreement. He reasoned they might have programs that are compatible with cacao farming.

“This is what we have been waiting for,” said Emma Tallada of the support from the local government.
As president of Lamac Multi­Purpose Cooperative, which has 54 thousand members, she thanked the Capitol for providing a venue for their assembly.

She hopes that Cebu will be successful in cacao farming like Davao which is the top producer of cacao in the country.

She said a cacao farmer only plants once and may continuously harvest until up to 30 years. In 18 to 24 months, he may start harvesting every two weeks.

Jamon also stated that the farmer can earn up to Php 200,000 net income per hectare per year, which is better than coconut, oil palm and mango.

The Capitol also looked at cacao as one of the priority commodities that should be considered in its effort to get a farm­to­market road project from the National Government through the Philippine Rural Development Program.

Cocoa Revolution 2015 to push for better cocoa production

Source: Far Eastern Agriculture

The upcoming Cocoa Revolution event will zoom in on advances, trends and cocoa market dynamics, according to organisers

To be held in Singapore at GoodWood Park Hotel on 4­5 March 2015, CMT’s inaugural Cocoa Revolution summit will feature discussions on ‘Profiting from Cocoa as Demand Rises in Asia’s Emerging Markets’. The event will see decision makers of the cocoa and chocolate industry convene in the city.

Besides reviewing emerging markets, processing trends, yield and quality improvement, the summit will also present perspectives from Latin American countries like Peru and Ecuador and key updates on cocoa bean varieties like CCN 51 with good yield potential, and resistance to the diseases.

Among the speakers to be present at Cocoa Revolution include Dennis Melka, founder and CEO of United Cacao Limited SEZC, who will share his perspective on ‘New Cocoa Plantation Project in Peru’ and V. Srivathsan, managing director for Africa & Middle East at Olam International Limited presenting the company’s ‘Cocoa Position and Value Chain Activities in Africa’. Gerard Stapleton, head of South­East Asian Research of LMC International Ltd would also be present and share a ‘Global View on the Future of Cocoa Market and Dynamics of Butter/ Powder Balance’.

Country­specific cocoa production trends will be presented via sessions such as Colombia: Diversifying the cocoa market with fine flavor cocoa varieties by Zarahemla Fine Foods; Malaysia: Innovations and product development to grow Malaysia as Asia’s cocoa producer by Malaysian Cocoa Board; Philippines: Can Philippines emerge as the top quality cocoa bean supplier? by Kennemer Foods International, Incorporated (KFI); Vietnam: Raising the bar for best cocoa quality in Asia by Puratos Grand­Place® Vietnam; West Africa: Ghana: Adding value to our raw materials & improving cocoa quality and yield by Niche Cocoa Industry Limited, besides others.

Chinese cocoa consumption is poised to rise 40 per cent in 2013­18, London­based market intelligence firm Euromonitor said.

Palawan agrarian-reform beneficiaries go into cacao farming

Source: BusinessMirror

The Department of Agrarian Reform (DAR) recently signed the Cacao Production and Purchase Agreement with Kennemer Foods International Inc. (KFI) involving 54 hectares of idle lands in Apurawan, Aborlan, Palawan to help agrarian-reform beneficiaries’ (ARBs) need for sustainable farming and high-income enterprises.

Provincial Agrarian Reform Program Officer Conrado S. Guevarra said the cacao production project is a partnership between the DAR, KFI, the Department of Agriculture and Land Bank of the Philippine under the Agricultural Production Credit Program.

Guevarra said the Landbank released an initial capital of P406,000 to 33 ARBs venturing into cacao farming for the first time.

Earlier similar undertakings had been forged between KFI and a number of agrarian reform beneficiaries organization involving 200 hectares of agricultural land in selected agrarian reform communities in Zamboanga del Norte and more than 250-hectare agricultural land in Davao City.

Guevarra added that 1 hectare of cacao farm is expected to yield 2,000 kilograms of dried cacao beans per year. With cacao’s average selling price of 40 per kilo in the international market, an income of P96,000 per hectare per year for cacao farmers.

He said DAR-KFI also conducted trainings on cacao production and maintenance to help the ARBs and field implementers to understand the requirements of land preparation and cacao production management through the proper application of KFI’s

“We are so thankful to the Department of Agrarian Reform and Land Bank of the Philippines for providing us financial assistance to pursue our dream to become a cacao capital in the province, and even in the whole country,” Jaime Favila Sr., chairman of Santo Niño Multipurpose Cooperative, said.

Kennemer Foods International (KFI) provides a valuable safety net to cocoa farmers

Source: Business Call to Action

KFI joins the Business Call to Action with initiative
in the Philippines

New York/Manila, 17 December 2014 –Kennemer Foods International, Inc. (KFI), a growing consolidator and supplier of cocoa beans to the international market, has announced its commitment to the Business Call to Action. The company has created an initiative to integrate 35,000 smallholder famers into their value chain by 2020.

With ideal agronomic and climactic conditions and a large number of smallholder farmers, the Philippines is well positioned to be a stronger producer in the cocoa market. By utilizing contract­
growing and buy­back guarantee agreements with small­holder cacao farmers, KFI is providing training and helping provide effective technology and practices to increase the income of rural farmers.
“KFI’s strategy is an important model designed to empower local farmers to increase their harvests –but more importantly it helps demonstrate the value that technical training can deliver. By building this more inclusive approach to increase cocoa production, small scale farmers gain purchasing power and are better equipped to deliver and expand their production,” said Suba Sivakumaran, Progamme Manager, Business Call to Action.

The main focus of KFI is to produce and export high quality fermented cocoa beans. The company is setting up a more reliable supply of cocoa beans from the Philippines through comprehensive farmer training and knowledge sharing of best practices. Working in partnership with the local government in the region, KFI will set­up 10 Provincial Cacao hubs mostly located in Mindanao.

The company has also pioneered the implementation of the Cocoa Doctor Network in the Philippines. The network is based on the Mars cocoa sector development model designed to support smallholder based production. Piloted in Indonesia and West Africa and now underway in the Philippines, the program provides specialized cocoa knowledge and technology approaches proven to be high yielding and pest resistant to farmers.

“Kennemer Foods is pleased to showcase the work that we have been doing in the Philippines in an effort to ensure that farmers are integrated into our value chain and support them in their efforts to properly develop, maintain and invest in their farms.,” said Simon Bakker, CEO Kennemer Foods International.
It is estimated that by supporting the smallholder cocoa famers in their production efforts, they will increase their incomes by an estimated $3600 per year. In addition, going forward, the company plans to train and certify 1,300 cocoa doctors in the Philippines by 2020.

Cacao’s simmering potential

Source: CoCoTea 2015

COCOA, the raw material for chocolate, is enjoying a turn in the commodities spotlight, with global prices driven to their highest levels since 2011 by strong demand and concern over the impact of ebola on the major producing countries of West Africa. Partly as a result of the boom, output is expected to grow in the leading Philippine cocoa region of Davao, as well as Mindanao in general. But for the growth to be sustained, Filipino planters will need to overcome years of neglect and chronic underdevelopment before they can raise their position in world markets.

Commodities traders are betting on economic disruptions in the ebola­hit West African region, even though none of the major producing countries is among those hit by the disease except Nigeria which has only had 20 cases ­­ a fraction of the thousands reported by Sierra Leone or Liberia, the epicenters of the disease. Cote d’Ivoire is the world’s coco leader and Ghana, Nigeria and Cameroon also account for significant quantities.

The actual supply numbers do not yet provide evidence of a shortage. The International Cocoa Organization, while noting that demand is strong due to improving economic conditions in much of the world, forecasts Cote d’Ivoire to break its 2010/2011 record of 1.511 million tons during the current growing season, while noting favorable weather in Ghana. Overall world production is estimated at 4.35 million tons, up 10% from the previous year’s growing season.

Global price movements may of course be based on perceptions of the fragility of Africa rather than reality, but closer to home, governments, NGOs, growers and investors have caught wind of the industry’s potential and are looking at the issue from the point of view of development as well as commercial gain. Their successes and failures in the next few years may determine whether Filipino planters can harness the boom and build an industry worthy of theobroma cacao ­­ the so­called “food of the gods.”

Compared with the West African giants, Philippine output is puny at 4,875 tons in 2013. Not only is it puny, it has also been declining ­­ the crop was 9,848 tons in 1990, and has been shrinking in most of the years since. Exports accelerated from a standing start of close to zero in 2002 to 553 tons in 2013, suggesting that much of the crop is overwhelmingly for domestic use, where it fetches low prices in part because of price­conscious consumers. The exception is the high end, where buyers prefer imports. The market intelligence firm Euromonitor estimated growth in the Philippine chocolate confectionery market to have been a “sluggish” 3% in 2013, with a retail market size projected at P12.6 billion by the end of 2018.

The sprawling Region XI ­­ which consists of Davao City, Davao del Sur, Davao Oriental, Davao del Norte and Compostela Valley ­­ is the leading Philippine growing region, accounting for 3,844 tons in 2013, up 2%. The Department of Agriculture estimates land planted to cocoa in the region at over 5,000 hectares, containing 2.5 million fruit­bearing trees and supporting over 9,000 farmers.

Unlike mature plantation economies, the region remains stuck at a relatively low level of development, with the government occasionally expected to intervene in favor of struggling farmers to provide seed, training and post­harvest facilities. The agriculture department’s Region XI budget to support cocoa production is about P14 million. Specialization in cocoa growing appears to be irregular. A common piece of advice given by agricultural experts is for coconut farmers to “intercrop” with cocoa in order to raise their incomes. Part of the reason is that farmers cannot be made to specialize in cocoa, according to Gov. Corazon N. Malanyaon of Davao Oriental, because of a “sentimental” attachment to coconut. It’s the kind of arrangement that suggests less than full­time devotion to the theobroma tree, possibly resulting in sub­optimal growing methods.

Farmgate prices for beans averaged P63.36 in 2013, according to the Bureau of Agricultural Statistics, though they were down from a recent high of P88.8 in 2011. By way of contrast, the International Cocoa Organization’s average daily price for August 2014 was $3,270 per ton, equivalent to nearly P150 per kilo.

According to agriculturist Bernardo Baruiz of the Davao City Agriculture Office, ordinary beans from the region command a price of P60­80 per kilo, while fermented beans can fetch as much as P120. Fermentation is a critical process, explains Eduardo de Vera of the Balingaeng Multipurpose Cooperative (BMPC), because it removes tannins, improving the flavor and aroma of cocoa. The catch is that farmers sometimes cannot sell fermented beans for the higher price, because processors would rather work with raw beans. “Exporters like Puentespina Farms in Malagos do not buy fermented cacao because they have the facilities to do that,” Mr. Baruiz said, indicating that, as with many agricultural products, control of the value­added processes can make a huge difference in payoff.

Development organizations have not been blind to the potential of cocoa for lifting farmers out of poverty ­­ particularly coconut farmers whose trees were destroyed by recent typhoons, as well as banana farmers under the long­term threat of plant disease. The World Bank­funded Philippine Rural Development Program (PRDP) recognizes cocoa as a main crop for Davao Oriental and Davao del Norte. Arnel V. de Mesa, PRDP deputy program director, said the program seeks to provide farmers with funding, technical analysis, and opportunities to capture more value­added for their produce.

In 2015, the program is spending P5.8 billion, of which P2 billion will go to Mindanao. Of the Mindanao total, P300 million will be set aside for enterprise development; it is not inconceivable that the cocoa industry may receive a boost if farmers receive even a fraction of this funding.

Among the commercial planters, Kennemer Foods International Inc. is the most high­profile private investor so far, entering into various partnership arrangements for its venture, signing up agrarian reform beneficiaries in the Davao region, local government units in Surigao del Sur province, and a rural
bank in Misamis Oriental. It is also developing farms in Agusan del Norte and Lanao del Sur, suggesting a new frontier for cocoa growing outside the Davao strongholds, starting from a low base and expanding rapidly. The Caraga region, which includes Surigao del Sur and Agusan del Norte produced only 57 tons of cocoa in 2013, while output for the Autonomous Region in Muslim Mindanao, which includes Lanao del Sur, was only 85 tons.

The Kennemer model follows the typical developmental road map ­­ providing planting materials and technical aid to farmers, including training for “cacao doctors” who can later help other farmers ­­ but is building its cocoa empire on a breathtaking scale, with a target of developing 50,000 hectares ­­ 10 times the cocoa acreage of the Davao region ­­ over the next five years in the Philippines, 80% of which will be in Mindanao.

If Kennemer and many other players now working to grow the industry succeed, cocoa may again take its place as an important Philippine crop. It used to be so in the days when the islands were an important producer for the Spanish empire. Historical evidence of the former excellence of the Philippine bean is not particularly hard to find, but perhaps this extract will suffice as a representative opinion, and also as a vision of an alternative future when the quality of Philippine chocolate again commands premium prices.

The source is Fedor Jagor, a German ethnologist and explorer whose Travels in the Philippines, published in 1875, was an influence on the young Jose Rizal. It was Jagor who later helped open doors to the highest German scientific circles for the future national hero. Convalescing in Bicol from an injury sustained while climbing Mount Mayon, Jagor wrote:

“My house was built upon the banks of a small stream, and stood in the middle of a garden in which coffee, cacao, oranges, papayas, and bananas grew luxuriantly, in spite of the tall weeds which surrounded them. Several over­ripe berries had fallen to the ground, and I had them collected, roasted, mixed with an equal quantity of sugar, and made into chocolate; an art in which the natives greatly excel. With the Spaniards chocolate takes the place of coffee and tea, and even the mestizos and the well­to­do natives drink a great deal of it…

“It was first imported into the Philippines from Acapulco; either, according to Camarines, by a pilot called Pedro Brabo de Lagunas, in 1670; or, according to Samar, by some Jesuits, during Salcedo’s government, between 1663 and 1668. Since then it has spread over the greater part of the Island; and, although it is not cultivated with any excessive care, its fruit is of excellent quality. The cacao of Albay, if its cheapness be taken into consideration, may be considered at least equal to that of Caracas, which is so highly prized in Europe, and which, on account of its high price, generally is largely mixed with inferior kinds. The bushes are usually found in small gardens, close to the houses; but so great is the native laziness that frequently the berries are allowed to decay, although the local cacao sells for a higher price than the imported.”

President Aquino launches Mindanao Inclusive Agribusiness Program

Source: Office of the President of the Philippines

President Benigno S. Aquino III on Monday thanked the Philippine Business for Social Progress (PBSP) for helping the government develop Mindanao’s agricultural potentials through its Mindanao Inclusive Agribusiness Program.
“I am glad to see that the government is not alone through this endeavor. Through the Mindanao Inclusive Agribusiness Program, PBSP and its member companies and supporting agencies seek to

engage the private sector to invest in Mindanao by helping build the capacities of its small farming communities, thus enabling them to capitalize on the rich resources and the many opportunities available in the region,” President Aquino said during the launch of the program at the SMX Convention Center here.

President Aquino said the launch of the initiative comes at an opportune time, as the government seeks to transform Mindanao “from the Land of Promise to the Land of Promises Fulfilled.”

He acknowledged that for a long time, Mindanao was left in the margins, suffering from poverty and underdevelopment, but his administration has worked to reform the system and invest in communities in the region.
“We must boost Mindanao’s capacities, so that they themselves may catch up and contribute to our economic growth,” he said.
The government’s efforts resulted in the construction, upgrading and rehabilitation of 3,491 km of national roads, and 208.4 km of farm‐to‐market roads, he said, adding that more than P99 billion was allotted for the construction of vital infrastructure in the region from 2011 to 2014, and P63.13 billion has been proposed for infrastructure in Mindanao for 2015.

Some 161.3 km of the Digos‐Kidapawan‐Pagalungan ‐Cotabato Road were improved and 39 bridges were rehabilitated early this year, while the Basilan Circumferential Road is expected to be finished soon, he said.

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The Lake Lanao Circumferential Road Project in Lanao del Sur is also targeted to be completed next year, he said.

President Aquino further said that the Department of Agriculture has helped build post‐harvest facilities and provide equipment for the production of coffee, cacao, and rubber for the region.

He also called on farmers to carry out intercropping to increase the income of the agricultural sector.

Growing coffee, bananas, or cacao, alongside coconuts, will not only diversify the produce of a community, but will enable the farmer to earn more, and contribute more to the region’s economic activities, he said.

The President said he earlier learned that certain companies have already responded to the call to advance inclusive business in Mindanao.
Citing examples, he said that through its agronomy and farmer‐connect programs, Nestlé has equipped local farmers with the knowledge and technique for coffee production. The company also purchases the farmers’ produce.

Bali Oil taps poor farmers from communities in Mindanao as contract growers of oil palm trees, he said, adding that in the next five years, the company plans to expand operations and provide livelihood to 22,500 households in the region.

Kennemer Foods International meanwhile trains farmers from rural areas how to plant cacao trees, and purchases their produce, aiming to generate jobs for 18,833 households in Palawan, Mindanao, and Visayas by 2016.

“If the public and private sectors remain committed to the same vision and if we maintain the synergy and trust that we have so far harnessed to undeniably positive results, we can look forward to a Mindanao that will serve as a true convergence point of trade and opportunity not only for the Philippines but also for our region,” President Aquino said.

Present during the event were Interior Secretary Manuel Roxas, Presidential Adviser on the Peace Process Teresita Deles, Trade Secretary Gregory Domingo, Mindanao Development Authority Chairperson Luwalhati Antonino, PBSP Mindanao Regional Committee Chairman Paul Dominguez, and PBSP Executive Director Rafael Lopa.

Kennemer signs contract with farmer­ beneficiaries on cacao product

Source: DAR­BDCD Zamboanga del Norte

The Department of Agrarian Reform (DAR) recently signed the Cacao Production and Purchase Agreement with Kennemer Foods International, Inc (KFI) involving five Agrarian Reform Beneficiaries Organizations (ARBOs) in the selected Agrarian Reform Communities (ARC) in the Province of Zamboanga del Norte.
Provincial Agrarian Reform Program Officer II (PARPO II) Moh Dassan Adju said that a total of
Provincial Agrarian Reform Program Officer II (PARPO II) Moh Dassan Adju said that a total of 1200 hectares of agricultural land will be planted with cacao in the selected ARCs of this province. The Land Bank of the Philippines (LBP) will finance the cacao production under the Agricultural Production Credit Program (APCP) amounting to Php 88 million through loan. Meanwhile, DAR will assist the ARBOs in the preparation of loan documentary requirements for submission to LBP.

The KFI through Allan M. Datu‐Iman said that they have a long term growing program for the cacao farmers. KFI will provide the high quality cacao seedlings, trainings, supervision and a buy‐ back guarantee of the harvest.

The five ARBOs who will benefit the project are Gabu, Balas, Lawigan Agrarian Reform Cooperative (GABALARBECO) in Labason; San Miguel Agrarian Reform Beneficiaries Multi‐ Purpose Cooperative (SMARBEMCO) in Mutia; Siari Valley Agrarian Reform Beneficiaries Multi‐ Purpose Cooperative (SVARBEMCO) in Sindangan; Agrarian Reform Beneficiaries of Marcelo Multi‐Purpose Cooperative ( ARBEMCO) in Kalawit; and, Depane, Don Jose Aguirre, Gupot, Linay, Lingatongan, Saluyong Agrarian Reform, Cooperative (DAGLLISARCO) in Manukan. “The DAR‐KFI partnership will bring the desired outcome of increased farmer’s income and farm productivity. That compelled us to expand our target from 200 hectares to 1,500 hectares cacao area in the entire province,” said PARPO I Rizzel B. Villanueva.

PARO Villanueva added that a minimum of 100 hectares per municipality will be established to the 15 municipalities as a pilot area to serve as catalyst for good cultural practices of cacao growing.
Gracing the agreement signing‐activity and expressing their support to the program were Sindangan Mayor Florentino Sy, Labason Mayor Eddie Quimbo, LBP Manager‐Lending Center Vinicius Hamoy, KFI Marketing Specialist Virginio Jamon, ARBO Chairmen and other DAR Officials.

Kennemer expands cacao production

Source: Business World


DAVAO CITY ­­ Multinational food company Kennemer Foods International, Inc. is expanding its footprint in Surigao del Sur through a partnership with seven towns for cacao production that will cover 1,400 hectares over the next five years.

Based on the memorandum of understanding that the company will sign with the local government units (LGUs) within the month, a copy of which was obtained by BusinessWorld, each municipality will allot 200 hectares each for Kennemer.

The municipalities, collectively known as Macasaltabayami (Marihatag, Cagwait, San Agustin, Lianga, Tago, Bayabas, and San Miguel), will be represented by Mayor Allan A. Pelenio of Marihatag.

Under the proposed agreement, the company will provide P1.12­million worth of planting materials every year to the seven towns at an economical price.

It will likewise “facilitate access to credit, including for cacao farmers in the province who are outside the provincial cacao program”.

The municipal governments, on the other hand, will have to set aside funds to help the farmers pay for the planting materials and buy other farm inputs.

The cacao harvest will be purchased by Kennemer at “prices linked to the world price”.

Kennemer will also train cacao farmers, some of whom under a more rigid program for becoming “cacao doctors.”

This training will be done with support from the LGUs.

The company will also provide “broader support for the industry in the municipalities… to improve yields and quality, to manage pest and disease, and to help address any developments that may impact the quantity and quality of cacao production in the municipalities.”

In turn, the LGUs will also be responsible for identifying and securing suitable land areas for cacao production, assign the farmers and assist them with organizing themselves.

The municipal governments will also have to develop a program that will modernize cacao production and create related jobs for the farmers.

The collective agreement is part of Mr. Pelenio’s initiative to include neighboring towns in cacao production after his municipality signed a similar partnership with the company for the development of about 5,000 hectares of cacao farms.

The mayor earlier told BusinessWorld that he aims to encourage the leaders of the other municipalities “to join in this endeavor so they will also reap its fruit.”

Meanwhile, Kennemer said it is looking at expanding its cacao production to about 50,000 hectares in the country within the next five years with 80% of the areas in Mindanao.

Kennemer President Simon Bakker said they are focusing on Mindanao because the quality of the harvest has proven to be better than in other parts of the world, particularly Indonesia.

The company is targeting to develop about 8,000 hectares in the country, which will be expanded to 18,000 hectares by next year, including the farms in Marihatag.

Aside from Surigao del Sur, the company has also set up farms in Davao del Norte, Davao del Sur, Compostela Valley, Agusan del Sur, Davao City and the southern part of Palawan.

If the 50,000­hectare target is achieved, it will pave the way for setting up a processing plant. ­
— Carmelito Q. Francisco

Kennemer signs cacao contract growing deals with DAR beneficiaries

Source: Business World

SEVEN Agrarian Reform Beneficiaries Organizations (ARBOs) in Davao recently signed a Cacao Production and Purchase Agreement with Kennemer Foods International, Inc. (KFII)

In the contract signed on June 20, the ARBOs committed to produce cacao and sell their output to KFII for 10 years. The contract growing area covers some 274 hectares.

In a text message to BusinessWorld, Department of Agrarian Reform (DAR) Region 11 Assistant Director Venchito S. Mandap said that the seven ARBOs are ARB Cooperative, Carmen Agricultural Multi-­Purpose Cooperative, Balacan Development Multi­-Purpose Cooperative, Suawan Proper Multi­Purpose Cooperative,
Fatima Multi­Purpose Cooperative, Callawa Bonggan Employees ARB Cooperative, and Latungan Farmers Multi­Purpose Cooperative, all in Davao City.

“These co­ops were able to access a loan assistance through the Agrarian Production Credit Program worth a total amount of P21 million,” he said.

The seven ARBOs represent 333 individual Agrarian Reform Beneficiaries (ARBs).

Provincial Agrarian Reform Program Office 11 Ernesto B. Tan said that these beneficiaries will be establishing a cacao nursery with the help of KFII. The produce will then be sold to the company.

KFII President Simon Bakker said that the company will purchase all cacao beans produced by the seven ARBOs at not less than 70% of the world market price.

Mr. Bakker added that the farmers will be given high­quality cacao seedlings, and they will also be trained on the proper cultivation of the beans.

The Department of Agriculture is also eyeing an increase in cacao production.

Recently, cacao was selected for Davao del Norte’s Priority Commodity Investment Plan under the P27.5­billion World Bank­supported Philippine Rural Development Program, which is aimed at identifying and supporting the development of a champion crop from each region. ­­ Jon Viktor D. Cabuenas

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