Commodity-Based Commodity-Based Associations of Small Associations of Small Producers in Addressing Producers in Addressing Competitiveness Competitiveness and Successful Market and Successful Market Engagements Engagements LEALYN A. RAMOS Department of Agriculture June 29, 2009
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The Importance of Commodity-Based Associations of Small Producers in Addressing Competitiveness and Successful Market Engagements LEALYN A. RAMOS Department.
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The Importance of The Importance of Commodity-Based Commodity-Based
Associations of Small Associations of Small Producers in Addressing Producers in Addressing
Competitiveness Competitiveness and Successful Market and Successful Market
EngagementsEngagements
LEALYN A. RAMOSDepartment of Agriculture
June 29, 2009
Outline of PresentationOutline of PresentationA. Overview of the Philippine Farm SectorB. Where Do We Want to GoC. Demands and Challenges to be Competitive,
Sustainable and EfficientD. Trends of Agri-related OrganizationsE. Commodity Based Organizations in the Region and its
importance and AdvantagesF. Marketing ClustersG. DA Interventions for Commodity-Based Organizations
The Philippine Farm Sector The Philippine Farm Sector • Consist predominantly of small
unorganized farm holdings planted to crops
• 4.8 Million farms covered 9.7Million has. with average farm size of 2 has.
• 40% of the farms were less than 1 ha. in size and occupied 8.6% of total agri area
• 41% was from 1 to <3 has. in size and occupied 31% of total area
• 10.6% was 3-5 has. covering 18.4% of total area
• 6.3% was from above 5 to <10has. accounted to 19.8% of total area
In effect, about…
90% of the farmers have less that 5 has. which was 58% of the total area.
97% of farms, occupying 94% of total agricultural area was owned by individuals while less than 0.2%, accounting for 2.2% of total area was owned by corporations;
Most farms were owner-operated, with nearly 79% (83% of the area) being owned; less than 13% tenanted (12% of the area) and 2.3 % leased (2% of area)
The Philippine Farm Sector
WHERE DO WE WANT TO WHERE DO WE WANT TO GO?GO?
Globally competitive,
sustainable and
efficient agriculture
Agriculture is the backbone of the economy.
Agriculture and fishery are the main occupations in the rural sector. Rural poverty remains high. By government accounts, half of the rural folks are poor; while 70% of the poor reside in the countryside. Indeed, poverty is an agricultural phenomenon.
Demands and Challenges to be Competitive, Sustainable and Efficient-
• Agreements under the GATT-WTO-we have to open our markets with decreasing tariffs-we have to access foreign markets
• Speed and sophistication of production and post production technologies
• Need to protect and improve productivity of our dwindling production areas
• Global climate change
Demands and Challenges to be Competitive, Sustainable and Efficient-
Trends of Agri-Related Trends of Agri-Related Organizations with DA-Organizations with DA-
RBOs based on gender and age - Farmers Associations (Male Farmers)
that soon transformed into Samahang Nayons and Coops
- Rural Improvement Clubs (Mothers or Single Matured Women)
- 4 H Clubs (youths both male and female)
Trends of Agri- Related Trends of Agri- Related Organizations with DA-Organizations with DA-
Multi- Purpose Cooperatives
Industry Associations and Federations-composed of producers, processors of common
commodity -first in the country at Region 10
CAFFINORMIN (Chamber of Agriculture, Fisheries and Food Industries in Northern Mindanao)
reduce costs, as well as maximize grower’s profits
The Normin Veggies The Normin Veggies ExperienceExperienceFormally organized on April 14, 1999 with 15 founding
members from Bukidnon and Misamis Oriental. Present membership reached 141 small growers and independent anchor farms in Region 10 with aggregate vegetable area of 750 hectares.
The organization aims to become a competitive vegetable industry producing high value, high quality and safe vegetables for the domestic and international markets.
The NORMIN VEGGIES The NORMIN VEGGIES ExperienceExperience NorminVeggies continues to bring growing microenterprises into the
mainstream markets guided with the principles on good agricultural practices, organization, clustering, customer satisfaction, value chain approach and entrepreneurship.
Applied Industry Clustering Approach in Year 2002. They transformed the vegetable farms from fragmented, smallholder farm production to market focused and competitive business operation along with converting products from “low value” to “high value”.
Their buzz phrases are “Not just farming, but farming profitably, and working with markets” and “Consolidate to compete”
The Normin Veggies The Normin Veggies ExperienceExperience A marketing cluster is a small group of 5-15 producers headed by a
cluster leader who commit to market collectively to an agreed buyer(s) and to follow a common quality management program.
Depending on the intended buyer, a cluster can be a one product
cluster like the iceberg lettuce for fastfood chain processors and the carrot cluster. It can also be a diversified-product cluster, like assorted vegetables for supermarket consolidators.
The Normin Veggies The Normin Veggies ExperienceExperience Since 2007, their average monthly outshipment reaches 57,889
kilos with an estimated value of P1.4 Million pesos Through the clusters, vegetables continue to be marketed jointly by
independent and small growers. The Association was awarded by Pres. Gloria Arroyo with Model
Regional Cluster Award and Specific One-Town-One-Product Citation Award
Farm to Plate: NORMIN Vegetables to Manila
Tomato: P 4.00 (Cost of Production)
P 6.00 (Farm gate price/kg)
Other Markets: P 25.00 (Selling Price/kg)
Fresh Valley (Manolo Fortich)
Loading in 2Go refvanPackinghouse
BFT Holy Spirit P 9.30 Transport and Handling Cost (RORO)
BFT Margin:10% of selling price
Total Farmer’s Margin: P 4.70
Total Farmer’s Margin: P 2.00
Tomato: P 20.00 (Selling Price/kg)
The Normin Veggies The Normin Veggies ExperienceExperienceInterventions from DA-
-Bagsakan Center at Agora-Reefer trucks and van-Cold Storage Facility-Small Irrigation Systems-Rain Shelters-Trainings and Techno
Demos
DA’s Various Interventions to DA’s Various Interventions to Clusters or OrganizationsClusters or OrganizationsHand/Farm TractorsRain SheltersFlatbed DryersVillage Corn Cob dryersPacking housesScreenhousesTrading Posts/Bagsakan CentersBarangay BagsakanTrainings, Demos, Seeds, Bio-control Agents, Laboratory services