Coconet and Bio-fertilizer Enterprise

Location

Project ConVERGE in the Province of Surigao del Norte cover 4 Municipalities which includes municipalities of Claver, Gigaquit, Bacuag and Placer. These municipalities were fused into one Agrarian Reform Community (ARC) cluster named CLAGIBAPLA where in the major agricultural product is coconut.

Baseline Profile

The processing plant is located in Barangay Mabini, Placer, Surigao del Norte. It is about 400 meters away from the Barangay road, 6 kilometers from Mabini to Placer and 33 kilometers from Surigao City. It can be accessed via land transportation.

CLAGIBAPLA stands for the municipalities of Claver, Gigaquit, Bacuag and Placer. As the acronym implies, this ARC Cluster covers the four aforementioned municipalities with 54 barangays wherein 29 barangays are covered by ARCs. These municipalities are located at the southernmost portion of mainland Surigao del Norte up to the border of Surigao del Sur. The total land area of the four municipalities is 60,423 hectares wherein 29118 hectares (48%) are agricultural lands.

The municipalities of Claver, Gigaquit, Bacuag and Placer (CLAGIBAPLA CLUSTER) are adjacent towns in the mainland and southern part of the province of Surigao del Norte under Congressional District 2, Placer is the nearest town from Surigao City which is 33 kilometers away, followed by Bacuag, 46 kilometers from Surigao City and 3 kilometers away from barangay boundary of Placer. Going eastward, next to Bacuag is the municipality of Gigaquit, 10 kilometers from Bacuag barangay boundary and 58 kilometers from Surigao City. Claver is the farthest from Surigao City with a distance of 62 kilometers and 7 kilometers from Gigaquit. It is the last municipality going to Surigao del Sur being the boundary between Surigao del Sur and Surigao del Norte. Placer, Bacuag, and Claver are along the national highway going to the province of Surigao del Sur while Gigaquit is an interior town 4 kilometers from its highway barangay to the center of the Gigaquit.

Specifically Claver stretches across 32,262 hectares over 14 barangays including Lapinigan Island and several Islets. It lays within the grid 125º0 to 125º0 north latitude and 9º21 to 9º37 east longitude. Due north is the Hinatuan passage; west, Gigaquit, south, Agusandel Norte and Agusan del Sur; and east, Surigao del Sur.

Gigaquit is the second to the last municipality of Surigao del Norte bounding Surigaodel Sur in the south. It lies approximately between the grid 125º38’ to 125º47’ north latitude and between the grid 9º18’ to 9º37’ east longitude. The municipality is interiorly located facing the Pacific Ocean. It is 58 kilometers from Surigao City, the Provincial Capital and 550 nautical miles from Manila.

The municipality is bounded in the east by the municipality of Claver; on the west by the municipality of Bacuag; on the north by the sea and on the south by the municipalities of Alegria and Kitcharao in Agusandel Norte.

Bacuag is situated along the Northeastern coast of Mindanao, along the eastern part of the Province of Surigao del Norte. It is bounded on the northwestern portion by the Municipality of Placer and on the northeastern portion by the Hinatuan Passage. On the southeastern side, it is bounded by the Municipalities of Tubod and Alegria. Bacuag is 44 kilometers from Surigao City and 119 kilometers from Butuan City.

Placer is approximately 33 kilometers away from Surigao City, the Provincial Capital and lies in the Northen portion of Surigaodel Norte from 125º31’ to 125º 41’ north latitude and from 9º35’ to 9º43’ east latitude.

It is bounded on the north by the municipality of Tagana-an, west by the municipality of Sison, on the south by the municipality of Tubod and Bacuag and on the East by the Hinatuan Passage.

It include half of the Masapelid island of Tinago, Banga, and Mahaba. The middle portion is centrally located within the mainland of the province and contains the junction of major highways to Tandag and Butuan City.

Development Issues

Farmers in the ARC Cluster relied only in the copra and the usual practices of coconut farmers in the ARC Cluster are; they don’t treat coconut husk as a money making business, they just simply dumped the coconut as take it as a waste.

One of the constraints in utilizing the coconut husk is that, coco land is situated in areas where access road is not good and there is no available processing plant and the lack of equipment to process coconut husk into products which requires a multi-million business investment. One of the issues also in achieving this enterprise is the lack of capability of the beneficiary organization to handle, manage and implement the processing and production of coconet and bio-fertilizer.

With this constraint’s, project ConVERGE addresses this by providing access road, processing plant and equipment’s and the technical trainings.

Below are some of the issues:

  • Coconut plantation productivity in these areas is low due to: use of organic, low cost fertilizers is still not widespread as farmers view this as an additional cost they cannot afford; and, significant number of coconut trees that are either senile or have aged beyond its optimum peak of productivity. This can be attributed to low awareness and acceptance of good agricultural practices. Farmers do not practice fertilization of coconuts.
  • Inability of farmer to access financing to embark on farm rejuvenation and adoption of modern farming technologies. This can be attributed, on one hand to farmers’ and their organizations’ capacity to fulfill requirements by lending institution. On the other hand, voluminous and stringent requirements of financial institution either as perception of the borrower or actual situation, represent hindrance to make available resources to farmers.
  • Poor or absence of farm to market roads and bridges so that more farms can be accessible as source of husks to processors. While there is a noticeable interest by some farmers, the cost and effort to transport bulky and heavy volume negates whatever benefits to gain selling to processors.
  • Potential labor prefers to work in mining companies rather than coco coir processing because of low wage. Those who work in the sector need to improve their skill set and productivity.
  • High costs of operation, particularly that of electricity and rent for warehousing.
  • Low volume of coconut husk production despite vast tracts of coconut plantations, because the farmers do nut dehusk the coconut fruit because of very low buying price of coconut husk and that there is no buyer of whole coconut fruit.
  •           In the products trading and marketing aspect, the following concerns need to be addressed:
  • Unscrupulous practice by mining purchasing officers to prefer other suppliers. This results to unpredictable practice of mining firms to honor their CSR commitment to buy from Cluster producers.
  • There is tendency by Cluster operators, particularly the cooperatives, to shy away from competing with producers from other regions, especially from those coming from Bicol and other parts of Mindanao. The cooperatives have grown to rely on supplying the mining companies and have neglected to develop and build on their competitive advantage.
  •          

  •   This has resulted into their being unable to tap the market segments available to them such as DPWH contractors, and to build relations with buyers that would be interested in other products such as the organic fertilizers, GDH and coco coir and twines.

Goals and Objective

Coconet and Bio-fertilizer Enterprise focuses on the use of coconut husk as a main raw material and converting it into coconet and bio-fertilizer by providing equipment and processing plant including capacity building.

The project is envisioned to help increased livelihood opportunities and increased income of Agrarian Reform Beneficiaries or Family Heads and create employment opportunities to the individual as human power complement in the Coconet and Bio-Fertilizer enterprise developed for 10 years in operation.

It is also envisioned that the cooperative will serve as a model organization for transparent administration, good financial and project management and established track records and integrity to financing institutions, government line agencies and support organizations.

Specifically, the project is aimed to:

  1. Stabilize coconet and bio-fertilizer production.
  2. Generate jobs among farmers in the ARC
  3. Uplift the economic status of the project beneficiaries both direct and indirect beneficiaries through knowledge impartation on business enterprise development through value chain approach.
  4. Contribute to poverty alleviation.

CLAGIBAPLA ARC has a total land area of 60,423 hectares wherein 29,118 hectares (48%) are agricultural lands and out of this agricultural land coco land is 22,942 hectares. Coconut farmers in the ARC make no use of coconut husk, and for this, the project identified this as a value chain enterprise with its market demand and feasibility considering that, provinces of Surigao del Norte and Dinagat Islands are both mining capital in CARAGA Region.

Strategies
The following strategies can be done to improve the conditions and promote successful project implementation:

1. Strengthen the organizational capacity of the cooperatives and people’s organization to access the PCA program particularly in providing robust seedlings and technical services to develop and use organic fertilizers.

2. At the farm production level, to improve the productivity of coconut farm and increase nut yield to 6,000/ha/year from 4,800/ha/year.

a. Encourage farmers to apply organic fertilizer into their farms practice organic farming.
b. Encourage the rejuvenation of coconut farms by replacing senile trees
c. Encourage good agricultural practices among farmers
d. Conduct financial literacy among farmers and their cooperatives to be able to access resources to finance their farm productivity program
e. Lobby for the construction of new and upgrading of existing farm to market roads and bridges to be able to access more coconut farm

3. For the bio-fertilizer, a demo farm should be established to showcase the efficacy of
the application of MAUNFACO organic fertilizer in rice and other crops like vegetable
per municipality of the cluster.

4. At the coco coir processing level, to increase production of coco coir products and
stabilize the organic fertilizer production:

a. Intensify buying and sourcing of coconut husks to support the target of increasing production volume

b. MAUNFACO has the option to venture into buying of whole coconut at Claver, de husk the coconut to extract the husk, produce and sell copra, and produce and sell charcoal.

c. Increase skill of labor and community workers, adopt new technology and techniques, thereby increasing productivity and income

d. Access financing program for cooperatives to acquire new facilities and increase operational capital as it step up its production capacity

e. Access research and development and capacity building program of enablers and service providers to increase quality, productivity and development of new products

f. Implement benchmarking activities to learn from model coco coir companies and communities particularly production process efficiency

g. Undergo extensive organizational development initiatives to prepare farmers and their cooperatives to be able to implement and manage full scale value chain upgrading project

5. At the trading and marketing level, to strengthen market among SDN mines and
expand and penetrate new markets beyond:
a. Establish marketing contracts with mining companies and DPWH/government contractors in the region

b. Establish marketing networks and actively participate in trade fairs/missions to supply coconet , biolog and coco peat products, particularly export buyers

c. Start initiatives to tap into organic agricultural sector and urban consumer markets

d. Undergo capacity building to enhance entrepreneurial and marketing skills and attitude specially among cooperative officers and leading farmer-leaders

 

Implementation Strategy

1. Strengthen the cooperative’s entrepreneurial and marketing capability through capacity building;
2. Implement farm improvements on coconut production;
3. Establish demo farm on the application of bio-fertilizer in crops production for farmers’ appreciation and adoption;
4. Increase production of coconet and bio-fertilizer;
5. Expand and penetrate new markets;
6. Organizational Development;
7. Adopt new technology;
8. The lead ARBO eventually will go into buying the whole nuts.

The strategy of this project is through Value Chain Approach where, the main product coconut will be utilized from copra to the waste material which is the coconut husk by processing and making it a useful material for coconet, and bio-fertilizer using the coco peat, and utilizing the whole nut to create different products.

Investment Needs

FInvestment needed are the following:

1. Provision of Farm to Market Roads
2. Provision of Processing Plant and Equipment’s
3. Capacity Building
4. Technical Support

MAUNFACO has been already into twinning as supplier of hanks. It has established suppliers of coco husks, trained labor force on the purchasing of husks, as well as trained twinners.

Likewise it has established linkages with different line agencies such as Department of Agriculture, Philippine Coconut Authority, Department of Trade and Industry Department of Agrarian Reform and Local Government Unit of Placer.

For the bio-fertilizer, MAUNFACO is already in its initial stages of production. Introduction to the market was already made and effort to sell it to the farmers to convince them of the benefits of bio-fertilizer is on-going.

Currently, the coop manages to operate on a modest scale and profit. It hopes to increase income once they are assisted to acquire the equipment and facilities needed. What are the investment needs.

Market and Opportunities

KRA Industrial Users (Priority 1) Organic Farmers
(Priority 2)
Product Specification

Bionets and Biologs, per

DPWH Specs

Coco peats and dusts in

bags

 
End Users

Mining, construction and

landscaping companies

both local and export

Organic farmers,
Gardeners, LA’s
 
Market and price range Reasonable buying price, but in bulk orders –economy of scale.  
  Needs to compete with other producers from other regions, but proximity to mining companies is advantage Lowered price, but as aby-product complements that of income from main product
Prospect for growth Very good particularly if DPWH policy is strictly implemented.  
     
     

 

Coconet Market

The coconet is gaining popularity as a green or eco-friendly solution to soil erosion and soil stabilization in recent times, in the wake of serious problems of climate change and ecological degradation. It is now accepted worldwide as an effective and potent media to address environmental challenges like protecting slopes from erosion, allowing vegetation to grow in denuded and desert areas, and even facilitating waste water treatment. 

Demand for coco fiber in the world market is growing by approximately 10% annually with Sri Lanka and India as export leaders accounting for around 90%. While the Philippines has no documented export in coconet, its exports of coco coir fiber significantly grew at an average of 93.8% from the period 2007-2012 with 2.38% share to the global market. While main export product is in the form of coco fiber with China as the major export market, part of this is further processed into coconet by the exporting country.

In the domestic market, utilization of coconet for slope protection, soil erosion control and soil stabilization has been advocated since the early part of 2000 with government issuing Memorandum Circular (MC) No. 25 s. 2002 “Directing All National and Local Government Agencies, Bureaus, And Other Instrumentalities Including Agricultural Institutions and Councils to Use Coco Peat or Coir Dust and Coconut Fiber Materials for Soil Conditioning and Erosion Control”. The said MC was strengthened by the series of Department Orders issued by the Department of Public Works and Highways (D.0. No. 28 & 29 s. 2008; D.O. No. 62 s. 2009; D.O. No. 41 s. 2010) Prescribing the use Coconut Bio-Engineering Solution in DPWH Projects and also Prescribing DPWH standards for Coconut Bio-Engineering Solutions, among others. For the Mines and Geosciences Bureau of the Department of Environment and Natural Resources, they are endorsing the use of coconet as bio-engineering solutions to rehabilitate the mined – out areas of mining companies. Compliance to the said memorandum would increase the demand of local buyers for the coconet.

As support from Philippine Council for Agriculture and Fisheries (PCAF) a resolution “Recommending to the Department of Environment and Natural Resources to require the use of coconet Bio-Engineering solution to address the environmental problems relative to the operations of the mining companies”.

 

Bio-Fertilizer Market 

Meanwhile, under Republic Act 10068 also known as Organic Agriculture Act of 2010, the “practice of organic agriculture to enrich soil fertility, increase farm productivity, reduce pollution, prevent depletion of natural resources and protect the health of farmers and consumers” is being promoted and encouraged. The law provides a platform for the use of organic fertilizer wherein coco peat can be one of the media.

Gradually, farmers are realizing and slowly starting to shift to organic farming but not fully because production is quite low if application is abrupt.

Gender, Youth and Indigenous Peoples

One of the beneficiaries of coconet and bio-fertilizer enterprise in the IP community in the ARC Cluster which is being reached by the project by including them in the production process of coconet through provision of equipment’s and by capacitating them in the value chain enterprise process. The province has target beneficiaries of 30 IP households and ensures that every activity is gender sensitive.

Expected Outcomes

The project in the province is expected to reached 4,040 households with the following categories: 

Key Areas

ARBs

SHFs

Value Chain Enterprise

713

804

CLOA

878

 

Secondary Crop

324

216

FMRs (7.1 km)*

348

757

TOTAL

2,263

1,777

*If 5km proposed FMR will be funded

As of December 2018, the project already reaches 1,202 beneficiaries of which 462 are men and 740 are women. Out this reached, 394 are ARBs, 808 Small Holder Farmers and 129 Indigenous People. This reached came from the conduct of capability buildings 1,145 and the provision of farm inputs of 57 individuals.

Sustainability Measures

This proposed enterprise will sustain with the continuous technical support from various stakeholders who has the capability to train the farmers on entrepreneurial skills, business management, conflict management or any skills development which comes out during TNA and has the capacity to extend soft loan for production and expansion purposes.

Besides, the machineries, equipment and the processing building will have its depreciation yearly base on the estimated life span of the equipment and processing building however, one of the sustainable measure is to secure operating and maintenance funds which is 30% of the Net Surplus with a separate bank account intended for the purpose of repairs and maintenance and replacement of non-functional equipment as years go by.

The beneficiaries of the proposed enterprise are members of the Mabini United Farmers Cooperative (MAUNFACO) as lead ARBO with the participating ARBO such as San Isidro Multi-Purpose Cooperative (SIMPUCO), Cabugao First Farmers Consumers Cooperative (CAFIFACOCO), Kabayen-an sa Panatao Producers Cooperative (KAPAPROCO) and the IP`s of the proposed Cluster.

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