Coffee Production, Rejuvenation, Processing, and Marketing

Location

BATA ARC Cluster is composed of two municipalities in second congressional district of Surigao del Sur – Barobo and Tagbina. The ARC Cluster is made up of 46 barangays in which 33 are Agrarian Reform Communities. At present, the Comprehensive Agrarian Reform Program (CARP) has already transferred the ownership of 18,995.057 hectares to ARBs; this area represents 86% of the total that is covered by the Program. Moreover, the BATA ARC is home to 11,099 Agrarian Reform Beneficiaries.

Baseline Profile

The land area in the cluster generally vary in description — from plain to rolling, from hilly to mountainous with the dominant slope of the rolling and hilly type. The cluster’s climate is characterized by rainfall that occurs throughout the year which is suitable for Robusta coffee production.
Looking at communities in the cluster, the current recorded population is 78,475 with an average annual growth rate of 1.91% (2.175% for Barobo and 1.651% for Tagbina). On the other hand, poverty incidence rates among families in the municipalities of Barobo and Tagbina were relatively high at 45.7% and 48.0%, respectively, although the area is endowed with bountiful natural resources that could have fueled the local economic growth therein — including development of coffee industry.

Development Issues

The BATA ARC coffee industry is faced with daunting disadvantages that will have to be addressed for opportunities to be optimized. The local coffee farmers are presently maimed by low productivity levels and lack of access to affordable credit. The lack of infrastructure, including water system and farm-to-market roads (FMRs) are also hindering factors for the industry. Not to be considered any less important, capacity building will have to be substantially infused and provided. Necessary trainings on the best practices in coffee farming, the use of the new technologies and facilities, and the marketing mechanics should be effectively conducted. Trainings on organizational development, credit and financial management — especially amongst members of cooperatives — also must not be overlooked.

Goals and Objective

Given the emerging industry and its challenges, the cluster is recipient of Project ConVERGE which has a primary objective to improve the household income for BATA ARC Cluster ARBs/farmers by increasing farm productivity in Robusta Coffee from 0.48 MT per year to 1.0 MT per year and to create employment for 4,000 farmers and workers in the area in 6 years, thereby help achieve inclusive growth. The specific objectives are:
a. To make coffee farming more profitable for the BATA ARC cluster farmers through productivity improvement & value adding;
b. To improve quality of coffee through provision of appropriate postharvest technologies and facilities;
c. To improve access to market through business partnership and improved logistics support/infrastructure;
d. To expand production scale and increase income of farmers through improved access to credit; and
e. To create sustainable convergence, collaboration and networking among stakeholders.

Strategies

Aiming to reduce poverty incidence in the two municipalities (Barobo and Tagbina) of BATA ARC cluster in Surigao del Sur, engaging the farmers and cooperatives in value chain-based agricultural processes for the major commodities in the area is essential. This includes productivity enhancement, rejuvenation, processing of raw produce and by-products for value addition and marketing/trading of commodities as shown in the diagram below:

Moreover, participation of other stakeholders is also ensured for an efficient and effective project implementation:

Academe, Financial Institutions, Private and Public Research Centers and Institute, Technology Licensing Organizations and Offices, Chambers of Commerce and Industry are relevant stakeholders involved in Project ConVERGE. These institutions function with their respective mandate to ensure different aspects in the development of Coffee Industry participated by our ARBOs.

Investment Needs

Focusing on the Value Chain, the project covers production, rejuvenation, processing, and marketing of the coffee. To increase production, paired with appropriate technology trainings, coffee seedlings and fertilizers will be distributed to the farmers in the cluster. Level 2 Potable Water System will also be provided to support coffee plantations. Together with technical and management trainings, coffee processing equipment such as depulper, dehuller, roaster, grinder, vacuum sealer, will be purchased and turned over to MKCCGC to ensure the production of good quality ground coffee. Several rural infrastructures – Farm to Market Road, warehouse, solar dryer, will also be constructed to improve the capacity of MKCGC and other ARBOs in supplying the expected increase of demand coffee. Moreover, through the project marketing agreements with business and private sectors and financing institutions will be facilitated to secure partnership and widen business ventures.

Market and Opportunities

In terms of market availability, existing coffee producing ARBOs are currently supplying to Nestle, Kopiko and other private buyers. With the increasing demand of coffee in the Philippines, it is further expected that the market of a quality coffee would also increase, and the project aims for the BATA ARC Cluster to be able to competitively participate in the industry.

Gender, Youth and Indigenous Peoples

Align with IFAD’s mandate, inclusion of women at least at 50%, IPs at 15%, and youth of the project beneficiaries is necessary and is given importance. For instance, women in management are encouraged and regularly monitored; and IPs are also included in technology and organizational development trainings and sub-project lobbying. The participation and role of these sectors are always highlighted in value chain plan implementation and will be continually observed throughout the project.

Expected Outcomes

The ConVERGE Project presents concrete programs to empower the BATA ARC farmers as entrepreneurs and the farmers’ cooperatives as solid, profitable organizations that will serve as efficient vehicles for ensuring that the provided infrastructure, facilities, equipment, financing, market linkages and capacity building will significantly contribute to augmented income and improved lives for the farmers.

Sustainability Measures

Lastly, the vital key to the sustainability of the operations of the Project ConVERGE in BATA ARC Cluster beneficiaries is market linkage. Other sustainability mechanisms are also identified such as the following:
• Product enhancement — blend with Robusta and Arabica to add flavor and aroma of the product. Membership to food processor associations, networking to financial institutions in product development, product registration to FDA and HALAL and inclusion of local government unit.
• Forming federation of Coffee Growers Cooperatives to increase volume of coffee production and to command good market price and have competitive market advantage.
The sustainability of the coffee industry in the BATA ARC can be further ensured by the continued support of the Philippine Government, the local government and the industry players. The ConVERGE Project can see to the forging of long-term market agreements between the farmers’ cooperatives and Nestle as well as other identified buyers of the cluster’s produce. Likewise, the immense support that will be provided by the national government agencies should constitute as leverage for continuing efforts to further increase the inclusive growth to be achieved in the BATA ARC Cluster initially through the ConVERGE Project.

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