Integrated Enterprises Enhancement for Abaca Value Chain in Tujakitsan Arc Cluster
Location

TUJAKITSAN ARC cluster is in Agusan del Norte which is a third-class province and the second smallest province in CARAGA Region. The cluster is composed of four adjacent municipalities namely: Tubay, Jabonga, Kitcharao and Santiago covering 24 Agrarian Reform Community (ARC) barangays and 21 Non-ARC barangays . The cluster has a total land area of 87,862 hectares, of which 21% or 18,576 hectares is agricultural land.

The cluster area is located along the National Highway about 1.5 hour ride going to Surigao City coming from Butuan City. Nearest to Butuan is the municipality of Tubay (39.10 kms) while the farthest is the municipality of Kitcharao (73.90 kms). The ARC Cluster, is bounded on the North by the municipality of Alegria, Surigao Del Norte; on the South by the municipality of Cabadbaran, Agusan Del Norte; on the East by the province of Surigao del Sur and on the West by Butuan Bay.

Baseline Profile

Tubay’s terrain is generally characterized by flat to rolling hills with mountainous portions bordering with Santiago. The large portion of Jabonga and Kitcharao is generally described to be plain to rolling and hilly lands. The highest elevation in Kitcharao is situated at sitio Zapanta Valley of Bangayan, which is 971 meters above sea level. The municipality of Santiago is generally rolling and mountainous.

The climate in the province is type II which means there is no definite dry season and wet season in the area. However, as observed, the wettest months are observed to be from December to February with maximum rain observed. Hottest period in a year, on the other hand, falls on March and April while maximum flooding was observed on February.

Based on the 2010 census, the total population in the cluster is 82,591 with 14,334 households. The household population comprises of Bisaya, Manobos, Kamaya and Higa-onon. The cluster’s population comprises 24.84% of the whole Caraga population. The number of households in the cluster is nearly one fourth of the total number of households in the province. Its municipalities are classified as 3rd to 4th class municipalities.

The cluster area has a total physical target of 567.0090 hectares with an accomplishment of 348.4497 hectares as of September 2018 with 251 agrarian reform beneficiaries (ARBs).

Development Issues

Agriculture is the main source of income in TUJAKITSAN ARC cluster as 58% of the total households depend on agriculture as their main economic activity and source of livelihood. Coconut is the primary crop in the cluster covering 15,393 hectares which is 83% of its total agricultural area . Other crops in the area are corn, banana, rootcrops and abaca .

Average yield of coconut is 1 ton/hectare/harvest at 4 times a year . Price are erratic from P3 to P20 / kilo which is practically dictated by traders.

There is an existing 485 has of abaca in the area .

Poverty incidence is still high in the area which is attributed to its economic activity.

Challenges encountered by the farmers are low productivity of farmlands especially coconut plantation, lack of access to value-adding technologies for agricultural products , inadequate all weather roads and bridges . The People’s Organizations (POs) in the area lack capacity to manage and expand existing enterprises.

Abaca is seen as an ideal intercrop for the vast coconut farms of the cluster that offers the potential of adding to the
household income of ARB coconut farmers and providing
more farm job opportunities for other rural workers.

TUJAKITSAN ARC Cluster identified abaca as its primary commodity for industry clustering due to the presence of established abaca farms within the cluster as well as the presence of SIUFMULCO, a cooperative considered as an abaca grading and baling establishment of the province with the potential of increasing the household income .

Goals and Objective

The proposed value chain project is Integrated Enterprises Enhancement for Abaca Value Chain in TUJAKITSAN ARC Cluster .

The value chain process includes productivity enhancement, farm diversification, processing of raw produce and by products for value addition and marketing/trading of abaca fiber. This involves the provision of inputs – abaca planting materials and fertilizers for the 700 hectares targeted area abaca production, provision of 27 units stripping machine and 1 unit hauling truck .

The project will provide technical assistance to enhance the capacity & capability of the target 21 Agrarian Reform Beneficiaries Organization (ARBOs).

SIUFMULCO will be considered as the Lead ARBO with 20 other participating ARBOs.

The objective of the project is to reduce poverty incidence in the four municipalities by engaging the farmers and cooperatives in value chain- based agricultural processes or the identified abaca commodity in the area.

The enterprise will focus on buying loose abaca fibers directly from cluster participating ARBO members, other farmers and local traders using the abaca stripping machines to achieve higher classification grade. The loose fibers will be classified and tagged according to specified grade in the warehouse in accordance with government and international standards by the Philippine Fiber Development Authority (PhilFIDA) representatives .

After classification the fibers are then baled by means of pressing
machines with standard weight of 125kgs. These baled fibers are quality control inspected by the PhilFIDA personnel and tagged according to its specific grade.

It will be delivered to existing large fiber processors like Ching Bee (SPMI Affiliate) in Leyte, New Tech Pulp in Iligan , Phil. Cordage in Bicol with an open Piurchase Order with SIUFMULCO.

Abaca farm can provide sustainable source of income and will continuously promote proper abaca fiber grading system guaranteeing them the right price of produce and easy access to market.

Strategies

The proposed enterprise intends to achieve sustainable abaca fiber production through strong partnership among local abaca stakeholders; improve its socio-economic status of abaca farmers in the entire cluster; and expand abaca fiber market globally”, the enterprise plans to supply the maximum demand of its buyers and penetrate the export market.

In order to have sustainable supply of abaca fibers, the enterprise will support the production activity of its members through provision of production inputs such as fertilizers, planting materials and equipment needed.

Investment Needs

In order to expand the present 485 hectares, the project targeted a total of 700 hectares for the project duration, provide equipment and farm to market roads.

Abaca production expansion is targeted at Year 1 of 300 hectares ,2nd year is 200 hectares and 200 hectares in the 3rd year. Provision of post-harvest facilities like the stripping machine and hauling trucks and other equipments on the 1st and 2nd year.

Presently, the SIUFMULCO is the major consolidator of Abaca Fiber in the Province of Agusan del Norte and the second largest consolidator in the region. Marketing strategies of SIUFMULCO includes direct marketing; inbound and outbound selling missions; and partnership with government. The cooperative will always find information regarding industry updates, price, competitors as well as prospect buyers and will always maintain relationship with the government.

In effect it will enhance capacity of local cooperatives in managing their projects.

Market and Opportunities

At present, Philippines supplies almost 85% of the world’s abaca requirement with only Ecuador as the prime competitor. Raw fiber export accounted to an average of 17,063 metric tons during the past 10 years with over 90% going to the US and Japan.
 
The major market of abaca fiber is the Specialty Pulp Manufacturing, Inc. (SPMI) an affiliate of Ching Bee Trading, Davao City, the NEWTECH PULP in Iligan City. And Phil. Cordage of Bicol Region. These market outlets buy any quantity of fiber of any grade/classification.

There is a huge export demand of the fiber, Philippines controlling almost 85% of the world production and supply. The price fluctuation is not as erratic as with other commodities .

Gender, Youth and Indigenous Peoples

Some areas of TUJAKITSAN ARC Cluster are located within the ancestral domain of IPs, thus giving them opportunity to earn more using their lands through planting abaca. Women are major consideration of the project to empower them and be able to have their own income.

Increased productivity in abaca farms will allow opportunities for farm laborers. The current situation wherein farm laborers are exploring other job opportunities brought by the mining sector thus endangering the availability of farm labor may be reversed once the abaca industry which can provide farm workers with employment for the whole year.

Mining activities while providing higher wages are only allowed to operate for a few months per year but if abaca farms with better technology can harvest three times a year thus farm workers are assured of work around abaca farms.

Expected Outcomes

Abaca farm can provide sustainable source of income. The enterprise will continuously promote proper abaca fiber grading system guaranteeing them the right price for their produce aside from giving easy, accessible market and convenient transportation thereby expanding its operation by replicating the practice to more other participating ARBOs in the cluster.

The proper disposal of waste abaca fibers to prevent agricultural waste accumulation uses the waste materials as organic fertilizer by way of composting.

Sustainability Measures

Proper Management of Abaca Farms prevents diseases of abaca plants.

Organic fertilizers through composting of the excess leaves and stalks of the abaca plants are encouraged to minimize farm waste at the same time replenish organic nutrients back to the soil. Furthermore, the organic materials will allow porosity of the soil to retain its capacity to absorb rainwater.

During typhoons, coconut as intercropped with abaca is used as wind breakers.

Regular training of operators and regular maintenance in the usage of equipment .

There will be no cutting of trees since abaca thrives well in shady environment such as those forested areas.

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