Intensified Rice Production, Milling and Marketing

Location

The Salug Valley Cluster ARC in the Province of Zamboanga del Sur, covering the municipalities of Aurora, Dumingag, Josefina, Mahayag, Molave, Ramon Magsaysay and Tambulig.

Baseline Profile

The Salug Valley Cluster ARC is located in the northwestern portion of the province of Zamboanga del Sur. It belongs to the 1st Congressional District of the province. The Salug Valley is composed of seven municipalities namely; a) Tambulig, b) Aurora, c) Ramon, Magsaysay, d) Molave, e) Mahayag, f) Dumingag, and g) Josefina.

The total land area of the Salug Valley is 152,009 hectares. It is a mix of sloped area of around 78% and the remaining 22% are ideal for forest activities. The towns of Dumingag, Mahayag and Tambulig have vast lowland areas. The climate of Salug Valley belongs to Type IV climate wherein it has even distribution of rainfall throughout the year with two seasons, wet and dry. A total of 16,267 ARBs are present in the Salug Valley Cluster area. This is broken into 12,878 males and 3,389 females belonging to 20 ARCs.

Development Issues

Development issues that confront the farmers and other stakeholders in rice production in the Salug Valley Cluster are: a) lack of proper production and post production facilities, b) lack of infrastructures to support their production and marketing such as additional farm-to-market roads, irrigation facilities (new and rehabilitated), c) limited access to credit facilities that will free them from high-interest private lenders, and d) absence of marketing center for trading their agricultural products.

Some of the production areas experience flooding during heavy rainy season. With the lack of infrastructure, storage and transportation has proven to be difficult. Aside from that, rice smuggling has been rampant and recently, the highly controlled price for milled rice.

It has a domino effect, thus the manipulation of buying price at the farm gate. Other problems include the lack of post-harvest facilities and machineries, lack of access to formal financial credit institution, high cost of the production farm inputs and lack of market information. These are among the issues faced by the cluster.

In turn, the project has identified that what the farmers need the most are: link to access the formal financial credit institution, a fair price of their produce, new and improved technologies to improve production efficiency, and an efficient irrigation facilities and farm to market road from the production and marketing to make deemed competitive to their focused crop.

Goals and Objective

By design, Project ConVERGE aims to strengthen/enhance the participation of ARBs and other smallholder farmers, women and indigenous people in the value chain by facilitating their engagement in agribusiness partnership with the private sector. Its objectives are to increase productivity, employment opportunities and income of the beneficiary household as the project’s contribution to poverty reduction and employment creation goals under the PDP.

It adopted a participatory value chain development approach to enable target beneficiaries to optimize production, improve their market access and competitiveness and increase household income from farm enterprise in a sustainable manner. The project used the agrarian reform community (ARC) clustering approach for the provision of support services for the value chain development and achieved economy of scale in their production and marketing activities.

With the project intervention, the Salug Valley ARC Cluster is set to receive additional processing services, including a combined harvester and a milling facility. Better farm seedlings and inputs will also be provided, consequently producing a higher quality of rice.

The primary goals and objectives of the project is to increase the ARBs income by 30% through: a) increasing farm productivity by 25% in the next three years from the level of 4.9mt/hectare/year to 6mt/hectare/year, b) reducing postharvest losses by 8-5%, c) increasing production efficiency by reducing production by 5-10%, d) transforming farmers into entrepreneurs and e) ensuring stability of land ownership of farmers.

Strategies

Rice production and marketing was undertaken with four cooperatives under a consolidator-integrator scheme. Three of the cooperatives will act as integrator (MANTILIBA FIAMCO, GARBENCO & CIVCABEFAMCO) and the MAFAMCO as a consolidator. The participating ARBOs will support the additional production loans capital, improve/strengthen the common service facilities thru rental services from farm equipment and postharvest facilities needed by farmers/members.

The project will also develop/strengthen the entrepreneurial skill of the cooperative wherein each integrator will be engaged in the buying of fresh palay (rice) from the members until the preparation of the palay (rice) for milling. These will then be sold to the consolidator cooperative which in turn will do the milling and marketing of rice to various markets both in local area and neighboring municipalities/cities and outside the province of Zamboanga del Sur. Profit sharing will be practiced through the provision of dividends/rebates to the integrator cooperatives which in turn share it with the farmers/producers.

Investment Needs

Major investments of the subproject component identified to the cluster are:

a) improvement of rural infrastructure including farm-to-market roads and rehabilitation of communal irrigation system
b) farm equipment and post-harvest facilities such as multi-purpose buildings, multi-pass rice milling equipment and accessories, single pass rice mill, repair of the existing of one unit single pass rice mill, combine harvester and thresher, hauling and delivery truck, tractor, collapsible/storage system, moisture meter and recirculating batch mechanical dryer
c) production and marketing of palay through provision of farm inputs and forged market contracts and
d) capability building.

The above intends to complete each segment in the value chain to make the project competitive considering they are new entrant to the rice industry.

As the project employs the convergence approach, each partner agency is also providing support services and other needs of the project. The Department of Agriculture aids in the introduction of new and improve production technologies, production Loan Easy Access (PLEA) and provision of Pre and Post-Harvest Facilities. In addition, Philippine Mechanization for Harvest Facility extend the technical assistance to the value chain equipment provided by the project and the Department of Science and Technology assists in the conduct of the trainings for “Good Manufacturing Practices for Rice Mill”.

On financing, the Land Bank of the Philippines (LBP) helps out with the APCP window for agri-production credit. Local Government Units also supports in the construction of infrastructures.

Meanwhile, private millers/traders are also engaged in buying palay/milled rice from the ARBO (consolidator) as private business partners in marketing.

Market and Opportunities

Salug Valley Cluster is known as major producer of palay in the region 9 with high volume traded within and outside the peninsula. Through collective marketing, these cooperatives can supply the demand both in the local and national arena. The project has 2,000 hectares of lowland rice with total volume trading of 12,000 MT per cropping enough to fill the demand of milled rice needed in the market. In the future, it can substitute the importation of rice despite the highly-controlled price of the milled rice.

Gender, Youth and Indigenous Peoples

The project also ensures the representation and quality participation of men and women in the project, with the goal of at least 30% of direct beneficiaries are women. The project will also provide resources to equip the women and build their skills for a more dynamic participation in the project.

Members of the Indigenous Peoples (IPs) also comprise the targets, considering that there is a good number of Subanens in the area.

The project also expects improved production, value addition and marketing of the selected agricultural commodities.

As of 2018, the project has reached a total of 424 direct beneficiaries participated in the conduct of capacity building and ARBO strengthening activities.

Of the total members in the lead ARBO, there are 958 Agrarian Reform beneficiaries. It constitutes 453 are women or 47% and 505 are men or 53%.

On the other hand, there are 1,141 non-ARB small holder farmers. It comprises of 798 women or 70% are women.

So far, as the project reached the proportion of the total women beneficiaries were 46% (2,667) and 54% (3,129) men.

Expected Outcomes

With the interventions from the project, it is expected that by 2020, the 3,682 target beneficiary households have already been reached through trainings, production and marketing of palay/rice, rural infrastructure, and the CLOA re-documentation and subdivision.

The provision of farm inputs equivalent to 1,819 hectares and deployment of 40 Para technicians is poised to help assistance farmers in the technicalities of their business.

Farmer-to-farmer approach has also shown significant result. In fact, it has initial contribution of increase in productivity of 7.3% per hectare compared to previous cropping and had an increase income of 28% of 2018. Factors considered in the augmentation are the buying price, appropriate technology adopted, and higher yield.

In farm equipment and post-harvest facilities provided by the project, the milling enterprise of two ARBOs (CIVCABEFAMCO and GARBENCO) was able to produce 60,080 kg of milled rice with an estimated value of Php106,811.44. In MAFAMCO, combine harvester and thresher fasten the harvesting time, reduce the post-harvest losses, and produce quality palay which can command better buying price.

An initial of 40% of the harvest yield per hectare would be collected by the integrator and process these to ready for milling palay and sold to the consolidator MAFAMCO which in turn will mill said rice. Every year, the project intends to achieve a 10% increase sale of produce and expand to more buyers within and outside the province by forging a market contract. Eventually, each cooperative will manage their own operation but they must adhere to the business scheme to reach the economy of scale.

Sustainability Measures

Knowledge is key in ensuring the sustainability of the project. With this, each Agrarian Reform Beneficiary Organization is ensured to be trained adequately to handle the equipment and other physical interventions. Development of market-driven production system to meet market demands and ensure fair price for the product. ARBOs will also be linked to financing institutions to maintain their funds even after the span of the project.

A regular monitoring and evaluation of project activities together with the representatives of the various stakeholder involved in the project needs to be undertaken for them to have feeling of ownership of the project.

For the infra projects and other equipment, in particular, MLGU/ARBOs are also expected to manage each for proper maintenance. They shall establish the proper financial support system for the operation and maintenance of the completed sub-projects.

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