Baseline Profile

The South Bukidnon cluster is characterized as rugged terrain with rolling, hilly portions. These hills and mountains are dissected by rivers and creeks, such as the Muleta River on the eastern part which serves as common natural boundary of the municipalities covered by the cluster. The soil is generally of medium fertility and predominantly derived from fine-grained volcanic rocks, various sedimentary derivatives and pyroclastics. The most pressing soil fertility problem is high soil acidity, a result of erosion of surface soil and oxidation of organic matter following deforestation and regular cultivation.

The cluster is outside the typhoon belt and is influenced by southwest monsoon with no pronounced maximum rain period and dry seasons. The area is relatively cool and moist throughout the year with a maximum temperature of 33°C while the coolest temperature is at 16.3°C based on records. This good climatic condition made the province to become one of the major contributors of various agricultural products in the country.

The total population in the Cluster is 69,185 derived from 14,894 households. But for the 6 ARCs covered under this project, the total population is 38,372, of which 4,376 are ARBs. Maray-maray ARC has a total of 874 ARBs from 532 households.

The South Bukidnon Cluster covered a total land area of 19,615.006 hectares which are being benefited by a total of 7,411 agrarian reform beneficiaries (ARBs).

Development Issues

Based on the discussions with farmers and the estimates provided by government, family income per farmer in Maray-maray ARC ranges from PhP 3,000.00 – 5,000.00 per month, for both on and off-farm activities.

Exclusive to the agrarian reform beneficiaries of South Bukidnon, incidence of poverty is apparent as reflected by the low income of farmers.

There is no value-added products (i.e. muscovado) produced by the farmers. Small farmers have low productivity, which resulted to low income. There were problems in the logistics, regarding distribution of cane points, and distribution of mud press (as organic fertilizer).

The establishment of a business where cooperatives work together in collaboration with developed organizations, and the private sector, which will enable the project to move forward.
Development of manpower to reach a skills level that will meet the standards in both processing of muscovado is needed.
While productivity focuses on the application of good agricultural practices, the mechanisms or infrastructures should be designed in a way that it would be transformed in actual business endeavors, as in the case of providing Farm to Market Roads and a Warehouse.

Goals and Objective

A positive outlook in implementing value-adding activities for the sugar industry in Maray-maray, Bukidnon addresses various productivity issues confronting both government, private, peoples’ organizations, and largely the sugarcane farmers.  Moreover, with threats posed by the reduction of tariffs in the sugar industry in the ASEAN, this project is generally aimed at providing the enabling environment for peoples’ organizations and farmers, to be more productive and competitive:

1. To strengthen the Cooperatives and Sugar Planters in South Bukidnon.
2. To engage in value-added activities aimed at improving the income of cooperatives and farmers (addressing productivity, agri-processing and other allied activities).
3. To develop entrepreneurship among social enterprises through implementation of common business activities.
4. To further develop human resources, with the aim of improving productivity.
5. To develop muscovado as an inclusive business in Maray-maray ARC, developing the enterprise “ground-up”.
6. To provide the direction of the project from an organization point of view vis-à-vis market and institutional networking perspectives.
7. To determine strategies to ensure the readiness of the organization that will operate and manage the project.
8. To provide the mechanism that will direct the development of the project such that it will be attractive for investors in the long term.
9. To raise the level of marketing activities of the product including branding and quality assurance.

Strategies

The research process and development of the study to determine the project’s feasibility are embodied in Value Chain Analysis and Planning, which will be undertaken through the following:

1. Analysis and validation of the value chain;
2. Reference to available publications and unpublished references for secondary data and gathering of background information;
3. Review of existing market channels;
4. Interview and data gathering from value chain players through Focused Group Discussion and one-on-one interviews, which includes government institutions, muscovado processors, peoples organizations and project proponents;
5. Plant visits;
6. Evaluation of the capacities of the proponents of the project;
7. Analysis of existing business models and their application to the project and the area as specified in this study;
8. Identification of convergence / collaboration efforts among value chain players;
9. Financial viability and profitability of the project.

Investment Needs

There is a donation to be made by an individual farmer (i.e. Mr. Zosimo Soroy-soroy) to be done in favour of the cooperative where he belongs (BUKIFCARB), to increase the asset size of the organization and be able to increase its capacity to access funding; BUKIFCARB (in this case) will then be leasing the property to the Muscovado Project (in this project, proposed:  PhP 15,000/yr).

Investment plan is prepared that indicates the budget of each part of the Muscovado processing equipment.

To sustain its competitiveness, the Muscovado project will need to work in collaboration with all other stakeholders in Bukidnon in the following strategic actions:

1. Establishing a strong linkage with other producers-consolidators for improved quality.
2. Linking to bigger market prospects through the Department of Trade and Industry and Provincial investment councils/organizations.
3. Cooperation and supplementation among quality producers and suppliers.
4. Standardization, labelling and certification.

Advocacy on traceability and quality assurance, to support market positioning.

Market and Opportunities
There is a huge market potential (local and international) for value-added products. The technologies are available on muscovado processing that can be provided to the cooperatives by the government. There’s a Private sector willing to work with the cluster in muscovado. There is an available module/design in mechanizing muscovado processing.

Muscovado is experiencing resurgence in demand attributed to the growing consumer awareness and preference for organically-grown food or product alternatives that are considered healthier than conventional/mass-produced commodities.

The favourable retail price of the commodity in the domestic market and export market creates a pull-up effect on the farm gate price that is beneficial to the farmers.

In the Maray-maray ARC, they see the very positive prospect for growth since the commodity is market driven and price fetches higher rate than that of the regular milled white and brown sugar. In terms of investment requirements, the industry require relatively low capital to operate and maintain compared to other agricultural crops. It uses indigenous materials for inputs and doesn’t need complex and costly equipment.

Gender, Youth and Indigenous Peoples

The COMAT and workers of the planned Muscovado Plant will be men and women from the ARB and SHF. Laborious work will be assigned to men and youth. Tasks that require minimal intense physical activity will be given to females. The IPs in the area, who are mostly farmers will be encouraged to be suppliers of raw materials for the Muscovado Plant. The youth participated in the capacity building workshop and trainings. Since they are considered second liners, they are expected to take part in the project.

Expected Outcomes

In the first and second year of operations, projecting a maximum output of 500 kilos muscovado sugar per day, the project will need at least 2,000 metric tons of sugarcane per year, or at least covering 35 hectares a year, Doubling the investment module within Maray-maray ARC by the 2nd or 3rd year will mean that the project will require 70 hectares,

Further, expecting that there will be a ‘mushroom’ effect, in the next five years, Bukidnon will have a total of 4 modules with a maximum output of 2,000 kilos of muscovado per day. This will equate to 140 hectares devoted to Muscovado in the next 5 years, or at least 10% of the total sugarcane hectarage in Maray-maray. By then, the Maray-maray ARC Muscovado project, with all the influence areas and expansions within and outside of the ARC, will be producing 528 Metric Tons of Muscovado Sugar per year, or 44 percent of the total Muscovado exports of the Philippines of 1,700 Metric Tons. This will in effect create an increased number of employment opportunities which will include farmers, farm and factory workers of male and female of youths and IPs and non IPs.

Sustainability Measures

Sustainability of this project does not only take into account the continuity of the business or the enterprise that will be established, but should largely address its effect in the sugar industry. As the timeline in the imposition of tariff reduction draws near, there is a need for both government and private sectors to swiftly do measures that will protect the interests of sugar farmers, particularly small holder farmers. Thus, the approach to development should be both intrinsic and external to the organizations that are supposed to benefit from this project.