Tuesday, February 28, 2012

Reflections About Supporting Cacao Farmers

I started this grad school program in social entrepreneurship and change because I wasn't simply interested in making money. I wanted to contribute to creating social change - to help empower those who are in a context that has confined their dreams and possibilities.

Last fall, I finally determined that I was interested in the chocolate business and so discovering that the majority of the world's chocolate comes from child slave labor was alarming to me. This problem seems to be coming from Africa - the Ivory Coast. But simply rescuing slaves can't be the only solution to this because there is still an increasing demand for chocolate globally. If the Ivory Coast remains a major producer supplying this demand, then the business of chocolate will always overshadow the ethics.

So I figure that if we can help create new producers of cocoa in other parts of the world, then we can deal with the human rights violations without the business pressures. For example, it's easier to tell chocolate lovers to buy from some where else as opposed to simply telling them not to buy chocolate at all. By shifting the supply, we take business away from the Ivory Coast. Then we can approach them differently. This part of the issue is beyond my own scope though. For me, I want to focus on supporting producers in the Philippines.

They've got their own issues too. With growing demand for quality cocoa, the Philippines has the potential for becoming a major supplier (as they used to be in the 1980's before an insect infestation devastated crops nationwide). The problem is that small holder cacao farmers (essentially family farms) don't have the capacity to produce large quantities of quality cocoa beans. They lack the technology for more efficient farm techniques. They lack the education for effective pest control. They lack the capital to invest in farm inputs. They lack the business knowledge for operating their farm sustainably.

As I came to the Philippines, I learned of great efforts being made by two organizations. The Cocoa Foundation of the Philippines (CocoaPhil) is a local filipino non-profit organization supporting cacao farmers by offering trainings. ACDI/VOCA is a U.S. non-profit organization operating globally that is doing field work in the Philippines. Both organizations work together (and in fact have a contractual relationship for projects and funding). I'm happy to have had the opportunity to work with both organizations during my month-long stay in the Philippines for my grad school internship experience.

Both organizations have developed great connections and relationships with cacao farmers. CocoaPhil seems to operate more in the northern island of Luzon and some in the Visayas region. ACDI/VOCA seems to operate more in the southern island of Mindanao and some in the Visayas region. CocoaPhil does work in Mindanao as well though, particularly in partnership with ACDI/VOCA. The majority of the agriculture in the Philippines comes from Mindanao because the climate is so ideal.

Cacao farmers are engaged through several workshops that help teach effective farm techniques. Through organic farming, they are able to learn how to compost and to manage pests. Farmers have access to demonstration farms in various parts of the country that they can visit to learn techniques. Both CocoaPhil and ACDI/VOCA have field staff that go out to the farmers to build connections. This helps create engagement with the farmers. I didn't necessarily see ways that farmers participated in decision making, however, I did get the impression that the input from the farmers was valued.

I think both CocoaPhil and ACDI/VOCA are effective in engaging with cacao farmers. When I did farm visits in the provinces of Bicol and Quezon (on Luzon) and in the provinces of Davao and Davao del Sur (on Mindanao), I was impressed with the way the field staff was recognizable to farm leaders and also respected by farmers. That was a good indication of the kind of engagement both organizations had with them. CocoaPhil wants to engage with farmers by offering microloans but they need the financial resources to initiate such a program.

Overall, the internship experience helped shape my own social entrepreneurship endeavors. While I'm still working on developing the business side of what I want to do with chocolate (either a product or a location like a cocoa cafe), I do know that I want to provide a direct connection between the producers and the consumers. I want to tell the stories of these farmers who are cultivating the cocoa beans that eventually becomes what the consumers enjoy. I would like to maintain a relationship with CocoaPhil and ACDI/VOCA and help support their mission of supporting, educating, and empowering farmers. I would also like to allocate a portion of profits to continue supporting farm families. I'd like to help provide financial support for school tuition and supplies, medical facilities, literacy classes, and also business training. I'd also like to resource CocoaPhil in implementing a microloan program so that farmers can reinvest in their farms.

Ultimately, this internship experience in the Philippines motivates me to want to continue exploring ways of using cocoa for good.

Sunday, February 26, 2012

Reflections About The Internship Experience

I think my expectations about this internship experience remained pretty flexible. I guess I wasn't really sure what to expect. I thought that I would meet some really interesting people. I thought that I was going to get my hands dirty and actually do some farming. I thought that I was going to have a really hard time trying to communicate with people.

My expectations were positively met. I'm pretty happy with the experience. I did meet some really interesting people. There were several with happy-go-lucky personalities. There were several that reminded me of my parents. I was surprised that many people did speak some level of English even if it was only a little. I'm okay with the fact that I didn't actually get to do any farming. I visited so many farms that phase 1 was purely observational. I met so many farmers that phase 2 was focused on gathering specific data. So i didn't actually get to sit down and really get to know farmers on a personal level. They were all very accommodating in answering my questions for the study. But there wasn't much time to do more than that because I really wanted to interview as many farmers as possible. We really worked hard at getting to 40 respondents!

By the end of my internship experience in the Philippines, I was surprised at how connected I felt to my heritage. I don't think I was expecting that. I see myself as pretty Americanized since I've lived here my whole life except for the first three years after I was born. For most of my life, I had no interest in visiting this country. I imagined it as a very hot and humid place where mosquitoes ravenously attacked. However, after the internship, I'm surprised at how much I enjoyed being here and how much I want to invest into helping people here. I happened to be here during an ideal weather period that had wonderful cool breezes. This is between the really hot season and the rainy season. So the timing was great.

But overall, I learned a lot about the farmer's lifestyle and how microfinancing can help them. I'm glad I came.

Friday, February 24, 2012

Reflections About The Philippines


It is unfortunate that there is so much poverty in a country so rich in agricultural resources.

It’s a striking contrast to see the flush green fields and mountains as a backdrop for the overcrowded city centers of nomadic people looking for ways to support their families. It was surprising to me to see so many different ways that people were trying to make money. It didn’t seem to me like a beggar culture. It seemed like an entrepreneurial culture. Sure there were plenty of people wanting a few pesos, but it was in exchange for them doing some kind of service or offering some kind of product for it. Indeed there were also those who appeared incapable and relied on compassion (or pity) that begged. But the vast majority of people looked like they were willing to at least try to earn their peso.

On one occasion I rode a horse drawn cart called a calesa with my mom. We rode around Manila seeing some of the city sites while dodging cars in insane traffic. There was a moment when we stopped in traffic and saw a naked toddler girl who was dirty and probably hungry. Our calesa driver probably wasn’t a wealthy man either. I’m sure he had his own family to support. He through a coin that bounced on the ground near the little girl before traffic allowed us to proceed forward. She quickly ran to collect the coin which would likely contribute to purchasing a meal.

Poverty is relative.

There is a spectrum of those in extreme poverty, those who are barely making enough to survive, those who are able to own, and those who are able to support the livelihoods of others. Yet, even in this spectrum, the concept of living comfortably can be experienced by anyone. There are those that don’t know a lifestyle outside of their own context.

The shame in this, I think, is that corrupt people leads to the taking advantage of others. I heard about it often in the way people talked about government and law enforcement. Corruption was so common place that it was assumed by the people. I also saw people taking advantage of service providers or day laborers or farm workers in that they were paid so little for such long and hard work. I can also see families taking advantage of each other in those who rely too much on family members who come from the U.S. to pay for everything. This was a frustrating realization for me. I discovered that some of it was cultural to assume that the person with the most cash will pay for the meals when going out in a group, or pay for the groceries, or pay for the transportation. My American attitude was offended! However, even if some of it was cultural, I still thought it was rude.

It was a surprising contrast to see the hospitality of people and hard-working people alongside the willingness to get something free for as long as it’s being offered.

With so much agricultural resources, why is there still so much poverty and pollution? I think it is because there seems to be an overall lack of vision for anything better. As a student of social entrepreneurship, I know that creating change will take systemic action. This means that it will require everyone, in all parts of this society, to shift the way they see their environment. Those in government will have to adopt an empowerment attitude and lose the power-grabbing attitude. Those in communities will have to adopt an ownership attitude and lose the apathetic attitude that it’s someone else’s problem. Those in business will have to adopt a value for fairness and lose the value for profit-at-any-cost.

When I went to Davao City on the southern island of Mindanao, I immediately noticed the lack of trash littering the streets. In contrast to Manila which had trash everywhere, Davao City actually seemed clean.  I saw billboards and signs and even a sign in my hotel room discouraging smoking on a city level. It said that it just isn’t good for us. Clearly, this city had a mayor with vision who was working to help residents adopt certain values.

Overall, I think the Philippines has so much potential. I have to keep reminding myself that this is a country that has had its independence (from the U.S. and from Spain) for less than 100 years. They still have a lot of infrastructure to build. Globalization brings knowledge of what everyone else in the world has, does, or can do into a context where government and technology is just trying to keep up. This produces a tension in people’s attitudes and sense of culture. Gentrification leads to the building of large cities while displacing those too poor to live there into the slums or outlying areas. While at the same time, the allures of technology and industrialized living environments brings people in from the rural areas to overcrowd the urban cities.

I think a greater sense of equity would help. I don’t think social hand-outs are the solution. But creating an empowering model in every level and context of the Filipino society can create an environment that will allow so many of the hard-working people to receive real value for their work instead of the scraps they have been accustomed to.

But I know it’s not that simple. It’s just one piece that can contribute to some real systemic change. 

Wednesday, February 22, 2012

Phase 2: Study of Farmers' Need For Microfinance


Preliminary Summary Results

Survey Period: February 15 – 17, 2012
Interviewer: Eric Leocadio

Total Respondents:  40
Group A:                                       Gumalang, Baguio, Davao City                      (18)
Group B:                                        Subasta, Calinan, Davao City                         (3)
Group C:                                         Tawantawan, Baguio, Davao City                  (5)
Group D/E:                                     Basiawan, Santa Maria, Davao del Sur          (14)

Gender/Age:
Male:                                                               19 respondents
Female:                                                            21 respondents
Age Range:                                                     38 – 69 years old
Average Age:                                                  53 years old

History of Borrowing:                                     85% of Respondents (34)
Average Loan Amount:                                  13,191.18 P
Loan Greater Than 10,000P                          50% of those with history (17)
Loan Less Than 10,000P                               50% of those with history (17)
Average Interest Rate:                                    7%
Used Loan for Farm:                                      58.82%
Used Loan for Personal Needs:                      55.88%
Repayment Rate:                                            100%
Average Repayment Length:                          7 months

Comfort in Borrowing or Using Credit:

Comfort Scale:                                                0 – 2  (Not at all / Little / Comfortable)
(Measured average score from respondents)

Borrowing from Bank:                                    1.05
Borrowing from Co-op:                                  1.65
Borrowing from Relative:                               1.50
Borrowing from NGO:                                   1.23
Using Credit for Inputs:                                 1.60
Using Credit for Supplies/Tools:                    1.63
Cash Advance from Trader:                           1.20

Aware of Credit Sources in Area:                  72.50%
Willing to Access Known Sources:                51.72%

Preferred Reasonable Interest Rate:               5% (average of responses)

Interested in Receiving a Microloan
   to invest in their farm:                                  98%

Method of Handling Money:

Has Bank Account:                                         28%
Keeps Cash Wallet/Purse:                               98%
Has Credit Account:                                       10%


Risk Assessment:

Lost Crops Due to Weather or Insects:          30%
(Note: Only 1 respondent cited weather (flooding) as the reason. All others cited insect or disease as the reason for the lost crops.)

Farm impacted by Weather:

Typhoon                                                          0%
Flood                                                               3%
Drought                                                           0%
Other Weather                                                0%


Participation in Cooperatives:

Member of a co-op                                          78%
Average Capital Share                                    4,097 P (average of co-op members)

Cited benefits of co-op                                   Patronage, Dividends
Other benefits from some co-ops                    Mortuary Insurance, marketing, organic 
                                                                       fertilizer, Use of Post-Harvest Facility

Literacy and Math:

Literacy Scale:                                                0 – 2 (Not at all / Little / Very Well)
(Measured average score from respondents)

Read Visayan                                                  1.88
Read Tagalog                                                  1.70
Read English                                                   1.43
Write Visayan                                                 1.85
Write Tagalog                                                 1.70
Write English                                                  1.28
Basic Math (Add/Subtract)                            1.43

Interested in Literacy and Math Classes:       98%
Interested in Business Classes:                       95%



Cacao Beans:

Ferment and Dry at Home                              27.50%
Sell Unfermented Beans                                 27.50%
Sell Wet Beans                                                42.50%
Use Co-op’s facility                                        2.50%

Income/Expenses:

Average hectares:                                            1.98

Receive income from coconuts                       95% of respondents
Average income from coconuts                      6,815.22 P/month (average of income receivers)

Receive income from bananas                        60% of respondents
Average income from bananas                        2,593.42 P/month (average of income receivers)

Receive income from cacao                            93% of respondents
Average income from cacao                           2,622.54 P/month (average of income receivers)

Receive income from durian                           40% of respondents
Average income from durian                          2,064.38 P/month (average of income receivers)

Minimal income from other crops:                  Mango, Mangosteen, Lanzones, Corn

Receive income from livestock                       38% of respondents
Average income from livestock                      1,836.53 P/month (average of income receivers)

Receive non-farm income                               48% of respondents
Average non-farm income                              2,902.26 P/month (average of income receivers)

Cited non-farm income sources:                     SS Pension, Labor, Store/Shop, Rental Income,
                                                                        Buy/Sell cacao beans (wet/dry), service fees,
                                                                        Honorarium, Direct selling (avon)

Average Total Income                                   13,965.84 P/month

Average Farm Expenses                                 3,543.28 P/month
Average Family/Personal Expenses                5,875.00 P/month

Average Total Expenses                                 9,418.28 P/month

Difference (Income – Expenses)                    4,547.56 P
Percent (Income/Expenses)                             148.28%  

Respondents with Positive Net Income:        70%  (28)
Respondents with Deficit:                              30%  (12)

Respondents with income more than
   double their expenses:                                  20%  (8)

Respondents with income more than
   their expenses but less than double:             50%  (20)




Tuesday, February 21, 2012

Interviewing Farmers and Collecting Data

Last week I flew down to the southern island of Mindanao to Davao City to take part in phase 2 of my global internship experience. I came to work with ACDI/VOCA - an awesome international organization that is helping to improve the economic opportunities for people all around the world. Here in the Philippines, they have been working to support coconut, cacao, and rice farmers through their COCOPAL program. With the support of ACDI/VOCA, i'm here to conduct a small study of cacao farmers in the Davao region to examine the need, usage, and accessibility of micro-finance for small-holder farmers.

Upon my arrival to Davao City, I immediately noticed how clean the streets appeared. I departed from the airport in Manila so I saw the contrast of Manila which had so much litter. It was definitely evident to me that an intentional effort was being made to keep their streets clean. I asked a few residents and I got the impression that the mayor here is pretty strict. Some like her and some don't but nevertheless I think a clean street is good for tourism which benefits their economy. So good for them.


I met with the director of ACDI/VOCA's operations there in the Philippines, along with the staff of about 12 locals. The director is Australian and he's been there for several years now. This part of the internship seemed much more formal as compared to my visit with the CocoaPhil staff. Probably because I had only met with the CocoaPhil staff in person for three hours at their headquarters before going out to visit farms. This time, I would work out of the ACDI/VOCA office. I was given some work space and I interacted with the other staff as needed. This was good because I still had a degree of autonomy. They gave me some direction and they took care of the logistics of me going out to the farmers. But I still got to do the core of the work on my own.

On my first day, I developed my survey tool and methodology. I had to first identify what kind of information I wanted to collect. What would be valuable for me to know? What would be valuable for ACDI/VOCA to know? How would I measure the responses into something quantifiable? With the input of some of the staff, I was able to develop my sets of questions for the farmers, for the bank, for the microfinance NGO, and for the cooperatives.

On my second day, I went to meet with the Mindanao Microfinance Council (MMC). They are a network of microfinance institutions in Mindanao. I thought it was interesting to see how they were encouraging these lending institutions to be socially conscious and to find ways of supporting the farmers. Typically, microfinance is out of reach for many farmers because the interest is so high, the repayment period is too quick, and the collateral is costly. Farmers can lose their farm land, literally. After meeting with the MMC, I met with a representative at one of the major banks called the Development Bank of the Philippines (DBP). Since this was a major institution, I could see that this bank's services would be out of reach for many of the small-holder farmers. Though they want to be accessible, their services are more conducive for farm cooperatives and large farm owners.

The rest of the week was spent traveling to several parts of the Davao region and interviewing the farmers. I had the help of an interpreter who already knew many of the farmers. That made it easier to find farmers who were willing to be interviewed. It was an anonymous interview so I didn't collect names. I just collected demographic information and each person was asked the exact same questions. In total, I was able to interview 40 farmers from four distinct areas of the Davao region.


In addition to meeting farmers, I also had the opportunity to visit some post-harvest facilities. I didn't get to see any when I went to Bicol or Quezon provinces because they are at an early stage of cacao farming. It's much more developed in Davao. I also got to meet with and interview representatives from the Bansalan Cooperative Society, a cooperative that serves over 37,000 members. They offer microloans to its members.


After a long week of interviews, my last few days here with ACDI/VOCA is dedicated to compiling the data into a spreadsheet so that I can present some preliminary results to the director. Once I get back to the U.S., I'll write a paper on my study and submit it to both ACDI/VOCA and CocoaPhil. Though not actually part of my class assignment for this internship, I'll be able to use this paper for my final semester's academic portfolio.


Friday, February 17, 2012

Interviews Completed

This week, I visited 5 farm cooperatives, interviewed 40 cacao farmers and also interviewed 1 large 37,000 member cooperative, 1 bank (and snubbed by 2 other banks), and 1 microfinance non-governmental organization. Whew! We drove all over Davao City and other parts of the region. This was a long but productive internship week with ACDI/VOCA.


Next week I will start compiling the data.

Wednesday, February 15, 2012

Crazy Drivers

You know what I miss in the U.S.? Street intersections with traffic lights, cross walks, street lanes, a double yellow divider line, and drivers that actually follow traffic laws, stay within the lines, and are patient enough to stay driving behind the same car for more than two minutes. 


Seriously folks in the Philippines drive like maniacs! Lanes are merely suggestions. Cars play leap frog by driving into oncoming traffic to pass someone on their left side, then swerve back in to avoid head to head collision. 


And the streets are anarchy. There was a moment today when literally people were going in every direction. U turn while in the right hand lane. Everyone honks their horn every two minutes because that's how they alert everyone else "ready or not, here I come!" 

Saturday, February 11, 2012

Phase 1: Introduction to Cacao Farming - Part 3

Here are my notes on some of the things I have learned so far about cacao farming and the cocoa industry based on my time with the CocoaPhil team, farmers, and agriculturalists (part 3):


Problem for Farmers

  • Farmers aren’t profitable enough to sustain themselves
  • Farmers don’t have the money to invest in their own growth
  • Current microfinance institutions require too much collateral or too high interest rates for it to be a viable option for farmers
    • 12% interest rate
    • 4% to 5% interest per month
CocoaPhil Roadmap

  • Transparent & Dynamic Market and Market Information System
    • Establish and operate fermentation and drying centers
    • Accreditation, licensing PH centers
    • Means of Markets, price info dissemination
    • Packing houses
  • Improved Production Techniques
    • Quality planting materials
    • Farming inputs, assistance for crop nutrition and protection
    • Research /institution to formulate and continue improving Good Agricultural Practices
  • Efficient & Effective Extension Services
    • Enabling farmers on Good Agricultural Practices
    • Business Skills
    • Core of capable extension agents
    • Farm-based technology resource centers
  • Enabling Policies and Regulations
    • Loan schemes and credit windows
    • Implementation of Philippine National Standard (PNS) for cacao
    • Program on Research & Development
    • Policies on trading, exporting, logistics
  • Contract Growing Scheme - The key is massive production of quality planting materials and facilitate sustainable production
    • Seedlings (Plant now, pay later)
    • Other inputs (fertilizer, IPM materials – paid on deliveries)
    • Training and other extension services
    • Post-harvest facilities and marketing
Developing Research and Technologies

  • solar drying – shortening the drying time
  • better environmental approaches
    • composting
    • insect protection management (no pesticides)
Investing in Small Farm Holders

  • Because of the work that CocoaPhil has been doing with training small farm holders, they can properly identify those that are best suited for a microfinance program. CocoaPhil can leverage the existing relationship and knowledge of small farm holders so that collateral would not be required for a microloan. This means that they have a ready-made borrower pool.
  • CocoaPhil would start with $1 million (43 million pesos).
  • Microloans would be issued in the amounts of 100,000 pesos per hectare over 3 years.
    • One hectare - $2,500 (100,000 pesos)
    • Two hectares - $4,700 (200,000 pesos)
    • Three hectares - $7,000 (300,000 pesos)
  • Microloans would support approximately 230 farm families
    • One hectare – 80 microloans x 100,000 pesos = 8 million pesos
    • Two hectares – 100 microloans x 200,000 pesos = 20 million pesos
    • Three hectares – 50 microloans x 300,000 pesos = 15 million pesos
  • Farmers will use the microloan for:
    • the purchase of cacao seedlings – 500 seedlings per hectare
    • farm equipment, supplies, and materials
    • family subsidy (farm worker salary)
  • CocoaPhil continues to offer assistance programs to ensure farmer success
  • In 3 years, farmers will reach the post-harvest stage of the Cocoa Value Chain. They sell their cocoa beans to CocoaPhil’s post-harvest centers.
    • This ensures that the farmers will be able to sell their beans at a good price and thus be profitable. Farmers can either sell their beans for the profit so that they can pay back their microloan or they can give their beans to the post-harvest center in-kind towards the payback of their microloan. Once the microloan is paid back, the farmers can continue to harvest and sell their cocoa beans to the post-harvest centers.
    • This ensures the quality-control. Farmers focus on the agriculture. The post-harvest center takes care of the quality processing.
  • Post-harvest centers continue the value chain with processing and production. They can now sell quality cocoa beans to global buyers.
  • Profits of post-harvest centers can be used to further benefit the livelihoods of farm families and farm workers
    • health care centers for farm families
    • day care centers for farm families
    • set up approximately 30 around the country
Financial Impact

  • Farmers can sell dry beans to CocoaPhil for 40-60 pesos per kg
  • 50 pesos x 1,500 kg = 75,000 pesos / 42.3 = $1,773.05 per metric ton extra income for farmers
  • CocoaPhil can sell to buyers for 80-120 pesos per kilo
  • 100 pesos x 1,500 kg = 150,000 pesos  / 42.3 = $3,546.10 per metric ton

Friday, February 10, 2012

Phase 1: Introduction to Cacao Farming - Part 2

Here are my notes on some of the things I have learned so far about cacao farming and the cocoa industry based on my time with the CocoaPhil team, farmers, and agriculturalists (part 2):


The Cocoa Industry

  • Since 2007, global production of cocoa beans has averaged 3,656,660 metric tons:
    • Africa 69.9%
    • Asia 16.6%
    • Americas 13.5%
  • Cacao bean prices by December 2010 was at $3,470 US per metric ton
  • Global cocoa consumption is about 3.5 million metric tons and has grown 2.5% annually over the past 10 years
  • Chocolate product consumption has been growing at about 3% annually (except in 2009 due to recession)
  • Consumption has been growing fastest in Brazil
  • Per capita consumption of cocoa is highest in Western Europe and North America where incomes are higher and is lowest in Latin America and Asia where incomes are lower
  • Major manufacturers want to do more to meet rising demand:
    • Kraft Foods in 2009 was 22,000 metric tons; target in 2012 is 50,000 metric tons
    • Nestle in 2009 was 4,000 metric tons; target in 2012 is 30,000 metric tons
    • Mars in 2009 was 5,000 metric tons; target in 2012 is 100,000 metric tons
    • Hersheys in 2009 was 10,000 metric tons; target in 2012 is 855,000 metric tons
  • Domestic production in the Philippines in 2009 was only 6,263 metric tons
    • Domestic demand continues to outpace production
  • In Asia, there is increasing consumption but also a large grinding industry that continues to expand
  • The regional production of quality fermented beans is only 26% of the 680,000 metric tons of beans produced annually in the region. As a result, regional processors import almost 220,000 metric tons of fermented beans from West Africa and South America.
  • Because of higher shipping costs due to rising fuel prices, the Philippines has an increased competitive advantage in gaining access to the Asian market compared to West African and South American
  • Race to the Top of the Global Cocoa Market:
    • Indonesia in 2006 was 680,000 metric tons; target in 2020 is 900,000 metric tons
    • Papua New Guinea in 2006 was 55,000 metric tons; target in 2020 is 100,000 metric tons
    • Philippines in 2006 was 6,000 metric tons; target in 2020 is 100,000 metric tons
    • Malaysia in 2006 was 30,000 metric tons; target in 2020 is 50,000 metric tons
    • Vietnam in 2006 was 3,000 metric tons; target in 2020 is 30,000 metric tons

Philippines Goal by 2020

  • produce 100,000 metric tons of cocoa country-wide
  • Philippines can intercrop with 10% of existing coconut areas – that gives approximately 107,874 hectares for planting cacao trees.
  • will need to plant 10 million seedlings per year over the next 5 years – 50 million cacao trees will result in approximately 105,000 metric tons in anticipated cocoa bean production by 2020



Thursday, February 9, 2012

Phase 1: Introduction to Cacao Farming - Part 1

Here are my notes on some of the things I have learned so far about cacao farming and the cocoa industry based on my time with the CocoaPhil team, farmers, and agriculturalists (part 1):

The Cocoa Value Chain / The Cocoa Supply Chain

Small Holder Farmer
  • Nursery - Seedings
·         Plantation and Maintenance
·         Harvest
·         Post Harvest
o   Fermentation
o   Drying
Trader
Grinder
Industry
  • Confectionary Industry
  • Food Industry
  • Industrial, Artisanal, Pharma & Tobacco consumers
Retailer
Consumer

Cacao Farming

  • Small holder farms are family operated – 1 to 3 hectares.
  • Seedlings require 80-90% shade. Medium sized trees only require 50% shade.
  • Coconut trees provide permanent shade cover. Banana trees provide temporary shade cover.
  • Cacao trees are best interplanted alongside coconut trees and banana trees.
  • Seedlings take 18-24 months to flower. It takes about 6 months for flowers to reach pod maturity.
  • Primary pollinator is the mitges – little moths.
  • Pollination times are 5am – 7am and 7pm – 8pm.
  • Smoking on the farm can affect the mitges and hinder pollination.
  • Pods should be harvested at 75-80% ripeness. Pods that are too ripe are likely to have beans that are germinated.
  • 18-25 pods = 1 kilogram of wet beans
  • 3 kg of wet beans = 1 kg of dry beans
  • 50 kg needed to ferment
  • 1 metric ton = 1,000 kilograms
  • 1 cacao tree produces 2 kg of dry beans per year
  • Best soil conditions is loam soil – porous
  • Best temperature is 18 degrees Celsius
  • Best pH is 4.5 – 6.5
  • 1 hectare = 1,100 cacao trees open with 3 meters apart (good only if 18 degrees Celsius and no summer – rainy season year round. otherwise, needs shade cover)
  • 1 hectare = 750 cacao trees interplanted with other crops (coconut & banana)
  • 1 hectare of 750 cacao trees will produce (2 kg/yr) 1,500 kg of dry beans per year
  • 1 hectare = 50,000 pesos in expenses (25,000 pesos for seedlings, 25,000 pesos for labor)
  • Labor can include fertilizing, clearing, holing, staking, weeding, etc.
  • CocoaPhil membership is 1,000 pesos per year.
  • Farmers also pay land tax and business license annually.

Wednesday, February 8, 2012

My First Farm Visits


I spent the last several days in the province of Bicol and also the province of Quezon. I stayed in a cheap hotel in Naga City across the street from a mall. CocoaPhil arranged for me to connect with one of their technical advisors. She served as my escort, translator, and teacher.


Our first stop was to go to Naga City’s Department of Agriculture in City Hall. There I got to meet the Rural Based Coordinator and also the Agricultural Engineer. After spending the day with them visiting farms and learning about the city’s efforts, I learned that Naga City is doing a pretty good job at balancing urban growth and agricultural support. The city has a motto for being all “S.M.I.L.E.S.” which stands for See-Meet-Invest-Live-Enjoy-Study.  They presented their city as an innovative and wholistic place.


My first farm visit was to a fairly large one owned by a farmer who was also the president of the Naga City Cacao Planters Organization. His goal is for the organization to evolve into a cooperative. Since he is also an engineer, I was impressed with the way he designed his irrigation water ways. After taking a walking tour through his newly planted cacao trees, he had a meal prepared for us.

More Filipino hospitality!


In addition to seeing a farm in Naga City, we also visited several farms in the city of Lupi. Lupi was about an hour away from Naga City so it was more rural. I got to meet about a dozen farmers who had already gathered to meet me. Together, our group took walking tours through three cacao farms. I also got to see much of their barangay called Bulawan Junior. A barangay is kind of like a subsection of a city district, like a rural area with several neighborhoods. After the tour, of course they prepared a meal for everyone to eat.


On another day, we drove even further to the neighboring province of Quezon. A province is kind of like a county. We visited the town of Tagkawayan. I got to meet the Municipal Agriculturalist (the department head) and some of their staff. Then a pair of agricultural aides took us out to visit a few more farms.


In total, I was able to visit 10 farms and meet about 25 farmers. I was not expecting to see such diversity in cacao farming. It was interesting to see that all 10 farms had very different landscapes. Some farmers planted their cacao trees on very hilly terrain. Some planted on very flat land. Some had plenty of shade and others inappropriately had too much sun. Intercropping means that they plant two or three different kinds of trees next to each other. It’s common to intercrop coconut trees, banana trees, and cacao trees. Cacao trees require 80-90% shade while they are seedlings and about 50% shade while they are medium sized. So the coconut trees provide the permanent shade cover higher up and the banana trees provide the immediate shade cover closer to the ground. It was interesting to see the various designs that the farmers used to plant their trees. Some used a triangle design. Others planted the different trees in rows. Others seemed to have a more random design. I got to see very good designs that resulted in healthy trees. I also got to see poor designs that resulted in unproductive or slow-producing trees.


I learned that agriculture is an art – both in growing and in design. The farmer can be as creative as he or she likes in the landscape of their crops. I loved that I could see the personality of the farmer through the way he or she artistically (or not artistically) placed the trees, built irrigation systems, and the maintenance of weeds.

Saturday, February 4, 2012

Getting Around

In one week, I've been on 15 different modes and types of transportation: huge airplane 777, smaller airplane, van, car, calesa (horse and carriage), tricycle (motorcycle with a passenger carriage attached), jeep-nee (a little mini bus), motorcycle, bus, taxi cab, propeller airplane, airport shuttle, hotel shuttle, zipline (that was way fun!), and of course, my own two feet!

Tuesday, January 31, 2012

First Day Culture Shock


On my first day of arrival to the Philippines, I flew in to Clark International Airport on the island of Luzon. Interestingly, this is where I was born – back when it was Clark Air Force Base. At the time, my dad (a Filipino) was in the U.S. Air Force. After being born here, my family left the Philippines for the U.S. when I was only 3 years old. This was the first time being back to the Philippines since having left.

It was warm and humid, as I expected. It was about 1:00AM in the morning. Upon exiting the doors of the airport and entering the waiting area, I was immediately greeted by an over-helpful local who wanted to assist me with my baggage and transportation.  I was to be picked up by my mom and I didn’t need or ask for the gentleman’s help. Once my mom arrived, he lingered around with a big suspicious smile. I got the impression that he wanted a tip. I felt very uncomfortable and I thought it was very rude of him to assert his unsolicited help and then to expect me to give him money for it. So I pretended not to understand what he was saying. I had been warned by family ahead of time that this sort of thing happens, but I didn’t expect myself to feel so uncomfortable about it.

That was my first culture shock.


My mom lived in the province of Bataan. After getting some sleep, we traveled later that afternoon about 3 hours to get to Quezon City (next to Manila).

My global experience will consist of two phases: the introduction phase and the study phase. The first phase involved receiving an introduction to cacao farming with time spent with the Cocoa Foundation of the Philippines, and the second phase involved conducting a study on the need, usage and accessibility of microfinance for small holder cacao farmers with time spent with ACDI/VOCA.

To start my introduction phase, I was to meet with the President and staff of the Cocoa Foundation of the Philippines (also known as CocoaPhil). My appointment was for 1:00PM but we arrived early during lunch time. Everyone was in the staff lounge. I felt weird about interrupting their lunch and I expected to either wait in the lobby until 1:00PM or that they would end their lunch to have the meeting. I was surprised that instead they invited me to hang out with them. It was very casual. My mom and cousins had accompanied me and so they took the liberty of coming inside to join us. Then everyone started talking and getting to know each other. They offered my mom durian (a fowl smelling fruit) and so she just casually pulled up a chair and started eating with them.

I was pretty surprised at how casual and hospitable everyone was being. I was expecting to have a formal professional serious meeting and instead I watched everyone chit chatting and socializing – the staff and my family meeting for the very first time but interacting like it was a family potluck. In hindsight it was actually pretty funny to watch it all happen!

This was my second culture shock.


We did eventually have our formal professional serious meeting. My family waited outside while I met with the staff in a conference room.

The Cocoa Foundation of the Philippines is a filipino non-profit organization of farmers, cacao buyers and processors, and professionals that was established in 1993 and serves as an umbrella organization for the cocoa industry in the Philippines. They are currently connected with over 15,000 farmers and have about 50 staff and volunteers country wide. They have a well-developed and established training program for nursery, plant maintenance, and post harvest. Approximately 50% of their participants are women.

During our meeting, they gave me an overview of the cacao industry, insights into cacao farming, an explanation of the training and services that CocoaPhil offers, and their aspirations if they had the funding. Then we discussed some of the farm visits that I'll be doing. Instead of driving to some farms like I originally planned, they recommended going to the province of Bicol. That would be a 7-8 hour drive. So instead I decided to fly a plane to Naga City in Bicol. CocoaPhil would then connect me with someone on their staff there. I spent the rest of the week with my mom in Bataan, then on Sunday I would go to Naga City on my own.



Overall, I found my first day in the Philippines interesting. My cultural expectations and actual experiences were varied. Prior to this trip, my knowledge of the country came only from stories and the internet. But seeing it for myself for the first time was surreal.

This is going to be fun!

Thursday, January 19, 2012

Global Internship Approved

For the past two months, I've been corresponding with a contact at ACDI/VOCA in the Philippines. We finally developed the details of my internship and I was able to send in the approval of the organization to the Dean of my grad school program at Pepperdine.

So it'll be with ACDI/VOCA (Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance).

They provide assistance in developing countries for agricultural business, community development, and food security. They have an operation in the Philippines that has been working to improve the cocoa industry.

I will be conducting a small study for the organization examining the access, needs, and usage of finance for cocoa-based farming families. It will involve visiting farms, interviewing farmers, collecting data, and preparing a report for the organization. I will explore the opportunities and constraints for farm families in the industry, including the accessibility of micro-finance to farm families. The study will also examine farm family income including non-farm income and farm income to look at profitability from farming activities.

My internship will be for two weeks on Feb. 12th through Feb. 25th  in Davao City on the southern island of Mindanao, Philippines. I will be arriving early on Jan. 31st through Feb. 11th to visit my mom in the northern island of Luzon. I'm going to try to visit some farms in the North while I'm up there though so the internship experience will be a little longer than two weeks.

Everything is coming together quite nicely and I'm so excited to be going soon!

Monday, January 2, 2012

Sunday, January 1, 2012

Snap Shot Demographics

I found some quick statistics and demographics on the Philippines that can help paint a picture of the country. This is from Index Mundi's profile on the Philippines for 2011:
Population
101,833,938 (July 2011 est.) 
Age structure
0-14 years: 34.6% (male 17,999,279/female 17,285,040)
15-64 years: 61.1% (male 31,103,967/female 31,097,203)
65 years and over: 4.3% (male 1,876,805/female 2,471,644) (2011 est.) 
Median age
total: 22.9 years
male: 22.4 years
female: 23.4 years (2011 est.) 
Life expectancy at birth
total population: 71.66 years
male: 68.72 years
female: 74.74 years (2011 est.) 
Population growth rate
1.903% (2011 est.) 
Net migration rate
-1.29 migrant(s)/1,000 population (2011 est.) 
Urbanization
urban population: 49% of total population (2010)
rate of urbanization: 2.3% annual rate of change (2010-15 est.) 
Nationality
noun: Filipino(s)
adjective: Philippine 
Ethnic groups
Tagalog 28.1%, Cebuano 13.1%, Ilocano 9%, Bisaya/Binisaya 7.6%, Hiligaynon Ilonggo 7.5%, Bikol 6%, Waray 3.4%, other 25.3% (2000 census) 
Religions
Roman Catholic 80.9%, Muslim 5%, Evangelical 2.8%, Iglesia ni Kristo 2.3%, Aglipayan 2%, other Christian 4.5%, other 1.8%, unspecified 0.6%, none 0.1% (2000 census) 
Languages
Filipino (official; based on Tagalog) and English (official); eight major dialects - Tagalog, Cebuano, Ilocano, Hiligaynon or Ilonggo, Bicol, Waray, Pampango, and Pangasinan 
Literacy
definition: age 15 and over can read and write
total population: 92.6%
male: 92.5%
female: 92.7% (2000 census) 
School life expectancy (primary to tertiary education)
total: 12 years
male: 12 years
female: 12 years (2008) 
Education expenditures
2.8% of GDP (2008) 
Children under the age of 5 years underweight
20.7% (2003) 
Obesity - adult prevalence rate
4.3% (2003)
My own quick observations from the stats above:

I think the contrast between underweight children under the age of 5 years old (20.7%) and the obesity rate in adults (4.3%) is rather interesting. Particularly in contrast to America where the obesity rates in both children and adults are rather high. Is it the Filipino diet and/or poverty that keeps the rate of children underweight high? How does the growing influence of American fast food and availability affect child nutrition after the age of 5 years old?

It's also interesting to see that 49% of the population lives in an urban center. Poor rural families are gradually moving into the urban city where resources are more readily available. What kind of resources are needed in rural areas? What kind of infrastructure is needed to provide for the sufficient needs of rural farm communities?

I also thought the age structure statistics was interesting. I would have expected high percentages of seniors over the age of 65 years old. Was there ever a baby boom in the Philippines like there was in the U.S. after WWII?