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
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