There was a time when the farmers belonging to the Panayotti-Escaler Farmers’ Association, an Agrarian Reform Beneficiary (ARB) Organization in Pampanga, thought they would not be able to own the land they till. The land tenure issues propelled the farmers to form their organization.
Years later, their challenge was to make the awarded land productive. The farmers were beset with lack of capital and other support services.
Last year, though efforts of the Department of Agrarian Reform, the Panayotti-Escaler Farmers’ Association partnered with AgriNurture Inc. (ANI), a company pursuing agro-commercial businesses, to implement an agri-enterprise arrangement. ANI offered the Panayotti-Escaler Farmers’ Association a crop production loan in the form of farm inputs based on mutual agreement that by harvest time, the members of the ARB organization will sell their harvest to ANI and their loans (principal and interest) would be deducted from the harvest proceeds.
The screening of partnership participants was done by the ARB organization itself. Afterwards, the Panayotti-Escaler Farmers’ Association recommended the qualified farmers to the DAR Municipal Office for certification that they are ARBs. ANI evaluated the applicants and released the loan to those that passed the requirements.
The total area covered by the partnership is 43 hectares. It was participated in by 15 ARBs. ANI provided the following production inputs: hybrid seeds, pesticides, molluscide, herbicides, and fertilizers. The Peso value for the inputs (loan package) ranges from PhP 28,000 to PhP 30,000 per hectare. A 15% interest rate for the entire cropping season was charged by ANI for the unsecured inputs loan, way below than the prevailing interest rate from local lenders, which is 20%.
Results of initial demonstration, harvested from March to April 2013, are as follows:
(w/out ANI support)
|Average yield||65-80 cavans/ha.||125 cavans/ha.|
|Kg/cavan||55-57 kgs./cavan||55-57 kgs./cavan|
|Prevailing price||PhP 16.10/kg delivered||PhP 16.10/kg purchase price of ANI from the farm gate|
|Sales||PhP 16.10/kg x 57kg./cavan x 80 cavans/ha.||PhP 16.10/kg x 57 kgs/cavan x 125 cavans/ha.
|Increase in income||PhP 73,416.00/ha||PhP 114,712.50/ha|
The partnership led to an increase in PhP 41,296.50/ha in farm sales or 56.25% improvement. More farmers now want to participate in the arrangement since there is high farm income due to the low interest rate on loan, transparent pricing and weighing of palay, and immediate cash payment for the palay.
At first, the members of the ARBOs did not believe the income prospects.
Mr. Rogelio Soriano said, “Nung una maraming agam agam kasi di ako naniniwala sa sinasabi ng technicians ng ANI tungkol sa makukuhang kita. Subalit nahigitan ang nakukuha kong 120 cavans per hectare at naging 130 cavans per hectare. Bumigat din ang timbang ng palay.”
Mr. Benito Soriano, chairman of the Panayotti-Escaler Farmers’ Association was convinced by the lower interest rate required by ANI, “Mas mababa ang porsyento, hindi katulad dati na kung nangungutang kami ay nagi-interes ng 5-10 percent per month. Sa DAR-ANI, 15% na lang kada cropping kaya pumapatak ito ng 3% kada buwan.”
When asked why they entered into a partnership with the DAR and the ARB organization, Larry Lacson, the Vice President and General Manager of ANI, said that the nearness of the ARB organization to the ANI rice mill in Magalang and the agricultural insurance of the ARBs contributed to the confidence of ANI to pursue the partnership aggressively.
Last year, the DAR and the Philippine Crop Insurance Inc. or PCIC inked an Agricultural Insurance Program for ARBs. This program covers the provision of premium subsidy for agricultural insurance to ARBs and their household members and complements the DAR’s credit access and agricultural enterprise projects, which. The project aims to protect ARBs against losses due to pest and disease infestations, natural calamities, and extreme weather events brought about by climate change. This is a Php 1 billion-funded project that covers rice, corn, high-value crops, and livestock production.
Mr. Lacson attributed the success of the initiative to the openness of the process, “The partnership took off very well because every player is transparent in its deals and all of them have the objective of making the partnership long-term. The farmers themselves are now informing their neighbours and fellow ARBs about the benefit of partnering with ANI.”
With the success of the first agri-enterprise arrangement among ANI, the ARBO, ARBs and DAR, the partnership is looking forward to expand to 500 hectares to be participated in by around 200 farmers in in four (4) ARB Organizations.