CALABA Development Program on Vegetables and Ornamentals I. RATIONALE Traditionally, the Cavite, Laguna, Batangas (CALABA) provinces are major
producers of tropical vegetables. However, in some highland areas of CALABA, semi-temperate vegetables and ornamentals are also promising commodities. Although CALABA is fast becoming a highly
industrialized zone, there are still areas suitable for vegetable and ornamental production. The initial take-off of this CALABA program is a pilot activity to
sustainably supply high quality vegetables and ornamentals to Jollibee, Wendy's, Mc Donald, Gourmet's Restaurants, and the Society of Filipino Florists. These so-called institutional buyers source out
bulk of their vegetable and ornamental requirements from huge imports and from other provinces in the Cordillera and Mindanao. In terms of market access, the CALABA has the advantage because of its proximity
to the Manila markets. The program will jumpstart the implementation of modern agriculture using a holistic approach in an agribusiness system. The program will include the provision of
packages of basic infrastructure, introduction/adoption of high-end technology, provision of basic production support services including research and development, credit, extension, market assistance, policy advocacy;
and institutional capacity strengthening. Thus, the program supports AFMA's two-pronged visions of market-led and private sector-led approach in agri-fishery sector development
which is expected to redound to poverty alleviation, social equity; food sufficiency; rational use of resources; global competitiveness, sustainable development, people empowerment, and protection from
unfair competition. II. INDUSTRY OVERVIEW A. Ornamentals 1. Supply
CALABA produces cutflowers such as anthuriums, orchids, roses, heliconias, daisies and chrysanthemum at a yearly average of 500 thousand dozen. Cutflowers
fillers like aster, ilang-ilang and sampaguita had an average production of 900 kilos per annum.Sales of cutflowers from CALABA had a yearly average of P8.0 M. Most saleable flowers of CALABA in major Manila
markets are asters (P6 M), Roses (P0.6 M), Orchids (P0.5M), Anthuriums (P0.4 M), Chrysanthemum, and Gerbera (P0.1). 2. Demand
Two flower shops in Makati alone requires 2,730 dozens supply of cutflowers
per year. Likewise, the Society of Filipino Florist, Inc. (SOFFI) is requiring large supply of ornamentals to meet the demands of the major hotels and restaurants in Metro Manila. B. Vegetables1. Supply
For
vegetables, the production of CALABA reached about 113.4 M kilos at a farmland size of about 11 thousand hectares. Of the total volume, 46% were sourced from Batangas. 2. Demand
From the major markets
of southern Manila, an estimated volume of vegetables coming from CALABA was reported at 7,000 tons, worth over P90M. Average consumed in hotels and food chains reached to about 85 tons, valued at P1.5M.A huge volume
amounting to 409 thousand metric tons of upland vegetables was imported in 1998. Among, the leading food chains that imports are Jollibee, Mc Donald and Wendy's. Common vegetables used by Jollibee, Mc Donald
and Wendy's are lettuce, tomatoes, onions, potato, and green and red pepper which can easily be grown under the CALABA condition. Jollibee and Wendy's need 22 tons of tomato per month. III. GOAL AND OBJECTIVES
Goal :
The program envisions to increase ornamentals and
vegetables production in the CALABA areas through the modernization of production, post harvest, processing and distribution practices; and to strengthen the linkages between and among the producers, integrators,
institutional buyers, national and local governments, and the State Colleges and Universities. Objectives :
1. Promote and increase adoption of modern technologies from production to distribution,
2. Ensure ready market of vegetables and ornamentals through linkages with institutional buyers,
3. Strengthen the capacity of the extension workers in providing technical assistance to the farmers,
4. Strengthen the Department's linkages with the Local Government Units (LGUs), State Universities
and Colleges (SCUs) and the Private Sector (institutional buyers, integrators, farmer
cooperators/cooperatives).
IV. CHALLENGES AND OPPORTUNITIES
1. Upgrading and adoption of viable and sustainable technologies for both production and marketing of
vegetables and ornamentals;
2. Reducing post-harvest losses through appropriate post harvest facilities installation, cold chain
distribution system, processing and packaging technologies and proper product labeling;
3. Assurance of high quality product through establishment of collection centers, packing/cooling house
with trained professional quality controller;
4. Need of extension workers to assist small farmer-beneficiaries in the synchronized planting and
harvesting schedule to attain consistency in supplying the institutional markets;
5. Timely dissemination of market information;
6. Imperatives of matching resources of the Department of Agriculture (DA) with the Local Government
Units (LGUs) in tandem with private sector needs;
V. POLICY AND STRATEGY FRAMEWORK 1. Market-led. The type/variety, quality and quantity of vegetables and ornamental plants to be
produced will depend on the needs of the markets. For this program, the kind of commodity and
the volume of production will be based on the requirement of the institutional buyers.
2. Private-sector-led. The government (national and local) will not compete with the private sector in
their investment and marketing activities. It will instead complement these efforts by providing the
basic infrastructure and support services, and the policy incentives to the institutional buyers,
integrators, and farmer-coops.
3. Cost sharing.
The Department of Agriculture and the Office of the Governors will cost share on
infrastructure development and in providing production support and market assistance to the private
sector. The private sector and the participating cooperatives are likewise expected to share in the
cost of implementing this program.
4. Advanced and sustainable technology-based.
The Program will avoid reinventing the wheel but
will rather advocate the adoption of available and proven modern farming techniques to include use
of greenhouses and tunnels with plastic mulch to ensure steady supply of high quality high value
vegetables and ornamentals.
5. Market linkages/matching.
The farmer cooperatives/producers of vegetables and ornamentals
under the Program will be linked to the institutional buyer. A Memorandum of Agreement (MOA)
between farmer cooperatives and institutional buyers will be forged through the facilitation of DA in
collaboration with LGUs. Initially, an integrator will be accredited to handle the business
transaction in the meantime that the cooperatives are establishing their good track record. The
integrators will self-destruct once the cooperatives become viable.
6. Agribusiness orientation. The Program will adopt the agribusiness approach of vertical and
horizontal integration, government-private sector- financier partnership, and producer-end user
linkages.
VI. SCOPE AND TARGETS The program will cover selected municipalities in
CALABA. Initially, the cooperators in the Program will produce about 10% of the requirements of Jollibee, Wendy's and Blue Dairy/Mc Donald's on lettuce, tomatoes, green pepper, and bell pepper). Similarly,
the SOFFI's requirement is open to CALABA. Commodity specialization will be employed by looking into the comparative advantage of the three provinces. A synchronized production and harvesting
schedule will be adopted to ensure adequate and sustainable supply. The target hectare per province by commodity will be harmonized among the three provinces to have a proper planting schedule, per buyer requirements.
PROGRAM COMPONENTS1. Improved Production Technology.
The Program will introduce high-end technologies on the
production and distribution of vegetables and ornamentals. In order to sustain production of high
value vegetables and ornamentals, protective production system ( e.g. greenhouses) will be
employed.. 2. Improved Post-harvest Practices. A cold chain system (cooling house, refrigerated van, proper
packaging and labeling ) will be adopted by the Program to maintain high quality of produce from the
farm to the end-users. Besides, the market collection centers/packing houses will be established in
strategic areas to centralize the quality control. A quality controller shall be assigned to handle the
commodity grading and classification in order to comply with the market specifications.
3. Marketing Assistance.
The Program target markets are the institutional buyers. A market linkage
between the farmers' cooperatives, individual farmers and institutional buyers will be facilitated by
the program . A Memorandum of Agreement (MOA) shall be forged as instruments for suppliers
(cooperatives or individuals) and institutional buyers.
Use of integrators will be employed in the initial stage of the program. However, the integrators will
self-destruct once the cooperatives have established good track record, or once they have
established their capability to deal directly with the institutional buyers.
4. Financing and Investment Assistance.
An initial fund of P50 M is allocated to jumpstart the
implementation of the program. The utilization of the said fund will be based on the work and
financial plan approved by the program's National Steering Committee. Funds for the succeeding
years will come from the participating agencies' regular budget, private sector investment,
beneficiary incomes from the program, and official development assistance (ODA).
5. Institutional Capacity Building.
The program will provide trainings to program farmers'
cooperatives, individual farmer-cooperators, and extension workers. The PMO will coordinate with
ATI and SUCs on the design and conduct of the trainings. Equipment and facilities will also be
provided to the participating agencies to strengthen their capacities to implement the program.
6. Research and Development.
The Program will provide support funds to participating SUCs for the
conduct of research on selected commodities and fields. Researches to be undertaken will be
based on the felt needs of the program, (e.g., commodity research, market research, post-harvest
research, etc.). The private sector participants are likewise expected to invest on research and
development. 7. Policy Advocacy.
Coordination with appropriate agencies to advocate for policy measures that will
support the implementation of the program will be undertaken. Policies on inputs, planting
materials, similar commodities need to be monitored. 8. Program Management. A National Steering Committee (NSC) chaired by the Department of
Agriculture will be established. All the participating agencies (LGUs, SUCs, and private sector) will
be represented in the said committee. The NSC
will serve as the program clearinghouse on policy
issues, set program direction, and approve the program's work and financial plan. A Program
Management Office (PMO) will likewise be established to manage the day-to-day operation of the
program. The PMO will take care of the planning, coordination, monitoring and evaluation, and will
provide administrative support services to the program. The HVCCD Program Director will serve as
the Program Director, on a concurrent capacity. He will be supported by detailed staff from AMAS,
RFU IV, and the Office of the Governor. VII. ROLE OF CONCERNED AGENCIES/ENTITIES 1. Department of Agriculture
The DA will establish the Program Management Unit, with staff coming from AMAS and RFU IV.
The DA through the PMO will
a. coordinate with the institutional buyers to determine their demand for planning and programming
purposes;
b. facilitate the execution of marketing contracts and ensure the fulfillment of the provisions in the
said contract by both parties;
c. coordinate with the Project Packaging and Resource Mobilization Division (PPRMD) for the
preparation of component proposals for ODA, particularly on the provision of technical assistance
and capital investment, and on the preparation of proposals for program expansion.
2. Local Government Units
The Office of the Governors shall appoint its Provincial Agriculturist to coordinate with the PMO in the
implementation of the program, and to ensure the following:
a. allotment of counterpart support (physical, financial and manpower resources) in activities
involving the province and its respective municipalities,
b. supervise the implementation of the program in collaboration with the concerned Municipal
Agricultural Officers;
c. participation of concerned farmers' groups and agricultural technicians on training and study tours;
d. update the Governor on the progress of the program.
3. The Institutional Buyers shall:
a. ensure ready market for the produce of the program,
b. accredit an integrator as initial central buyer and supplier of a required quantity (e.g., 10% of
total requirement),
c. forge a Memorandum of Agreement (MOA) with the integrator to include in a clause on farm
expansion and contract growing scheme with small farmers' cooperators/cooperatives,
d. deal directly with the farmer cooperator/cooperatives upon the latter's establishment of good tract
record.
4. The Integrator shall:
a. act as the accredited supplier of vegetables and/or ornamentals,
b. serve as central controller of quality vegetables and/or ornamentals;
c. assess the capabilities of the farmer-cooperators/cooperatives to produce the required supply;
e. assist the cooperatives in preparing their synchronized farm plan and budget for a harmonized
participation in the program; and,
f. ensure a steady supply of vegetables and/or ornamentals to the institutional buyers. In the event of
crop failure in CALABA, the integrator may outsource supply from other provinces.
5.THE STATE COLLEGES AND UNIVERSITIES shall:
a. spearhead the conduct of research and development activities under the program,
b. provide technical assistance in the conduct of technology demonstrations and training of farmers,
local Agricultural Extension and Technicians and Extension Workers in coordination with DA-ATI
and LGUs,
c. receive funding from the program, and ensure the availability of required counterpart (physical,
financial, and manpower).
6.THE SEED GROWERS shall:
a. provide good quality planting materials at a reasonable price;
b. conduct research and development on varietal improvement; and,
c. promote and transfer the newly developed varieties of vegetables and ornamentals to farmer
cooperators through techno-demonstrations and training/seminars.
7. THE FARMERS' COOPERATORS/COOPERATIVES shall:
a. adopt high-end technologies for the production of vegetables and ornamentals;
b. ensure quality and sustainable supply of ornamentals and/or vegetables to the accredited
integrator and eventually to the institutional buyers;
c. ensure continuous supply of vegetables and ornamentals following specified schedule of delivery;
d. forge a contract with the integrator for the regular supply of produce.
VIII. WORK AND FINANCIAL PLAN
In the initial year of the Program operations, an amount of P50M is required based on activities presented
(see attached table). The amount estimate includes credit facilities of farmers' cooperators/cooperatives. For the year 2001 to 2004, the amount requested per year totaled to P35M, P25M, P17M, and
P12.5M, respectively. IX. OPERATIONAL FRAMEWORK X. MARKETING FRAMEWORK |
