Integrating the Smallholder Farmers in the Philippines to the Value Chain

Agriculture is one of the backbones of the Philippine economy. It is loaded with opportunities in the local and international market.

Photo of Erwin S. Embuscado
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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Alalay Sa Kaunlaran Inc.

Year founded

1987

Initiative stage

  • Growth (the pilot has already launched and is starting to expand)

Annual budget in 2017 (USD)

  • Over $5mil

Number of beneficiaries impacted so far

  • 10,000 - 50,000

Organization type

  • Nonprofit, NGO, or citizen sector

Secondary Focus Area

  • Rural development

Headquarters location: Country

  • Philippines

Headquarters location: City

Cabanatuan City, Nueva Ecija

Location(s) of impact

Nueva Ecija, Philippines
Aurora, Philippines
Other provinces in Regions 1, 2 and 3

Website

http://www.aski.com.ph

Facebook URL

https://www.facebook.com/aski.sakaunlaran

Problem: What problem is this initiative trying to address?

ASKI believes that the agriculture is one of the country’s strength in facing its present economic difficulties. It is loaded with opportunities in the local and international market. However, smallholder farmers in the rural communities need support to sustain their venture into agriculture like financing, market linkaging, infrastructure support and capacity building.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

Helping the farmers through microfinance, the provision of infrastructure support like water pumps for irrigation, solar dryers to reduce postharvest losses, hanging bridges for easy transport of their produce as well as technical training on agriculture to improve their productivity and increase their technical know-how is crucial. This will give them increased income and create job opportunities in their respective communities. Ready market for their harvests is also one of the problems faced by Filipino farmers. This is one of the program components of the agriculture value chain that ASKI introduced to the organized farmers group. By having an assured market, problems with postharvest losses and middlemen transactions will also be eliminated giving them higher profits. However, at the moment we are only supporting limited communities, there are still areas and groups to be supported, as soon as the project spins-off with the help of the prize, ASKI will ensure its sustainability.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

The credit program for the farmers has a total loan portfolio USD 25,800,000 benefiting 20,161. ASKI also provided the following support in some communities with organized people's group.

30 units of water pumps benefiting 300 families in 9 villages
4 solar dyers benefiting 500-700 families
3 hanging and foot bridges for 700 families
3 small farm machines like threshers and hand tractors in 2 communities
1 multipurpose hall
around 5,000 trained farmers

These infrastructures contribute in reducing the pre and postharvest losses of the crops as they can now dry the produce easily using solar dyers, expect a good harvest from the previously non-irrigated areas and ease the transportation from the farm to the market using the hanging bridges. For our microfinance activities, we have a policy on exclusion list of activities, enterprises and businesses that cannot be financed under any circumstances by the microfinance due to violation of Philippine or International Laws.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

The project is 100% supported by the ASKI microfinance group in terms of financing, monitoring and identifying potential areas to be linked to the value chain, the ASKI Community Development group is in charge of organizing the community into a people's organization and the ASKI Multipurpose Cooperative serves as the consolidator for the cassava and ginger farmers. The farmers share their equities in every project as part of the PPP (public, private and people) partnership. They also have their policies and guidelines on the use of facilities to cover maintenance and other operating expenses.

Operating in an agricultural area and as one of the vulnerable sector due to typhoons, coordination with the government's crop insurance and the guarantee fund is being done to mitigate the risks.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

The project is a success story of public, private and people partnership in the areas of ASKI's operation. Over the years, farmers had problems with middlemen as they earned more profit. With this initiative, the smallholder farmers are linked directly to institutional markets like Jollibee Foods Corporation, for onion growers, San Miguel Foods Inc. for cassava growers and Sunnybing International Trading for ginger exported to Japan. Selected rice growers also supply their produce to ASKI Coop.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

When a group of small onion farmers was able to supply their produce to Jollibee Foods Corporation, one of the biggest hamburger chain the Philippines, ASKI decided to replicate the program in other cooperatives and farmers groups. Today, ASKI is supporting another group of onion farmers, indigenous peoples supplying cassava to a feed milling company and ginger farmers supplying ginger to a Japanese exporter. The agriculture value chain program for smallholder farmer hopes to benefit more farmers and be linked to the value chain to ensure a stable food for more Filipinos. These farmers are feeding the nation. This is why, support must be given to them especially in addressing concern of the smallholder farmers in the Philippines.

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Participated in previous CSV Prize competitions

26 comments

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Photo of Marg Leijdens

Dear Erwin, I like your project to link farmers to specific markets. How do you take care of quality control?
We have a comparable project, but only for spices, in the North of Tanzania. The difference is that we process spices in a central processing plant in the village and sell from there. We have a strict system for quality control, as to make sure to satisfy the requirements of the buyers.
You can see: https://network.changemakers.com/challenge/creatingsharedvalue/entry/village-based-processing-of-organic-spices/
Wishing you good luck.
Marg

Photo of Erwin S. Embuscado

Hi @Marg Leijdens, at the farm level there is already a strict quality control. For instance, the onion farmers need to have a required size set by the institutional buyer so they use an onion sorter. In the case of the ginger farmers, there is a consolidating area and pre-processing procedures before the final processing and packaging. All the best on your project as well. Cheers!

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