A different kind of organization is spearheading a new trend for cacao marketing in Mindanao, southern part of the Philippines. Marketing of cocoa products has been an uphill struggle, but one group is showing a new way for smallholder farmers. The real challenge is to unite the local traders with the farmers and cooperatives, to overcome deep seated mistrust and distorted value chain relationships. In a One Town One Product-type scenario, the Department of Trade & Industry (DTI) and the San Isidro Local Government Unit , encouraged all the shareholders to unite in order to produce better and more competitive products and in volume.
So late in 2007, the local traders, farmers, farmers cooperatives, tablea makers and local micro-entrepreneurs in the municipality of San Isidro, Davao del Norte formed and became shareholders of the Chokolate de San Isidro, Inc, (CSI) a unique private corporation. It is unique because the shareholders are local traders, cooperatives, farmers, micro-entrepreneurs and interested town folks.
Some cooperatives are still hesitant to join because they think that the corporation is controlled by the local traders. However, the distrust between the traders and the farmers is being addressed by establishing transparent systems and practices, allied to good business governance. By being transparent, all stakeholders can understand the company's buying and selling schemes -- that everybody gets a fair share of the business. This goes a long way to dispelling distrust and secrecy amongst the members. Until now CSI attends meetings of non-member cooperatives and explain to them the objectives of the company and encouraging them to join and become shareholders.
CSI, through its marketing arm CSI Trade Ventures, are selling tablea (in the form of tablets and cocoa blocks) to various markets in Manila, Cebu and Davao. It also recently went in to cacao-bean export (as a separate operation from its tablea production) and has shipped thus far, about 200 MT unfermented cacao beans to Europe. It is now in negotiations with a large European organic bean processor, to export cacao beans.
It receives invaluable help from the government. The local government units (LGUs), for instance, help CSI at the farm level. The DTI, on the other hand, still attends CSI board and general meetings and act as a guide and mediator. NGOs like ACDI/VOCA , the EU and DAs Upland Development Program (UDP), and Mars Inc. still provide technical support, especially at the farm level.
Many of the officers and members of CSI and their member cooperatives, have attended trainings , seminars and workshops conducted under the ACDI/VOCA SUCCESS Alliance Phase II project , a partnership of USDA, ACDI/VOCA, World Cocoa Foundation , MARS Inc, and Cocoa Phil. ACDI/VOCA’s Success Alliance Phase II is a recipient of USDA Food For Progress program in FY2006. Many of its farmer members have attended the Farm Field Schools and some became recipients of tree rehabilitation assistance, post harvest facilities, quality bean grading trainings and other SA II activities.
ACDI/ VOCA recently gave CSI and nine other groups, a complete set of cocoa bean quality assessment equipment, including a moisture meter, thermometer, weighing scale and bean cut test device. In addition they received training and coaching in conduction the cacao bean quality assessment, under the Philippines National Standards for Cacao Beans, PNS Cacao. The PNS cacao is one of the major outputs of SA II.
“This is the most valuable thing CSI as an organization received from SUCCESS Alliance II” said Theodore Garcia, President of CSI. He said further, “aside from providing us the much-needed toolkit, SUCCESS Alliance has also encouraged us to follow and adopt the National Cacao Bean Standard (PNS Cacao). The trainings provided enabled us to properly farm and process our beans and make them eligible for export. In terms of production, we are about to pilot test a wet-bean buying scheme and process the beans centrally using SA II post-harvest processing standards. At long last, San Isidro will now ferment its beans. As a start, we hope to export at least 300 MT of good quality fermented cacao beans this year.”
According to Garcia, the recent export activities by CSI and Puentespina Farm (both SA II assisted organizations) as well as others, has prompted the local Chinese cartel to increase its buying prices, in a domestic market that traditionally does not react to global prices. Because of this, cacao farmers in the Davao region enjoyed at least a 35-peso increase in the price of beans as compared to last year.
