The high value commercial crops programming response to global trade: a case of Saranay Multipurpose Cooperative in Apayao, Cordillera Administrative Region

The study aimed to describe the cassava industry in the Philippines, in general, and the industry in Apayao, Cordillera Administrative Region, in particular, considering global trends and growing marker demand for the crop. SWOT analysis was used to describe the state of the cassava industry. SWOT analysis was also used to describe the cassava production areas in Apayao, in relation to the participation of cooperative (Saranay Multipurpose Cooperative) in joint ventures agreement with a market outlet (San Miguel Corporation). The areas for further development, strengthening and improvement to increase the competitiveness of cassava production in Apayao were identified. Recommendations for the identified areas that need improvement were also put forward. Among all rootcrops produced in the country, cassava ranks number one in terms of volume produced, area planted and yield per hectare. Aside from being a ”security food crop”, cassava is a raw material for non-food products such as ingredient for animal feeds, source of ethanol for biofuel and high grade starch for various industrial uses including biodegradable packing material. Hence, cassava finds itself in the list of crops that have great potential in addressing global concerns on food, industrial use and environmental concerns. The Philippine Government has put in place programs that help boost the production of cassava. The Joint Agribusiness Ventures (JAV) of the High Value Commercial Crops Program (HVCC) provides marketing assistance to small holders by facilitating tie-ups with major buyers and processors such as the San Miguel Corporation (SMC). With this program, the production of cassava registered positive growth rates in both the total volume and yields, as shown in the Cordillera Administrative Region (from a negative 0.06 in 2000-2003 to positive 0.32 in 2004-2006). The implementation of the JAV strategy has provided cassava farmers an assured market for their cassava production, in the form of dried cassava chips. With JAV, the productivity of farmers enrolled under the production, supply and purchase agreements has improved due t0 the technical assistance and training on improved technology provided by the cooperative. DA-RFU, LGU, DTI and SM. Farmers' incomes have also increased due to the value-adding processes of producing dried cassava chips. Cassava chips were purchased by SMC at an average of Php11.12/kg compared to farmgate price of Php3.49/kg for fresh cassava tubers. Although the farmers incurred additional expenses on processing and handling dried cassava chips, their net incomes were higher by 154% (Php46,305.71/ha, 2004-2006 average) compared to farmers who only produced fresh tubers (Php19,000/ha, 2004-2006 average). For the same period, the cooperative, as a consolidator of cassava chips also earned additional income of Php1.5M from providing marketing and handling services to the cassava farmers. Government's suport through the HVCC program's strategy of facilitating market linkages and providing infrastructure support along with the active collaboration among government institutions and partnership between the public and private sectors have helped the farmers in their cassava production and processing endeavors. However, as shown by the cassava farmers in Apayao, the arrangements in the marketing linkages need to be reviewed and corresponding amendments should be instituted in order to encourage greater participation of farmers in the production, supply and purchase arrangements. Specifically, the cassava chips production target of 40 mt/wk, was barely met over the span of three years. In addition, only 545 hectares of the targeted area of 2,000 cassava plantations was so far covered in 2006. Stringent contact requirements have inhibited the farmers from enlisting in the production of cassava chips. With only three years into contract-growing scheme and marketing arrangements, the farmers are still on their ”infancy” stage with regard to the production of dried cassava chips following specific quality requirements and production and delivery schedules. In spite of this, the farmers bear most of the risks in complying with the production, supply and purchase agreements. There should be a period for ”baby-sitting” the farmers by providing less stringent requirements. There should also be a shared responsibility and risk absorption among all the participants of the production, supply and purchase agreements.