Like many other rice farmers around Davao del Sur, Demosthenes Aquino initially found it hard to shift to organic rice farming despite cheaper production costs and obvious health benefits to consumers. The reason: demand for brown organic rice remains low.
Compared to conventional rice, organic rice production is relatively cheaper because there is no need anymore for expensive fertilizers and pesticides. Still, despite the many valiant efforts towards a shift, the industry is still plagued with a host of other problems such a slack of consumer awareness and an unstable rice supply of brown organic rice.
But Aquino's heart was set on producing brown rice and he was relentless in addressing the problems. He and other rice farmers then decided to form the Davao del Sur Organic Farmers (DASORFA) Multi-purpose Cooperative in 2004.
Aquino, a Gawad Saka Outstanding Farmer candidate and a Farmer Scientist awardee, leads efforts to teach other farmers the benefits of organic rice farming by sharing his succes story.
"The farmers, although they are the suppliers of rice, are often abused by the rice industry. The buik of the profits until now still goes to the traders," Aquino said."We want to correct it by forming the cooperative. That is our intervention."
Today his efforts finally paid off. The cooperative now assists farmers by extending production loan to members with only a two to three percent interest and jumpstarted advocacy work among other farmers to shift to organic ricefarming. When DASORFA was set up, it started with a lot of help from the Technical Assistance Center for the Development of Urban and RuralPoor(TACDRUP), a non-government organization based in Davao City that has been involved in development work in the region for 26 years. TACDRUP had initialy provided the capital which in turn was partly sourced out from a loan it obtained from Federafion of Peoples' Sustainable Development Cooperative (FPSDC).
A portion of the loan was also used for marketing services now being provided by the Mindanao Agri-Network Corporation (MANCOR), a spun-off program of TACDRUP.MANCOR is engaged in the buying,processing, and selling of organic rice and occasionally of conventional rice.
The loan from FPSDC had been providential for MANCOR. At that time, they had difficulty accessing loans from commercial banks for they could not produce any collateral. "In 2006, FPSDC came in and allowed TACDRUP to avail of their credit facility for MANCOR as their way of support to organic farming," said Elmer Te Eng Fo, MANCOR's General Manager. A credit line of P2 million was extended that had been used for buying palay and for other expenses incurred during harvest and post-harvest. Eventually, they were able to pay the equity and had been cleared of all their liabilities with FPSDC. It was also in that same year when TACDRUP renewed its membership with FPSDC.
Right now, DASORFA is the main organic rice supplier of MANCOR which operates a four-hectare post-harvest facility strategically located at Barangay Sinaragan, Matanao, Davao del Sur. The area is at the center of four leading organic rice producing municipalities: Matanao, Magsaysay, Hagonoy, and Bansalan comprising of about 10,000 hectares.
The facility has a storage capacity of 50,000 bags and a solar drier for 800 bags per day. It also boasts of a Konskilde batch type mechanical drier at 40 tons capacity and a rice mill with gracler rated capacity of 3.5 tons per hour. Rental payment for the said facility mainly comes from income derived from services including scaling and drying at Pl0 per sack and milling and warehouse use costing at P40-P50 per kilo.
Rice Trading Practices
Te Eng Fo said that MANCOR are now working towards making the DASORFA farmer members as shareholders and part owners of the marketing; enterprise. "We are now looking for ways on how the farmers could become part owners of the marketing enterprise as well as operating the post-harvest facility so that they will have profit shares." He added that this is being envisioned by MANCOR as a way of addressing sustainability issues and to encourage farmers to sell their produce only to their own marketing enterprise' The way things are now, he said, most rice farmerss till resort to selling rice to traders who could afford to buy rice in bulk and peg a higher selling price.
"The more they are able to buy in bulk, the more they could control the supply. Many times, the cooperative itself are left with nothing as the palay had already been bought by the traders," said Aquino.
Aquino said that while farmers could perhaps earn more because of the higer selling price from traders,this practice is disadvantageous to them in the long run. Most farmers are dependent on traders who would extend cash loans, loans for purchase of fertilizers and other inputs, and even personal emergency loans.
In turn, the traders would charge exorbitant interest rates and in exchange would demand exclusive buying rights over the expected crop harvest. "It is sad to see how some farmers have to even sell everything just to pay off their debts including their own "konsumo" (household) supply. Nothing is left even for themselves or their families."
To make farmers less dependent on traders, DASORFA is encouragirrg them to sell their products to the cooperative and MANCOR. "Our vision is to really turn the farmers into part owners of the enterprise. In this way, they would be more keen to sell their rice to us," Te Eng Fo said.
The cooperative strives hard to buy rice at a higher cost than the prevailing market price. Right now, the price of the conventional rice is pegged at P12.00 per kilo but the cooperative makes sure that they buy the organic rice from P12.50 to P13.00 per kilo. "This is being done as an additional incentive to encourage farmers to shift to organic rice," Aquino'r said. "That's why we need to boost our own capital so we could have the capacity to buy to ensure that they will no longer go to the traders," said Aquino.
MANCOR is setting up a scheme that would allow farmers to be shareholders without them giving cash but by setting aside a portion of their net profit in favor of the cooperative. "When we buy from them, they already earn," said Te Eng Fo, adding that they are too well aware that farmers do not have the capacity to buy equity shares. "Under this scheme, everytime we buy from them, we will withhold, say P0.10 or P0.25 centavos that will automatically be converted into the cooperative's equity shares until it reaches a substantial amount," Te Eng Fo said. "The more equity shares the cooperative shall have, the more it is translated into profit shares."
MANCOR envisions that eventually, farmers shall control at least 49 percent ownership of the enterprise. "That is our vision," Te Eng Fo said. But he quickly added that there should be many interventions to be made for the DASORFA rice farmers as well as the organic rice industry itself. "We all need to cooperate and help each other, production on the part of the farrners and marketing on the part of MAINCOR."
Organic Rice Life Giving
A lot of efforts of the DASORFA also go into promoting organic rice production among farmers. Davao del Sur is one of the top rice producers in Mindanao but only an estimated 20 percent is devoted to organic rice production.
The cooperative, which holds office at MANCOR's post harvest facility, regularly conducts seminars and information drive among farmers on organic rice production. "But we respect the farmer's choice on whether to go organic or not," said Aquino. "At most, what we do is to encourage them by providing incentives. Bottom line is we just wanted to help." The cooperative, for instance, requires members to use the organic rice variety seeds before any loan is extended.
Aquino, however, is glad to note that more farmers now see the value of organic rice farming. "There is no need for chemicals anymorer just organic fertilizers, therefore it is cheaper," he said, admitting though that the production process may be a little bit more tedious. "But in the end what matters is vou have lesser costs. It is actually the use of feriilizers in conventional rice farming that increases production costs which in turn lead many farmers to seek loans from traders."
Efforts are also being harnessed towards the marketing and promotion on the use of organic rice. "While DASORFA is the supplier, MANCOR makes sure that the product gets to the market," said Te Eng Fo.
The process usually starts with the palay being brought to the mill for drying, classificationg, rading, labeling and storage. MANCOR then comes up with a distribution and marketing plan for the next six months to minimize "rush" orders and ensure stock availability at the outlets at all times.
He also added that through DASORFA, there is an assurance that the rice produced by its farmer members are genuinely organic, citing cases in the past where there would be farmers who would claim that their product is organic but is not.
Te Eng Fo also noted that their marketing strategies address consumers lack of awareness on organic rice. "We want to let the public know that organic rice is very healthy and hundred percent chemical free."
Right now, MANCOR is using the brand name NSTF which stands for "Nature Farming Technology Products." Soon the name might be changed to "Farmers Best" once approved by the Department of Trade and Industry, for ease in marketing.
They are also undertaking a certification process with the Organic Certification Center of the Philippines (OCCP) with technical assistance from the Philippine Development Assistance Programme (PDAP). "While we may be known in Davao, we need the certification if we need to sell it in other places," he said.
MANCOR now distributes and sells the organic brown rice in six out of seven malls in Davao City. These are packed in one to five kilogram vacuum bags and up to about 25 kilos of ordinary rice bags, The vacuum-packed brown rice is being sold at a retail price of P35 per kilo.
Vacuum-packing the brown rice, said Te Eng Fo, had extended the shelf life to a minimum of six months. Other innovations include a current research they undertake on producing "instant rice" that would reduce the length of cooking time. "Although many real conscious in dividuals don't mind this, the bigger bulk of the potential market for brown rice, both in the local and export markets, could be reached if cooking time could be shortened without sacrificing product quality," he added.
Right now, MANCOR also seeks to expand its procurement processing and marketing with the goal of increasing the supply base in Davao del Sur to 1,000 hectares that may entail a projected cost of P50 million.
Relating to this is the limited supply of organic rice. DASORFA only produces about 50 bags per farmer every harvest for at least two harvest seasons every year, from February to March and then again from Augpst to October. Aquino said that to address these, they are targeting to increase their rnembership base, raise additional capital for credit services; boost marketing efforts, seek certification, and more skills development and technology training.
"There are many challenges," Aquino said, "but in the end its our commitment to life-giving agriculture such as organic that keeps us going."