PHILIPPINES
The Bukidnon Lettuce Cluster, Mindanao
The farmers. The island of Mindanao, southern Philippines, has considerable natural advantage for horticultural production and is a source of much of the Philippines' fruit and vegetable supply. Until recently, farmers either sold their produce on local markets or through traditional marketing channels that involved village collectors and wholesalers in Mindanao and wholesalers and retailers in the major buying cities, such as Cebu and Manila. Recently, with support from a USAID project, a new approach has been developed, involving "clusters" of farmers who supply markets directly. This particular cluster comes from Bukidnon, around two hours by road from the city of Cagayan de Oro in northern Mindanao. There are five farms.
The markets. The main market for lettuce identified by the project was "fast food" companies, notably McDonalds and Kentucky Fried Chicken. A cash and carry chain was identified as a market for up to 10 percent of production, while the wholesale market in Cagayan de Oro could be used to market additional production, particularly off-sizes.
The linkages. Marketing activities are coordinated by the largest of the five farms, which accounts for 44 percent of production. This involves: (1) contacting each grower for confirmation of weekly supply and matching any individual shortfalls with production by others in the cluster; (2) checking the pre-cooling and packing area and the supply of plastic crates; (3) transmitting weekly outturn reports and payments to the other growers and discussing identified quality problems; and (4) liaising with the crate supplier, transporters and input suppliers. Individual farmers' crates are colour coded for traceability. Information about each shipment is faxed in advance to the cluster's agent in Manila who receives the shipment at the buyers' premises, monitors the outturn weights, identifies any quality problems and reports back to Bukidnon. The agent also arranges bank transfer of payments to growers.
Training and support services. The cluster, along with other vegetable farmers in the area, has benefited from significant organizational assistance from the USAID project, from training by FAO in production, quality control and post-harvest handling, and from support provided by the provincial Department of Agriculture.
The results. The five farms ship a total of 10 tons of lettuce to Manila weekly. Although substantial external assistance has been received, there are clear indications of strong commitment by the growers to the venture and the likelihood that it will become sustainable.
Lessons and distinct features. The cluster provides a model of an integrated approach that involves close liaison with input suppliers, transporters and buyers. The coordinating role of the leading farmer appears to be the essential component of the cluster's success.
Source: Flor Lantican
THAILAND
In-Net-Vegetable Growers' group
The growers-cum-suppliers. The In-Net-Vegetable Growers' (INVG) group, in Chiang Mai Province's Sarapee District, consists of 72 members from eight villages who together produce kale, cabbage, bean and broccoli. Members of the group pay no membership fees, but each buys a share of 120 baht which is used as initial funding and operating capital, mainly to provide loans for inputs. The INVG group has invested in water pumps and tube irrigation.
The markets. The INVG group supplies two supermarkets of the Rim Ping chain in Chiang Mai, as well as two wet (fresh produce) markets and a university shop. The Rim Ping outlets offer high quality produce to high-income customers and discard unsold vegetables daily.
The linkages. The INVG farmers deliver vegetables to their chairman, who acts as a buyer and has supplied Rim Ping for more than 15 years without a written contract. The produce is then delivered to the supermarkets. Suppliers to the supermarket are responsible for product shelving and display. Supermarket staff visit farmers' fields each year and produce is checked for freshness and cleanliness. Since Rim Ping's purchasing system is by consignment, the INVG chairman must carefully determine the right quantity to deliver each day to avoid losses. Fruit is inspected piece by piece, leading to high rejection rates. There is no specification or product standard, only grading. Each member's code is included on bag labels for traceability. Payment is made every 45 days.
Training and support services. The group obtained a 70,000 baht loan from the Bank of Agriculture and Agricultural Cooperatives at a low rate of 7 percent interest and received substantial financial aid (500 000 baht) from the Sub-district Administration Office. These loans were allocated to members for net-covered production areas. The group chairman was responsible for the allocation of funds.
The results. Two advantages of selling to the Rim Ping supermarkets are that produce keeps fresh for the whole day, and the certainty of a market due to a sizable group of customers. The disadvantage is that the vegetables need to be sold within a day. The case provides an interesting example of where a leading farmer, trusted by the others, has taken on the role of trader, to the benefit of all group members.
Source: "Regoverning markets: Securing Small Producer Participation In Restructured National And Regional Agri-Food Systems In Thailand", by Aree Wiboonpongse and Songsak Sriboonchitta, Chiang Mai University, Thailand (2004) |
