Emerging Mindanao BSOs spur growth of food industry

BUTUAN CITY – Business support organizations (BSOs) are already playing a major role in maximizing the potential of the food industry of resource-rich Mindanao. The emergence of these organizations in recent years – they include chambers, commodity-specific associations and trade federations – have resulted in increasingly integrated campaigns to effect policy reforms.

Working from within BSOs allows members to raise specific problems and resolve fundamental issues at the local level. These organizations also facilitate networking, increase efficiency, and serve as effective mechanisms by which the different business sectors can strengthen their representation and position themselves.

In addition, BSOs are paving the way for the island-region’s enhanced role in overall national food production.

The 3rd Mindanao Food Congress, an ongoing regional summit here in Butuan City (Feb. 20-22) which is defining Mindanao’s role as "food basket" under the new administration, is a venue for bridging the efforts of BSOs in the food industry and the government.

Resolutions now being drafted, which will presented to President Arroyo at the Congress, include calls for the expansion of Mindanao’s irrigation network; improved post-harvest facilities, agricultural marketing and logistics systems; removing discriminatory tariffs on Philippine canned tuna exports; and fast-tracking tree crop development for domestic and export markets.

Most of these resolutions were born out of the advacocy efforts of these food-related Mindanao BSOs.

Although many of these organizations came into existence only recently, a number have already made their mark in terms of successful policy advocacy and industry integration. In terms of national and international impact, however, none can match the fishing federation based in General Santos City.

Success Story: The Fishing Federation

In 1998, representatives of the top fishing nations and resource owners were gathered in Tokyo for the Multilateral High Level Conference on the Management of Highly Migratory Species in the Pacific Ocean (MHLC).

The UN-backed Conference, already in its third session, was deep into discussion about future allocations of fishing rights over the multi-billion dollar Pacific tuna stocks – in other words, which countries in the next few decades were to get x amounts of tuna.

At previous meetings, the Philippines had been represented by just one government official and one individual from the private sector. This time, having been tipped off that without adequate representation they stood to lose access to Pacific fishing resources, 19 Filipino businessmen and the director of the Bureau of Fisheries and Aquatic Resources filed into the conference hall.

"It was a learning experience for us," recalls one member of the delegation. "The other fishing countries were already well aware of the implications of the MHLC, and they had their position papers well in hand. The Philippines, at that time, was at the bottom of the learning curve."

Fishing is a P45-billion industry in the Philippines, contributing about 4 percent of the country’s GNP. The Socsksargen area is a major player in this industry, with daily fish landings of about 400 metric tons (MT). It is a premier producer of tuna, with a daily landing of over 100 MT.

The industry contributes 60 percent of the GDP of General Santos City and is a major contributor to the national foreign exchange, with annual exports of $130 million.

This flourishing industry now faced a potential disaster. If the Philippines failed to lobby for its share of the tuna catch quotas, its fishing industry would be locked out of the world tuna market.

The Socsksargen fishing associations got together with the local canneries and other industry players and, with the help of the General Santos City Mayor’s office, it urged the government to lobby on behalf of the national tuna industry at the MHLC negotiations.

Due to their vigorous advocacy, the country was able to gain approval for its most pressing demands in succeeding sessions of the MHLC, and stands a good chance of being awarded as much as 20 percent of the total Pacific quota, translating to a potential annual tuna catch valued up to $600 million.

This was accomplished through joint effort by all sectors within the fishing industry, illustrating the many advantages of adopting an industry-wide approach.

The core group of fishing associations formed in 1999 the Socsksargen Federation of Fishing Associations and Allied Industries (SFFAAI), with assistance from the USAID-sponsored Growth with Equity in Mindanao (GEM) Program, which was present at the MHLC negotiations from the start.

The federation, at first composed of both small and large-scale fishing operators as well as traditional pumpboat operators, was soon joined by tuna canneries, processors and allied industries.

The federation has since grown steadily in strength and reputation, spearheading the formation of the National Tuna Council last year and hosting two meetings of the World Tuna Boat Owners Organization. It had topped the learning curve, and more.

Strength in unity: The Peanut Association

Another case in point is the Northern Mindanao Peanut Industry Association (NMPIA). Formed in 1999, NMPIA is a private sector-led organization of cooperatives, individual farmers, agrarian reform communities, and private agribusiness firms engaged in the growing and production of peanuts.

The country still imports most of the peanuts it consumes, in both raw and processed forms, from Asian neighbors. In 1999, about 46,000 MT of raw, unshelled peanuts valued at more than $29 million and about 600 MT of peanuts processed into snack foods costing about $700,000 were imported.

Mindanao with its rich soil and typhoon-free climate can be a major source of peanuts for national consumption, but prior to the NMPIA’s formation the industry suffered from a lack of organization and technical support. Luzon-based buyers were importing peanuts because they believed that the required volumes were not available within the country.

The NMPIA is working to change that through a peanut industry development plan they drew up with the assistance of GEM agribusiness specialists and regional government agencies.

The association has purchased seed varities preferred by processors and buyers from Luzon and trained members in producing them. The certified seed growers are multiplying the seeds for sale to the other members.

Currently, the NMPIA is shipping out 18 tons of unshelled peanuts each month to a major snack food processing firm in Luzon. Another buyer is asking them to deliver five tons of unshelled peanuts weekly to be processed for exports to Singapore. The association is also negotiating with a third buyer for delivery of 100 tons a month.

The group numbers more than 87 organizations in Region 10 and Caraga, including 58 co-ops, seven agrarian reform communities, three corporations, seven private enterprises, one barangay and one municipality. Each member-co-op represents 50 to 300 potential peanut growers, or a total of more than 3,000 farm households, some of whom were already growing peanuts in limited volumes. Several member-co-ops are based in communities of Muslims and indigenous peoples.

According to NMPIA President Edwin Andot, they expect some 5,000 hectares of peanuts suitable for commercial processing to be planted in Northern Mindanao alone within the next three to five years. Already the association is exporting tie-ups with growers in Southern Mindanao.

Fruits, trees and seaweed

Other important region-wide networks are the Mindanao Fruit Industry Development Council (Minfruit), Mindanao TREES Consortium, and the Western Mindanao Seaweed Industry Development Foundation.

Minfruit, organized in November 1999, brought together the region’s leading fruit growers’ association and groups of cooperative at the provincial level. In its first year of operation, Minfruit staged the first Mindanao Fruit Industry Conference as well as joint national and Mindanao-wide mango congresses, with support from the GEM Program, DA and other regional agencies.

"These are good venues in which to advocate among LGUs and the national government for industry support," says MinFruit Executive Director Elmo Ted Rodriguez.

According to Rodriguez, the Council currently has 23-member organizations with total of about 1,400 members. Among the members’ main concerns are technology transfers and the need to upgrade and expand rural infrastructure and post-harvest facilities.

Through a memorandum of agreement with the DA, Minfruit has been designated the agency’s partner in improving the region’s marketing system, under the Kalakal Agri 2000 project.

The TREES Consortium is an organization of ecology advocates, tree farmers, and institutional wood users focused on developing the tree farming industry as a vehicle for sustainable rural development.

The Western Mindanao Seaweed Industry Development Foundation is composed of seaweed growers, traders, and processors who want to tackle current industry problems such as declining productivity, continuing delivery of inferior quality raw materials, and growing competition from other seaweed producing countries. The group is currently organizing the Second Mindanao Seaweed Congress, scheduled for April in Zamboanga City.

For the greater good

SFFAAI Executive Director Ferdinand Hernandez says his federation’s members realize the importance of maintaining a common stand on issues, setting aside personal interest for sake of the group.

"A great part of [a BSO’s] success in lobbying for appropriate policies lies in the unity of the organization," he says. "In our case, this success cannot be attributed solely to the federation, but also to concerted efforts involving the cooperation and support of other stakeholder and concerned national government agencies."

He also adds some advice other Mindanao BSOs are already taking to heart: "Maintaining open communication lines and a willingness to exert extra effort will always play a critical role in attaining industry objectives."