SMC inks contract growing pact with Isabela farmers

SMC Foods, a subsidiary of San Miguel Corp., signed yesterday a memorandum of agreement with the Department of Agriculture, the Land Bank of the Philippines and the local government of Isabela to start a cassava-corn plantation, which will be the main source of raw materials for its meat subsidiary, Monterey Corp. and eventually for an alcoholic distilling plant that might be put up in Region 2 in the medium term.

The MOA was signed by Agriculture Secretary Leonardo Q. Montemayor, Land Bank president Margarito Teves, Isabela Gov. Faustino Dy Jr. and Vice Governor Respicio, and SMC officials led by Ferdinand K. Constantino, senior vice president and chief finance officer and treasurer.

The MOA, which was signed at the SMC head office in Ortigas, calls for the planting of cassava and corn on an initial 39,000 hectares of idle lands in Isabela by the Valley Planters Development Cooperative Inc. SMC will buy all the cassava at an agreed volume and price as feeds for the animal population of its subsidiary, Monterey Corp. Eventually, cassava will be processed into starch and fructose for a distillery to be put up in the coming years.

Dy said the 39,000 hectares will be taken from abandoned lands in the municipalities of Quezon, Malig, Quirino, Delfin Albano, Sto. Tomas, Sta. Maria and Cabagan, all in Isabela. The area will eventually be expanded to 150,000 hectares once other provinces in Region 2 will participate.

The project will allow SMC to enjoy a steady supply of raw materials, the bulk of which is now being imported by the company. But with the peso being so weak, SMC saw it fit to just acquire the bulk of its raw materials locally through contract growing arrangements, equity sharing (with local governments and farmers groups in idle lands) and other scheme.

The provincial government of Isabela will provide the infrastructure support, credit will be provided by Land Bank and processing and marketing by SMC. The DA will provide the technical support.

The venture will eventually result in the establishment of a cassava industry/enterprise that can generate 165,000 jobs.

Land preparation has started and planting in initially 39,000 hectares will begin by Dec. 15, SMC’s Titular said.