Meeting the Challenge

1. Meeting the Challenge Linking Small Vegetable Farmers to the Mainstream Markets Presented by: Joan C. Uy Chair, Resource Mobilization Committee, NorminVeggies and President/Gen. Manager, NORMINCORP

2. (service) (Northern Mindanao Vegetable Corp.) “NORMINCORP” (Marketing) CLUSTERS cabbage carrots strawberry lettuce tomato broccoli • 114 producers • Small growers • (independent) • Small farmers groups • Corporate farms • Input/service providers • Academe

3. (Northern Mindanao Vegetable Corp.) “NORMINCORP” LEGONG Project Vegetable Growers (Municipality of Impasug-ong, Bukidnon Province, Philippines) Marketing Services Infrastructure • Mgt. Assistance • Input Source/Credit • Techno devt. • Prodn & Post Harvest KAANIB Foundation Lutheran World Relief (LWR) Core Group of vegetable farmers in 4 barangays (villages) Leverage Fund/ Financing Kauyagan Savers Coop

4. Mainstream market access of small farmers to increase income and reduce poverty with NorminCorp

5. NorminCorp Key Products Independent Growers Small Farmers

6. Product Flow thru NorminCorp‘s marketing facilitation Iloilo Zamboanga Gen. Santos

7. “A good market is the key to increase farm income” Wet market Supermarket Distributor (e.g. Iloilo) Washed, air dried, sorted, packed in boxes, sweet tasting varieties, deep orange color and small inner core Unsorted, unwashed, packed in sacks Last week’s prices; May 2005 (Php/kg.) 10.00 – big 08.00 – med 06.00 – standard 04.00 – small 02.00 – super small 18.00 – big/med 13.00 – small

8. Vegetable Markets • Agora (Cag. de Oro City) wholesale traders • Retail wet market stall operators Wet/Mass Market • Numerous, dispersed traders • Arbitrary quality standards • Highly fluctuating prices • Spot trading (fluctuating volumes)

9. Vegetable Markets • Fast food/Quick service establishments • Hotels and restaurants • Food distributors (supermarkets, hotels & restaurants) • Caterers Institutional Market (Differentiated Market) • Big name customers • Well defined, clear quality specs • With Quality Control procedures for acceptance/rejection • Needing vegetables with regular frequency and long-term arrangements

10. “$?” The concept of best value Institutional Market Buyers: who among the growers/suppliers would give the best value? • Quality – Recovery • Delivery & Reliability – Timeliness • Prices – Value for money Implication: “Quality management and operational efficiency needs to be established at the farm & post harvest concerns” Growers: Does quality Management and operational efficiency give best value? Is it worth doing the work? Growers

11. The Institutional Market is the driving factor in developing a value chain system The Value Chain Analysis Added Value Wet Market price

12. Transport/Cold Storage Market Transport for Consolidation • transport • Packing Shed • Post harvest tools, packing & labeling materials Hauling/Sorting/Grading Packing Harvest containers, tools Harvesting Fertilizer, insecticide/ fungicide, bio-con, irrigation Cultural Management Seeds/seedling medium Planting/Transplanting Land Preparation Tools/Equipment Irrigation Roads Financing Communications System NorminCorp is just a facilitator. Since grower is given the buyer’s price, he/she is accountable for the product up to the buyer’s end. “Quality Assurance Plan (QAP)”

13. Getting growers’ acts together through the Clustering approach • A grouping of producers who undertake a common marketing plan for a particular products for identified market • It is product based • It is a strategy to respond to the challenge to transform fragmented, smallholder farm production to market-focused and highly competitive businessoperations Buyer’s visit

14. In the cluster, growers share best practices to attain a relatively homogenous quality of products

15. Land prep Plastic Mulch Thorough land prep Mulch Beds

16. Nursery Plastic Seed Tray Indigenous seed trays

17. Irrigation Flooding Drip irrigation Sprinkler Watering

18. Planting Tropical Rain shelters Compost Trellis Open field

19. Harvest

20. Post Harvest Packing House

21. Sorting, cleaning, treatment

22. Packing

23. Packing

24. Transport from the farm Regular Truck Reefer Truck Animal Hauling

25. Transport for outshipment(Manila, Cebu, Etc.) Closed Container Van Break Bulk Reefer Van Perforated Container Van

26. When we assist small farmers, we confront these production and postharvest situations

27. Production Lack of irrigation Choice of plant varieties not always preferred by buyers Lack of Integrated Pest Management (IPM)

28. Post Harvest

29. Transport

30. The Challenge to transform small farmer’s practices …

31. From this To this

32. Steps in Assisting Small Farmers 1/3 • Organization of a core group in a barangay (village) • Data gathering at the production site: - products - production practices - cost - yields - prices - buyers & market players - the growers (area) - Resources & limitations • Shortlist five (5) main products

33. Steps in Assisting Small Farmers 2/3 • Data gathering beyond the production site (Market) • Show quality management to reach the market • opportunities (product match with potential buyers) • Analyses of the four(4) areas of enterprise to screen the most promising products • Selection of two(2) to three(3) promising products • Objective: raise awareness for the needed work to be done (responsibility for quality) • Objective: raise awareness for the need to work together (core group Cluster participation)

34. Steps in Assisting Small Farmers 3/3 • Decision point: Core Group joins the Cluster vis-à-vis NorminVeggies • Development interventions a. Tools • Budget per economic module • Production protocol and QAP “what to do in the farm” • Production scheduling for the group (harvest calendars) • Cost and returns (packing lists, farmers’ ledgers) b. Credit c. Extension • Farm visits (visit cluster areas) • Technical assistance (production guide) • Trainings d. Marketing assistance

35. Conclusions • A good market is the key to increased farm income, a viable farm enterprise, and for small farmers, poverty alleviation • Institutional markets provide the good market because they give growers the opportunity to develop a value chain system that brings additional earnings

36. Conclusions • The value chain system empowers growers for they own the product up to the buyer’s end. But with it is the corresponding accountability for the output in terms of quality and delivery reliability • The key to success is constant innovation that increase quality, build operational efficiency and lower cost, and also the management of the relationship among supply chain participants • Growers • Service providers • Buyers • Development partners (government and private)

37. Conclusions • Meeting the challenge to link small farmers with the institutional markets require development interventions that build their capacities for new or expanded production with value addition: • Technology • Management assistance in production and post harvest • Input sources (credit) • Market linkage and services)

38. Conclusions The clustering approach of NorminVeggies where small farmers can exist side by side with the independent, better-resourced growers provide the “short-cuts” for farmers to build competencies. They can enjoy the advantage of collective know how, resources, and market contacts, otherwise, inaccessible to small individual growers.

39. CONCLUSIONS To be a significant market player, Size is not everything! • We can be small but act large through the cluster (volume growth) • We can be small butact sophisticated relative to institutional market demand (value growth)

40. Thank you