a b a c a s u b s e c t o r - institute for social

Model Building for Scaling Up

Biodiversity-Friendly Enterprise Initiatives (MBS-BDFEI)

A B A C A S U B S E C T O R

ACTION RESEARCH REPORT

This report was prepared by the Institute for Social Entrepreneurship in Asia (ISEA) with support from the GEF Small Grants Programme in the Philippines (SGP-5), a programme of the Global Environment Facility (GEF), United Nations Development Programme (UNDP) and the Biodiversity Management Bureau (BMB) of the Department of Environment and Natural Resources (DENR). December 2018

ABACA SUBSECTOR ACTION RESEARCH REPORT Page 1

T A B L E O F C O N T E N T S

TABLE OF CONTENTS 1

ACRONYMS 4

EXECUTIVE SUMMARY 8

INTRODUCTION 12

A. Background of the Subsector Action Research 12

B. Strategic/ Focus Subsector Selection Process 12

C. Rationale on the Choice of Abaca Industry as Focus for this Subsector Action Research 14

D. Subsector Action Research Scope, Methodology, and Constraints 16

Scope of the Subsector Action Research 16

Subsector Action Research Process and Methods/Tools Used 17

Research Limitations and Constraints 18

PART 1. RESULTS OF THE SUBSECTOR ACTION RESEARCH 19

A. SUBSECTOR HISTORY AND RELEVANCE 20

The Philippine Abaca Industry 20

Pre-Spanish & Spanish Colonial Period 20

American Regime 20

Post-World War II / Philippine Independence from the Americans-Present 21

The Abaca Industry of Eastern Visayas 25

The Abaca Industry of Northern Samar 27

The Abaca Industry of Mondragon, Northern Samar 29

B. SUBSECTOR DESCRIPTION AND SCOPE 32

C. Market Analysis: Market and Market Channels 37

Global Abaca Production and Market 37

National Abaca Production and Market 39

Regional Abaca Production and Market 41

Provincial (Northern Samar) & Municipal (Mondragon) Abaca Production and Market 44

CEFA as Local Abaca Fiber Trader 46

Perceived Demand & Demand Gap 47

D. Subsector Stakeholders/Participants, Functions and Technologies 49

Description of Participants in the Value Chain/Subsector 49

Cost-Benefit Analysis 54

Primary Stakeholders Analysis 57

Profile of Abaca Farmer Producers in Mondragon 57


Women Participation in the Abaca Subsector 57

E. Abaca Subsector Structure 64

F. Policy and Regulatory Environment 66

National Level 66

Local Level 69

G. Institutional Mapping of Potential Subsector Intervention Partners 71

H. State of the Natural Resource Base and Climate Change-Related Risks 79

I. Dynamics and Prospects of the Social Enterprises and Subsector Development and Growth 81

Analysis of Market Dynamics 81

Analysis of Opportunities for Social Enterprises and Identified Primary Stakeholders 83

Use of High-Yielding and Virus-Resistant (HYVR) Planting Materials 83

Better Management of Abaca Farms and Adoption of Sustainability Standards 83

Shifting from Manual/Hand Stripping to Spindled Stripping or

Decorticating Machines 85

Shifting of Channel from a Traditional Consolidator/Trader to a Developmental

Market Channel (CEFA) 86

Taking Over of Functions in the Value Chain 88

Application for Sustainability Certification 89

Opportunities for Leveraged Interventions 91

Strategic Cluster of Barangays and Municipalities 91

Development of a Multisectoral Platform for Subsector Development 93

Social Enterprise Development Focused on System Nodes 97

PART 2. STRATEGIC DEVELOPMENT AND INVESTMENT PLAN FOR SCALING UP ABACA BIODIVERSITY-FRIENDLY SOCIAL ENTERPRISE OF EVPRD-CEFA 113

Background 114

Objectives and Scope of Discussion 114

Strategic Assessment and Planning Process 114

Development Challenges, Strengths and Opportunities and Emerging Options 115

Strategic Development and Investment Plan (Phase 1):

Stakeholders and Abaca Subsector Plan (Year 1 to 3) 121

Stakeholder-Based Interventions:

EVPRD-CEFA, EVPRD and Non-CEFA Abaca Stakeholders

and Abaca Industry Enablers 121

Production-Based Interventions:

Abaca Subsector Plan of CEFA (in partnership with EVPRD) 122

Strategic Development and Investment Plan (Phase 2): 139


Trajectory of the Strategic Plan Phase 1 and Development Scenario

at the Onset of Phase 2: 139

Location in the Value Chain 140

Abaca Market and Final Product Demand 140

Imperatives to Move Up the Value Chain, Produce Intermediate Abaca Products

and Attain Major Player Status at the Community Level 141

Strategic Development and Investment Plan Phase 2: End of Year 3 onwards 142

Phase II Investments and Interventions Pre-positioned at Year 1 143

Investment and Budget for Year 1-2 (Utilization of the UNDP-GEF SGP5 Grant) 144

Strategic Development and Investment Plan: 145

PART 3. STRATEGIC DEVELOPMENT AND INVESTMENT PLAN FOR SCALING UP ABACA

BDFSE OF EVPRD-CEFA 147

Strategic Plan for Scaling Up the Abaca BDFSE of EVPRD-CEFA 148

Program Description 148

Desired Abaca Subsector Map in the Two Plan Phases (Year 1 to Year 5) 159

Investment Plan 164

REFERENCES 169

ANNEXES 175

Annex 1. Results of Validation of Candidate BDFE Initiatives 176

Annex 2. KII Respondents 186

Annex 3. List of FGDs Conducted 188

Annex 4. Gendered Market Supply Chain and Production Flow Maps 189

Annex 5. Gendered Production Process Flow 192

THE PROJECT TEAM 195

ABACA SUBSECTOR ACTION RESEARCH REPORT Page 4 A C R O N Y M S

4Ps Pamilyang Pilipino Pantawid Program

ABTV Abaca Bunchy-Top Virus

ACPC Agricultural Credit Policy Council

ACT Adaptive Community Transformation

ADMP Abaca Disease Management Project

AFAES Access Facilities and Enhancement Services

AFG Abaca Focal Group

AMCFP Agro-Industry Modernization Credit and Financing Program

AMSC Abaca Multi-sectoral Coalition

APCP Agrarian Production Credit Project

ARB Agrarian Reform Beneficiaries

ARBO Agrarian Reform Beneficiary Organization

ARMM Autonomous Region of Muslim Mindanao

ASL Accessible and Sustainable Lending

ASM Abaca Sustainability Manual

ATDF Abaca Techno-Demonstration Farm

BAFS Bureau of Agriculture and Fisheries Standards

BBrMV Banana Bract Mosaic Virus

BDFE Biodiversity Friendly Enterprise

BDFSE Biodiversity Friendly Social Enterprise

BMB Biodiversity Management Bureau

BPI Bureau of Plant Industries

BSP Bangko Sentral ng Pilipinas

BTP-WEE-AVCs Benchmarks for Transformational Partnerships and Women’s Economic Empowerment in Agricultural Value Chains

CALP Cooperative Agricultural Lending Program Facility

CAR Cordillera Administrative Region

CARD Center for Agriculture and Rural Development, Inc.

CARP Comprehensive Agrarian Reform Program

CBFM Community Based Forest Management

CBFMA Community Based Forest Management Agreement

CBP Currency Bank Paper


CDA Cooperative Development Authority

CEFA Centralized Farmers Association

CLOA Certificate of Land Ownership Award

CODA Cotton Development Administration

CPH Census of Population and Housing

CPMU Country Programme Management Unit

CRS Catholic Relief Services

CSO Civil Society Organization

CY Calendar Year

DA Department of Agriculture

DAR Department of Agrarian Reform

DBP Development Bank of the Philippines

DENR Department of Environment and Natural Resources

DOLE Department of Labor and Employment

DOST Department of Science and Technology

DOT Department of Tourism

DPWH Department of Public Works and Highways

DSWD Department of Social Welfare and Development

DTI Department of Trade and Industry

EO Executive Order

EVPRD Eastern Visayas Partnership for Rural Development Inc.

FAO Food and Agriculture Organization

FGD Focus Group Discussion

FIDA Fiber Industry Development Authority

FPE Foundation for the Philippine Environment

FPRDI Forest Products Research and Development Institute

GBE Grading and Baling Establishment

GEF-SGP5 Global Environment Facility - Small Grants Programme Phase 5

GFI Government Financial Institution

GMA Genetically Modified Abaca

GOCC Government-Owned and Controlled Corporation

HYVRV High Yielding and Virus Resistant Variety

ICTS Information & Communications Technology

IEC Information and Education Campaign


IPB Institute of Plant Breeding

ISEA Institute for Social Entrepreneurship in Asia

ISP Industry Strategic S&T Plan

Kalahi-CIDDS Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services

KII Key Informant Interview

KRA Key Result Area

LBP Land Bank of the Philippines

LCA Local Conservation Area

LGC Local Government Code

LGU Local Government Unit

MCIT Minimum Corporate Income Tax

MFI Microfinance Institution

MIT Massachusetts Institute of Technology

MOA Memorandum of Agreement

MPDC Municipal Planning and Development Coordinator

MRI Mutually Reinforcing Institution

MSMEs Micro, Small, and Medium Enterprises

MT Metric Ton

NARC National Abaca Research Center

NCR National Capital Region

NGA National Government Agency

NGO Non-Government Organization

NGP National Greening Program

NIA National Irrigation Administration

NICCEP National Industry Cluster Capacity Enhancement Program

NSIC National Seed Industry Council

P3 Pondo sa Pagbabago at Pag-Asenso

PAO Provincial Agriculture Office

PAR Philippine Abaca Roadmap

PCA Philippine Coconut Authority

PCAARRD Philippine Council for Agriculture, Aquatic, and Natural Resources

PCCAO Provincial Cooperative and Community Affairs Office

PCIP Provincial Commodity Investment Plan


PDC Provincial Development Council

PDP Philippine Development Program

PEC Personal Entrepreneurial Competency

PGENRO Provincial Government Environment and Natural Resources Office

PhilFIDA Philippine Fiber Industry Development Authority

PNS Philippine National Standards

PO People's Organization

PPDO Provincial Planning and Development Office

PPMA Philippine Paper Manufacturers Association, Inc.

PPP Public Private Partnership

PRDP Philippine Rural Development Program

PSA Philippine Statistics Authority

PSPI Pulp Specialties Phil., Inc.

PUNLA Program for Unified Lending in Agriculture

PVC Polyvinyl Chloride

RCIT Regular Corporate Income Tax

RDC Regional Development Council

S&T Science and Technology

SAN Sustainable Agriculture Network

SARED Sustainable Agribusiness and Rural Enterprise Development

SCFMF Special Credit Facility for Marginal Farmers and Fisherfolks

SEC Securities and Exchange Commission

SEI Social Enterprise Institution

SILCAB Social Infrastructure and Local Capacity Building

SINP Samar Island Natural Park

SPMI Specialty Pulp Manufacturing, Inc.

SPPI Sentro ha Pagpauswag ha Panginabuhi, Inc.

SSF Shared Service Facilities

TESDA Technical Education and Skills Development Authority

UEP University of Eastern Philippines

UNDP United Nation Development Programme

UPLB University of the Philippines Los Baños

VCA Value Chain Analysis

VSU Visayas State University


E X E C U T I V E S U M M A R Y This subsector action research (SAR) documents the study on the abaca subsector where CEFA (assisted by EVPRD) operates its biodiversity-friendly enterprise (BDFE) located within the Samar Island Natural Park (SINP) in Mondragon, Northern Samar. The results of the abaca SAR served as basis for guiding the strategic development and investment planning process to scale up the BDFE of EVPRD-CEFA along a social entrepreneurship framing. This was participated in by all the subsector and project stakeholders identified under the ISEA project “Model Building for Scaling Up BDFE Initiatives” funded by UNDP GEF-SGP5. The SAR used both primary and secondary data gathering methodologies. This covers the macro (global and national) and industry-level abaca historical past and present situation, as well as micro and local conditions at the ground level. Data and information were gathered and analyzed around the following major components: (a) socio-economic profile of the primary stakeholders (abaca farmers, women and farm workers), (b) condition of the natural resource base and state of biodiversity in area and its impact on the abaca subsector, (c) market and enterprise situation of the abaca value chain, and (d) level of support of enablers in the locality both from the public and private sector and how all these affect the development and growth of the abaca subsector and industry. The Abaca Subsector The Philippine abaca industry is centuries old. Abaca cultivation and utilization dates back to the pre- and Spanish colonial period. The Spaniards used abaca fiber to manufacture ropes for their ships that sailed between Manila and Acapulco, Mexico for the Galleon trade. The American colonial period -- the years 1900s to 1940s -- is considered to be the peak period of the Philippine abaca industry. During this period other uses of abaca fiber aside from textile and cordage were discovered. Bicol region, Samar Island, Leyte and later, Davao and the rest of Mindanao, are the main producers of abaca. Industry decline started in the mid-1940s until 1980s. Abaca fiber trading in the Philippines involved a lot of middlemen with the farmers ending up receiving only 25 to 50 percent of the buying price. Commercial use of plastic, nylon, and other synthetics for cordage has greatly reduced the market for abaca fiber and contributed to the unstable prices in the local and international market. The industry almost collapsed in the 1960s to 1980s due to low production. The development of local businesses that process abaca raw materials saved the industry from collapsing. Abaca products have diversified into pulp and specialty papers, cordage, handwoven fabrics, and fiber crafts. Abaca is also being introduced in the automobile and construction industry. Germany and other European countries, Japan, and the US are the biggest export market of Philippine abaca, particularly pulp (the product used in making paper). The bulk of abaca exports are pulp products. The Philippines still currently dominates the world market for abaca. It supplies 87.5% of the total global demand even with stiff competition from Ecuador, the growing demand of local industries, and limited abaca fiber production. Eastern Visayas was the top abaca producing region from 1993 to 2010. The province of Northern Samar is the current largest abaca producer in Eastern Visayas and the 2nd major abaca producing province in the Philippines behind Catanduanes. Abaca fiber production in Northern Samar was stable from 1990 to 1998 until it became unstable in 2006. From then it slowly increased until 2015. The peak productivity of abaca fiber production was attained in 2014 at 7,579 MT. The most recent typhoon that severely damaged abaca farms in Northern Samar was typhoon Nona in December 2015. Market The abaca industry presents several strategic advantages for the Philippines in local and international trade since it is basically a monopoly of the country for two centuries. The Philippines dominates global production, accounting for 63.23% of the total world production at 67,403 MT (FAO, 2016). The


Philippines’ closest competitor is Ecuador posting a 34.82% share. It has taken advantage of the fact that it is the leading producer of abaca in the world by dominating the export market. Presently, the country exports 87.50% of the total world abaca requirements. Abaca export trend has been unpredictable from 2010-2016. Market reports from PhilFIDA and FAO attributed the decline in overall export volume in 2012-2013 to the global weakening in demand due to the economic slowdown in major importing countries. In 2014, it increased due to the recovery of the importing countries’ economy. The export market for the abaca industry has greatly recovered after having some rough periods in 2012-2013. This trend is expected to continuously rise in the coming years. Majority of abaca fiber being produced in the Philippines is being processed locally into pulp, cordage, and various fibrecraft. The pulp sector consistently remains as the growth area of the industry. It utilized an average of 36,137 MT or 79% of the annual average local consumption from 2012-2016. The pulp millers’ utilization level is highly dependent on the demand for pulp by the specialty paper manufacturers abroad. The cordage sector consumed an average of 5,722 MT of abaca fiber or about 12% of the average fiber consumption of domestic manufacturers in 2012 -2016. Eastern Visayas is the second largest abaca producing region in the Philippines. In 2017, Northern Samar dominated the production with 57% average share of the total regional production. Twenty (20) out of the 24 municipalities of Northern Samar are producing abaca. The top producing municipalities are Las Navas, Silvino Lobos, and Mondragon, respectively. These top abaca producing municipalities are covered by the buffer zone of the SINP. CEFA members account for 4.33% of total abaca fiber production and 5.77% of total abaca planted area in Mondragon, Northern Samar. Out of the 67.50 MT average annual production of its members, CEFA can only buy 30 MT yearly with its current capitalization. Other produced not sold to CEFA are absorbed by other local traders. CEFA members represent 15% of the estimated total abaca farmers in Mondragon. It should be noted that CEFA only started trading abaca fiber in 2017. The forecast for abaca fiber demand in the next five years in the municipality will be 50 MT weekly or around 2,600 MT per year. In Eastern Visayas, the combined demand for abaca fiber by Leyte-based processors is 43,200 MT per year. There is also a 59,000 MT yearly demand deficit for abaca fiber in the Philippines according to PhilFIDA. The biggest pulp mill in the region with an estimated capacity of 36,000 MT of fiber or 12,000 MT pulp/year is only able to obtain 1,938 MT or 5.38% of its capacity. Due to extreme shortage of fiber supply, pulp mills obtain fiber from Catanduanes, Mindanao, and Ecuador to maximize operating costs. Subsector Stakeholders, Participants, Functions and Technologies There are five major stakeholders/participants that are involved in the abaca industry in Mondragon, Northern Samar:

1. Abaca Farmers which includes: (a) Women and men members of CEFA who are involved in the organized production and marketing of abaca fiber initiated by EVPRD and CEFA (200 active abaca farming household members), and (b) Other Abaca Farmers of Mondragon who are non-CEFA members (estimated at 1,106 active producers);

2. Abaca farm workers within Mondragon who are also abaca farmers that offer their services in exchange for immediate cash income. Usually, abaca farmers within a community/barangay work together among themselves;

3. Consolidators are local residents/abaca farmers who are involved in consolidating abaca fibers from farmers within a barangay or cluster of barangays;

4. Local Traders - There are six licensed abaca local traders in Mondragon. CEFA is included in this list. The primary functions of these local traders are: (a) buying and consolidating abaca fibers from farmers and consolidators from different barangays and even from other municipalities, and (b) selling these fibers to GBEs, trader-exporter, and processors;


5. Buyers (GBEs, Trader-Exporter, Processors) - The abaca fiber buyers in Northern Samar are S.C. Tan Export Corporation (Catarman-based GBE), Ching Bee Trading Corporation (a trader-exporter), SPMI (a GBE and processor which is a sister company of Ching Bee), and PSPI (a processor).

Women participate in all aspects of abaca fiber production except bundling of dried abaca fibers. Overall, women are involved in 84% of abaca production activities and 32.5% of marketing activities. Factors affecting economic benefits of abaca farmers are: (a) constraints in production (risk of typhoon damage, pests and diseases, poor cultivation practices, etc.), (b) constraints in marketing (market and pricing information, fiber classification and grading, etc.), and (c) constraints in value adding and processing (access to technology and equipment). Abaca Subsector Structure (Policy Environment, Mapping of Interventions and State of the Environment and other Risks) Market Channels. There are three existing market channels of abaca fiber in Mondragon, Northern Samar. Channels 1 (Farmer – Local Consolidators – Traditional Local traders – Buyers) & 2 (Farmer – Traditional Local Traders – Buyers) are the most dominant channels both in the past and in the present. Channel 3 is exclusive for CEFA abaca farmer members. Members of the association, at present, still go through channels 1 & 2 because CEFA cannot buy all their abaca fibers. Policy and Regulatory Environment. PhilFIDA is an attached agency of the DA which is mandated to promote the growth and development of the natural fiber industry through research and development, production support, fiber processing and utilization, standards implementation, and trade regulation. It is tasked with abaca trade regulatory services such as: (a) Licensing services to abaca fiber industry, (b) Fiber inspection and enforcement of grading standards, (c) Certification of abaca farms and farmers in terms of sustainability and good agricultural practices for the enhancement of cultural practices. It is undeniable that PhilFIDA plays a significant role in the development of the abaca industry in Northern Samar. However, the agency faces numerous constraints. Other agencies that are considered enablers of the industry are: DTI, DOST, DENR, DAR and local agencies such as: Abaca Multi-Sectoral Coalition, DENR-Provincial, Provincial LGU (PGENRO, PAO), CEFA, EVPRD, UEP, TESDA, DSWD, DPWH, NIA, GFIs (LBP and DBP), NGOs and the Private Sector. Natural Resource Base. The present BDFE site is being covered by a CBFMA that is awarded to the CEFA. The area is around 1,050 hectares of forestland nestled within Mondragon and is within the buffer zone of the bigger key biodiversity area—the SINP. EVPRD and CEFA believes that effective management of these areas would serve as a strong “biodiversity fence” that will shield the SINP protected areas from further encroachment and degradation. Dynamics and Prospects of SE Development and Growth Abaca farmers can get higher benefits from abaca production and trading if they can improve their farming practices, increase recovery of abaca fiber through better stripping technologies, join an organized marketing group such as CEFA and improve the quality of their abaca fiber to get higher price. The primary stakeholders have several opportunities to explore to improve and scale up their position or the benefits derived from the subsector. These are: (a) Use of high-yielding and virus-resistant planting materials compatible with the biodiversity parameters, (b) Better management of abaca farms and adoption of sustainability standards (CEFA protocol), (c) Shifting from manual/hand stripping to spindled stripping or decorticating machines, (d) Shifting of channel from a traditional consolidator/trader to a developmental market channel (CEFA), (e) Taking over of functions in the value chain, and (f) Application for sustainability certification.


Opportunities for Leveraged Interventions and Desired Subsector Map Building on the strengths of the primary stakeholders and their enablers, the following are the identified leveraged interventions:

a) Strategic cluster of barangays and municipalities radiating around the CEFA-influenced areas and abaca farmers;

b) Development of a multisectoral platform for subsector development – basically reviving the initiative of the PLGU on the abaca multisectoral and inter-agency oversight body;

c) Social enterprise development - strengthening CEFA, explore possibility of forming a cooperative structure of CEFA, and establishing abaca-related SEs and new product lines (tuxy, nursery, other value adding products, fabrication/trading of women-friendly stripping device);

d) TESDA accreditation as a skills training center, and e) Accreditation as agro-ecotourism site.

Through the several scaling up interventions already presented, CEFA shall be transformed, from being a mere fair trade and BDFE initiative, into a GBE or Class A trader social enterprise that is taking over several functions from planting stocks production to marketing. The abaca farmer producers shall have ample time to concentrate in farm establishment and maintenance, and in taking part in CEFA’s value adding activities such as fiber craft production as result of the association’s expanded functions.


I N T R O D U C T I O N

A. BACKGROUND OF THE SUBSECTOR ACTION RESEARCH The Institute for Social Entrepreneurship in Asia (ISEA) partnered with the United Nations Development Programme (UNDP) and the Biodiversity Management Bureau (BMB) of the Philippines’ Department of Environment and Natural Resources (DENR) to implement a project entitled: “Model Building for Scaling Up BDFE Initiatives” from July 1, 2018-December 15, 2018 under the UNDP’s Global Environment Facility-Small Grants Programme 5th Operational Phase (GEF-SGP5). BDFE stands for Biodiversity Friendly Enterprise. SGP5 has supported 35 projects with BDFE components in Palawan, Samar Island, and the Sierra Madre Mountain Range. Most of these BDFEs are being implemented by Non-Government Organizations (NGOs) and Peoples’ Organizations (POs). The project’s goal is to establish a model to scale up the outreach and depth of impact of these BDFE initiatives. The project fully supported a selected SGP5 grantee with a BDFE endeavor in scaling up its initiative by engaging its stakeholders in a strategic and investment planning process. It included the development of a one-year implementation plan that qualified the relevant BDFE stakeholders to receive a start-up grant from SGP5 in support to scaling up their enterprise. All of these were done through this subsector action research. The subsector action research approach was selected as a tool for this project because it is a systems approach to the study of economic activity which helps analysts better understand the dynamics of the subsector. Its objective is to analyze all of the participants, their linkages, and influential factors in the agribusiness system in order to identify constraints and opportunities for growth. Thus, subsector action research is a powerful tool for project designers and decision makers because it clearly illustrates where change can have the most significant impact on the subsector. Aside from supporting the scaling up of a selected BDFE initiative, this subsector study also greatly contributed to the realization of other project outputs which include:

A handbook on scaling up BDFE initiatives; and A framework paper for scaling up BDFE initiatives through a social entrepreneurship framed

subsector approach which also contains an adaptation of the benchmarks for transformational partnerships and women’s economic empowerment within the context of biodiversity conservation.

B. STRATEGIC/ FOCUS SUBSECTOR SELECTION PROCESS The process of selecting a BDFE initiative to be engaged for this subsector action research was tedious. The steps undertaken are as follows: 1. ISEA together with the SGP5 Country Programme Management Unit (CPMU), the Foundation for the

Philippine Environment (FPE)-the SGP5 implementing partner, and the DENR-BMB shortlisted 10 BDFE initiatives from among the 35 SGP5 supported projects with BDFE components. The following criteria were used in shortlisting these BDFEs:

Market potential for scaling up; Significance in terms of number/critical mass of poor/marginalized households to be

potentially engaged; Start-up capacity of leadership and team; Presence of support institutions and enabling organizations; and


Strategic value of the site for model building. 2. The holders of the shortlisted BDFEs participated in a learning event on social entrepreneurship as

pathways for scaling up BDFE initiatives (another output of the project). This was held on August 14-16, 2018 at Microtel, Diliman, Quezon City, Philippines. The subsector approach as a tool for scaling up BDFEs was emphasized in this training. During the event, the BDFE holder participants assessed their readiness for scaling up through self-assessment rating using the above-mentioned criteria and other Personal Entrepreneurial Competency (PEC) assessment tools.

In photos: BDFE leaders participate in sub-sector analysis workshops

3. ISEA, SGP5-CMPU, FPE and DENR-BMB used the self-assessment ratings of the BDFE holder

participants generated during the learning event to decide which BDFE initiative to engage for this subsector action research. However, the panel was not able to unanimously select a BDFE due to the emergence of two top contending candidates-the abaca production and marketing enterprise of Eastern Visayas Partnerships for Rural Development (EVPRD) and its PO partner-the Centralized Farmers Association (CEFA), and the seaweeds production and marketing initiative of Sentro ha Pagpauswag ha Panginabuhi, Inc. (SPPI). Both of these BDFE initiatives are located in Northern Samar. These two BDFEs present unique advantages and perceived weaknesses which needed further validation (i.e. market potential for abaca, organizational capacity of SPPI).

4. ISEA’s Field Research Team conducted site validation of the top two contending BDFEs to shed light on the issues surrounding each initiative. The five criteria used during the shortlisting of BDFEs were adopted. A sixth criterion was added which is the tenure security of the BDFE resource base. The abaca production and marketing of EVPRD and CEFA was chosen as the strategic BDFE to be engaged for this subsector action research based on the findings of the Field Research Team. The summary of findings during the validation is attached as Annex 1.


Top: (L) Bryan de Guia, a seaweed farmer and barangay consolidator of dried seaweeds in San Pedro, Biri, shows a row of harvestable seaweeds. (R) Merlinda P. Calubaquib (wearing black pants), ISEA’s Field Research Team Leader, visits SPPI’s office in Catarman to meet with the BOT and staff. Bottom: (L) ISEA Field Team interviews EVPRD Management Staff & Trustees, and CEFA Chairman at EVPRD’s Office in Catarman, Northern Samar. (R) CEFA’s Spindle Machine provided by buyer Ching Bee Trading.

C. RATIONALE ON THE CHOICE OF ABACA INDUSTRY AS FOCUS

FOR THIS SUBSECTOR ACTION RESEARCH The abaca industry was chosen as the focus of this subsector action research mainly because the selected BDFE to be supported for scaling up, which is the abaca fiber production and marketing of EVPRD and CEFA, is covered within its scope. Furthermore, the following local factors and conditions identified by the Field Research Team during the validation process greatly influenced the choice of abaca industry as focus of this subsector study.

MARKET POTENTIAL FOR SCALING UP: Abaca products have high and increasing market demand, both locally and internationally. Price of abaca fiber is stable and continuously increasing. CEFA officers and members, through Focus Group Discussion (FGD), revealed that volume of production of current producers is continuously increasing which enables the organization to complement the increasing market demand of abaca fibers. EVPRD and CEFA also expressed that they already have the capability to satisfy the volume requirement of their market/buyer. The abaca subsector has high potential for value adding with the finished products having ready market (i.e. abaca fiber to abaca twine/rope). The Philippine Fiber Industry Authority (PhilFIDA) also predicts that abaca products consumption worldwide will continue to increase due to recent developments on new industrial uses of abaca fiber.

SIGNIFICANCE IN TERMS OF NUMBER/CRITICAL MASS OF POOR/MARGINALIZED HOUSEHOLDS

TO BE POTENTIALLY ENGAGED: There are around 1,500 abaca producers in the municipality of Mondragon alone where CEFA operates as a developmental abaca fiber trader. Two hundred (200) of these farmers are members of CEFA. They are mostly located in three barangays of the


municipality, namely: Cablangan, Flormina, and Nenita. These are among the five barangays covered by the Community-Based Forest Management Agreement (CBFMA) that is awarded to CEFA. Mondragon has 24 barangays, 14 of which are abaca producing areas. CEFA estimates that at least 200 additional households spread in seven nearby barangays within and along the boundaries of its CBFM site can be actively engaged as captured producers. Moreover, approximately 1,025 farming households in other CBFM areas in Northern Samar with secured land tenure (CBFMA) can also be potentially engaged. Abaca farmers are considered poorest of the poor earning an average monthly income of Php 3,000 to 4000 pesos.

START-UP CAPACITY OF LEADERSHIP AND TEAM: EVPRD and CEFA have strong partnership

especially in their BDFE initiative which is centered on organized production and marketing of abaca fiber. This collaboration is made possible through the EVPRD’s SGP5 supported project entitled “Creating a Model on Social Fencing for SINP through Establishment of Organized Production and Marketing System for Abaca and other CBFM Produce” that was implemented from 2015 to 2017. SINP refers to the Samar Island Natural Park. The project covered the 1,050 hectares CBFM area that is managed by the CEFA. This CBFM area spans five barangays of Mondragon, Northern Samar, namely: Cablangan, Cahicsan, Flormina, Hinabangan, and Nenita. CEFA is based in Barangay Cablangan. An Abaca Techno-Demonstration Farm (ATDF) was established in this CBFM area and now serves as a platform for learning abaca production using conservation-compatible and socially acceptable farming systems, and technologies.

EVPRD and CEFA have competent/trained and adequate manpower support to sustain their social enterprise. They have management and finance unit which are necessary structures for a transparent and sustainable business operations. Moreover, EVPRD has substantial track record in project implementation since 2004. It has implemented 11 major projects (mostly in the field of agriculture and forestry) in partnership with 11 donor agencies, mostly foreign institutions. CEFA also has outstanding track record in implementing projects in partnership with various Civil Society Organizations (CSOs), Local Government Units (LGUs), and National Government Agencies (NGAs). In 2017, CEFA was recognized by the DENR of Northern Samar as ‘Best PO’ for their outstanding performance in implementing their project under the government’s National Greening Program (NGP).

EVPRD was organized in early 2003 by a group of local development workers and professionals seeking to contribute to the reduction of poverty in Northern Samar and in conserving its remaining biodiversity resources. EVPRD was formally registered with the Securities and Exchange Commission (SEC) in July 23, 2003. CEFA was formed in 2008 through the initiative of the Provincial Government Environment and Natural Resources Office (PGENRO) of Northern Samar. It was registered with the Department of Labor and Employment (DOLE). From its formation until today, the organization is involved in copra trading. It also engaged in palay trading but the venture was not sustained. In 2017, CEFA entered the abaca trade in order to contribute to increased income and improved quality of life of its farmer members. EVPRD supported the initiative through provision of technical support in terms of improving CEFA’s organizational and social enterprise management capacities and enhancing its current production and marketing practices.

PRESENCE OF SUPPORT INSTITUTIONS AND ENABLING ORGANIZATIONS: EVPRD and CEFA have

built strong linkages with various support institutions such as PhilFIDA, University of Eastern Philippines (UEP), Department of Agrarian Reform (DAR), and LGUs. Both have strong ability to mobilize external assistance and support such as technical, material inputs, policy, and equipment. For instance, CEFA has availed a truck from DAR and spindle stripping machines from Ching Bee Trading Corporation. These support institutions play critical roles in the BDFE scaling up process.

STRATEGIC VALUE OF THE SITE FOR MODEL BUILDING: The BDFE site has high potential to

influence the abaca industry in Northern Samar and the whole Samar Island. Furthermore, the BDFE site and influence areas rank high in terms of biodiversity conservation as they are located at the buffer zone of the SINP. Since the market demand of abaca is high and continuously increasing, both


locally and internationally, the BDFE has high potential for demonstrating sustainable value chain involving the primary stakeholders and the key industry players. Moreover, the BDFE has high potential for replication in other areas since abaca farming requires low capital input and simple technology. The local people also have inherent knowledge on the agronomic characteristics of abaca, its cultivation methods, as well as its soil and climatic requirements.

RESOURCE BASE SECURITY OF TENURE (PUBLIC LAND, STEWARDSHIP, ETC.): The current and

potential BDFE sites are within the buffer zone of the bigger key biodiversity area-the SINP. The BDFE holders believe that effective management of these areas (mostly covered by CBFMA) as multiple use zones would serve as a strong “biodiversity fence” that will shield the SINP protected areas from human encroachment and degradation. The EVPRD and CEFA abaca production and marketing enterprise requires farmers to comply with relevant production protocols such as:

Adoption of organized production pattern (the farmers need to pass the farm inspection being

required by EVPRD, and they should have an approved farm lay-out and production plan); Planting stocks must only be sourced within the municipality of Mondragon to prevent possible

pest and disease outbreak (e.g. bunchy top, mosaic); Producers are not allowed to open forest areas/kaingin for planting abaca; Abaca farms should only be established within the multiple use zones; Integrated farming must be practiced/adopted (i.e. intercropping of abaca with coconut,

endemic forest trees, root crops, and vegetables); and Planting of hedgerows for soil and water conservation is a must for sloping farms.

In addition to the above reasons, there are also various opportunities, prospects, and developments in the abaca industry that the Field Research Team has considered in selecting the abaca subsector as focus for the field research and BDFE model building. Foremost is that the abaca industry is expected to continue making a stronghold in both the domestic and international markets. The following information which were taken from Entrepinoy published articles strongly support this trend:

• Strong demand for abaca as a result of the expanding market for specialty papers for food packaging such as tea bags and meat casings, filter papers, non-wovens, and disposables;

• Growing demand to conserve forest resources and to protect the environment from problems posed by non-biodegradable materials, particularly plastics, contributed to the growing demand for natural fibers such as abaca;

• Due to environmental degradation, Japan, which is one of the major abaca consumers, is now replacing polyvinyl chloride (PVC) with natural fibers or materials free from chlorine;

• Development of new uses for abaca such as textile materials for the production of pinukpok or as blending material with silk, piňa or polyester in the production of high-end fabrics; and

• Growing demand for handmade paper for art media, photo frames, albums, stationery, flowers, all-purpose cards, and decorative.

D. SUBSECTOR ACTION RESEARCH SCOPE, METHODOLOGY, AND

CONSTRAINTS

SCOPE OF THE SUBSECTOR ACTION RESEARCH The scope of this subsector study is the abaca industry in Northern Samar in the Eastern Visayas Region (Region VIII) since it is where the EVPRD and CEFA operates their abaca-based BDFE initiative.


The province of Northern Samar is comprised of 24 towns or municipalities with 569 barangays. Northern Samar is considered a very rural area with 65% of its people residing in the countryside. Catarman is the capital town where most political and economic activities take place. It is also the seat of administration and the center of trade, commerce, and industry. The province has always been a player in the Philippine abaca industry. Today, it is the abaca production hub of Eastern Visayas as it holds the biggest share of the total abaca fiber production in the region. It is also the second largest abaca producing province in the Philippines as of 2017 in terms of volume (7,235 Metric Ton or MT) and production area (12,040 hectares). Twenty (20) out of the 24 municipalities of Northern Samar are producing abaca. The Field Research Team conducted this subsector study in selected barangays of the municipality of Mondragon, the 3rd highest producer of abaca fiber in Northern Samar. They are barangays Cablangan, Cahicsan, De Maria, Hinabangan, Mirador, Nenita, and San Jose. These barangays are mostly covered by CEFA’s operations which means that there are member producers who are actively engaging in abaca farming and are already adopting the organization’s organized production and marketing model introduced and promoted by EVPRD. Most of the primary data were gathered from the men and women officers and members of CEFA who represent seven out of the 24 barangays of Mondragon. These CEFA officers strictly adhere to the organization’s local governance and management policies concerning abaca fiber production and trading. The province’s major players in the abaca fiber supply and value chain such as the traders and buyers operating at various levels were also engaged as sources of data for this research’s market survey. The heads and representatives of relevant NGAs, research/academic institutions, financial institutions, and LGUs were likewise engaged as respondents of Key Informant Interviews (KIIs) to determine the nature and level of support they have provided and are still planning to deliver for the development of the primary stakeholders of the subsector. These helped as references in the identification of gaps and relevant interventions in the value chain. The list of key informants is attached as to this report as Annex 2.

SUBSECTOR ACTION RESEARCH PROCESS AND METHODS/TOOLS USED Primary data were derived through the conduct of FGDs involving abaca farmers and worker’s groups, and interview of key informants in the abaca subsector. These key informants include the principal officers of relevant NGAs such as PhilFIDA, DAR, DENR, Department of Trade and Industry (DTI), Department of Science and Technology (DOST), and Technical Education and Skills Development Authority (TESDA); Development Bank of the Philippines (DBP) and other Financing Institutions;

Figure 1. Top Abaca Producing Provinces, CY 2017. Prepared using raw data retrieved from the Philippine Statistics Authority (PSA).

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Figure 1. Top Abaca Producing Provinces, CY 2017. Prepared using raw data retrieved from the Philippine Statistics Authority (PSA) website.

Figure 2. Abaca Production Area of Top Producing Provinces, CY 2017. Prepared using raw data retrieved from the PSA website.

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Abaca Production Area of Top Producing Provinces (in Hectares), CY 2017


provincial and municipal LGU offices; and academic institutions such as the UEP that are involved in the development of the subsector. Key actors of the subsector’s market supply chain such as local traders and barangay middlemen were also interviewed. The Field Research Team also secured secondary data from official reports and publications of concerned NGAs, LGUs, academic and research institutions, and some NGOs with development programs related to the subsector to enrich the primary data gathered. Internet research was also performed to supplement the gathered primary and secondary data. Research tools especially for gendered mapping, market surveys, and guide questions for the various FGD topics and KIIs were developed. These tools ensured substantial data acquisition and orderly conduct of this subsector action research.

RESEARCH LIMITATIONS AND CONSTRAINTS This subsector action research is principally aimed on establishing a model to scale up the outreach and depth of impact of BDFEs so that the primary stakeholders are able to optimize their economic benefits. The abaca subsector in Northern Samar was selected as sample for this model building. This study focused on the following specific objectives:

• Establishing data that reflects the production or supply of abaca fiber for the last five years and in the next five years within the study area;

• Determining the market demand for abaca fiber for the last five years and in the next five years; • Defining the current abaca fiber market characteristics by plotting out the current market/value

chain, establishing gendered-market map, and delineating the enabling and disabling factors; • Establishing the viability of abaca subsector by determining what other products, processed or

semi-processed, that rural communities can develop aside from abaca fiber; • Determining the current producers and potential producers/adopters of abaca production in the

municipality of Mondragon and in the province of Northern Samar that can be engaged as primary stakeholders for the BDFE scaling up initiatives;

• Identifying the development constraints that impede the primary stakeholders from obtaining the optimum benefits from the subsector;

• Drawing out issues/constraints, opportunities, strategies/intervention, and potential recommendations to facilitate scaling up of the subsector and the benefits derived by the relevant primary stakeholders from the subsector;

• Identifying investment opportunities to facilitate the growth of the subsector as basis for a subsector development investment plan; and

• Developing a one-year plan of operations as initial step for the scaling up process. The Field Research Team encountered the following constraints in the conduct of this subsector action research:

• Absence of established social enterprises or institutions in Northern Samar that process or do value-adding works on abaca fiber despite the wealth of abaca production in the province. This constrained the team from gathering primary data on this aspect of the subsector.

• Inconsistencies and conflicting data base of PSA and PhilFIDA on important research data such as annual production area and the annual production volume of abaca fiber, among others, that made data presentation and analysis difficult.

• Hectic schedules of appropriate key informants especially the heads or point persons of NGAs and LGU offices which necessitated persistent follow ups and return visits by the research team members.

PART 1. RESULTS OF THE SUBSECTOR

ACTION RESEARCH


A. SUBSECTOR HISTORY AND RELEVANCE

THE PHILIPPINE ABACA INDUSTRY

Pre-Spanish & Spanish Colonial Period The Philippine abaca industry exists because of abaca-a Philippine native plant that is similar to banana. Abaca fiber, the raw material for abaca products, is extracted from the abaca plant. It is categorized as hard fiber because of its rough and hard external appearance. The Philippine abaca industry is centuries old. Abaca has been widely cultivated and utilized by the inhabitants of our islands for textiles before the Spanish occupation. Antonio Pigafetta, the Italian chronicler of Ferdinand Magellan’s voyage, recorded in 1521 that the natives of our archipelago were wearing clothing made from abaca. The Spanish colonizers used abaca fiber to manufacture ropes for their ships that sailed between Manila and Acapulco, Mexico for the Galleon trade (1565-1815). Abaca fiber became an exclusive Philippine export commodity in 1825 after the American Navy discovered that it is an excellent material for marine cordage. This was made possible because in 1820, John White, an American Lieutenant of the US Navy, brought abaca fibers to the United States. In 1831, export of abaca fiber amounted to 346 MT. It became the most important cordage fiber in the world market by 1850 especially in the shipping industry because of its strength, lightness, and resistance to salt water corrosion. By 1858, abaca fiber export reached 27,500 MT, of which 67% went to the United States. Abaca fiber comprised 20% to 30% of the total value of exports from the Philippines in the latter part of the 1800s. Within the said period, the cultivation of abaca land in the Philippines increased tenfold.

American Regime Abaca fiber was the most important export item from the Philippines during the American regime. It made up 72% of the total export value in 1904. The US, UK, and Japan were the biggest importers of the commodity until World War II. In the early 1900s, progress in Philippine abaca fiber production was challenged by several issues caused primarily by defects in organization and lack of control of the industry. Dissatisfaction abounds on all sides. Abaca plantations were neglected which resulted to low product quality. Large number of export firms imposed varied fiber grading and inspection. Sellers were suspicious that they were being cheated. Manufacturers and consumers complained about poor product quality. To solve these conditions, the Philippine Legislature in 1914 passed a law known as Act No. 2380-"An Act Providing for the Inspection, Grading, and Baling of Abaca (Manila Hemp), Maguey (Cantala), Sisal, and Other Fibers." The grading of abaca was based on color, tensile strength, and cleaning. Four classes were created, namely: excellent, good, fair, and coarse. Each of these classes was subdivided into a total of 21 grades of definite description. Bicol region, Samar Island, and Leyte were the main producers of abaca fiber prior to World War I. After the war, Davao region in Mindanao became the new abaca production center after the introduction of modern plantation management by the Japanese. Abaca cultivation in Davao region was started by retired US soldiers and was later taken over by Japanese immigrants who first came to work as farm laborers in the abaca plantations starting in 1903. By 1930 the Japanese came to own 75,070 hectares of abaca land. After 1938, the abaca fiber production in Davao region, most of which were produced by the Japanese, accounted for more than half of all abaca fiber production in the Philippines.


High market demand for abaca fiber led to the introduction of the abaca plant in Sumatra by the Dutch (1925); in Panama, Costa Rica, Honduras, and Guatemala by the US Department of Agriculture (1929); in North Borneo (now Sabah) by the British (1930); and in Ecuador by the Japanese (1930). During World War II, abaca production in South America greatly increased because Philippine abaca has fallen to the hands of the Japanese. The years 1900s to 1940s is considered to be the peak years of the Philippine abaca industry. It was during this period that other uses of abaca fiber aside from textile and cordage were discovered. In 1935, Fay H. Osborne, an MIT graduate and paper chemist at the Dexter Corporation in the US, produced long fiber paper out of discarded abaca ropes. This served as the precursor to the development of teabags and coffee filters after World War II. In Japan, abaca fiber found its way into the paper manufacturing and sanada weaving industry, aside from rope making. Of all the uses of imported abaca fiber, sanada weaving had the biggest impact on Japanese modern industry and local societies although its utilization share of all the Japan exported abaca fiber is only four to five percent. Sanada weaving was an industry that followed the fashion trends of the time such as hat making. The weavers tried to anticipate the fashion of the importer countries and made efforts to develop new products. Initially, a sharp competition existed between abaca fiber and Mexican sisal hemp (henequen). When sisal production started in Africa and Indonesia, it surpassed abaca in terms of production. In the 1930s, sisal production was more than double the amount of abaca fiber production. However, sisal lacked durability because it absorbed water and decayed easily. While this presented no problem for machinery rope, it was not suited for rope intended for ships, oil wells, and agriculture. Because of its light color, sisal hemp packaging twine was needed widely in places such as department stores. Sisal grew in barren tropical land and did not require much labor even on a large-scale tract of land. It was cost effective since it produced twice as much volume as abaca per hectare and it was easy to extract fiber from the sisal using machinery. The usage of sisal expanded due to improvements made in terms of breeding, cultivation technology, and water resistance (accomplished by treating it with preservatives). As result, it encroached on the demand for abaca fiber. Sisal eventually surpassed abaca except for making rope for ships and for sanada weaving, which required the best quality fiber.

Post-World War II / Philippine Independence from the Americans-Present

Industry Decline After World War II, abaca fiber trading in the Philippines involves a series of middlemen. Because of the numerous middlemen involved, the farmers end up receiving only 25 percent to 50 percent of the buying price. Commercial use of plastic, nylon, and other synthetics for cordage in the Philippines after the war has greatly reduced the market for abaca fiber and contributed to the unstable prices of the commodity in the local and international market. The Philippine abaca industry almost collapsed in the 1960s to 1980s due to low production (i.e. average of 0.60 MT per hectare in 1982), low and unstable prices of abaca fiber, poor farming practices (i.e. farmers used unidentified and low-yielding varieties which resulted in decline in production by 8,000 MT in 1982), lack of farmers’ capital, incidence of pest and diseases, occurrence of natural calamities (i.e. typhoons), and lack of production inputs and drying facilities. The major diseases of abaca were first observed as early as 1901 but it was still manageable by that time. Their rampant spread is believed to have occurred during World War II when most abaca plantations were neglected.


In the 1980s, the country's abaca product exports consisted of unmanufactured or raw fiber, cordage, cables, ropes and twines, pulp, and fiber crafts. Among these five export items, raw fiber is most valued followed by cordage, and pulp. Abaca fiber export generally declined from the 1980s to the present. The Fiber Industry Development Authority (FIDA) was created on July 27, 1981 through Executive Order (EO) 709 to promote the growth and development of the Philippine natural fibers (except cotton). On May 29, 2013, FIDA merged with the Cotton Development Administration (CODA) and became the PhilFIDA. Its mandate is to promote the growth and development of the natural fiber industry through research and development, production support, fiber processing and utilization, standards implementation, and trade regulation. The National Abaca Research Center (NARC) at the Visayas State University (VSU) in Leyte, which is mandated to help uplift the abaca industry, started its operation in 1987 with the launching of an integrated and multidisciplinary research and development program on abaca. Up to this day, NARC is one of the agencies that is actively involved in research and extension work in the industry.

Industry Resurgence The development of local businesses that process abaca raw materials in the Philippines saved the industry from collapsing. Currently, a whole range of abaca products are being produced such as specialty papers, cordage products, handwoven fabrics, and fiber crafts. Abaca is also being introduced in the automobile and construction industry. Manufactured abaca products complement Philippine abaca fiber exports, thus, keeping the industry afloat and making it one of the major contributors of foreign exchange earnings to the country's economy. The biggest exporters of Philippine abaca products, especially pulp, the product used in making paper which consists the bulk of abaca exports, are Germany and other European countries, Japan, and the US. Philippines generates an average of US$100 million from exports of abaca fiber and manufactures. In 2016, the abaca industry generated 130.3 million US dollars in foreign exchange earnings. The majority of this revenue comes from outbound shipments of abaca pulp which averaged US$63.1 million, equivalent to a 65% share of the average export earnings per year. The country’s abaca pulp exports averaged 20,382 MT from 2006 to 2015. On the average, about 49,260 MT or 76.51% of the country’s average yearly production of abaca fiber in the last ten years is consumed by domestic processors of pulp, cordage, and fibercraft. The remaining 23.49% (15,124 MT) is exported. Pulp processors account for 75% (36,945 MT) of the domestic utilization. Cordage and fibercraft manufacturers comprise 17% (8,374 MT), and 8% (3,941 MT) of the consumption, respectively.

Figure 3. Philippine Abaca Fiber Export, 1983-2013. Adapted from "Determinants of the Export Demand for Philippine Abaca Fiber", by Quilatan, Julie Ann, M., 2017, December 21, Journal of Academic Research, [S.l.], v. 2, n. 2, p. 38-51. Retrieved on October 8, 2018 from http://ojs.ssu.edu.ph/index.php/JAR/article/view/179.

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Trends, Opportunities, and Challenges Today, Philippines still dominates the abaca world market. It supplies 87.5% of the total world demand despite stiff competition from Ecuador, growing demand of local industries, and limited abaca fiber production. PhilFIDA reports that the current demand deficit for abaca fiber in the country is 59,000 MT yearly because of increasing local and international demand for abaca products, and low abaca fiber production. As result, local pulp mills have been importing abaca fiber and sisal from Ecuador since 1991 to plug the shortfall in local production. PhilFIDA shares that the country’s low yields was the foremost problem of the abaca industry due to use of mixed varieties, lack of disease-resistant planting materials and postharvest facilities, and fragmented research and development. The Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCAARRD) also mentioned the use of outdated planting techniques instead of the new technologies, farmers’ lack of financial and educational capabilities, peace and order situation in some areas, and stronger typhoons as the factors hindering the development of the abaca industry. Most of these were the long-standing problems of the abaca industry five or six decades ago. In 2012, the Philippine government allotted Php 4.1 million to rehabilitate and expand abaca plantation in some provinces. The rehabilitation was led by the NARC. It included the mass production of laylay and inosa varieties as well as providing disease-resistant breeds and capability building for farmers to further establish and manage nurseries for tissue-cultured plantlets. From 2016-2017, PhilFIDA formulated the Philippine Abaca Roadmap (PAR) for 2018-2022. The roadmap sets the direction for the Philippine abaca industry for the next five years and is targeted to be implemented to meet the volume of abaca fibers needed by the domestic and international markets. Under the PAR, PhilFIDA targets to triple the average annual abaca production volume and double the current production area by 2022. Rehabilitation of existing abaca farms will also be carried out. PhilFIDA targets to concentrate the expansion of production areas in Bicol and Eastern Visayas under the PAR. Moreover, existing abaca farms in Bicol (89,558 hectares) and Eastern Visayas (19,214 hectares) are also set for rehabilitation. PhilFIDA developed an Abaca Sustainability Manual (ASM) to guide the implementation of the roadmap. An upward trajectory in prices of abaca fiber of all classification is observed in the last 27 years. This is expected to continue due to existing and renewed demand for natural fibers in the local and international market. This was buoyed by the United Nations (UN) when it declared 2009 as the UN International Year of Natural Fibres which promoted natural fiber as an environmentally friendly product. With the whole world “going green”, the art and fashion industry is recently embracing the use of abaca fiber.

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Figure 4. PAR Targets, 2018-2022. Prepared using raw data retrieved from PhilFIDA website.


Figure 5. Wholesale Prices of Abaca Fiber, 1990-2017. Prepared using raw data retrieved from the PSA website.

In 2008, it is estimated that 1.5 million Filipinos (at least 90 thousand are farmers) are employed by the abaca industry. Today, the estimated number of abaca farmers nationwide is 128,958. The yearly abaca fiber production in the country ranges from 59,418 to 77,180 MT with an average of 68,149 MT over the last 27 years. Within the same period, abaca production area in the Philippines ranges from 102,164 to 138,991 hectares with an average of 122,090.50 hectares. The average yearly abaca fiber production per hectare is 0.56 MT. A considerable increase in production area starting in 2004 did not significantly contribute to an increase in production volume.

Figure 6. Abaca Production Area and Production Volume, 1990-2017. Prepared using raw data retrieved from the PSA website.

The consistent top abaca producing regions in the last 27 years are Bicol, Eastern Visayas, Davao, CARAGA, and ARMM. From 2010 to the present, Bicol holds the distinction as Philippines’ top abaca producing region. The highest abaca production in Bicol is recorded in 2016 at 30,016 MT while the lowest is 16,681 MT in 1990. Bicol region’s abaca production area is almost unchanging since 1998 with an average of 44,729 hectares.

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The Abaca Industry of Eastern Visayas Eastern Visayas was the top abaca producing region from 1993 to 2010. Abaca production in Eastern Visayas peaked at 30,174 MT in 2000 while the lowest was recorded in 2016 at 12,493 MT. Abaca production in the region started to decrease in 2005 due to disease infestation. This decline was further worsened by super typhoon Yolanda in 2013 which ravaged the area. The region exhibits considerable instability in terms of abaca production land area in the last 27 years. It recorded the largest production area in the Philippines from 2005 to 2008 before it gradually decreased until today. A steep drop-off in production area occurred in 2013 to 2014 due to damages sustained from super typhoon Yolanda. Abaca fiber production in Eastern Visayas was previously dominated by Leyte and Southern Leyte, followed by Northern Samar. However, Abaca Bunchy-Top Virus (ABTV) gravely affected abaca farms in Leyte and Southern Leyte starting in 2002. As result, 80% of abaca fiber production in said provinces was diminished. Northern Samar led the region in terms of share in abaca fiber production starting in 2011. In 2017, Eastern Visayas produced 12,671 MT of abaca fiber. Northern Samar has the highest share of the regional production at 57% followed by Southern Leyte (19%), Leyte (13%), and Western Samar (11%). Biliran and Eastern Samar accounted for 1% of the total regional abaca fiber production.

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Figure 7. Abaca Production Volume and Trend in Top Abaca Producing Regions, 1990-2017. Prepared using raw data retrieved from PSA website.

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Figure 7. Abaca Production Volume and Trend in Top Abaca Producing Regions, 1990-2017. Prepared using raw data retrieved from PSA website.


Figure 9. Abaca Production Volume and Trend in Eastern Visayas, 1990-2017. Prepared using raw data retrieved from PSA website.

In 2017, Eastern Visayas had a total of 30,698 hectares of abaca-planted areas. Northern Samar had the largest share of planted areas at 39%, followed by Leyte (27%), Southern Leyte (20%), Western Samar (6%), Biliran (5%), and Eastern Samar (3%).

Figure 10. Abaca Production Area in Eastern Visayas, 1990-2017. Prepared using raw data retrieved from PSA website.

The PhilFIDA has been busy in rehabilitating calamity affected and disease infested abaca areas in the region. The agency is working closely with LGUs, CSOs, NARC, and other stakeholders in the implementation of its different programs and projects. Through its Abaca Disease Management Project (ADMP), several municipalities in the region were declared disease free. However, replanting of these disease eradicated areas can only be done after two years. A total of 3,879 hectares planted with abaca, mostly in Leyte and Southern Leyte, were covered by the ADMP from 2014 to 2016.

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Abaca Production Area in Eastern Visayas 1990 - 2017

....Biliran ....Eastern Samar ....Leyte

....Northern Samar ....Samar (Western Samar) ....Southern Leyte


In 2016, only 60% or 27,816 hectares of the 46,360 hectares total abaca production area in the region were productive while 40% were rehabilitated.

The Abaca Industry of Northern Samar In 2017, Northern Samar produced 7,235 MT of abaca fiber which represents 57% of the total regional production. This was produced in 12,040 hectares of abaca farms. Abaca production area in Northern Samar significantly increased starting in 2001; then it stabilized from 2009 until today with an average of 12,033 hectares. The Provincial PhilFIDA data shows that from 2009 to 2013, there were 11,000 farmers producing abaca in the province (3,000 in District I and 8,000 in District II). It is assumed that the number holds true until today given that production area almost remained the same based on PSA data. Abaca fiber production in Northern Samar was stable from 1990 to 1998 then it became very unstable until 2006. From then it slowly increased until 2015. The peak productivity of abaca fiber production was attained in 2014 at 7,579 MT. A little drop off in production was recorded in the last two years. Productivity of the farms in the province continues to be unpredictable due to prevalence of typhoons in the area and abaca disease infestation. The most recent typhoon that severely damaged abaca farms in Northern Samar was typhoon Nona in December 2015. The Field Research Team was not able to secure data on the extent of the damages due to lack of historical information. It was learned, however, that PhilFIDA implemented replanting project of typhoon Nona damaged abaca farms in the province immediately after the calamity. There are 24 municipalities in Northern Samar which are divided into two districts. Twenty (20) out of the 24 municipalities are producing abaca. As of 2016, the top three abaca fiber producing municipalities as to the area planted are Las Navas, Silvino Lobos, and Mondragon, respectively. Around 43% of abaca production area in the province is concentrated in these municipalities. The average annual yield of abaca fiber in Northern Samar varies per district. The annual average production in MT per hectare in District I is 0.45 while in District II is 0.55.

Figure 11. ADMP Covered Areas in Eastern Visayas. Adapted from “Abaca Commodity Profile of Northern Samar” – a document obtained from the Provincial Planning and Development Office (PPDO) on October 26, 2018.


Figure 12. Abaca Producing Municipalities in Northern Samar. Primary Data. Most of the abaca production sites in Northern Samar are located within or near watershed areas such as the Catubig Watershed and the Bantayan Watershed. They are also found within the buffer zone of the 333,300 hectares SINP-the largest contiguous tract of old growth forest in the Philippines and the country's largest terrestrial protected area. Its buffer zone is spread north to south over the island's three provinces (Eastern Samar, Northern Samar and Samar Province) and totals 458,700 hectares, about a third of the entire island of Samar. The municipalities of Catubig, Las Navas, Lope de Vega, Mondragon, and Silvino Lobos in Northern Samar are covered by the SINP buffer zone. The abaca industry in Northern Samar, as strategically located and given its continuous expansion as previously presented, can pose critical environmental consequences. Among said concerns is encroachment into key protection areas when not regulated which could spell a bane to the local environment. It could also become an advantage or boon to biodiversity conservation given proper regulation and development interventions.


The Abaca Industry of Mondragon, Northern Samar This section presents the abaca industry of Mondragon, Northern Samar-the center of operation of the BDFE initiative of EVPRD and CEFA. Mondragon is the 3rd largest abaca producing municipality of Northern Samar. It is located in the province’s 1st District. Mondragon is a 3rd class municipality with 24 barangays. Based on FGD results, 14 of these barangays are producing abaca wherein 11 are top producers. There are about 1,500 abaca farmers in Mondragon as of 2013. The abaca production area in the municipality declined by 51% between 2013 to 2016 (from 1,800 hectares to 890 hectares) mainly due to typhoon damages especially typhoon Nona in December 2015. In March 2016, PhilFIDA assisted 336 farmers in seven barangays of Mondragon to replant one hectare each of abaca farms damaged by typhoon Nona. A total of 128,000 abaca suckers were delivered to the recipient farmers. Based on the foregoing data on abaca production area and on the average production volume of abaca fiber per hectare (0.45 MT), the municipality of Mondragon produced around 810 and 401

Figure 14. Abaca Production Volume and Land Area of Mondragon, 2013 & 2016. Adapted from “Value Chain Analysis of Abaca (Musa textiles) Fiber in Northern Samar, Philippines”, by Celestino, Edwin, R., et al., 2016, August, International Journal of Innovative Science, Engineering & Technology, Vol. 3 Issue 8. Retrieved October 8, 2018, from http://ijiset.com/vol3/v3s8/IJISET_V3_I8_19.pdf.

810

401

1800

890

2013 2016

Abaca Production Volume & Land Area of Mondragon, 2013 & 2016

Abaca Fiber Production (MT) Abaca Production Area (Ha.)

Figure 13. Land Classification Map of Northern Samar. Adapted from “EVPRD Profile”


MT of abaca fiber in 2013 and 2016, respectively. There are not enough historical data on abaca fiber production volume, abaca production area, and number of abaca farmers in the municipality. Thus, trends cannot be established.

As previously cited, Mondragon is among the municipalities of Northern Samar that is within the buffer zone of the SINP. It is also the largest municipality of Northern Samar in terms of land area (289 km2), 60% of which is timberland while the remaining 40% is alienable and disposable land. Abaca and coconut are the major crops in the municipality. Secondary crops are palay and root crops. Thus, the main economic activities are abaca fiber and copra production complemented by palay and root crop production. The abaca production areas in the municipality are located mostly in the upland barangays. The practice of kaingin farming for abaca and other crops is among the foremost concerns in these areas. This involves clearing/ cutting of trees and vegetation then burning them to pave way for agricultural activities. According to FGD participants, this kind of farming practice is not any more prevalent in the municipality. They stated that kaingin is now illegal and is punishable by law. They further said that with CEFA, they have been conducting community education and public awareness campaigns in the communities on the ill-effects of kaingin to biodiversity. The LGU of Mondragon and DENR have also been campaigning against kaingin. But some said that there are still pockets of kaingin occurring in some of the forest-edge communities.

Table 1. Typhoon Nona Rehabilitation Sites in Mondragon, 2016 Barangay # of Farmer Beneficiaries

& Hectares # of Suckers

Delivered De Maria 44 18,500 Hinabangan 60 20,449 Mirador 52 17,080 Nenita 86 34,065 San Isidro 42 16,000 San Antonio 18 5,632 Cahicsan 34 16,274 Total 336 128,000 Note: KII Results

Figure 15. Major Abaca Producing Barangays of Mondragon, Northern Samar. Primary Data.


When scaled up, the BDFE initiative of EVPRD and CEFA, as presented in Part I Section C, has the potential of boosting the abaca industry in the municipality of Mondragon and the whole province of Northern Samar. Among its potential impacts include production technology improvements, fairer trade practices, farmer empowerment, and biodiversity conservation.


B. SUBSECTOR DESCRIPTION AND SCOPE Abaca, scientific name Musa textilis Nee, is a plant native to the Philippines. It is similar to banana since they both belong to the Musaceae family. The first comprehensive and botanical description of the abaca plant was done in 1801 by Luis Nee, a French-born naturalized Spanish botanist, who established that the plant is indigenous to the Philippines. The flower and fruit of abaca are very similar to those of the banana. The major difference can be observed by looking at the leaves-abaca leaves are more pointed at the tip. The abaca fruit, which is inedible and is rarely seen, as harvesting occurs as it appears, grows to about 2-3 inches (5.1-7.6 cm) in length and 1 inch (2.5 cm) in diameter. It has black turbinate seeds that are 0.167 inches (0.42 cm) in diameter. The abaca plant to the untrained eye, can easily be mistaken for the banana plant-without the fruit. The abaca plant is stoloniferous, meaning that the plant produces runners or shoots along the ground that then root at each segment. It reproduces on its own by suckering. Cutting and transplanting rooted runners is the primary technique for creating new plants, since seed growth is substantially slower. Abaca has a "false trunk" or pseudostem which is about 6-15 inches (15-38 cm) in diameter. The leaf stalks (petioles) are expanded at the base to form sheaths that are tightly wrapped together to form the pseudostem. There are from 12 to 30 leaves, dark green on the top and pale green on the underside, sometimes with large brown patches. They are oblong in shape with a triangular base. They grow in succession. The petioles grow to at least one foot (30 cm) in length. When the plant is mature, the flower stalk grows up inside the pseudostem. The male flower has five petals, each about 1.5 inches (3.8 cm) long. The leafsheaths contain the valuable fiber. After harvesting, the coarse fibers range in length from 6-12 feet (180-370 cm) long. They are composed primarily of cellulose, lignin, and pectin. Abaca grows in clay loam and sandy clay loam types of soil. It is more productive in areas where the soil is volcanic in origin, rich in organic matter, loose, friable, and well-drained. Soil pH level must be about 6.0 to 7.0 and site elevation should be less than 1,000 meters above sea level. There are three main diseases of the abaca plant, namely: Abaca Mosaic, ABTV, and Abaca Bract Mosaic. These diseases are described in detail as follows:

o Abaca Mosaic is caused by abaca mosaic potyvirus. This disease causes leaf mottlings found in the petiole, pseudostem, flower bracts and fruits including formation of irregular, pale green or yellowish streaks on the leaves extending from the midrib to the leaf margin. Spraying insecticides to vectors and infected plants including the surrounding weeds before roguing and burning infested plants is the common practice of controlling the disease.

o ABTV is a persistent type of virus. It causes chlorotic areas on young leaves and the

damage is characterized by stunted and bunchy growth of the plant forming a rosette with bladeless leaves. The leaves become stiff and brittle, tear along the margin, curls upward and dry up. Control measures include spraying infected plants with insecticides to kill vectors, roguing and burning of infested plants.

o Bract Mosaic is another viral disease caused by a potyvirus similar to banana bract mosaic

virus (BBrMV). This disease is characterized by distinctive dark reddish-brown mosaic patterns on the bracts of the inflorescence. The symptoms are somewhat similar to those of abaca mosaic diseases. Infected plant parts are chopped into pieces, sprayed with herbicide and buried to control the disease.

If the abaca is not somehow protected against these viruses, it might disappear from the Philippines all together. Some scientists believe that the only way to preserve abaca from these


diseases is by developing Genetically Modified Abaca (GMA). GMA is now being tested at the University of the Philippines in Diliman and in Los Baňos. Compared to other crops, abaca is one of the few cash crops that can grow with relatively little input in steep forest areas. For this reason, it is often the crop of choice of households living in villages at the mountain slopes. Abaca is the only source of cash income for some households especially the poorest members in the community. It is also an important secondary income source of households in the lowland farming villages. In the past, abaca is mostly grown as a third phase crop in forest plots, after a slash-and-burn area has become less fertile and unable to produce the initial crops of rice and corn, and after even less demanding second phase crops such as cassava and sweet potato. At present, it is often intercropped with coconut and other food crops such as sweet potato or camote. Abaca first harvest can be made two years after it is planted. From then on, three harvests can be made per year depending on the region. Harvesting of the stalks usually takes place between 18 and 24 months from the first shoots. When mature the abaca plant consists of about 12 to 30 stalks radiating from a central root system. Each of these stalks is about six to 12 feet high and the fibre is stripped from the stem rather than the leaf, with each stalk being cut into sheaths and then strips or "tuxies". The strips are then scraped to remove the pulp, then sometimes washed, and dried. The outer sheaths of the plant are wider and contain more but coarser fiber than the inner sheaths.

Figure 16. Abaca Leafsheath Layers. Adapted from "Abaca Sustainability Manual", 2018. Retrieved on September 29, 2018 from http://www.philfida.da.gov.ph/images/Publications/abacasustainabilitymanual/ASM.pdf.

Fancisco Ignacio Alcina, a Spanish theologian and historian, wrote the earliest descriptions of the abaca plant, its processing, and utilization in 1668. Abaca fibers, in the old days, are stripped manually from the leafsheaths of the abaca plant. Today, extraction of abaca fiber is normally done through the following three methods:

o Hand Stripping: A manual process of extracting fiber in which narrow strip of abaca leafsheath (tuxy) is placed under a serrated knife with pressure. Fiber extraction is done by pulling the leafsheath with hands. Output ranges from 15-25 kg of fiber per person day.

o Spindle Stripping: A semi-mechanized process of extracting fiber. The tuxy is fed into the

stripping knife of the machine and extraction is done by spindle rotated by a motor. Output is between 80-120 kg of fiber per day.

o Decortication: A fully mechanized process of fiber extraction where leafsheath are scraped

by means of revolving wheels with knives. A stalk of abaca contains fiber equivalent to 3%-4% of its weight depending on the variety, maturity, and source of plant. The method of extraction influences fiber recovery. At 3.5% fiber weight content of abaca stalks, hand stripping yields 1% fiber by weight of the stalk or 28% of the


recoverable fiber; spindle stripping recovers 1.5% fiber by weight of the stalk or 43% of the total fiber content; while the decorticating process produces 3.34% fiber by weight of the stalk or 95% of the total recoverable fiber. Abaca fibers are either sun-dried, air-dried, or mechanically dried after stripping. When dry, the fibers are bundled manually at size and weight according to the capability of the farmer to carry them for hauling or transporting. Hand twisted abaca twine is used for ropes. Abaca fiber quality is determined by strength, cleaning, color, texture, and length of the fiber. Hand stripped and spindle stripped abaca fiber has higher tensile strength compared to decorticated fiber. This is because weaker fibers usually remain behind the stripping component together with the waste pulp. Only the strongest fiber passes through the stripping knife, thus, hand-stripped and spindle stripped fibers are of a better quality compared to fibers obtained by decortication. The tensile strength of hand-stripped and spindle-stripped abaca fiber ranges from 35 to 55-kilogram force per gram meter (kgf/g.m.) while tensile strength of decorticated abaca fiber ranges from 19.5 to 32.50 kgf/g.m. The Philippine National Standard (PNS) for grading hand stripped, spindle stripped, and decorticated abaca fiber is formulated and governed by the Bureau of Agriculture and Fisheries Standards (BAFS). Hand stripped and spindle stripped abaca fibers are indicated by the letters “H” and “S”, respectively, before the official grade.

Table 2. Standard Grades for Hand Stripped and Spindle Stripped Abaca Fiber

Stripping Grade Color Source Strand

Thickness (mm)

Texture

Excellent H-EF Light ivory to a hue of very light brown to very light ochre, frequently intermixed with ivory white

Inner leafsheath

0.20 to

0.50

Soft S-EF

H-S2 Ivory white, slightly tinged with very light brown to red or purple streak

Leafsheath next to outer leafsheath & middle leafsheath

S-S2 Light ivory to very pale brown with very red or very light purple streaks

H-S3 Predominant color-light to dark red or purple or a shade of dull to dark brown

Outer leafsheath

S-S3 Light brown to dark red or light purple with occasional streak of very light green

Good H-I Very light brown to light brown Middle and inner leafsheath

0.51 to

0.99

Medium Soft S-I Light to very light brown

H-G Dingy white, light green and dull brown Leafsheath next to outer leafsheath & middle leafsheath

S-G Light brown with occasional streaks of very light green

H-H Dark brown Outer leafsheath S-H Brown to dark brown, intermixed with

substantial portion of fiber with lighter colors. In some, color approaches black

Fair H-JK Dull brown to dingy light brown or dingly light yellow, frequently streaked with light green

All leafsheath layers except outer leafsheath

1.00 to

1.50

S-JK Light dull brown to dingy light brown or dingy light yellow with occasional streaks light green

H– M1 Dark brown to almost black Outer leafsheath S-M1 Brown or nearly black

Tensile strength ranges from 35 to 55 kgf/g.m. Length of fiber not less than 60 centimeters Note: Adapted from "Abaca Sustainability Manual", 2018. Retrieved on September 29, 2018 from http://www.philfida.da.gov.ph/images/Publications/abacasustainabilitymanual/ASM.pdf.


Other grades of hand-stripped and spindle stripped abaca fibers are: Coarse-L, and Residual-Y1, Y2, O, T, WS. Manual hand stripping (‘kigi’ in local dialect) using improvised stripper is the fiber extraction method usually employed by abaca farmers in Mondragon. The FGD participants said that they normally produce good, fair, and residual grades of abaca fibers.

Decorticated abaca fiber that do not fall under any of the above grades are classified as residual (AD-R). Abaca fibers are processed into cordage, pulp and specialty paper, and fiber crafts, including handwoven fabric. Each of these uses require certain grades of abaca fiber.

There are many different varieties of abaca, each with a specific length, diameter and resistance that are grown for commercial purposes. Among these varieties are Laguis, Inosa, Linawaan,

Table 3. Standard Grades for Decorticated Abaca Fiber

Process Grad

e Color Source

Strand Thickness

(mm)

Length (cm)

Good AD-1 White to ivory white Middle & inner leafsheaths

Not greater than 1/2 mm

Not less than 60 cm

AD-2 Light brown to white AD-3 Streaks of purple, green, and brown Outer and

leafsheath next to outer leafsheath

Irregular AD-4 Regardless of color with some admixture of fiber of good cleaning/ stripping. Dark colored streaks but of good cleaning/ stripping.

All leafsheath layers

Tensile strength ranges from 19.5 to 32.6 kgf/g.m. Note: Adapted from "Abaca Sustainability Manual", 2018. Retrieved on September 29, 2018 from http://www.philfida.da.gov.ph/images/Publications/abacasustainabilitymanual/ASM.pdf.

Table 4. Uses of Abaca Fibers and Grade Requirements Abaca Fiber Uses Grade Requirements

Pulp and paper manufactures

tea bags, filter paper, mimeograph stencil, base tissue, sausage skin, base paper,

cigarette paper, currency paper, chart, file folders, envelops, time cards, book binders and parchment paper

microglass, air filters media, x-ray negative, optical lens wiper, vacuum filter, oil filter

S2, I, G, JK, M1, Y, O, T, S2, JK S2, I, G, JK

Cordage products

ropes, twines, marine cordage, binders, cord S2, S3, I, G, JK, M1, Y

Nonwovens medical gas masks and gowns, diapers, hospital linens, bed sheets

S2, I, G, JK

Handmade paper

paper sheets, all-purpose cards, lamp shades, balls, dividers, placemats, bags, photo frames and albums, flowers, table clock

All grades including waste stationeries

Fibercrafts handbags, hammocks placemats, rugs, carpets, purses and wallets, fishnets, door mats

S2, G

Handwoven fabrics

sinamay, pinukpok, tinalak, dagmay sacks, hotpads, hemp coasters, baskets, furniture, lupis, and

bacbac wall paper, wall cover

High grades S3, H

S2, G, JK, Y

Others wire insulator and cable Automobile components/composites JK, M1, Y, O, T Note: Adapted from “Value Chain Analysis of Abaca (Musa textiles) Fiber in Northern Samar, Philippines”, by Celestino, Edwin, R., et al., 2016, August, International Journal of Innovative Science, Engineering & Technology, Vol. 3 Issue 8, p. 155-156. Retrieved October 8, 2018, from http://ijiset.com/vol3/v3s8/IJISET_V3_I8_19.pdf.


Minenonga, Laylay, Linlay, Linino, and Linlib. The varieties grown in Northern Samar, based on the province’s commodity profile on abaca, are Linawaan, Lawisig, Lakbangan, Hinagikhik, and Alman. In the municipality of Mondragon, the FGD participants said that the major varieties grown are Alman, Lawisig, and Ilahas. According to them, these are widely used because they are pest-resistant, adaptive to the local agro-climatic conditions, and produces more fiber with better tensile strength. Local farmers claimed that these species have been existing long before humans populated Samar Island, thus, they are endemic in the area. Some farmers said that Alman and Lawisig are already cross breed of Ilahas and other outside species. Some also mentioned that other varieties of abaca such as Laylay, Linawaan, Hinagikhik, and Hambanganay are still found in municipality. The specific characteristics of the major abaca varieties grown in Mondragon as described by the respondents are as follows:

o Alman: Taller than other variety with large trunk; produces more pulp and fiber; dark green in color

o Lawisig: Pale in color; trunk is slender and straight; and produces good fiber o Ilahas: Short and slender; fiber produced is less but is resilient to climatic variations and

resistant to pests In Mondragon, planting stocks are normally sourced within the locality. This is to mitigate spread of abaca diseases from potentially contaminated areas. The normal planting stock being used by farmers is abaca sucker (saha). The FGD respondents shared that buyers usually prefer to buy fibers of alman and lawisig because of their better fiber and pulp quality as compared to ilahas.


C. MARKET ANALYSIS: MARKET AND MARKET CHANNELS As it stands, the abaca industry as a subsector presents several strategic advantages for the Philippines in local and international trade since it is basically a monopoly of the country for around two centuries. Its development, as recognized by the government and other stakeholders, is crucial in generating local and national wealth for the benefit of the Filipino people especially those who rely on it for employment and livelihood. This subsector study aims to contribute to the Philippine abaca industry development initiative.

GLOBAL ABACA PRODUCTION AND MARKET The Philippines dominates the global production of abaca. Based on the Food and Agriculture Organization (FAO) bulletin in 2016, Philippines accounted for 63.23% of the total world production at 67,403 MT. It should be noted that this figure on the Philippines’ national abaca fiber production from FAO is 4,437 MT lower than the PSA’s production data in the same year which is 71,840 MT. The Philippines’ closest competition is Ecuador posting 34.82% share. Other Southeast Asian countries produce abaca though not in a commercial scale. Indonesia, which is the most prominent, only accounted for 0.53% of the world abaca requirement. Philippines has taken advantage of the fact that it is the leading producer of abaca in the world by dominating the export market. Presently, the country exports 87.50% of the total world abaca requirements. Aside from raw abaca fibers, Philippines also exports pulp, cordage, and fibercrafts out of the remaining fibers in the country. Ecuador is only exporting abaca fibers and this supplements 14.59% of the global consumption. In 2001, Ecuador’s share in the abaca export market reached its highest at 40%. The commercial production of abaca in Ecuador started in 1965 and is mainly aided by post-war Japanese interventions led by Yoshizo Furukawa, one of the pioneers of Japanese abaca plantation in Davao in the early 1900s.

Table 5. World Export Volume of Abaca Fibers and Manufactures, 2010-2016

Exporting Country/Product Export Volume (in MT)/Year

2010 2011 2012 2013 2014 2015 2016 Ecuador 10,200 9,600 11,100 9,400 8,400 8,600 11,400 Fiber 10,200 9,600 11,100 9,400 8,400 8,600 11,400 Philippines 40,700 48,500 33,400 27,100 38,300 39,000 38,200 Fiber 11,300 9,800 4,500 3,300 9,800 12,000 13,700 Cordage 7,000 7,500 5,000 4,200 5,100 4,500 2,900 Pulp 20,900 29,800 21,500 17,600 20,900 22,200 21,600 Fibercrafts/Others 1,600 1,400 2,400 2,000 2,500 300 - Total Exports in Fiber Equivalent 72,300 88,400 66,400 54,600 68,200 70,000 71,400 Fiber 21,500 19,400 15,600 12,700 18,200 20,600 25,100 Cordage 7,300 7,900 5,200 4,500 5,400 4,700 3,100 Pulp 41,800 59,500 43,000 35,200 41,800 44,400 43,200 Fibercrafts/Others 1,800 1,500 2,600 2,200 2,800 300 - Ecuador’s Share 10,200 9,600 11,100 9,400 8,400 8,600 11,400 Philippines’ Share 62,100 78,800 55,300 45,200 59,800 61,400 60,000 Note: Adapted from “Abaca Commodity Profile of Northern Samar”-a document obtained from the PPDO on October 26, 2018.

It can be seen in the table above that the abaca export trend has been unpredictable from 2010-2016. Market reports from PhilFIDA and FAO attributed the decline in overall export volume in 2012-2013 to the global weakening in demand due to the economic slowdown in major importing countries. In 2014, it increased due to the recovery of the importing countries’ economy. Contrasted to the overall increase in raw fiber exports, there is decrease in export of pulp, cordage, and fibercrafts. The huge disparity in the average rate changes between abaca fibers and its


manufactures implies that demand for raw fibers has increased rapidly with the expanding opportunities for abaca fiber. Pulp and raw fiber exports have steadying increase in export earnings after the drop in 2013. Fiber, especially, has exhibited an average growth of 67% from 2012-2016. Performance in earnings generally follows that of the volume of exports, except with that of pulp. Export volume of pulp has been decreasing at -10.47% while export earnings has been increasing at 5%. This implies that out of the product formats of abaca, pulp has a more established market with increasing value. Fibercrafts exhibited an irregular trend in export earnings at 25%. Unlike raw fibers, cordage, and pulp; fibercrafts are exported as end-products or as non-industrial commodities. The plunge in export volume and earnings of cordage is attributed to the suspension of operations of Manila Cordage, one of the largest exporters of abaca cordage in the country. The decline in fibercraft export is largely caused by China’s tweaking of Filipino abaca product designs. This has recently become a problem for abaca handicraft exporters. According to a trade player, the Chinese were able to imitate and mass-produce the once expensive Filipino abaca-made handiworks that flooded big US stores such as Macy’s. The insider also revealed that China does not just “pirate” the designs but they also employ the Filipino designers. With the Chinese’s cheap labor and inexpensive production costs, Philippine abaca made items are now rendered uncompetitive. The export market for the abaca industry has greatly recovered after having some rough periods in 2012-2013. This trend is expected to continue to increase in the next years. Germany and other European countries, Japan, and the US are the biggest exporters of Philippine abaca products, especially pulp. As previously cited, Philippines generates an average of US$100 million from exports of abaca fiber and manufactures. In 2016, the abaca industry generated 130.3 million US dollars in foreign exchange earnings. The majority of this revenue comes from outbound shipments of abaca pulp which averaged US$63.1 million, equivalent to a 65% share of the average export earnings per year. The country’s abaca pulp exports averaged 20,382 MT from 2006 to 2015.

Table 6. Annual Export Earnings from Abaca Fiber and Manufactures, 2008-2012 (in US$)

Abaca Products & Manufactures

Earnings (in US$) AVERAGE (US$) 2008 2009 2010 2011 2012

Fiber 22,232,835 9,802,084 13,431,420 13,428,641 5,462,185 12,871,433 Pulp 57,346,582 42,174,835 71,243,330 104,140,707 74,667,343 69,914,559 Cordage, Ropes & Twine

13,824,592 11,224,537 14,769,942 16,957,861 16,249,598 14,605,306

Yarns & Fabrics 1,110,558 766,331 816,248 988,925 1,149,872 966,387 Fiber Crafts 4,948,428 4,541,122 4,273,370 4,597,461 10,739,296 5,819,935 TOTAL 99,462,995 68,508,909 104,534,310 140,113,595 108,278,294 104,179,621 Note: Adapted from “Value Chain Analysis of Abaca (Musa textiles) Fiber in Northern Samar, Philippines”, by Celestino, Edwin, R., et al., 2016, August, International Journal of Innovative Science, Engineering & Technology, Vol. 3 Issue 8, p. 164. Retrieved October 8, 2018, from http://ijiset.com/vol3/v3s8/IJISET_V3_I8_19.pdf.

Figure 17. Top Destination of Philippine Abaca Pulp, 2006-2015. Adapted from "Market demand, competition test strength of PHL’s abaca", by Arcalas, Jasper, Y., 2018, February 26. Retrieved on September 29, 2018 from https://businessmirror.com.ph/market-demand-competition-test-strength-of-phls-abaca-2/.

7444 7420

3466

15901201 1147

Other EuropeanCountries

Germany Japan France US Other AsianCountries

VO

LU

ME

(M

T)

Top Destination of Philippine Abaca Pulp2006 - 2015


Table 7. Abaca Exports from the Philippines, 2013-2017

Particulars Year 2013 2014 2015 2016 2017

Volume (MT) 30 110 390 90 150 Value (FOB in Million US$) 5.11 14.71 16.28 20.24 36.06 Note: Prepared using raw data retrieved from PSA website.

NATIONAL ABACA PRODUCTION AND MARKET Although abaca has been found to be ideal for almost all soil types and climate of the Philippines, it is reported to be most productive in areas with volcanic soil, rich in organic matter, loose, friable and well drained, clay loam type. It also requires warm and humid climate for optimum growth and productivity. Due to these properties, almost all regions in the country have abaca production except the Ilocos Region and Cagayan Valley.

Table 8. Philippine Abaca Production, 2013-2017 (in MT)

Region 2013 2014 2015 2016 2017 % Share in

2017 Philippines 64,951.60 68,052.97 70,356.40 71,839.75 68,841.45 100% Bicol Region 24,077.96 28,950.59 29,561.07 30,016.45 26,196.22 38.05% Eastern Visayas 16,597.42 12,849.25 12,752.59 12,492.61 12,671.07 18.41% Davao Region 7,268.63 8,127.16 8,300.21 8,088.90 8,438.55 12.26% CARAGA 5,827.89 6,031.23 7,179.75 7,798.57 7,643.28 11.10% ARMM 4,974.44 4,896.94 4,903.30 4,856.24 4,723.92 6.86% Northern Mindanao 2,243.88 3,120.36 3,198.57 3,316.93 3,417.47 4.96% Western Visayas 1,741.29 1,599.11 1,958.81 2,909.57 3,341.68 4.85% SOCCSKSARGEN 953.65 1,048.80 1,051.44 1,027.10 1,062.83 1.54% Zamboanga Peninsula 589.54 678.55 676.78 597.16 607.32 0.88% Central Visayas 414.57 492.97 555.19 15.06 557.72 0.81% MIMAROPA 120.98 149.26 112.85 105.93 116.58 0.17% Central Luzon 113.25 95.20 101.70 54.13 55.63 0.08% CALABARZON 15.07 2.31 4.14 8.55 9.18 0.01% CAR 13.03 11.24 - - - 0.00% Negros Island Region - - - 552.55 - 0.00% Ilocos Region - - - - - 0.00% Cagayan Valley - - - - - 0.00% Note: Prepared using raw data retrieved from PSA website.

The table above shows a stable national abaca production with an average of 68,808 MT from 2013-2017. Production was at its highest in 2016 at 71,839.75 MT. It was steadily increasing since 2013 but decreased in 2017 by 4.35%. Based on reports of PSA, the decrease was due to the damages of Typhoon Nina in Catanduanes on the onset of 2017; limited harvest and stripping activities due to the frequent rains in CARAGA and Western Visayas, and the peace and order situation in Sulu. There was also less harvest in Northern Samar and Eastern Samar due to the bunchy top and mosaic disease infestation. Of all the regions, Bicol Region, where abaca is considered a major crop, occupied the largest share in the last five years with 38.05%. Eastern Visayas had the second largest average production contributing 18.41% followed closely by Davao Region with 12.26%. The remaining 30.63% belongs to other abaca producing regions. Majority of abaca fiber being produced in the Philippines is being processed locally into pulp, cordage, and various fibercraft items. The average domestic market consumption from 2012-2016 was 45,962 MT or 66.81% of the country’s average yearly production of abaca fiber. The remaining 22,838 MT or 33.19% was exported.


Today, the pulp sector consistently remains as the growth area of the abaca industry. It utilized an average of 36,137 MT or 79% of the annual average local consumption from 2012-2016. The pulp millers’ utilization level is highly dependent on the demand for pulp by the specialty paper manufacturers abroad. The cordage sector consumed an average of 5,722 MT of abaca fiber or about 12% of the average fiber consumption of domestic manufacturers in 2012 -2016. Fiber utilization of the fibercraft processors which are mostly cottage-based is 4,102 MT or 9% of domestic fiber consumption within the same period.

Table 9. Abaca Fiber Consumption by Sector in MT, 2012-2016 Sector Consumption (in MT) per Year AVERAGE

SHARE 2012 2013 2014 2015 2016 AVERAGE Abaca Pulp 37,435 30,639 36,375 38,608 37,627 36,137 79% Cordage, Yarn & Twine 6,601 5,579 6,701 5,866 3,865 5,722 12% Fibercrafts 5,510 4,647 5,707 1,909 2,739 4,102 9% TOTAL 49,546 40,865 48,783 46,383 44,231 45,962 100% Note: Adapted from “Abaca Commodity Profile of Northern Samar”-a document obtained from the PPDO on October 26, 2018.

There are 1,024 major abaca industry players in the Philippines as of 2017. Majority of these players are local traders-either individual, association, cooperative, and corporation. Region V (Bicol Region) have the most local traders followed by Region XI (Davao Region). There are 172 abaca processors. They are mostly found in Region IV (Calabarzon), V, and VII (Central Visayas). Majority of abaca traders-exporters are based in Region IV and in the National Capital Region (NCR). Buying stations are commonly found in Region V and Region XIII (Caraga). Grading and baling establishments (GBEs) are mostly based in Region V and Region VIII (Eastern Visayas). Region V have the largest number of abaca industry players (391) followed by Region XI with 175 stakeholders, and Region VIII with 90. Regions IV, VII, IX (Zamboanga Peninsula), X (Northern Mindanao), and XIII have at least 61 industry players.

Table 10. Major Abaca Industry Players in the Philippines, 2017-2018 Abaca Industry

Players Region TOTAL

CAR

I IV / NCR V VI VII VIII IX X XI XIII

GBE 1 5 1 5 1 4 1 18

Buying Stations 6 1 1 4 12

Trader-Exporter 10 1 1 1 1 1 15

Processors 1 1 18 78 17 30 9 1 9 8 172

Local Traders 38 301 31 33 74 60 51 161 58 807

Total 1 1 67 391 48 64 90 61 62 175 64 1024 Note: Adapted from “Directory of Licensed Fiber Industry Stakeholders, 2017-2018”. Retrieved October 8, 2018 from http://www.philfida.da.gov.ph/images/Directory/2017-2018_Directory_of_Fiber_Industry_Stakeholders.pdf

Licensed abaca industry players are categorized according to their transaction capacity. PhilFIDA’s classification system are as follows:

Table 11. Classification of Licensed Abaca Industry Stakeholders Type of Abaca

Industry Players Classification Description

Grading & Baling Establishments

First Class Pressing more than 30,000 bales (3,750 MT) a year Second Class Pressing more than 20,000 bales (2,500 MT) a year Third Class Pressing more than 10,000 bales (1,250 MT) a year Fourth Class Pressing 10,000 bales (1,250 MT) and below a year

Buying Stations First Class Buying more than 60 MT a year Second Class Buying more than 30 MT a year Third Class Buying more than 10 MT a year


Fourth Class Buying 10 MT and below a year

Trader-Exporter Class A Trading more than 500 bales (62.50 MT) a year Class B Trading more than 300 bales (37.50 MT) a year Class C Trading 300 bales (37.50 MT) and below a year

Processors

Class A Consuming 1,000 MT and above a year Class B Consuming more than 500 MT a year Class C Consuming more than 200 MT a year Class D Consuming 200 MT and below a year Class E All processors-exporters except those exporting pulp/paper

Local Traders

Class A Trading more than 75 MT a year Class B Trading more than 50 MT a year Class C Trading more than 25 MT a year Class D Trading 25 MT and below a year

Note: Adapted from “Directory of Licensed Fiber Industry Stakeholders, 2017-2018”. Retrieved October 8, 2018 from http://www.philfida.da.gov.ph/images/Directory/2017-2018_Directory_of_Fiber_Industry_Stakeholders.pdf

REGIONAL ABACA PRODUCTION AND MARKET Eastern Visayas is the second largest producing region in the Philippines. The table below shows the production volume from 2013-2017 of the provinces in the region.

Table 12. Comparative Abaca Fiber Production in Eastern Visayas, 2013-2017 (in MT)

Provinces 2013 2014 2015 2016 2017 % Share in 2017

Eastern Visayas 16,597.42 12,849.25 12,752.59 12,492.61 12,671.07 100.00% Northern Samar 7,433.55 7,579.32 7,550.15 7,241.25 7,234.90 57.10% Southern Leyte 2,498.26 2,155.65 2,106.84 2,110.38 2,358.75 18.62% Leyte 4,832.89 1,482.53 1,531.89 1,616.72 1,584.96 12.51% Samar (Western Samar) 1,381.40 1,270.00 1,318.00 1,313.25 1,342.00 10.59% Biliran 81.42 69.80 122.75 131.50 133.00 1.05% Eastern Samar 369.90 291.95 122.96 79.51 17.46 0.14% Note: Prepared using raw data retrieved from PSA website.

In 2017, Northern Samar dominated the production with 57% average share of the total regional production. This was followed by a wide margin by Southern Leyte at 19%, Leyte with 13%, and Samar with 11%. Eastern Samar and Biliran posted the lowest contribution to the regional abaca production. Abaca production was previously dominated by Leyte and Southern Leyte, followed by Northern Samar. However, ABTV gravely affected abaca farms of the former provinces greatly diminishing production by around 80%. By 2011, Northern Samar led the region with highest share in abaca production. In 2017, Eastern Visayas had a total of 30,698 hectares of abaca-planted areas. Northern Samar had the largest share of planted areas with 39%, followed by Leyte (27%), and Southern Leyte (20%).

Table 13. Abaca Fiber Yield in Eastern Visayas, 2017 (in MT) Provinces Planted Areas (Hectare) Production (MT) Yield (MT/Hectare/Year)

Eastern Visayas 30,698.00 12,671.07 0.41 Northern Samar 12,040.00 7,234.90 0.60 Southern Leyte 5,998.00 2,358.75 0.39 Leyte 8,250.00 1,584.96 0.19 Samar (Western Samar) 1,950.00 1,342.00 0.69 Biliran 1,460.00 133.00 0.09 Eastern Samar 1,000.00 17.46 0.02 Note: Prepared using raw data retrieved from PSA website.


PhilFIDA records show that there are 90 licensed abaca industry players in Eastern Visayas in 2017 composed of five GBEs, one buying station, one trader-exporter, nine processors, and 74 local traders.

Table 14. Abaca GBEs, Buying Stations, Trader-Exporters, & Processors in Eastern Visayas, 2017-18 Type of Industry

Player Name Class Address

Grading-Baling Establishments

Specialty Pulp Manufacturing, Inc.

1st Class Hilapnitan, Baybay City, Leyte

Fibers Trading, Inc. 2nd Class Magsaysay Avenue, Baybay City, Leyte S.C. Tan Export Corporation 3rd Class Dalakit, Catarman, Northern Samar Justmar Marketing, Inc. 4th Class Obrero, Calbayog City, Western Samar

Buying Station Fibers Trading, Inc. 3rd Class Rizal Extension, Sogod, Southern Leyte Trader-Exporter Ching Bee Trading Corporation Class A Domingo Veloso St., Baybay City, Leyte Processors Specialty Pulp Manufacturing,

Inc. Class A Hilapnitan, Baybay City, Leyte

Pulp Specialties Phil., Inc. Class A Tinag-an, Albuera, Leyte Jocelyn Sinamay Buyer Class D Punong Bato, Leyte Cherry Sinamay Industry Class D Caridad, Matalom, Leyte Aurora Sinamay Industry Class D Libertad, Matalom, Leyte Hantag Farmers Multi-Purpose Coop, Inc.

Class D Hantag, Maasin City, Southern Leyte

Prima G. Parong Class D Matalom, Leyte Charito F. Pizon Class D Matalom, Leyte


Abaca industry players in Eastern Visayas are involved in producing and trading abaca fiber, abaca specialty pulp, sinamay, and twine. Bulk of the income of the abaca industry in the region is from abaca fiber and pulp exports. The following table shows the names, classifications, and addresses of the licensed abaca fiber GBEs, buying station, trader-exporter, and processors in Eastern Visayas. Local abaca fiber processors are found in Leyte and Southern Leyte. They use abaca fiber in fibercrafts (wine bags, placemats, home decors, utility/gift boxes, baskets, etc.), sinamay weaving, and twine making. Sinamay are traded to fibercraft processors in the Bicol region. There are 74 licensed local traders in Eastern Visayas and 18 are based in Northern Samar. Their classification and distribution per province are as follows:

Table 15. Number of Local Traders in Eastern Visayas, 2017-2018 Province # of Local Traders per Classification Total

Class A Class B Class C Class D Northern Samar 4 4 2 8 18 Eastern Samar 1 1

Leyte 1 2 4 20 27 Southern Leyte 1 1 7 9

Western Samar 1 12 13

Biliran 1 5 6

Total 6 7 9 52 74 Note: Adapted from “Directory of Licensed Fiber Industry Stakeholders, 2017-2018”. Retrieved October 8, 2018 from http://www.philfida.da.gov.ph/images/Directory/2017-2018_Directory_of_Fiber_Industry_Stakeholders.pdf

Seventy percent (70%) of the regional production in 2016 are supplied to GBEs. GBEs export abaca fibers and also supply processors outside of the region. The remaining 30% was consumed by


pulp processors in the region. Around 70.80% of fiber consumption for pulp in 2016 goes to SPMI while PSPI only accounts for 29.20%. SPMI is a sister company of Ching Bee Trading Corporation.

Table 16. Abaca Fiber Supplied to GBEs and Trader-Exporter (in MT), 2014-2016

GBEs, Trader-Exporter

Supplier of Fiber Year

Average % Share

2016 2014 2015 2016 Ching Bee Trading Corporation

Leyte 680.88 323.00 723.25 575.71 12.79% Southern Leyte 54.50 212.25 290.88 185.88 5.14% Northern Samar 191.50 346.13 249.63 262.42 4.41% Eastern Samar 92.88 113.88 44.75 83.83 0.79% Samar 9.88 122.00 78.50 70.13 1.39% Biliran - - 8.38 8.38 0.15% TOTAL 1,029.63 1,117.25 1,395.38 1,180.75 24.68%

TAG Fibers Inc. Leyte 303.50 101.88 218.88 208.08 3.87% Southern Leyte 289.50 278.25 372.50 313.42 6.59% Northern Samar 1,113.00 786.13 890.00 929.71 15.74% Eastern Samar 16.13 21.50 16.25 17.96 0.29% Biliran - - 3.88 3.88 0.07%

Elisa D. Casil Abaca Dealer

Leyte 73.88 15.25 11.25 33.46 0.20% Southern Leyte 99.88 59.88 85.75 81.83 1.52% Northern Samar 0.13 - - 0.13 Eastern Samar 8.25 - - 8.25 Samar 2.88 - - 2.88 TOTAL 185.00 75.13 97.00 119.04 1.72%

S.C. Tan Export Corp. (Baled in Elisa Casil Abaca Dealer)

Leyte 475.75 86.38 75.38 212.50 1.33% Southern Leyte 1,175.75 701.75 802.75 893.42 14.20% TOTAL 1,651.50 788.13 878.13 1,105.92 15.53%

S.C. Tan Export Corp. Catarman, Northern Samar

Northern Samar 2,340.75 2,240.25 1,681.75 2,087.58 29.74%

TOTAL 2,340.75 2,240.25 1,681.75 2,087.58 29.74%

Justmar Marketing Inc. Calbayog City, Samar

Samar 191.88 171.75 101.25 154.96 1.79%

TOTAL 191.88 171.75 101.25 154.96 1.79%

GRAND TOTAL 7,120.88 5,580.25 5,655.00 6,118.71

Note: Adapted from “Abaca Commodity Profile of Northern Samar”, document obtained from the PPDO on October 26, 2018.

Table 17. Abaca Fiber Supplied to Pulp Processors (in MT), 2014-2016

Processor Supplier of Fiber Year

Average % Share

2016 2014 2015 2016

SPMI

Leyte 107.50 131.50 205.63 148.21 8.36% Northern Samar 1,660.86 1,395.38 1,357.50 1,471.25 55.18%

Eastern Samar 377.75 65.75 56.00 166.50 2.28% Samar 191.64 143.12 122.62 152.46 4.98%

SUB-TOTAL 2,337.75 1,735.75 1,741.75 1,938.42 70.80%

PSPI

Leyte 55.88 55.88 2.27% Northern Samar 650.00 650.00 26.42%

Samar 9.75 9.75 0.40% Biliran 2.62 2.62 0.11%

SUB-TOTAL - - 718.25 718.25 29.20% GRAND TOTAL 2,337.75 1,735.75 2,460.00 2,656.67 100%

Note: Adapted from “Abaca Commodity Profile of Northern Samar”-a document obtained from the PPDO on October 26, 2018. Data for PSPI in 2014 and 2015 is not available.


PROVINCIAL (NORTHERN SAMAR) & MUNICIPAL (MONDRAGON) ABACA PRODUCTION AND MARKET The following information about the abaca industry in Northern Samar and in the municipality of Mondragon were established in the foregoing section:

o Northern Samar is the top abaca producing province in Eastern Visayas and the 2nd largest producer of abaca fiber in the Philippines. In 2017, the total abaca fiber production volume in the province is 7,235 MT and the production area is 12,040 hectares. Abaca production volume and production area in Northern Samar is stable in the last five years with an average of 7,408 MT and 12,033 hectares, respectively. Abaca production outlook in the next five years is positive due to several efforts by the Philippine government and other stakeholders to further develop the industry.

o Twenty (20) out of the 24 municipalities of Northern Samar are producing abaca. The top producing municipalities are Las Navas, Silvino Lobos, and Mondragon, respectively. These top abaca producing municipalities are covered by the buffer zone of the SINP.

o There were 11,000 abaca farmers in Northern Samar in 2013 (3,000 in District I and 8,000 in District II). One thousand five hundred (1,500) of these farmers are in the municipality of Mondragon. Abaca farmers are considered poorest of the poor. They are earning an average monthly income of Php 3,000 to 4000 pesos.

o Fourteen (14) out of the 24 barangays in the municipality of Mondragon are producing abaca. The 11 top producing barangays are as follows:

Six inner barangays: Cagmanaba, Cahicsan, De Maria, Hinabangan , San Antonio, and San Jose

Two interior-lowland barangays: Flormina and San Isidro Three barangays near the town proper: Cablangan, Mirador, and Nenita

o Abaca and coconut production are the top economic activities in Mondragon. o Abaca production area in Mondragon decreased by 51% between 2013 to 2016 (from 1,800

hectares in 2013 to 890 hectares in 2016). As result, production volume also decreased by 50% (from an estimated 810 MT in 2013 to 401 MT in 2016).

o Abaca fiber is the abaca by-product that is being traded in Northern Samar. There are 1,500 abaca farmers in Mondragon based on 2013 data of PhilFIDA. The average abaca production area per farmer, according to FGD farmer respondents, is three hectares. Multiplying these figures yield 4,500 hectares average abaca production area in the municipality. This accounts for 37% of the total area planted with abaca in the province in 2017. The average abaca fiber production volume in District I where Mondragon belongs is 0.45 MT per year based on PhilFIDA data. Therefore, the average abaca fiber production capacity in the municipality is 2,025 MT per year. This is equivalent to 27% of the average abaca fiber production volume of Northern Samar in the last five years (7,408 MT). The current abaca fiber production volume in Mondragon that is being traded is 30 MT per week according to FGD respondents. This is equivalent to around 1,560 MT a year or 21% of the average abaca fiber production volume of Northern Samar in the last five years. This production is just enough to cater the minimum demand of all licensed local traders in the province. However, it is low compared to the estimated 2,025 MT average annual abaca fiber production capacity of Mondragon (2,025 MT). Currently, the estimated number of abaca farmers and land area planted with abaca in Mondragon is 1,306 individuals and 3,467 hectares, respectively. These numbers are derived using the current volume of abaca fiber being traded in Mondragon, the 0.45 MT average abaca fiber production per hectare in District I, and the 200 farmers and 150 hectares production area of CEFA.


Table 18. Abaca Fiber Yield of CEFA in Comparison w/ Regional, Provincial & Municipal Averages, 2017-2018 (in MT) Administrative Coverage Planted Areas

(Hectare) Production (MT) Yield (MT/Hectare/Year)

Eastern Visayas 30,698.00 12,671.07 0.41 Northern Samar 12,040.00 7,234.90 0.60 Mondragon 3,467 1,560.00 0.45 CEFA 150 67.50 0.45 Note: Prepared using raw data retrieved from PSA website and PhilFIDA.

CEFA members account for 4.33% of total abaca fiber production and 5.77% of total abaca planted area in Mondragon, Northern Samar. Out of the 67.50 MT average annual production of its members, CEFA can only buy 30 MT yearly with its current capitalization. Other produced not sold to CEFA are being absorbed by other local traders in the municipality. In terms of number, CEFA members represent 15% of the estimated total abaca farmers in Mondragon. There are 19 abaca industry players in Northern Samar composed of one GBE-the S.C. Tan Export Corporation, and 18 local traders. There are no licensed buying station, trader-exporter, and processor in the province. There are six licensed local traders in the municipality of Mondragon, Northern Samar. They represent 33% of the total local traders in the province. Their names and addresses are shown below. FGD participants and key informants revealed that there are barangay consolidators in Mondragon who operate under the auspices of the aforesaid local abaca traders.

Table 19. Local Traders in Mondragon, 2017-2018 Class Name Barangay Location

A Francisco C. Echaluce Bugko B B-Joy Store and Abaca Buyer Nenita

Liberty U. Salomon Bugko D CEFA Cablangan

Center Town Abaca Buyer Chitongco Rosario Conde Chin Chitongco


150

3,317 3,467

200

1,106 1,306

0.75 3.00 2.65

CEFA Other Farmers Total

Abaca Producers & Production Area in Mondragon, 2018

Production Area (Ha) No. of Farmers Average Farm Size perFarmer (Ha)

Figure 18. Abaca Producers and Production Area in Mondragon, 2018. Derived using data from PhilFIDA and CEFA.


CEFA AS LOCAL ABACA FIBER TRADER It should be noted that CEFA only started trading abaca fiber in 2017. S.C. Tan Export Corporation was its first buyer. The initial volume of abaca fiber traded by CEFA was one MT monthly, graded G, I, H (good grades), JK (fair grade), and Y (residual grade). According to CEFA officers, the company pays good price for good fiber quality. However, CEFA incurred around Php 60,000 losses due to strict quality standards and low fiber quality traded. The company do not buy low grade fibers. These are either returned to CEFA or not at all. Starting in March 2018, CEFA is selling its fibers to Ching Bee Trading Corporation, a company that is based in Davao City but has satellite plant in Leyte. It is the biggest buyer of raw fiber in the Philippines. It is now CEFA’s preferred market because it accommodates all delivered abaca fibers regardless of grade, unlike S.C. Tan Export Corporation. The average volume of abaca fiber being traded by CEFA is 2.5 MT per month. These fibers are also mostly graded G, I, H, JK, and Y. Ching Bee’s volume demand is ten tons per week, but it can buy more. Ching Bee pick up products at the site provided that the minimum volume should at least be two MT/pick up. The buyer pays 80% of total amount one day after delivery. The remaining 20% is being paid after all the abaca fibers are graded by the company’s fiber classifiers. Payments are deposited to CEFA’s bank account. From March 31, 2018 to September 5, 2018, CEFA was able to trade 12.143 MT of abaca fibers with a total gross sales of Php 962,502. The total amount paid to abaca farmers within this period is Php 856,837. The gross income of CEFA within this same period is Php 93,165. From their gross income, Php 12,500 covered operating and administrative costs which leaves Php 93,165 as net income.

Figure 19. Location of Licensed Local Abaca Traders in Mondragon. Primary Data.


Abaca farmers have difficulty in meeting excellent quality (i.e. S2 grade) of abaca fibers due to the stripping technology that they are using which is manual stripping. As mentioned in the previous section, farmers normally produce good, fair, and residual grades of abaca fibers. S2 grade (excellent) of abaca fibers can be obtained through the use of spindle stripping machine. Buyers prefer excellent grades of abaca fibers. Ching Bee granted one spindle stripping machine to CEFA in support to improving product quality. This machine will be tested and when the results are positive, Ching Bee will grant four additional units. Provision of these machines is part of the Memorandum of Agreement (MOA) signed between the parties which provides that CEFA shall exclusively sell their abaca fibers to Ching Bee. Like other local traders, CEFA buys abaca fibers “all-in” or one price for all grades. This is because farmers and CEFA lack grading skills due to absence of licensed classifiers. The buying price to farmers is Php 80 per kg. CEFA’s buyer, the Ching Bee Trading Corporation, classifies the fibers per grade. Income of local abaca fiber traders such as CEFA is dependent on prices of fibers after classification. The prices of abaca fibers after classification are very unstable (see Fig. 20).

PERCEIVED DEMAND & DEMAND GAP The perceived demand of abaca fiber in Northern Samar based on the capacity to transact of all licensed local traders in the province is at least 750 to more than 900 MT per year. Similarly, the perceived demand in the municipality of Mondragon is at least 250 to more than 375 MT per year.

Table 20. Perceived Demand of Abaca Fiber in Northern Samar, 2018

Trader Classification Number Total Combined Capacity to Transact (MT/ Yr)

Minimum Maximum Class A: Trading more than 75 MT a year 4 300 >300 Class B: Trading more than 50 MT a year 4 200 300 Class C: Trading more than 25 MT a year 2 50 100 Class D: Trading 25 MT and below a year 8 ≤200 200

Total ≤750 >900 Note: Prepared based on classification of local traders in terms of abaca fiber transaction volume provided by PhilFIDA.

97

54

9294

50

8684

36 40

G H Y

Ching Bee's Buying Price (PHP), Aug. 22-Sep. 21, 2018

Aug. 22, 2018 Sep. 07, 2018 Sep. 21. 2018

Figure 20. Ching Bee’s Abaca Fiber Prices, August 22, 2018 to September 21, 2018. Adopted from CEFA’s sales receipts.

Personnel of Ching Bee Trading Corporation haul abaca fibers from CEFA’s office in Cablangan,Mondragon, Northern Samar. Photo taken October 30, 2018.


Table 21. Perceived Demand of Abaca Fiber in Mondragon, 2018

Name of Local Trader Class Capacity to Transact (MT / Year)

Minimum Maximum Francisco C. Echaluce A 75 >75 B-Joy Store and Abaca Buyer B 50 75 Liberty U. Salomon B 50 75 CEFA D ≤25 50 Center Town Abaca Buyer D ≤25 50 Rosario Conde Chin D ≤25 50

Total ≤250 >375 Note: Prepared based on classification of local traders in terms of abaca fiber transaction volume provided by PhilFIDA.

The FGD participants forecast that in the next five years, abaca fiber demand in the municipality will be 50 MT weekly or around 2,600 MT per year. This is a bit higher than the projected annual abaca fiber production capacity of Mondragon. But it can still be achieved if all the estimated 1,500 abaca farmers in the municipality (2013 data) actively engage in abaca production in at least 4,500 hectares (average of three hectares farm per individual) and practice good farm management practices. In Eastern Visayas, the combined demand for abaca fiber by the SPMI and the PSPI (both are based in Leyte) is 43,200 MT per year. There is also a 59,000 MT yearly demand deficit for abaca fiber in the Philippines according to PhilFIDA. Therefore, a lot of grounds need to be covered in order to meet the growing demand for abaca fiber. SPMI is the biggest pulp mill in the region with an estimated capacity of 36,000 MT of fiber or 12,000 MT pulp/year. However, only 1,938 MT or 5.38% of this fiber requirement is met. Majority of the fibers from the region supplied to SPMI is from Northern Samar, while the rest are from Leyte, Samar, and Eastern Samar. Due to extreme shortage of fiber supply, SPMI sources from Catanduanes, Mindanao, and Ecuador to maximize operating costs. PSPI has an operating capacity of 7,200 MT/year of fiber or 2,500 MT of pulp/year. However, only 10% of the fiber requirement is met by the region. PSPI sources majority of its fiber supply from Northern Samar, with the rest from Leyte, Samar, and Biliran. PSPI also sources abaca fiber from Bicol and Mindanao to meet their fiber requirements. To sufficiently supply the fiber requirement of the pulp processors of the region, production must increase by at the very least 400%, assuming that all fibers go to the pulp mills.

250

1560

2600

556

3,467

5,778

Current Demand, 2018(Minimum)

Current Production Volume,2018

Projected Demand - Next 5Years

Current & Projected Demand of Abaca Fiber in Mondragon

Volume (MT)/Year Production Area at 0.450 MT/Ha/Year

Figure 21. Current &Projected Demand of Abaca Fiber in Mondragon, 2018. Derived using data from PhilFIDA and CEFA.


D. SUBSECTOR STAKEHOLDERS/PARTICIPANTS, FUNCTIONS

AND TECHNOLOGIES

DESCRIPTION OF PARTICIPANTS IN THE VALUE CHAIN/SUBSECTOR There are five major stakeholders/participants that are involved in the abaca industry in Mondragon, Northern Samar. This section describes these participants, their functions, and the technologies that they are using. It also presents a cost-benefit analysis for each of the major stakeholders and the issues and constraints being encountered by the primary stakeholders. All of this information, unless otherwise specified, are gathered through FGDs and KIIs with abaca farmers in Mondragon, CEFA officers, EVPRD staffs, local traders, and buyers.

The Abaca Farmers For the purpose of this subsector study, abaca farmers are classified into two-those members of CEFA, and other abaca farmers of Mondragon.

In photos: (L) Pablo B. Paet, Jr., ISEA’s Field Research Associate (wearing light blue shirt), facilitates an FGD on key abaca industry players and market/market channels with abaca farmers in Mondragon, October 3, 2018 at CEFA’s Office, Cablangan, Mondragon, Northern Samar. (R) Gregorio Sarmiento, EVPRD’s Executive Director (wearing white shirt), conducts FGD on household and community profile, and stakeholders analysis with abaca farmers of Mondragon, October 4, 2018 at CEFA’s Office, Cablangan, Mondragon, Northern Samar.

Abaca Farmer Members of CEFA: These are abaca farmers who are involved in the organized production

and marketing of abaca fiber initiated by EVPRD and CEFA which this subsector action research aims to scale up. There are 200 active abaca farming household members of the organization. They are mostly found in Barangays Cablangan, Flormina, and Nenita. These three barangays are among the five barangays wherein the 1,050 hectares CBFM area awarded to CEFA is located. The total production area of the current 200 farming household members is 150 hectares. Thus, their average production area is 0.75 hectares. Sixty-eight (68) hectares out of the 150 hectares current production area is owned by CEFA wherein 80 out of the 200 farming households are located and are the caretakers of the site.

Other Abaca Farmers of Mondragon: These are abaca farming households who are not members of

CEFA. Presently, they are estimated at 1,106 active producers. They are usually members of other farmers’ organizations, but their abaca production and marketing are not organized. The estimated abaca production area of these households is 3,317 hectares. Each farmer has 0.50 hectare to 10 hectares farm. Their average production area is three hectares. Most of these farming households are traditional abaca producers but a few trained farmers practice improved farming system such as adoption of abaca production protocols as coconut intercrop which the Philippine Coconut Authority (PCA) introduced starting in 2011. The recommended planting distance under this protocol is 2m x 3m.


The primary function of abaca farmers in the abaca industry in Mondragon, Northern Samar is the production of abaca fiber. They manage and operate their farms’ production cycle. Presently, abaca farmers are also fully responsible in drying, classifying, weighing, and bundling their harvested fibers and selling them to consolidators or local traders. Below are the production and primary processing activities being done by abaca farmers and the technologies they employ. Farm Establishment and Maintenance Before EVPRD and CEFA introduced their current production protocol, the farmer members of the association practiced traditional abaca farming just like the other abaca farmers in Mondragon. Some of the differences of EVPRD and CEFA abaca farming protocol and the traditional abaca farming method are shown as follows:

Table 22. Comparison of EVPRD & CEFA Abaca Production Protocol with Traditional Abaca Farming Method

Production Aspect EVPRD & CEFA Protocol Traditional System Farm planning Farm lay –out and production plan are required

and need to be approved by EVPRD and CEFA No written farm plan

Opening new kaingin farm for abaca farming

Not allowed Usual practice of farmers

Location of farm Should be within multiple use zones, must pass farm inspection by EVPRD and CEFA

Farmers decide where to open or establish farm

Planting stock Should be sourced within Mondragon to prevent possible disease outbreak

Farmers sourced planting stocks within Mondragon

Crop integration Required Farmers’ discretion Planting of hedgerows Required for soil and water conservation Not usually practiced Planting distance 3m x 5m to allow intercrop Farmers’ discretion Frequency of brushing Monthly within the first six months from

planting; quarterly from the 7th month onwards Quarterly, usually before harvesting

PhilFIDA released the ASM in August 2016 which details abaca production technologies but it is yet to be adopted by abaca farmers in Mondragon. All activities in growing abaca-from land preparation, hole digging, gathering of planting stocks, planting, and brushing are done manually with the aid of simple traditional farm tools such as bolo. Most abaca farmers in Mondragon engages fellow abaca farmers to work in their farms from establishment to maintenance. Abaca farmers in Mondragon do not use fertilizers and pesticides. Their pest and disease control method is limited to roguing and burning infested plants. Harvesting, Tuxying and Stripping Manual abaca harvesting, tuxying, and stripping are the methods being used by farmer producers in Mondragon. They are usually done by the farmers themselves or with the help of other abaca farmers. Bolo, tuxying knife, and simple stripping knife are the basic tools for the job. Abaca Fiber Drying, Classifying, Weighing, Bundling, and Storing Abaca farmers hang up abaca fibers to dry on makeshift hangers usually made of wood or bamboo either under the sun or under the shade depending on the weather. Dried abaca fibers are classified into three according to color (white, brown/red, and blackish), weighed, and bundled by farmers as to their preferred bulk or weight (usually between 40 kg to 60 kg per bundle) using hand twisted abaca twines. The dried abaca fibers are usually kept or stored in the farmers’ houses until they are sold. Selling Abaca Fiber


Abaca farmers are responsible in hauling the products from their farms to consolidation points or to the local abaca traders’ place either by foot or by motorcycle or habal-habal. Abaca farmers incur between two to six pesos hauling cost per kg of abaca fiber depending on the distance of the barangay to the consolidation or selling point. Farmers in remote areas usually spend more on transportation costs compared to other farmers who are near car lines or access roads.

In photos (Clockwise): A farmer member of CEFA does under brushing in the organization’s abaca plantation in preparation for harvesting; a CEFA farmer member tumbles a matured abaca plant; another CEFA member separates tuxy from the abaca stalk; the tuxies are stripped of fibers using the spindle stripping machine provided by Ching Bee.

Farm Workers Abaca farm workers within Mondragon are also abaca farmers who offer their services in exchange for immediate cash income. Usually, abaca farmers within a community/barangay work together among themselves. Farm owners prefer to hire fellow abaca farmers because they know the farming technology. The primary function of abaca farm workers is provision of labor during abaca farm establishment and maintenance; harvesting, tuxying and stripping; and hauling of dried fibers. They provide their own farm tools (the ones which they themselves use in their farms) in carrying out their function. For a day’s work in the farm, a farm worker earns a net of Php 200-Php 300 depending on existing rate in their community. For contracted abaca farm work package (which usually include cleaning of abaca farm, harvesting, tuxying, and stripping) a farm worker earns between 60%-70% of total abaca fiber harvest. Farm owners provide for the meals and snacks of farm workers. Sometimes, these expenses are converted into cash if both the farm owner and farm workers agree to monetize it which means that the workers bring their own meals and snacks to work. In this case, a farm worker receives around Php 500 a day.

Consolidators Consolidators are local residents/abaca farmers who are involved in consolidating abaca fibers from farmers within a barangay or cluster of barangays. For the purpose of this subsector study, abaca fiber consolidators are classified into two-CEFA cluster leaders and barangay middlemen.


CEFA Cluster Leaders: These are CEFA farmer members who are designated as cluster leaders. Their

primary functions are classifying, buying, and consolidating abaca fibers from CEFA farmer members in a given barangay or cluster of barangays. Cluster leaders are paid one peso per kg of abaca fiber by CEFA. They do not incur transportation expenses because CEFA is in-charge in hauling the products from the consolidation points.

Barangay Middlemen: These are local farmers, usually the affluent ones, who are engaged in the abaca

fiber trade at the community level. Most of them have large farmlands and are also involved in abaca production. They buy the raw fibers from neighboring farmers, some are their tenants, before selling them to local abaca traders (except CEFA). Barangay middlemen usually conduct re-classification of the fibers at their level to check if farmers’ classification is appropriate. They also do classification for farmers who cannot classify on their own. In practice, fibers are generally sold “all-in” or one price for all grades of abaca fibers. This practice, however, is now prohibited by PhilFIDA starting the fourth quarter of 2018. Transportation is the main cost incurred by barangay middlemen. They pay an average of Php 20 per bundle of abaca fibers (a bundle is between 40 to 60 kg.) The more remote the areas, the volume becomes more important to barangay middlemen. Motorcycle or habal-habal is the mode of transporting abaca fibers due to poor road conditions in most abaca producing areas. This situation sometimes reduces economic attractiveness because in many cases barangay middlemen in remote areas receive a lower net price due to high marketing costs especially when volume is lacking. The barangay middlemen rely on local abaca traders for price information. They buy abaca fiber at two pesos per kg lower than the buying price of local abaca traders to whom they sell their products.

Barangay middlemen usually extend loans or advances (in cash or in kind) to abaca farmers primarily to ensure continuous supply of raw fibers. However, this form of service is only given to farmers who regularly sell to them. This practice is disadvantageous to the recipient farmers as the price paid to them is sometimes lower than the prevailing market price just to cover the “cost of money” (interest rates).

Local Traders There are six licensed abaca local traders in Mondragon. CEFA is included in this list. The primary functions of these local traders are buying and consolidating abaca fibers from farmers and consolidators from different barangays and even from other municipalities; then selling these fibers to GBEs, trader-exporter, and processors. In Northern Samar, S.C. Tan Export Corporation and Ching Bee Trading Corporation are the major buyers of abaca fibers from local abaca traders. Local traders have weighing device, adequate storage, capital, and transport facilities. Local traders buy abaca fibers “all-in”. They are dependent to their buyers for market information. Local traders shoulder transportation cost of abaca fibers from product origin (car lines or access roads/consolidation points) which is usually Php 20 per bundle. At their level, local traders usually do re-classification of fibers just like the barangay middlemen. They, too, extend loans and advances to abaca farmers. Sometimes, local traders (except CEFA) infuse capital to barangay middlemen to tie them for deliveries. They also impose a one-peso mark-down from the set “all-in” price to cover marketing costs. CEFA buys abaca fiber two to three pesos higher than other local traders. The organization earns an average of Php 7.70 gross income per kg of abaca fiber that they sell to their buyer. Other local traders are conservative in providing information regarding their operations. However, since CEFA buys abaca fiber at two to three pesos higher than them, it can be assumed that their gross income per kg is Php 9.70- Php 10.70.

Buyers (GBEs, Trader-Exporter, Processors) The abaca fiber buyers in Northern Samar are S.C. Tan Export Corporation (a GBE based in Catarman), Ching Bee Trading Corporation (a trader-exporter), SPMI (a GBE and processor which is a sister company of Ching Bee), and PSPI (a processor). SPMI and Ching Bee are based in Baybay City, Leyte. PSPI is based in Albuera, Leyte. These buyers have baling press, metric weighing device, storage and processing areas, licensed fiber classifier(s), and adequate machineries and equipment required of their trade. They usually pick up abaca fibers from local traders or pay transportation costs in cases wherein local traders deliver the products.


Buyers usually pay up to 80% of estimated value of each transaction with local traders. The remaining 20% is settled after all the abaca fibers are classified based on stricter grading. These buyers do not practice “all-in” buying. They classify abaca fibers based on standard grading system then they pay local traders the corresponding price of each grade of fiber. It is through this scheme that local traders generate income from each transaction especially when bulk of their deliveries (which they buy at “all-in” price) are high grade. Buyers relay market price information to local traders. Prices of abaca fiber is determined by the law of supply and demand. Changes in abaca fiber prices happen on a yearly basis according to a representative of S.C. Tan Export Corporation. This is because local and international industries that are utilizing abaca fibers usually set their demand based on yearly company targets. Thus, price is basically stable throughout a given year. Ching Bee and S.C. Tan provide abaca planting materials to farmers and other services such as provision of spindle stripping machines to organized groups (i.e. CEFA) and capital loans to local traders. These are provided with the condition that local traders deliver abaca fibers to them. In a sense, buyers exert monopolistic control over local traders.

Table 23. Functions, Participants, & Technologies of Abaca Industry Players in Mondragon, Northern Samar

Function

Participants

Technology

Ab

ac

a

Fa

rme

rs

Fa

rm

Wo

rke

rs

Brg

y.

Mid

dle

me

n

Lo

ca

l T

rad

ers

Tra

de

r-

Exp

ort

ers

Ph

ilFID

A

UE

P

EV

PR

D

CE

FA

DT

I

DO

ST

DA

R

LG

U

Ma

rke

tin

g

Trading

Processing Pulp Mills Grading & Baling

Baling Press

Buying/ Consolidation

Weighing Scale

Selling

Hauling/ Transporting

Manual, Habal- Habal, Truck

Pri

ma

ry P

roc

es

sin

g

Storing House, Warehouse

Sorting/ Classifying

Manual

Bundling Manual

Drying Improvised Hanger, Air/ Sun Drying

Stripping & Cleaning

Traditional Farming Practice, Sucker for Plantlets, Manual Works, Locally Fabricated Tools

Harvesting

Fa

rm E

sta

blis

hm

en

t &

Ma

inte

na

nc

e

Farm Maintenance

Planting

Selection & Collection of Planting Materials

Hole Digging Land Clearing & Land Preparation

Farm & Production Planning

Selection of Abaca Planting Site

Su

pp

ort

S

erv

ic

es

Input Provision

Cultured Plantlets


(Planting Stock) Machine/ Equipment Provision

Spindle Stripping Machine, Truck

Trade Regulation

Certification

Training & Capacity Building

Research & Development

Plantlets Propagation

COST-BENEFIT ANALYSIS The table below shows the marketing costs for the different marketing levels of abaca fiber in Mondragon. The following data were used in the computations:

Volume of abaca fiber: 450 kg-the average yearly production of one-hectare abaca farm in the municipality (PhilFIDA data)

Buying price: Php 80/Kg-the current “all-in” price of CEFA

40%: 60% harvest sharing between farm owner and farmer workers, respectively

Php 20 transportation cost per bundle of abaca fiber being paid by local traders, 1 bundle is 50 kg

Php 2-6 transportation cost of farmers per kg gathered through FGD

Php 7,025 total expenses of CEFA for a 3,000 kg abaca fiber transaction gathered through FGD/KII

Table 24. Marketing Costs for Different Marketing Levels of Abaca Fiber (Php/Kg)

Activity Abaca

Farmers

Consolidators Local Traders CEFA Cluster

Leader Barangay

Middleman CEFA

Other Local Traders

Harvesting, tuxying & stripping 48.00 - - - - Drying, classifying, bundling/ rolling

- - - - -

Transportation 4.00 - 0.40 0.40 0.40 Consolidation - - - 1.00 - Labor & other fees - - 0.94 0.94 0.94

Total 52.00 0.00 1.34 2.34 1.34

Abaca farmers incur the highest marketing costs per kg of abaca fiber. Marketing costs of CEFA is higher than other local traders because it shoulders the compensation of cluster leaders which is one peso per kg of abaca fiber. Presented below is the marketing margins and income from abaca fiber of the different industry players in Mondragon. The marketing costs derived in the preceding table along with the following information were used in the computations:

Php 80/Kg-the current “all-in” price of CEFA which is being paid to farmers through its cluster leaders

CEFA buys abaca fiber from members at Php 2-3 per kg higher than other local traders

Barangay middlemen buy abaca fiber at Php 2 per kg lower than other local traders

Php 7.70 average gross income of CEFA per kg of abaca fiber including incentives to cluster leaders


Table 25. Marketing Margins and Income from Abaca Fiber of Different Industry Players (Php/Kg)

Particulars Abaca Farmers Consolidators Local Traders

CEFA Member

Other Farmer

CEFA Cluster Leader

Barangay Middleman

CEFA Other Local

Trader Selling Price 80.00 75.50 - 77.50 87.70 87.70 Buying Price - - - 75.50 80.00 77.50 Marketing Margin - - - 2.00 7.70 10.20 Marketing Cost 52.00 52.00 - 1.34 2.34 1.34

Profit Margin - - Receives one peso from CEFA’s profit

margin. 0.66 5.36 8.86

Net Farm Income 28.00 23.50 - - - - Marketing Cost as % of Marketing Margin

- - - 67% 30% 13%%

Profit Margin as % of Marketing Margin

- - - 33% 70% 87%

Presently, abaca farmers who are members of CEFA earn more than other farmers because of higher buying price of the organization. Based on the above results, the current relative financial position of value chain players in the abaca BDFE initiative of EVPRD and CEFA in Mondragon, Northern Samar is as follows:

Table 26. Relative Financial Position of Value Chain Players in the Abaca BDFE Initiative of EVPRD & CEFA in Mondragon, Northern Samar

Players Product Costs (in Php) Profit (in Php) Margins (in Php)

Total Unit Cost

Added Unit Cost

% Added Unit Cost

Unit Price

Unit Profit

% Profit

Unit Margin

% to Price

Farmer One kg abaca fiber

52.00 52.00 96% 80.00 28.00 78% 80.00 89% Cluster Leader

0.00 0.00 0% 0.00 1.00 3% 1.00 1%

CEFA 80.00 2.34 4% 87.70 6.70 19% 9.04 10% Total 54.34 100% 35.70 100% 87.70 100%

Figure 22. Relative Financial Position of Value Chain Players in the Abaca BDFE Initiative of EVPRD and CEFA in Mondragon, 2018.

% A D D E D U N I T C O S T

% P R O F I T % T O P R I C E

96%78% 89%

3% 1%

4%19% 10%

R E LA T I VE F I N A N CI A L P O S I T I O N O F VA LU E CH A I N P LA Y E R S I N T H E A B A CA B D F E I N I T I A T I VE O F E VP R D & CE F A

Farmer Cluster Leader CEFA


The current relative financial position of value chain players in the traditional abaca industry in Mondragon, Northern Samar is as follows:

Table 27. Relative Financial Position of Value Chain Players in the Traditional Abaca Industry in Mondragon, Northern Samar

Players Product

Costs (in Php) Profit (in Php) Margins (in Php) Total Unit Cost

Added Unit Cost

% Added Unit Cost

Unit Price

Unit Profit

% Profit

Unit Margin

% to Price

Farmer One kg abaca fiber

52.00 52.00 97% 75.50 23.50 66% 75.50 84% Brgy. Middleman

75.50 0.40 1% 77.50 2.00 6% 2.40 3%

Local Trader 77.50 1.34 2% 87.70 10.20 29% 11.54 13%

The marketing margins and income from abaca fiber of the different industry players from a one-hectare farm producing 450 kg of abaca fiber yearly are as follows:

Table 28. Marketing Margins and Income of Different Industry Players from One-Hectare Abaca (Php)

Particulars Abaca Farmers Consolidators Local Traders

CEFA Member

Other Farmer

CEFA Cluster Leader

Barangay Middleman

CEFA Other Local Trader

Selling Price 36,000.00 33,975.00 - 34,875.00 39,465.00 39,465.00

Buying Price - - - 33,975.00 36,000.00 34,875.00

Marketing Margin - - - 900.00 3,465.00 4,590.00

Marketing Cost 23,400.00 23,400.00 - 603.00 1,053.00 603.00

Profit Margin - - Receives 450 pesos from

CEFA’s profit margin.

297.00 2,412.00 3,987.00

Net Farm Income 12,600.00 10,575.00 -

Figure 23. Relative Financial Position of Value Chain Players in the Traditional Abaca Industry in Mondragon, 2018.

% A D D E D U N I T C O S T

% P R O F I T % T O P R I C E

97%

66%84%

1%

6%

3%

2%

29%13%

R E L A T I V E F I N A N C I A L P O S I T I O N O F V A L U E C H A I N P L A Y E R S I N T H E T R A D I T I O N A L A B A C A I N D U S T R Y I N M O N D R A G O N

Farmer Brgy. Middleman Local Trader


PRIMARY STAKEHOLDERS ANALYSIS The primary stakeholders of the abaca industry in Mondragon are the farmer producers who are also basically the farm workers. This segment provides in-depth analysis on their situation as part of the subsector.

Profile of Abaca Farmer Producers in Mondragon As previously cited, there are currently 1,306 active abaca farmers in Mondragon cultivating a total of 3,467 hectares abaca farms. The present production volume of abaca fiber in the municipality is 1,560 MT per year. The average production area of abaca farmers in Mondragon is three hectares. CEFA farmer members’ average abaca production area is 0.75 hectares. The average family size of abaca producing households in Mondragon is seven, usually composed of four males and three females. The average age of household members is 23 years old. Abaca farmers, who are usually the older population, are also mostly coconut farmers. Some of them are rice farmers, carpenters and mason/construction workers. They belong to the poorest of the poor sector of society. Their average monthly income is Php 3,000 to Php 4,000 monthly. On average, income from own household abaca farm contributes 38% to the monthly earnings. The rest are obtained from copra and other income sources such as working as farm hands in other abaca farms. Sixty percent (60%) of abaca farmers are either elementary undergraduates or graduates, 30% reached or finished high school, and 10% are college level or college graduates. Within the household, the mother acts as the safe-keeper of money and manages budget for food, education and other family expenses. Both parents decide on investment and disposition of assets and on their children’s education. Both parents work to earn income for the family. Children are instructed to help in the farm works if not in school. The mother usually takes charge of household chores primarily cooking and tending the small children. The father leads in farm works and in seeking livelihood for the family. Both father and mother decide on family planning. Most parents adopt family planning (because of economic hardship to raise children) but some do not. Parents let their children decide if they want to work outside (i.e. Manila, Cebu, and abroad). But children have to seek approval from parents to marry. If children can find jobs locally with the same salary with that of abroad, parents prefer that their children to work locally to be close to them. Abaca farmers have the basic production skills from planting to stripping. Some have advanced skills in production as result of trainings provided by NGAs (i.e. DAR, PhilFIDA, & PCA) and other institutions such as EVPRD. They also have the basic farm tools for production and extraction of abaca fiber.

Women Participation in the Abaca Subsector In an abaca farming household, women participate in all aspects of abaca fiber production except bundling of dried abaca fibers. Overall, women are involved in 84% of abaca production activities and 32.5% of marketing activities.


Table 29. Women Participation in Abaca Fiber Production

Production Activities

Roles of Women Hours

Spent/Day Remarks

Selecting of Planting Site

Assist husband in decision making 1

Gathering of Planting Materials

Selection of planting stocks (suckers), uprooting of suckers, and assist in hauling suckers to the farm

10 Workdays vary based on farm size

Land Clearing & Land Preparation

Assist in weeding and strip brushing, cutting of shrubs, bushes, and grasses.

4-8 Workdays vary based on farm size

Hole Digging & Planting

Hole digging and planting 4 Workdays vary based on farm size

Farm Maintenance

Brushing of weeds along the whole length of abaca plant rows and in between hills. (The cut weeds are left to decompose in order to increase organic matter content of the soil.)

8-10 Workdays vary based on farm size

Harvesting, Tuxying, and Stripping

Tuxying (Harvesting and stripping are done by men but there are rare cases wherein women do stripping because they do not have husband or are widowed.)

12 Workdays vary based on farm size

Drying Assist in hanging abaca fibers on makeshift hangers until they have reached desirable moisture content, and in collecting the dried abaca fiber.

0.50

Bundling No participation. The role is usually done by men. 0

Table 30. Women Participation in Abaca Fiber Marketing

Market Supply Functions Time Spent

Remarks Men Women

Tuxying 8-10 Hrs.

Stripping (25 to 35 kg of fiber/day, time spent is 8-12 hours per day. Per harvest, a farmer usually produces an average of 500 kg of fiber)

14-20 Hrs.

There are a few female solo parents who do stripping but very rare cases.

Drying 2-3 Hrs. 30 Mins. Women just assist in drying. Bundling/Packing 1 Hour

Merlinda P. Calubaquib, ISEA’s Field Research Team Leader (back row wearing pink shirt), facilitates an FGD on gendered mapping with abaca farmers of Mondragon, October 5, 2018 at CEFA’s Office, Cablangan, Mondragon, Northern Samar.


Weighing and Recording 30 Mins -

1 Hr.

Transporting/Delivery to Local trader's warehouse/consolidation point

10-20 Mins.

Travel time depends on the distance of highway to trading point. Farmers use habal-habal or single motorcycle in transporting.

Trading/Selling 10 Mins.

Total Hours Spent per Gender

Minimum 18.33 Hrs.

9 Hrs.

Maximum 26.5 Hrs. 11.5 Hrs.

Total Hours Spent for Marketing Activities (Both Gender)

Minimum 26.83 Hrs. The 30 minutes spent by women during drying was not considered in this total because it is overlapped with a longer time allotted for the activity which is one to two hours.

Maximum 37.50 Hrs.

Average % of Women Participation in Marketing of Abaca Fiber

32.50%

Factors Affecting Economic Benefits of Abaca Farmers Abaca farmers in Mondragon, Northern Samar are consistently challenged by several factors which generally limit their economic benefits from the abaca industry, both as producers and farm workers. These are as follows: Constraints in Production Abaca fiber production (from farm establishment and maintenance to primary processing) and marketing by abaca farmers is greatly affected by the following conditions:

Occurrence of typhoons. Eastern Visayas is among the areas that are prone to typhoons in the Philippines.

Many abaca farmers do not practice advanced production technologies due to lack of training. Thus, their farm production and income are not maximized.

Most abaca farmers lack financial capital to establish their farms especially in terms of financing labor and planting material requirements. This constraint also limits the capacity of abaca farmers who are trained on advanced production technologies to actualize/ translate their trainings into practice in their farms.

Lack of family labor force because most children are in school and other family members prefer off-farm related work.

Most abaca farmers belong to the old population.

Some abaca farms are not well maintained because farmers prioritize works that give them immediate cash income. This is because most abaca farmers are subsistence farmers. From farm establishment, abaca farmers can only start harvesting after 18 to 20 months-one or two harvests only. Farmers can start harvesting quarterly starting on the 3rd or 4th year after farm establishment until the 10th year. After which, replanting is already necessary. Many abaca farmers have loans from local traders as result of family emergencies and basic consumption needs.

Farming tools of abaca farmers are mostly locally fabricated. These tools can still be improved for better efficiency. Most farmers in Mondragon do not own or have access to spindle stripping machine or improved manual stripping tools.

Men, 67.50%

Women, 32.50%

% Share of Men & Women in Abaca Fiber Marketing Related Activities

Figure 24. % Share of Men & Women in Abaca Fiber Marketing Activities


Abaca farmers are threatened by the spread of abaca diseases which can potentially damage their plants. Abaca diseases are spreading in the neighboring municipality of Silvino Lobos and are already being observed in Mondragon.

Abaca farmers lack drying facility to dry abaca fiber during rainy season. Thus, most farmers only harvest during summer or when they can dry their abaca fibers under the sun.

Presented in the following table is the occurrence of critical factors that affect abaca production of farmers in Mondragon, Northern Samar. Production activities of abaca farmers are always in parallel with copra and rice farming undertakings.

Table 31. Occurrence of Critical Factors in Abaca Production

Critical Factors Degree Months of the Year

J F M A M J J A S O N D

Prevalence of pest and diseases

High Low

Typhoon occurrences High X

Low

Labor availability High Y Z Z Z Low

Conflict with other livelihood activities (copra & rice farming)

High C RP

C RH

C RH

C RH

C RP

C RP

C RP

C RH

C RH

C RH

C RP

C RP

Low

Conflict with social events of community (i.e. festivities)

High Low

Mortality rates of abaca related to extreme weather condition

High Low

Note: (X)-High Frequency of Typhoon Occurrence, (Z)-High Availability of Migrant Laborers, (Z)-High Availability of Local Laborers, (C)-Copra, (RP)-Ricefield Preparation & Rice Planting, (RH)-Rice Harvesting

Table 32. Seasonal Calendar of Abaca Production Activities

Production Activities Months of the Year

J F M A M J J A S O N D

Selection of planting site Land clearing and land preparation Gathering of planting materials (suckers) Hole Digging and Planting Farm maintenance (weeding, under brushing) Harvesting & Primary Processing (i.e. stripping, etc.)

Selling

For New Expansion Farm For Enrichment of Existing Farm Peak Low

The following table shows cost and benefit computations of four abaca farmers in Mondragon in 2017. They have different farm areas and length of farm establishment. The farms of Mr. Felisino Sagonoy and Mr. Ricky Macquian are already productive (at least four years after planting) while that of Mr. Jeffrey Sagonoy and Ms. Lodi Aguilardo are newly established. One or two harvests can be done within two years after farm establishment. This is why Mr. Jeffrey Sagonoy and Ms. Lodi Aguilardo only harvested once and twice, respectively. Mr. Ricky Macquian and Mr. Felisino Sagonoy did not harvest quarterly, as typical for established abaca farms, because of rainy weather.


Table 33. Cost and Benefit Computation of Four Abaca Farmers of Mondragon, 2017

Particulars

Non-CEFA Members CEFA Members

Felisino Sagonoy (Brgy. San Jose)

Ricky Macquian (Brgy. De Maria)

Jeffrey Sagonoy (Brgy. Cahicsan)

Lodi Aguilardo (Brgy. Cablangan)

Farm Area 1 Ha 3 Ha 2 Ha 1 Ha

No. of Abaca Plants 200

1,500 (3m x 3m planting

distance, intercrop) Not known 200

No. of Harvest 3 times 200 kg/ harvest

2 times 800 kg/ harvest

Once 2 times

150 kg/ harvest

Total Harvest 600 kg 1,600 kg 300 kg 300 kg

Ave. Production Volume/Year 0.60 MT/Ha/Yr. 0.53 MT/Ha/Yr. 0.15 MT/Ha/Yr. 0.30 MT/Ha/Yr.

Selling Price Php 82 Php 80 Php 78 Php 78

Gross Sales Php 49,200 Php 128,000 Php 23,400 Php 23,400

Less Expenses Planting Stocks 200 pcs x Php 10

= Php 2,000 1,500 pcs x Php 10 =

Php 15,000 Not known

200 pcs x Php 10 = Php 2,000

Labor (Harvesting, Tuxying, and Stripping) (Note: Farmers cannot recall their labor expenses during farm establishment, thus, it is not factored in.)

Tuxying & Stripping: 2 persons x 5 days x Php 500/day x 3

harvests = Php 15,000

Farm Maintenance: 5 persons x 1day x Php

250 per day x 3 harvest = Php 3,750

40% for farmer owner: 60% for farm workers

harvest sharing system (limahan)

960 kg x Php 80 = Php 76,800

40% for farmer owner: 60% for farm workers

harvest sharing system (limahan) 180 kg x Php 78 =

Php 14,040

No expense, did not hire labor

Transportation 600 kg x Php 6 = Php 3,600

1,600 kg x Php 2 = Php 3,200

300 kg x Php 2 = Php 600

None

Net Income Php 24,850 Php 33,000 Php 8,760 Php 21,400

Despite the aforementioned constraints, there are also positive development and opportunities in the abaca industry that abaca farmers can benefit from and take advantage of to improve their production and income from the industry. These include the following:

Abaca farmers who lack advance skills in production can take advantage of trainings being provided by support groups. They can also learn from other farmers who are practicing advanced production technologies.

Abaca farmers who are trained on advanced abaca production technologies can serve as trainer/coach/ mentor to other farmers to improve their farming practices.

Abaca farmers are positioned to gain more income from the increasing trend in price of abaca fiber. They still have expansion areas (unutilized farm land) for abaca production.

Most abaca farmers are members of community-based POs. Thus, they can request for government assistance to through these POs.

Making abaca farming a profitable industry can also sway younger members of the population to engage in the industry.

Abaca farmers can benefit from the scaling-up of CEFA’s operations if they become member of the association because CEFA can avail of training on its production protocol. Under this production scheme, abaca farmers can produce between 888 kg to 2,664 kg of abaca fiber per hectare per year starting on the third year after farm establishment. This is dependent on the variety of abaca that farmers choose to plant and, on the farmer’s, strict adherence to the protocol. The average investment cost for a one-hectare abaca farm following the EVPRD and CEFA production protocol is Php 22,490.


Table 34. Average Investment Cost for a One-Hectare Abaca Farm Based on EVPRD & CEFA Protocol

Particulars Quantity Unit Unit Price (Php) Amount (Php)

Labor Land clearing, hole digging and planting 30 Person-days 250 7,500

Weeding, under brushing 10 Person-days 250 2,500

Harvesting, Tuxying & Stripping 10 Person-days 250 2,500

Planting Stocks 666 Pcs 12 to 15 9,990

Total 22,490

Constraints in Marketing CEFA farmer members have a distinct advantage in terms of marketing their abaca fibers because the organization buys higher than other local traders. In fact, CEFA is different compared to other local traders because it promotes fair trade and is transparent in terms of prices. However, CEFA farmer members cannot fully maximize their income from abaca fiber sales because CEFA is limited in its buying capacity due to lack of capitalization. Thus, they are still constrained, along with other farmers, by the following factors in terms of marketing their abaca fibers:

Abaca producers lack market information especially on price monitoring of abaca fiber. Thus, traditional local traders can just tell them that price has dropped, and they have no way to validate it.

Abaca farmers have no hand in setting the price of abaca fibers. They are price takers.

Although most farmers are member of POs, they are not organized in terms of marketing their products.

Abaca farmers do not have the capacity to market their own abaca fiber outside of the local traders due to lack of means of transportation and marketing skills.

Abaca farmers lack knowledge and skills on abaca fiber grading/classifying. They only know two to three grades of abaca fibers. This is partly a result of the “all-in” or “all grade-one price” buying system of local traders which was the long-time practice until it was prohibited by PhilFIDA just recently. This loose observance of a classification system also has taken away the farmers’ motivation to produce quality fiber.

The most recent development involving the abaca fiber trade which is the PhilFIDA’s order to strictly enforce a classification trading scheme for abaca by the fourth quarter of 2018 (through Memorandum Circular 112, series of 2018, issued on July 25) can be utilized by abaca farmers to command better prices for their abaca fiber. This action by PhilFIDA is aimed to ensure high-quality domestic output of the natural fiber in the Philippines. It basically abolished “all-in buying” of abaca fiber which is good because farmer producers now have incentive to improve their abaca fiber production in the form of better price. This also can influence the abaca farmers to learn further the classification/grading of abaca fibers. Moreover, abaca farmers can benefit from the scaling-up of CEFA’s operations because CEFA can offer premium price of abaca fiber and rebates if they become member of the association. Constraints in Value Adding/Processing There are some abaca farmers, mostly women, who were trained on fiber craft production through DTI but they lack the capacity to translate it into an enterprise due to lack of capital, equipment, and entrepreneurial skills. They were able to produce products (i.e. abaca bags) but due to stiff local competition and lack of marketing capacity they were not able to get a share of the local market. There was an international market that expressed willingness to buy their products, but the farmers cannot meet the volume demand which is high. With further support, abaca farmers may be able to develop a profitable abaca-based enterprise to increase their benefit from the industry.


Factors Affecting Economic Benefits of Abaca Farm Workers The daily rate of Php 200-300 a day is considered low by abaca farm workers. Their desired rate is at least Php 350 a day. However, they take the existing rate because, according to them, it is better than not being able to earn anything. Farm workers can benefit from the scaling-up of CEFA’s operations if they become member of the association because CEFA can employ them to provide services to farmer members. For instance, CEFA can enter into a service package contract with abaca farmers from cleaning of their abaca farms to harvesting and stripping. This will require a pool of farm workers to carry out the services.


E. ABACA SUBSECTOR STRUCTURE

Eastern Visayas has an established abaca industry. Presently, there are 90 licensed abaca industry players in the region composed of five GBEs, one buying station, one trader-exporter, nine processors, and 74 local traders. The region’s main market channels are the export markets for abaca fibers and abaca specialty pulp. GBEs are the main consolidators of fibers produced in the region. Inspection, classification, and grading of abaca fibers are done exclusively by the GBEs. All fibers sold by GBEs undergo inspection by PhilFIDA for the issuance of permit to transfer. This practice implies that only portions of loose abaca fibers are inspected by PhilFIDA inspectors in the region. The loose fibers that were bought by local fibercraft/ handicraft manufacturers and rope makers within the provinces in the region and in Bicol region were not inspected. From the GBEs, the fibers are either shipped to buyers abroad, or supplied to pulp and cordage processors in Leyte, Bicol, Cebu, and Lanao del Norte. Exports of raw fibers are accounted for by S.C. Tan in Northern Samar and Ching Bee Trading Corporation in Leyte. There are three existing market channels of abaca fiber in Mondragon, Northern Samar as presented below. Channels 1 & 2 are the most dominant channels both in the past and in the present. Channel 3 is exclusive for CEFA abaca farmer members. It is

existing since 2017. Members of the association, at present, still go through channels 1 & 2 because CEFA cannot buy all their abaca fibers. Channel 3 provides the most income for abaca farmer producers because CEFA’s buying price is two to three pesos per kg higher than traditional local traders. The income of consolidators in channel 1 & 3 is one and two pesos per kg, respectively. Farmers who are selling directly to traditional local traders can get additional two pesos per kg of abaca fiber. This subsector study aims to support the scaling up of channel 3 towards the development of the abaca industry in Mondragon municipality. This development is envisioned to contribute to the overall growth of the provincial, regional, and national abaca trade. Toward this end, several interventions and strategic options for scaling up shall be explored through EVPRD and CEFA in close partnership with their local partners such as the Provincial PhilFIDA, Provincial LGU, Municipal LGU of Mondragon, NGAs, and other stakeholders from

Figure 25. Geographical Flow of Abaca Fiber in Eastern Samar, 2016. Adapted from “Abaca Commodity Profile of Northern Samar” – a document obtained from the PPDO on October 26, 2018.


the private sector. The UNDP’s GEF-SGP5 shall provide Php 3M as initial start-up fund for scaling up of this developmental channel. This capital can be leveraged to other partners for bigger impact.

Channel 1: Abaca Farmer

Producers Consolidators

Traditional Local Traders

Buyers


Producers

Traditional Local Traders

Buyers


Producers (CEFA Members)

CEFA Cluster

Leaders (Consolidators)

CEFA

(Developmental Trader)

Buyers

Figure 26. Existing Abaca Market Channels in Mondragon, Northern Samar, 2018.

Channel 1 Channel 2 Channel 3

Selling

Primary Fiber

Processing

Farm Establishment

& Maintenance

Planting Stock

2 Pulp Processors

SPMI, PSPI

(Leyte)

2 Pulp Processors

SPMI, PSPI

(Leyte)

Buying

Classifying/

Grading/ Baling

Distributing

Exporting

Processing

Trading

Abaca Subsector Map of Mondragon, Northern Samar

5 Licensed Local Traders

(Except CEFA)

11 Barangay Middlemen

1,306 Abaca Farmers in

Mondragon; 200 of them

are CEFA Members

1,306 Abaca Farmers in

Mondragon; 200 of them

are CEFA Members

5 Licensed Local Traders

(Except CEFA)

CEFA as Developmental

Abaca Fiber Trader; 12

Cluster Leaders

200 CEFA Abaca Farmer

Members

Ching Bee

(Leyte)

S.C. Tan

(Northern Samar)

Ching Bee, SPMI, PSPI

(Leyte)

S.C. Tan

(Northern Samar)

2 Pulp Processors

SPMI, PSPI

(Leyte)

Ching Bee

(Leyte)

S.C. Tan

(Northern Samar)

Ching Bee

(Leyte)

S.C. Tan

(Northern Samar)


(Leyte)

S.C. Tan

(Northern Samar)


(Leyte)

S.C. Tan

(Northern Samar)

Consolidating

Figure 27. Abaca Subsector Map of Mondragon, Northern Samar, 2018.


F. POLICY AND REGULATORY ENVIRONMENT

NATIONAL LEVEL Through web-research, the Field Research Team found relevant policies and regulations as well as programs, projects, and initiatives of various NGAs, NGOs, and multi-stakeholder’s network which can facilitate the scaling up process of the abaca industry in Northern Samar. These are as follows: A. The PhilFIDA trade regulatory services such as:

Licensing services through the issuance of licenses to abaca fiber industry participants which included GBEs, buying stations, trader-exporter, local traders, processors, and classifiers. It entails continuous monitoring and evaluation of their facilities to ensure they conform to PhilFIDA regulations; and

Fiber inspection and enforcement of grading standards through the strict enforcement of fiber grading system to ensure that fibers traded conform to government protocols to maintain the leading Philippine position in the international market.

Certification of abaca farms and farmers in terms of sustainability and good agricultural practices for the enhancement of cultural practices. The PhilFIDA started to assist abaca farmers in acquiring sustainability certification from certifying bodies that are recognized by the Sustainable Agriculture Network (SAN). This initiative is in compliance with the requirement of major international buyers that prefer to buy from exclusively certified farms.

It is undeniable that PhilFIDA plays a significant role in the development of the abaca industry in Northern Samar. However, the agency faces numerous constraints to move forward. These include, among others, the lack of manpower to perform extension services and monitoring of abaca plantation, the agency’s limited funds, and the insufficient supply of cultured abaca plantlets for distribution to farmers. The provincial PhilFIDA chief recommends the revival of the Abaca Focal Group (AFG) to act as a multi-sectoral platform to lobby industry development supports from LGUs, NGAs, and private institutions.

B. The PNS/BAFS 180:2016 for Abaca Fiber-Grading and Classification-Hand Stripped and

Spindle/Machine Stripped, and the PNS/BAFS 181:2016 for Abaca Fiber-Grading and Classification-Decorticated. These national standards intend to provide specifications on the requirements and grading quality of hand stripped, spindle stripped, and decorticated abaca fiber for local consumption and international trade. These were formulated with PhilFIDA and BAFS as lead agencies in collaboration with representatives from the private sector. Comments from the stakeholders on the draft were carefully assessed and deliberated prior to its finalization and approval.

C. The PhilFIDA Memorandum Circular 112, series of 2018 titled “Strict Implementation of

Administrative Order No. 1, Series of 1999, Memorandum of Agreement on ‘All-in Buying,’ and Other Rules and Regulations”. This memorandum circular aims to safeguard the quality of fibers in the Philippines. It orders the strict enforcement of a classification trading scheme for abaca by the fourth quarter of 2018 to ensure high-quality domestic outputs of the natural fiber. Under the classification-based trading scheme, abaca manufacturers, processors, and traders are required to buy high-quality fiber.

The provincial PhilFIDA chief said that the implementation of a classification trading scheme would allow farmers to earn double, as first-class abaca fiber is being bought at around Php 120 per kilogram compared to the Php 60 per kg average quotation of low-grade ones. Furthermore, stopping the all-in buying scheme would ensure that farmers shall produce the highest-quality of abaca fiber. The memorandum circular also seeks to address the increasing realization among some stakeholders that


the loose observance of a classification system has taken away the farmers’ motivation to produce quality fiber, thus threatening the sustainability of the current high demand.

D. The PhilFIDA Administrative Order No. 1 Chapter II Section 1. This aims to further strengthen that only

credible and licensed stakeholders should be engaged in fiber trading. All persons/associations engaged in any of the following activities are required to be register and secure license from PhilFIDA:

Grading and baling whether for domestic or foreign consumption;

Buying and selling commercial fibers for domestic and/or foreign consumption;

Buying for their mother companies;

Processing/manufacturing fibers into semi-finished or finished fiber-based of fiber products whether for domestic and/or foreign consumption;

Converting semi-finished or finished fiber products into other forms; and

Classifying commercial fibers at GBEs, Class A Traders, or at processing or manufacturing plants. E. The Grants-in-Aid Programs/Projects. The government, through the DOST-PCAARRD and its partners

pushes several science and technology (S&T) interventions to address the poor technology adoption of farmers. The national government has allocated Php 45,545,639.00 to fund S&T programs and projects from 2015 to 2019. Most notable of these interventions is the Industry Strategic S&T Plan (ISP) for abaca. Poverty reduction and empowerment of the poor and vulnerable stakeholders of the abaca subsector is the common Key Result Areas (KRA) of these project interventions.

Table 35. Abaca ISP Programs and Projects, 2015-2019 Project

No. Project Title Budget (Php) Timetable

1 Characterization and Performance Evaluation of Fibers from High-Yielding and Virus Resistant Abaca Hybrids for Textiles and Other Application

7,557,581.20

Jan. 15, 2015-Dec. 2017

2 Optimization of conditions for the production of abaca-reinforced packaging and printing/writing papers using recycled fiber

5,270,338.70

3 Development of teabags and security/currency base papers using abaca pulp

6,644,706.50

4 Processing of nanocrystalline cellulose from abaca pulp 2,780,581.50

5 Electron beam-induced grafting of abaca/polyester nonwoven fabric and its application as toxic metal ion adsorbent

4,007,836.10

6 Program Management Coordination 584,724.00

7 Advanced Evaluation of Abaca Hybrids with High Fiber Yield and Resistance to Bunchy Top Virus Selected Areas in Catanduanes, Bicol

4,893,698.00 Nov. 2016-

Oct. 31, 2018

8 Establishment of Ten Hectares Abaca Hybrid Plantation at VSU and Evaluation of Fiber Quality for the Pulp Industry

4,998,429.00 Nov. 2016-

Oct. 31, 2019

9 Mapping the Distribution of Abaca Bunchy Top in Different Cropping Systems and Analyzing Epidemic Risks in the Zamboanga Peninsula

4,995,080.00 Jan. 15, 2015-

Dec. 2017

10 S&T Community Based Farm on Strengthening the Abaca Production Through Rehabilitation and Nursery Management in Sogod, Southern Leyte

3,812,664.00 Dec. 1, 2015-Nov. 30, 2017

Total 45,545,639.00

F. The Investor’s Lease Act (Republic Act No. 7652). This Republic Act allows foreign investors to lease

commercial lands in the Philippines for a maximum of 75 years. Under this law, any foreign investor infusing capital into the country can lease private lands, in observance of Philippine laws and the following:


Lease contract shall first be for 50 years and renewable only once for another 25 years,

Leased area will be used solely for investment, and

Lease contract will conform to the Comprehensive Agrarian Reform Law and the Local Government Code (LGC).

G. The Export Development Act of 1994 (Republic Act No. 7844). This law provides incentives to

exporters to encourage investments in the export sector. Exporters are generally defined as those earning at least 50% of their normal operating revenue from the sale of products or services abroad.

H. The Minimum Corporate Income Tax (MCIT). A 2% MCIT on annual gross income is imposed on

corporations with zero or negative taxable income or whose regular corporate income tax (RCIT) liability is less than the MCIT beginning on the fourth taxable year following the year they started business operations. Any excess of the MCIT over the RCIT shall be carried forward and credited against the RCIT for the three immediately succeeding taxable years. However, the Secretary of Finance may suspend the imposition of the MCIT upon the submission of proof by the applicant-corporation, verified by the Commissioner of Internal Revenue or his/her authorized representative, that the corporation sustained substantial losses on account of a prolonged labor dispute, force majeure, or legitimate business losses.

I. The DENR Administrative Order No. 96-29 or the CBFM Program. This program of the government

encourages reforestation and sustainable management of forests. Under a CBFMA, a community is entitled to develop and use a forest area and its resources for 25 years renewable for another 25 years. The DENR and LGU are to provide technical assistance to CBFM participants to help them attain sustainable forest management. The agreement is intended to help participants to access investment capital, identify markets, and build marketing capabilities. CBFMAs may be made in all areas classified as forest lands, including allowable zones within protected areas not covered by prior vested rights. The principal participants of the program are local communities including indigenous people represented by their POs and traditional tribal councils whose members are:

Actually tilling portions of the area to be awarded, or

Traditionally using the resource for all or substantial portion of their livelihood, or

Residing in or adjacent to the areas to be awarded. J. The Shared Service Facilities (SSF) of the DTI. The SSF Project of DTI aims to improve the quality and

productivity of micro, small, and medium enterprises (MSMEs) by addressing the gaps and bottlenecks in the value chain of priority industry clusters. The project is a Public Private Partnership (PPP) initiative and is envisioned to benefit the most number of existing MSMEs covered by the national government’s priority industry clusters all over the country specifically within the 609 poorest municipalities. It has the following objectives:

To enhance the competitiveness of the priority industry clusters through the use of quality and productivity enhancing machinery and equipment, and

To develop priority and market-driven industries in support to the National Industry Cluster Capacity Enhancement Program (NICCEP).

One of the project components is the provision of processing machines/equipment for the common use of MSMEs. This is to grant them access to the technologies needed to improve productivity and product quality. The type of machines/equipment being provided include, but not be limited to, packaging machines, retort, kiln driers, dye vats, slicers, thickness planers, and handlooms. This particular project component is being implemented through private sector partners who can provide sustainable facilities to house the machines/equipment.


LOCAL LEVEL 1. The Abaca Multi-Sectoral Coalition (AMSC). The AMSC includes state colleges and universities,

government research institutions, private organizations, municipal and barangay LGUs, and the media. The AMSC was among the participants of the first ever stakeholders’ summit of the country’s abaca industry which was held in Sogod, Southern Leyte in 2015. During this event, AMSC developed an integrated action plan for advancing the abaca sector in Region VIII. A manifesto based on the said plan was also developed and submitted for legislation.

The proposed plan covers the establishment of barangay nurseries, setting up an integrated disease management scheme, production of tissue-cultured planting materials, development of an incentive-based expansion of the planting areas-especially those within the forest cover, providing training sessions for the farmers on fiber quality, and developing a baseline for the abaca farms which will become a support system for decision-making.

2. DENR-Provincial Office. The agency enforces environmental laws and penalize illegal poachers. They conduct regular information and education campaigns (IECs) to make people aware about the importance of protecting their local environment and biodiversity resources. Through their NGP, they are able to provide funds to POs for greening and rehabilitating denuded forest areas in the region.

The DENR EO 263 dated July 1995 or the National Strategy to Ensure the Sustainable Development of Forestland Resources is also being implemented. It aims to promote social equity and sustainability, community participation,

sustainable forest management & biodiversity conservation in the countryside.

3. DAR. The agency’s banner program is the “Links Farms” that aims to link small abaca farmers directly to the markets. The project is launched just this year in partnership with Agrarian Reform Beneficiary Organizations (ARBOs). Another project is the APCP or Agrarian Production Credit Project through the Land Bank of the Philippines (LBP) which involves provision of lending facility or production loans to well-organized and competent ARBOs with established track record on organizational and financial management. Any farmer regardless of agricultural commodity being produce could avail of the DAR facility provided he is a member of the ARBOs. The inaccessibility of the ARBOs and the absence of abaca farmers in some ARBOs constrained the agency to extend necessary projects supportive of the abaca subsector.

4. Provincial LGU. The Provincial LGU has legislated the ordinance prohibiting ‘kaingin’ making and opening

of forested areas intended for abaca farming. Also, local conservation areas (LCAs) were established to ensure proper management and conservation of forestlands in covered areas of the province. The PGENRO, Provincial Agriculture Office (PAO), and PPDO are three line departments of the Provincial LGU involved in the industry development program for abaca. Their specific interventions are presented as follows:

4.1. PGENRO. The PGENRO was instrumental in organizing CEFA in Mondragon, Northern Samar. Besides

organizational and technical assistance, PGENRO provided small financial and material supports to CEFA that helped them generate revolving capital in establishing various social enterprises like copra and rice trading.

Mateo G. Aleria, ISEA’s Local Field Staff, interviews For. Paquito Dabuet, the PENR Officer of DENR Northern Samar at the latter’s office in Catarman.


The PGENR Officer revealed that their local department has not implemented significant project pertaining to abaca production because of PhilFIDA’s active operation in the province. However, the PGENR Officer mentioned several points that constrains the abaca industry to move forward in Northern Samar as follows:

Lack of abaca processing centers

Lack of local industry and business establishments that utilize abaca as raw materials for value-adding products

Inefficient stripping machines which entails heavy manual labor and produces poor fiber quality

Trading of abaca fiber is concentrated by only a few but big traders who largely control and dictate the price of abaca

Poor energy source

The PGENR Officer cited the following recommendations to help improve the above conditions:

Government supports for the introduction of industry level factories and processing centers for abaca

Improvement of energy/power source

Convergence investment planning for abaca development program

Feasibility study on potential enterprises using abaca fiber as raw material for rope or twine making, textile manufacturing and paper making

Establishment of Abaca Economic Zone in Northern Samar to be used exclusively for abaca products and industries with legislation and budget allocation

4.2 PPDO. The PPDO was instrumental in the formation of the AFG in Northern Samar in 2007. The AFG

was tasked to formulate policies and program for the development of abaca industry in the province. This group was composed of multi-sectoral groups from PhilFIDA, Department of Agriculture (DA), DENR, DAR, DTI, NGOs, POs, and representatives of local traders. It served as oversight committee for the proposed Convergence on Abaca. Unfortunately, the AFG was no longer functional since 2010. In the previous year, the Provincial LGU has funded the Abaca Tissue Culture Development and Germination Project in partnership with UEP to determine the viability of tissue-cultured plantlet as alternative to abaca suckers.

The Provincial LGU is currently implementing the Philippine Rural Development Program (PRDP) in partnership with the DA which identified abaca as important commodity to focus in the Provincial Commodity Investment Plan (PCIP) of Northern Samar. The PCIP-Abaca is subject for stakeholder’s consultation and approval of the Provincial Development Council (PDC). The PPDO plans to popularize the PCIP to help promote abaca and to secure commitment of the NGAs and international development institutions to accelerate resource accessing. The following are important requirements to advance the development of abaca subsector in the province of Northern Samar:

Rehabilitation of abaca plantations

Provision of high-yielding and pest-resistant planting materials to the farmers

Massive capability building for technology improvement on abaca production

Close and regular monitoring of abaca plantations/ farms

Provision of pre/post-harvest facilities such as stripping machines, drying facilities, etc.

Confederating the people’s associations to lobby support for the establishment of abaca grading/processing center

Nursery establishment in inland municipalities to ensure disease free planting materials readily available for farmer’s access.

Revival of the tissue culture laboratory in the province

Construction and improvement of farms to market roads in abaca producing areas


4.3 PAO. The PAO reiterated the Provincial LGU’s partnership with UEP in the Abaca Tissue Culture Development and Germination Project as the center piece project of the department. PAO is engaged in the distribution of tissue-cultured plantlets to farmers. To significantly contribute to the abaca development program of the province, the PAO plans to establish a Tissue Culture Laboratory with the support of DA, conduct massive promotion of tissue cultured- high quality plantlets, distribution of tissue cultured plantlets to farmers, and provision of farmer’s training on the proper management and operation of abaca pre- and post-harvest facilities.

The PAO recommended the following strategies to facilitate the scaling up of abaca industry in Northern Samar.

Training of farmers and technology upgrading in the identification/diagnosis of indications of pest and disease in all stages of growth of abaca plants

Provision of affordable and efficient equipment to accelerate extraction of abaca fiber

Strengthening of peoples’ organizations engaged in abaca production

Expansion/establishment of abaca farms in plantation type

Financing Institution must open credit windows for abaca farmers 5. CEFA. The role of CEFA is to directly manage and protect the CBFM area awarded to them

through patrolling and apprehension of illegal poachers. It regularly conducts replanting/reforestation of forest areas and carries out IEC and advocacy campaigns on biodiversity conservation. CEFA actively enforces their organizational policy on the exclusive use of locally sourced planting materials and restricting the adoption of tissue-cultured planting stocks introduced by NGAs to prevent the possible outbreak of abaca diseases. Local cluster teams were organized to conduct periodic monitoring on the compliance of members on said policy to safeguard existing abaca plantations from disease contamination.

6. EVPRD. This local NGO actively provides technical support to CEFA to enhance their

capabilities and skills in establishing abaca farms using conservation-compatible technologies. EVPRD established a community learning site for demonstrating sustainable livelihoods in Mondragon through its recent SGP5 project.

INSTITUTIONAL MAPPING OF POTENTIAL SUBSECTOR

INTERVENTION PARTNERS During the course of the field research, the team encountered the following national and local stakeholders with significant programs and initiatives that benefit the abaca subsector: 1. PhilFIDA. The PhilFIDA is an attached agency of the DA which is mandated to promote the growth and

development of the natural fiber industry through research and development, production support, fiber processing and utilization, standards implementation, and trade regulation. PhilFIDA pursues a range of programs particularly for the development of disease-resistant and high-yielding planting materials, sustainable disease management program, improved fiber extraction machines, and the acquisition of sustainability certification for the production of high-quality abaca fibers.

FGD respondents have mentioned that PhilFIDA recently conducted massive dissemination of their policy on eliminating the "all-in” buying practice of local traders to establish people’s awareness. They said that traders were required to sign an agreement to compel them not to engage in the “all-in” buying scheme. Despite this enabling policy, abaca farmers raised their concerns on the lack of standard policy for setting the base price of abaca fiber. They said that the traders are the ones who set the price for fiber, and the farmers end on taking up the price imposed by traders.

PhilFIDA also conducted distribution of abaca planting stocks/suckers in some municipalities of Northern Samar to help farmers recover from the effects of ABTV. The Department of Social Welfare and


Development (DSWD) provided cash for work (Php 2,500) as incentive and financial assistance to farmers who participated in the planting of abaca suckers.

FGD respondents recalled that PhilFIDA has promised local farmers with stripping machines and other needed facilities to improve their fiber quality but these promises have not been fulfilled/delivered until this time. During the KII with Engr. Ralph Bandal, PhilFIDA Provincial Director, the team validated the information secured from DOST about the AFG in Northern Samar composed of multi-sectoral groups that was organized by the former Governor Daza. Unfortunately, the AFG ceased to function because the present administration did not sustain and support its operation. The agency still perceives the importance of a multi-sectoral group to help them oversee the local industry development program for abaca and to serve as a policy making body to strengthen trade regulation for the abaca industry.

2. UEP. The UEP is a public higher education

institution in Northern Samar that is mandated to provide outreach or extension delivery programs to its clientele in its service areas. For the most part, the services it offers are along the lines of agricultural development, capacity building, marketing, agribusiness/ enterprise development and management.

In 2016, UEP in collaboration with EVPRD and CEFA conducted a Value Chain Analysis (VCA) of Abaca (Musa textiles) Fiber in Northern Samar that aims to contribute to the process of effectively linking smallholders to the market and optimize their benefits from the value chain. The study has:

described the various actors, their functions and nature of inter-firm relations;

identified the key constraints or issues that hinder or promote the meaningful participation of farmers, sustainability of the chain and its competitiveness;

formulated and prioritized interventions needed to overcome constrictions throughout the chain that would foster value chain competitiveness;

explored how to link farmers with industry players in the abaca industry to spur inclusive growth; and

identified investment opportunities that will be the basis of the Provincial Government Investment Plan.

The study also presents substantial recommendations and strategic interventions that policy makers, development planners, and project implementers can used to improve their interventions for the development of the abaca industry in Northern Samar. Despite the several researches conducted by UEP, local communities mentioned that they are not aware of the results and findings of these researches due to lack of dissemination, hence they did not benefit much on these research and development activities of government.

4. DOST. The DOST has commitment to provide S&T solutions that will address gaps in the major

stages of abaca production. DOST led the conduct of several research studies to help revitalize the abaca industry through S&T interventions. Recently, DOST spearheaded a collaborative research initiative with the PCAARRD, University of the Philippines Los Baños (UPLB), Institute of Plant Breeding (IPB), and the DA-Biotech in a project dubbed “Production of High Yielding and Virus-Resistant Abaca Hybrids” through the development of molecular markers to assist in the hybridization of bunchy top virus free abaca.

Mateo G. Aleria, ISEA’s Local Field Staff, interviews Rowena Punzalan, Director for Research of UEP at Catarman, Northern Samar


Another research work was with the Forest Products Research and Development Inc. (FPRDI) that resulted to the crafting of technology that can produce currency bank paper (CBP) from local indigenous materials. The country’s banknotes or paper money are imported and printed on currency base paper made from 20 percent abaca and 80 percent cotton fiber. Ms. Adela Torres of the pulp and paper products development section of FPRDI said that because of their promising research results, they are planning to team up with the Bangko Sentral ng Pilipinas (BSP) to make Philippine banknotes using 100 percent locally available fibers.

DOST and FPRDI targets to revitalize the paper industry while enhancing the abaca pulp industry through S&T intervention utilizing abaca for paper and other high-end products based on the proposed roadmap of the Philippine Paper Manufacturers Association, Inc. (PPMA). The program shall provide the S&T interventions to improve properties of paper from low-grade recycled/waste paper using abaca as reinforcement, develop abaca pulp-based specialty and security paper, expand and improve the utility of abaca fiber by preparation of purified pulp and extraction of its Micro/Nano cellulose for high-end products, and assist the pulp and paper industry in walking through its roadmap.

During the interview with Engr. Veronica Laguitan, DOST Provincial Director of Northern Samar, she mentioned of the search for the most efficient stripping machine conducted by the department. Also, DOST has provided grant-aid programs to selected farmers associations in Region VIII to help them pursue sustainable farming practices. She also cited that there was an organized focal group on abaca in the past but was not sustained referring to the AFG. At the regional level, the Regional Development Council (RDC) of Region VIII organized a sub-committee on abaca. However, there is a need for reorganization to pave way for the inclusion of DOST as a regular member of the committee.

5. DAR. The DAR is mandated to lead the implementation of the Comprehensive Agrarian Reform Program (CARP) through land tenure improvement, agrarian justice, and coordinated delivery of essential support services to client-beneficiaries. It has three major functions such as to:

provide land tenure security to landless farmers through land acquisition and distribution; leasehold arrangements' implementation and other services;

provide legal intervention to Agrarian Reform Beneficiaries (ARBs) through adjudication of agrarian cases and agrarian legal assistance; and

implement, facilitate and coordinate the delivery of support services to ARBs through Social Infrastructure and Local Capability Building (SILCAB), Sustainable Agribusiness, and Rural Enterprise Development (SARED), and Access Facilitation and Enhancement Services (AFAES).

In the municipality of Mondragon, some lowland areas which are alienable and disposable lands are covered by CARP. Eligible farmer-beneficiaries were awarded with Certificate of Land Ownership Awards (CLOAs). DAR has committed to provide transport vehicle to CEFA through its "Links Farms Project" to facilitate consolidation and delivery of farmer's produce directly to markets/final buyers. The project is being implemented in partnership with Municipal LGU of Mondragon, UEP, DOST, among others, to reduce market channel in the value chain. DAR has conducted orientation to CEFA officers and members on its “Links Farms Project” last September 27, 2018.

6. DTI. The DTI envisions "a more inclusive and prosperous Philippines with employment and income

opportunities for all." Thus, it is mandated to realize the country's goal of globally competitive and innovative industry and services sector that contribute to inclusive growth and employment generation. Pursuant to the Philippine Development Plan (PDP) 2017-2022, the agency shall endeavor to reduce inequality and poverty by expanding economic opportunities in industry and services, and by increasing the access particularly of MSMEs, cooperatives, and overseas Filipinos to these opportunities. To attain these sector outcomes by 2022, DTI needs to:

increase local and foreign direct investments


increase competitiveness, innovativeness and resilience of industries and services

improve access to finance, to production networks, and to markets,

enhance productivity, efficiency, and resilience, and

ensure consumer access to safe and quality goods and services

FGD respondents conveyed that DTI has conducted livelihood development trainings like handicraft making to a women's group in Barangay Mirador, Mondragon. DTI has helped them find local market for selling their abaca bags and baskets produced in the past. Unfortunately, the production and marketing of these handicrafts did not last long because of high selling price that made their products less competitive in the local market. Most of the FGD respondents stated that most of the services DTI has provided are mostly in the form of training and marketing support. The respondents complained that DTI project activities are not sustainable due to lack of follow up and limited financial support.

7. DENR. The DENR is the primary agency responsible for the conservation, management, development, and

proper use of the country’s environment and natural resources, specifically forest and grazing lands, mineral resources, including those in reservation and watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos.

FGD participants said that DENR has contributed much in re-greening the forestlands particularly in Mondragon and in Northern Samar in general. CEFA officers mentioned that the NGP program of DENR was able to develop approximately 1,000 hectares of degraded and idle lands both within the barangays covered by the awarded CBFM area to the organization and other barangays within the buffer zones of the CBFMA. Through the NGP, CEFA was able to generate revolving capital for their copra and fiber trading business as well as construction of its office building.

During the interview with For. Paquito Dabuet, PENR Officer of DENR Northern Samar, he stated that the agency has funded the establishment of approximately 40 hectares abaca plantation in the province that provided alternative livelihood to local communities and forest occupants. After the project, the agency did not sustain and expand this project initiative due to limited funds. The lack of budget allocation for abaca production and the decreasing annual budget of the agency for forestlands development constrains it to contribute much for the development of abaca industry in the province.

8. TESDA. The TESDA is the government agency tasked to manage and supervise technical education and

skills development in the Philippines. TESDA is mandated to:

integrate, coordinate and monitor skills development programs;

restructure efforts to promote and develop middle-level manpower;

approve skills standards and tests;

develop an accreditation system for institutions involved in middle-level manpower development;

fund programs and projects for technical education and skills development; and

Manage trainer’s training programs.

According to CEFA officers, two of their staff members are now enrolled with TESDA to secure a national certificate on fiber classification which is very important for passing the practical examination on fiber classification and grading being conducted by PhilFIDA. CEFA at present is a local trader licensed as Class D, trading only utmost 25,000 kg of fiber a year. A licensed classifier is not yet a requirement for CEFA in its trading operation. However, if CEFA plans to increase the volume of fiber for trading in the future, a licensed classifier and grader would be a major requirement for upgrading its license into a higher level- fiber trader.

9. LGU. The LGC devolves to all LGUs the administration of five basic services: agriculture, health, social

welfare, maintenance of public works and highways, and environmental protection. This means that the


appointment of persons performing these functions in their local areas is now done by the local chief executives.

On Environmental Management: the LGU is responsible in developing appropriate solid waste disposal system, providing services or facilities related to general hygiene and sanitation; implementation of community-based forestry projects which include integrated social forestry programs and similar projects and the management and control of communal forests.

On Agriculture: the LGU is responsible in implementing Inter-barangay irrigation system, water and soil resource utilization and conservation projects and the enforcement of fishery laws in municipal waters including the conservation of mangroves.

Besides the enactment of LCAs, Provincial LGU of Northern Samar and Municipal LGU of Mondragon strictly implement their respective solid waste management programs and regularly carry out on-site monitoring and IEC campaigns to ensure that the agricultural waste derived from the primary-processing of abaca will not pose hazards to public health and to the local environment. In Mondragon, abaca is not included in the priority commodities identified in the municipal investment plan. As result, accessed of support services for the abaca industry in the municipality is limited. For instance, DTI cannot implement programs and other assistance for abaca industry development in Mondragon because their programs are tied to the priority commodities of LGUs. Through this subsector action research, the Municipal Planning and Development Coordinator (MPDC) has included abaca in its 2019 municipal investment plan.

10. Ching Bee Trading Corporation. Ching Bee is known as the biggest trader of abaca raw fiber in the

Philippines and in the world. Ching Bee primarily serves the fiber needs of its affiliate company, SPMI, of which Ching Bee holds majority ownership. SPMI exports abaca pulp mostly to Europe, Japan, and the US. Ching Bee also maintains holdings in companies engaged in the manufacture of coconut and vegetable oil and desiccated coconut. To meet the demand for abaca, Ching Bee expanded its operations and established buying stations or branches in strategic locations in the country. It currently has branches in Tabaco City, Albay in Luzon; Baybay City, Leyte in Visayas; and Davao City in Mindanao. Ching Bee’s mission is to enhance its customers’ business by providing the highest quality abaca with value pricing, while fostering long-lasting, successful, and mutually beneficial relationships with its customers, suppliers, and work force.

According to CEFA officers, a MOA was signed between Ching Bee and CEFA on September 19, 2018. The agreement stipulates the provision of support by Ching Bee in terms of equipment such as abaca spindle stripping machines to enable the farmers to provide good quality harvest of abaca fiber to improve their income and living condition. CEFA will maintain the machine, provide fuel, and shoulder repair and maintenance. Moreover, CEFA will sell alone to Ching Bee Trading Corporation all its abaca fiber. The agreement is somewhat advantageous to CEFA because it now has already a secured market for its supply. However, this may prevent CEFA from engaging other potential market channels that may offer better prices as well as production and/or trading support in the future.

11. EVPRD. The EVPRD is a non-stock, non-profit, non-sectarian organization committed to coordinate

private-public leadership for community and economic development throughout Samar Island. Its programs and services include upland development, sustainable agriculture, capacity development, project development, and provision of technical assistance for LGUs and CSOs on value chain analyses, feasibility studies, ecosystem-based planning, and project development. EVPRD was organized in early 2003 by a group of local development workers and professionals seeking to contribute to the reduction of poverty in Northern Samar and in conserving remaining biodiversity resources. EVPRD was formally registered with the SEC in July 23, 2003.

In 2016, the EVPRD in partnership with CEFA has implemented the project entitled “Creating a Model on Social Fencing for SINP through Establishment of Organized Production and Marketing System for


Abaca and Other CBFM Produce” that was funded by the UNDP’s GEF-SGP5. An ATDF was established in barangay Nenita and now serves as the platform for learning that is designed to produce and use conservation-compatible and socially desirable farming systems and technologies to upscale the abaca production and other non-timber forest products. According to CEFA, their partnership with EVPRD gained positive results because they were able to establish and institutionalize an efficient system for production and marketing which would largely benefit abaca farmers in Mondragon.

12. DSWD. The DSWD is a national government agency that provides interventions/opportunities that

will uplift the living conditions of the distressed and disadvantaged individuals, families, groups and communities and enable them to become self-reliant and actively participate in national development. It implements statutory and specialized social welfare programs, projects and services.

In the municipality of Mondragon, FGD respondents recognized Kalahi-CIDSS or the Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services, and 4Ps or the “Pamilyang Pilipino Pantawid Program” as the most prominent national government project being implemented by DSWD in the area. In this project, poor families are provided small grants/subsidy to improve their access to quality basic social services. DSWD has provided abaca farmers with cash for work to accelerate the planting of abaca suckers previously distributed by PhilFIDA in the area. Also, DSWD provides support funding through community grants to eligible LGUs. The funds are released directly to the community accounts.

13. Department of Public Works and Highways (DPWH). The DPWH is mandated to undertake the

planning of infrastructure, such as national roads and bridges, flood control, water resources projects and other public works; and the design, construction, and maintenance of national roads and bridges, and major flood control systems. Respondents of the FGDs recognized that all barangays have access to farm to market roads. However, they complained of the poor condition of farm to market roads in remote areas or inner barangays which causes long and difficult product transport. Some barangays used motorboats to bring their products to the consolidation point. They noted some unfinished road construction due to expired contracts. They added that it is the government procurement process like bidding scheme that usually delays the implementation and timely completion of important infrastructure projects in the countryside. They also observed that most government infrastructure projects (e.g. roads) do not last long because they are constructed using sub-standards materials.

14. National Irrigation Administration (NIA). The NIA is a Government-Owned and Controlled Corporation (GOCC) that is responsible for irrigation development and management. It was created by Republic Act 3601. Its charter was amended by Presidential Decree 552 and 1702, which increased the capitalization and broadened the authority of the agency. By 2020, NIA is envisioned to be a professional and efficient irrigation agency contributing to the inclusive growth of the country and in the improvement of the farmers’ quality of life. Its mandate is to construct, operate and maintain irrigation system consistent with integrated water resource management principles to improve agricultural productivity and increase farmers’ income.

During the FGD, the respondents recognized the efforts of the agency in constructing communal irrigations systems to help farmers increase their production. However, they complained that some of the constructed structures in the inner communities are either not operational, not completed, or not properly maintained.

15. Catholic Relief Services (CRS). The CRS Philippines is part of Catholic Relief Services, the official

international humanitarian agency of the Catholic community in the United States. CRS in Northern Samar is currently implementing the Adaptive Community Transformation (ACT) project that provide capacity building on disaster risk reduction and management, livelihoods opportunities/options for aquaculture, crops, and livestock, as well as forming and strengthening savings groups. ACT project is being


implemented by CRS in partnership with Caritas Catarman Foundation, Inc., a local church-based organization based in Northern Samar.

The CRS project aims to provide intervention to 2,820 households (as direct beneficiary) in selected 30 barangays in five municipalities of Northern Samar. The project intends to effectively prepare communities and respond to natural disaster as well as reduce the effect of typhoons on livelihoods of vulnerable households. FGD respondents, however, said that CRS project interventions are more in coastal municipalities and none to very rare in upland areas where support for the abaca subsector are badly needed.

16. LBP. The LBP in partnership with the DAR and the DA, has developed a new loan program to increase

the income of small farmers especially the ARBs. The new lending facility-called Accessible and Sustainable Lending (ASL) Program for Small Farmers or ASL Farmers Program was launched on July 10, 2018 in compliance with Presidential Directive No. 2018-0176 which directs LBP, in coordination with DA and DAR, to reach out to farmers and provide them with financial assistance for their agricultural needs. The program is hoped to make credit very accessible to most Filipino farmers at a low interest rate of 6% per annum.

According to LBP President and Chief Executive Officer Alex V. Buenaventura, ASL complements LBP’s existing agricultural lending programs to help small farmers increase their productivity and income. The program has three lending modules namely:

Module 1-Lending to Individual Small Farmers and through Agri-based Cooperatives/Associations;

Module 2-Lending through LBP-Assisted Agri-based Cooperatives/Associations; and

Module 3-Lending Farmers Cooperatives through Farmers Corporative Inclusive Financing Program. 17. DBP. The DBP is the country’s pre-eminent development financial institution that has taken the

strategic task of influencing and accelerating sustainable economic growth through the provision of resources for the continued well-being of the Filipino people. The DBP, under its new charter, is classified as a development bank and may perform all other functions of a thrift bank. Its primary objective is to provide banking services principally to cater to the medium and long-term needs of agricultural and industrial enterprises with emphasis on small and medium-scale industries.

DBP is boosting its support to the agricultural sector with its Agricultural Credit Policy Council (ACPC)- Cooperative Agricultural Lending Program Facility (CALP) that will fund stable cooperative banks and cooperatives extending agricultural loans to small farmers and fisher folks. It also provides financing of on-farm or off-farm/non-farm activities of agricultural households using the household cash flow lending approach. Eligible borrower-retailers for this facility are cooperatives and cooperative banks with at least two years profitable operations. Small farmers and fishermen or their household members engaged in farming not more than seven hectares of land, or engaged in backyard poultry/ livestock raising, may avail of loans under this program. Ms. Irish Mae Creer, DBP Manager in Northern Samar, revealed that despite their available financial resources for agricultural lending to small farmers, only one client has availed of their facility to date. The difficulty in complying and accomplishing the various documentary requirements hindered their target clients to access loans extended by the bank. The lack of personnel to carry out information campaigns of the bank’s financial services and lending programs for small enterprises in rural communities is another issue. Tie up and partnership with local traders and cooperatives is being planned to increase the number of farmer-clients availing of their programs.


18. Microfinance Institutions (MFIs) The Center for Agriculture and Rural Development, Inc. (CARD). Based on an article published by

Business World dated September 12, 2018, CARD has released about Php 450.9 million in loans to MSMEs since July 2017 as part of its agreement with the government for the Pondo sa Pagbabago at Pag-Asenso (P3) program of the government. CARD, a part of the CARD Mutually Reinforcing Institutions (MRI), said in a statement that 39,300 MSMEs in 20 provinces including Northern Samar have availed of the financing windows. CARD Executive Director Jocelyn D. Dequito said that the “MSMES “can avail of loan up to Php 100,000 with an affordable interest rate of up to 2.5% per month, adjusted based on diminishing balance. Payment terms are either on a daily or weekly basis over a period of one year. Under the P3 program, the government intends to give MSMEs an alternative to informal lending schemes with high interest rates. The loan application can be processed within 24 hours. “We have streamlined our processes to become relevant and respond immediately to the changing needs of our clients,” said Ms. Dequito. Dr. Jaime Aristotle B. Alip, CARD MRI founder and chair emeritus, said that the program is part of their campaign to help alleviate poverty, especially in the rural areas.

ASA Philippines Foundation - ASA is a non-profit and non-stock corporation specializing in microfinance. It is committed to deliver the highest value for money and client-responsive microfinance and supplementary products and services to the poor through the enterprising women of the family. ASA aims to develop other sustainable interventions supplementary to microfinance such as providing scholarship for deserving children of clients. ASA services includes loan, capital build-up (savings), insurance benefits, and other benefits such as business management trainings, and academic scholarships (for the children of the clients). At present, ASA caters to more than 300,000 clients; who are called by ASA as Micro Entrepreneurs.

Program for Unified Lending in Agriculture (PUNLA). The PUNLA was launched in August 2016 by

the ACPC of the DA. The program is designed as a Special Credit Facility for Marginal Farmers and Fisher Folks (SCFMF) to address their financial needs for fast, convenient, and affordable credit. The funds to be source from ACPC’s Agro-Industry Modernization Credit and Financing Program (AMCFP) shall be utilized for the implementation of a simplified and non-collateralized lending to intended beneficiaries of the agricultural loan program with interest of 6% per annum. The intended beneficiaries are farmers/fisher folks listed under the RSBSA and/or “Juan Magsasaka’t Mangingisda” database prepared by the DA’s Information & Communications Technology Service (ICTS). The program will provide institutional and capacity building support to lending conduits to ensure the effective and sustainable delivery of credit to intended borrowers and will be implemented in the 15 poorest provinces including Northern Samar.

Despite the presence of MFIs and Government Financial Institutions (GFIs) in the province, the FGD respondents said that only few of the abaca farming households, particularly the women, are accessing loans and services because of difficulty in complying with the documentary requirements as well as the compulsory payment terms (usually daily and weekly). They further said that they cannot fulfil the policy on payment terms because they only have cash income during harvesting season. FGD respondents also said that GFIs seldom carry out community immersion to disseminate their programs and policies on how marginalized sectors could avail and access their financial assistance.


G. STATE OF THE NATURAL RESOURCE BASE AND CLIMATE

CHANGE-RELATED RISKS The present BDFE site is being covered by a CBFMA that is awarded to the CEFA, a PO operating in the municipality of Mondragon, Northern Samar. The area is around 1,050 hectares of forestland nestled within Mondragon and is within the buffer zone of the bigger key biodiversity area—the SINP. EVPRD and CEFA believed that effective management of these CBFM areas as protection zone would serve as a strong “biodiversity fence” that will shield the SINP protected areas from further encroachment and degradation. The DENR in partnership with CEFA has implemented the NGP in the municipality of Mondragon covering a total land area of approximately 1,000 hectares. The NGP aimed at improving the socio-economic condition of the upland settlers while enhancing the condition of the environment and its resources. Through the active participation of CEFA in the NGP, it was able to generate some savings of which portions of these were used as revolving capital for trading of abaca fibers, financial support for abaca production through microfinance, and purchase of land rights of 80 CBFMA occupants covering around 68 hectares of forestlands to prevent encroachment and devastation of the CBFMA area once acquired by non-CBFM and CEFA members. CEFA is now developing the purchased lots for abaca production through sustainable farming management systems. Through the funding support of UNDP-GEF-SGP5, EVPRD in partnership with CEFA has implemented a project on “Creating a Model on Social Fencing for SINP through Establishment of Organized Production and Marketing System for Abaca and Other CBFM Produce”. The project involved the establishment of ATDF in barangay Nenita, of Mondragon, Northern Samar. The ATDF serves as a platform for learning that is designed to produce and use conservation-compatible and socially desirable farming systems and technologies. The ATDF serves as learning sites to upscale the production of abaca and other non-timber forest products. According to PhilFIDA, abaca is a suitable plant to be incorporated in reforestation farming system. The plant can assist in improving biodiversity conditions if intercropped with coconut and other tree species within former monoculture plantations and rainforest areas. Planting abaca can also aid in minimizing erosion and sedimentation problems in coastal areas which are breeding grounds for sea fishes. The plant can effectively improve the water holding capacity of the soil, therefore, it can prevent floods and landslides as well. Furthermore, the abaca does not deplete soil as much as other plants and requires less land for its production. Abaca waste materials are used as organic fertilizer by farmers. Some pests of coconut trees can also be controlled because abaca serves as host for predators. CEFA, the CBFMA holder of the current BDFE site has assured to strictly implement necessary production protocols in order that their abaca farming system will not pose threats to biodiversity. EVPRD also commits to continually provide the necessary technical and capacity building supports to CEFA to ensure that the proper technology and agronomic practices for abaca farming are promoted to local producers. Moreover, EVPRD will be more active in conducting farm inspection to check if the farmers have approved farm lay-out and farm production plan and if they are complying with these requirements. During the FGD, the respondents described the state of natural resources and biodiversity in their areas as follows: Land. The barangays hosting the BDFE is endowed with large agricultural area since Mondragon has the

largest land area among the 24 municipalities of Northern Samar. There are two main land classification in the area. These are alienable and disposable land and timberland/public land. Some lowland areas are covered by CARP of DAR. CLOAs were awarded to eligible farmer-beneficiaries. The rest (about 60%) are timberland. An LCA covering 1,050 hectares was approved by DENR as a CBFM area and a CBFM agreement was awarded to CEFA who was given the authority to manage and protect the area. The CBFM area covers five upland barangays.


Water. All barangays have existing sources of water. The most common is spring water which is the

source of water for household needs. Other water sources are rivers and creeks. The headwaters of Mondragon River come from the watershed areas of Barangays Cagmanaba, San Jose, and Cahicsan. These headwaters are also the source of water for NIA’s irrigation project that is now being constructed.

Trees and other forest vegetation. The native forest tree species existing in the area are toog, narra, lauan, siyaw and tiga. These are good timber for housing and building construction. Other forest resources are abaca and coconut. Secondary crops are rattan, orchids, nito, and anahaw.

Flora and Fauna. There are several kinds of orchids thriving in the forest areas. Edible ferns such as ‘pako’

and ‘bago’ are existing. Wild boar, tarsier, bats, and deer can also be found in the forest area.

Extinct endangered species. According to the FGD participants, spotted deer and wild boar are now

rarely seen. They conclude that these animals have become extinct. The practice in abaca production that directly affects the biodiversity and climate condition is the ‘kaingin’ (slash-and-burn) system of farming. This involves clearing/cutting of trees and vegetation then burning them to pave way for planting of abaca. But according to the participants, this kind of practice is not any more prevalent in the area. They averred that kaingin is now illegal and is punishable by law. They further said that with CEFA, they have been conducting IEC in the communities on the ill-effects of kaingin to biodiversity. The LGU of Mondragon and DENR have also been campaigning against kaingin. But some said that there are still pockets of kaingin occurring in some of the forest-edge communities as well as uncontrolled timber and wildlife poaching. Abaca farming in Mondragon does not involve agro-chemical inputs such as fertilizers and pesticides. From the beginning, abaca famers have not use chemicals in the abaca farms. With this, it can be said that farmers are practicing biodiversity-friendly farming practices. Processing of abaca from harvesting, tuxying and extraction/stripping of abaca fiber is also biodiversity-friendly, and no chemical is use in all phases of abaca primary processing. Instead, harvesting of abaca increases the production of biomass and organic matter because the waste materials (pulp and leaves) are left in the farm to decompose which act as organic matter and source of nitrogen for the plants.


H. DYNAMICS AND PROSPECTS OF THE SOCIAL ENTERPRISES

AND SUBSECTOR DEVELOPMENT AND GROWTH

ANALYSIS OF MARKET DYNAMICS The Field Research Team confirmed four major intermediaries or market channels where the product move before it reaches the final buyer. These consists of the abaca farmers, barangay consolidators, licensed local traders further classified as institutional and individual trader and the final buyers either to Ching Bee, S.C. Tan, PSPI, and SPMI. Based on income/cash benefits derived from performing their functions and roles in the value chain, the final buyers get the highest income benefits per year, second are the local traders, third are the barangay consolidators/middlemen, and the least are the farmer producers. Interestingly, this order remained the same before 2016 and after 2017 when CEFA started to engage into fiber trading in Mondragon.

Table 36. Market Dynamics of Key Players Market

Channels Driving Forces Constraints

Exporter/ Processor

o Ching Bee, the leading abaca fiber trader and exporter in the Philippines with established track record in fiber trading.

o Controls the market in villages because of their connections to local and international market outlets

o Has big capitalization and has the financial capacity to extend cash advance/loans to local traders who supplies him with the volume he needs for his market outlets

o Can rely on their buyers for market information. But they also depend on the internet in their buying and selling decisions.

o Can exercise secrecy when it comes to their price, sales and other marketing strategies

o Have the power to set the price at each level of the market supply chain

o Has sufficient facilities such as transport, warehouse, GBEs, among others that are necessary for huge buying of fiber

o Has ability to employ competent manpower to work with the trading/processing and exporting business

o Knows the demand trends both domestic and international markets

o Has higher educational attainment and extensive experience in trading business

o Huge demand and supply gap of abaca fiber both local and international markets

o Inadequate supply of high-quality abaca fiber.

o High energy costs and inadequate/poor infrastructure

o The shortage and insufficient quality of raw materials

o High financial requirements (initial capital investment and maintenance and operating expense) serves to screen potential entrants into the industry

o PhilFIDA’s rules and regulations on accreditation of abaca traders, inspection and certification serve as barrier to entry

o Depends mainly on the consolidated volume of abaca fibers supplied by individual and institutional local traders to sustain the supply requirements for exporting/processing business

Local traders (Individual Licensed Trader)

o Presence of consolidators who engage producers to supply him the volume he needs for his market outlet

o Possess more market knowledge because they can rely on other traders for information on prices and the general demand and supply conditions in the market

o Can provide cash advance to consolidators and producers to keep their patronage/loyalty to him

o Has connections to higher-level buyers because of his ability to supply needed volume for his buyers

Depends mainly on the consolidator and producers to supply him with the volume he needs for his buyer


o Has sufficient capital, transport system, warehouse that are necessary for storage and bulk buying of abaca fiber

o Can cover a wide geographical area to accumulate and buy greater number of abaca fiber

o Knows the demand trends within and outside Northern Samar

o Belong to influential and well-off families in the community/municipality with extensive experience in local trading

Institutional Licensed Trader (CEFA)

o With secured land for abaca plantation because CEFA is a CBFMA holder of approximately 1,050 hectares of forestlands that is suitable for abaca farming.

o Has office building that serve as consolidation point, warehouse/storage and a place for meetings and trainings

o Has 200 farming households as secured source of fiber for trading

o The most sought by NGAs and NGOs as direct partner and recipient of their community development programs and projects

o Has established good partnership with Ching Bee as sole buyer of abaca fibers that it secures from the producers in covered production sites

o Has strong partnership with EVPRD as assisting NGO for the fiber trading enterprise

o Has strong ability to mobilize/expand the # of producers and members from other farmers associations because CEFA itself is a federation member of the provincial CBFM association in Northern Samar

o Has organized barangay cluster teams serving as consolidator of abaca fiber in respective areas of assignments

o Has limited capital as major constraint to scale up its fiber trading enterprise

o Has small warehouse and storage area that limits the volume of fiber to store for a longer period

o Absence of a drying facility to service its producers who are in dire need especially during rainy season where drying of fiber becomes a problem

o Lack of financial services to offer for the producers to finance the production requirements of current farms and expansion sites and for upgrading pre and post-harvest facilities

o Absence of licensed classifier as PhilFIDA’s basic requirement for bigger trading operations

o Limited number of professional management staffs to run the trading enterprise more efficiently and effectively

Barangay Consolidators/ Middlemen

o Has connections with local traders o With good ability to engage producers to

supply him with the volume he needs for his buyer

o Receives cash incentives from local trader based on the volume of abaca fiber supplied to his buyer

o Has a small place for keeping the accumulated volume off abaca fiber until ready for pick up by the trader

o Consolidators main source of price information is the traders

o Has no capital to increase the volume of fiber to supply for his buyer

o Absence of own transport facility o Has limited access to government

financial services and lending facilities

Producers o Has land available for abaca production either covered by CBFMA, CLOA and tax declaration

o They are members of CBFM associations, Agrarian Reforms Beneficiary Organizations and farmers associations existing in the areas. These associations are usually tapped by NGAs and NGOs as beneficiary organizations of community development programs and projects

o Has the innate knowledge and skills needed for abaca production

o Has large family size (average of 7 persons in the household) to render manpower support for abaca production

o Lack of market information in the abaca marketing system.

o The farmers’ main source of price information is the traders

o Farmers’ ignorance of the prevailing market prices because of distant farm locations

o Farmers have very weak bargaining power when dealing individually with the traders

o Outdated pre and postharvest technologies

o Susceptibility of abaca plants to diseases o Limited knowledge on disease and pests

management


o Presence of support institutions to provide trainings and planting materials to farmers

o Poor farm to market roads that made hauling and transport of fiber expensive and difficult

o Lack of access to capital and credit services for production and upgrading of basic facilities for stripping, drying and farming tools and implements

o Modest income derived from abaca production

o Absence of own transport facility. He usually rents motorcycles, motorboats and/or commutes by tricycle to transport his fiber to adjacent trading center

o Limited access to communication and business development services

o Low educational attainment which makes technology comprehension difficult

o Lack of family labor o Old population of abaca farmers

Abaca farmers can get higher benefits from abaca production and trading if they can improve their farming practices, increase recovery of abaca fiber through better stripping technologies, join an organized marketing group such as CEFA and improve the quality of their abaca fiber to get higher price.

ANALYSIS OF OPPORTUNITIES FOR SOCIAL ENTERPRISES AND IDENTIFIED PRIMARY STAKEHOLDERS Findings of the field research reveal that the primary stakeholders have several opportunities to explore to improve and scale up their position or the benefits derived from the subsector.

Use of High-Yielding and Virus-Resistant (HYVR) Planting Materials The DOST-PCAARRD through UPLB researchers have developed high yielding and ABTV-resistant abaca hybrids namely Abuab (NSIC 2017 Mt 001), Inosa (NSIC 2017 Mt 002) and Tangongon (NSIC 2017 Mt 003). These hybrids are more vigorous, could produce a yield of at least 800 kg/hectare dried fiber and have fiber recovery of at least 1.5% of total abaca stem weight. These varieties are registered with the National Seed Industry Council (NSIC). The traditional variety only yield an average of 450 kilograms per hectare in Northern Samar. The research team has computed a 44% increase in gross income when farmers use the HYVR as planting materials as presented in the table below.

Table 37. Difference in Gross Income Using High-Yielding Virus Resistant Variety versus Traditional Variety Variety Yield/Hectare/Year Price (Php) Amount (Php) High-Yielding Virus-Resistant Variety 800 Kg 80 64,000 Traditional Variety 450 Kg 80 36,000 Difference in Gross Income 28,000 % Increase in Gross Income 44%

Better Management of Abaca Farms and Adoption of Sustainability Standards To enhance or increase the quality and yield of abaca fiber, it is necessary to strictly follow the proper way of production methods and practices. This entails proper selection of plantation site and planting materials and observing the proper time of planting. Land clearing and preparation of the area will depend on the type of soil, slope and terrain, and kind of weeds growing in the area. Planting method and distance should be strictly followed. Proper fertilization using organic fertilizers, mixed with carbonized rice hulls and saw-dusts are necessary for soil improvement. Planting Intercrops under abaca is also important because farmers will earn additional income from intercrops aside from the income earned from abaca. If legumes were planted like mungbean, bushbean or peanut under abaca, fertility status of the soil will be alleviated.


Maintaining the ideal number of suckers is highly recommended. The regular removal of undesirable suckers of abaca will maintain fertility of the soil and also enhance the growth of the remaining plants. This can be done simultaneously during the weeding period. The table below presents the Cost and Return between a Low Input Abaca Farm/Typical Farm and a Good/Improved Farm which traditional producers could use as tool for planning and decision making.

Table 38. Cost and Return for a One Hectare Low Input Abaca Farm in Northern Samar, 2016 Particulars Year 1 Year 2 Year 3 Year 4 Yield is 450 Kilograms at Php 72.00 per kg 32,400 40,500 50,625 63,281 Sales (in Php) Share of Strippers (in Addition to Labor Cost) Development Cost 21,000 Land Preparation, 5 Person-days at Php 200/day Farm inputs 22,000 Abaca Seed 1,200 Pcs at Php 10/Pc Maintenance 3,000 3,000 3,000 3,000 Round Weeding, 15 Person-days at Php 200/day Harvesting/Tuxying/Stripping/Drying Maintenance 20,250 25,313 31,641 Marketing/Transportation 900 1,400 2,800 Total Cost 46,000 24,150 29,713 37,441 Net Income of Farmer (13,600) 16,350 20,912 25,840

Average Net Income Yearly 15,775.50 Note: Adapted from “Value Chain Analysis of Abaca (Musa textiles) Fiber in Northern Samar, Philippines”, by Celestino, Edwin, R., et al., 2016, August, International Journal of Innovative Science, Engineering & Technology, Vol. 3 Issue 8, p. 163. Retrieved October 8, 2018, from http://ijiset.com/vol3/v3s8/IJISET_V3_I8_19.pdf.

Table 39. Cost and Return for a One Hectare Good Abaca Farm 1. Farm Practices Planting Density (hills per hectare) 1,600 at 2.5m x 2.5m distance

4,000 at 1.5m x 1.5m distance Plant Propagation practice tissue-cultured plantlets at

Php 15 per piece Fiber Extraction Method machine stripped/ decorticated Fiber Recovery 1.5%-3.34% Weeding and Underbrushing regularly done after harvesting 2. Harvest (Year 2) Harvesting Frequency at peak 4 times per year Average yield per hectare* 2,560-4,267 kg Average price per kilogram (farmer’s selling price on 2015) Php 45 3. Costs and Returns Average Gross Income Per Year Per Hectare Php 115,200-Php 192,000 Average establishment costs per hectare (Year 1) Php 82,995-Php 147,050 Average Net Income Per Year Per Hectare Php 32,205-Php 44,950 Note: Adapted from "Abaca Sustainability Manual", 2018. Retrieved on September 29, 2018 from http://www.philfida.da.gov.ph/images/Publications/abacasustainabilitymanual/ASM.pdf.

Based on the computation presented above, an income increase ranging from 51% to 65% shall be derived if a typical farmer adopting a low capital input production shifts his farming system into the improved system or high capital input production. However, this shift necessitates the farmer to also increase 45% to 69% of his establishment costs. The huge expense increase that a farmer incur may not be attractive for him to adopt the FIDA farming model because of lack of capital. In this case, the development interventions of government financial institutions and microfinance institutions are important to help address the financial needs of small farmers. Interestingly, if the PhilFIDA model is replicated, this will not only result to substantial increase in farmer’s income but also 82% to 89% substantial increase in fiber yield per hectare that may significantly contribute filling the huge demand-supply gap for abaca fiber both local and international markets.


NOTE: During the local stakeholder’s orientation held on December 7, 2017, specific reactions and concerns were raised regarding the use of ‘high-yielding’ or hybrid varieties and a critique of the PhilFIDA abaca production model which should be given attention by EVPRD and CEFA when prioritizing and adopting the suggested opportunities in this study for scaling up their BDFE. PGENRO: The use of ‘high-yielding’ or hybrid varieties should not be an opportunity for abaca farmers because it will marginalize the local indigenous species that are already adapted to the local agro-climatic conditions. It will also contribute to the depletion of the genetic base of native abaca species. EVPRD: In the context of biodiversity-friendly enterprise and along promotion of conservation-compatible farming practices, native varieties should be used instead of the ‘high-yielding’ and hybrid varieties. Although the PhilFida production model create higher income, it is costly since it requires an investment of Php 82,995 - Php 147,050 for 1 hectare; Moreover, it promotes the use of chemical inputs that area harmful to biodiversity. Atty. Quicho: Maybe ‘high-yielding’ or hybrid varieties can be used in plantation type of abaca production that are strictly confined to a particular production zone. This can be a good business opportunity but should not be implemented or promoted in the protection areas of the SINP. PhilFiDA: Abaca varieties in Northern Samar are not anymore pure native species. But anyway, a mix variety can be used in abaca farming. EVPRD: We should be science-based. There is a need to research the existing abaca varieties so that we can really claim with authority the kind of abaca species that we have

Shifting from Manual/Hand Stripping to Spindled Stripping or Decorticating Machines Abaca farmers have difficulty in meeting premium grade of abaca fibers due to the manual or hand stripping technology they employ. However, this issue can be addressed through shifting into more efficient machines like a spindle stripping machine or a decorticated machine that usually produces premium grades (excellent) of abaca fibers such as S2 which are usually priced higher than the lower grades. According to CEFA officers, manual stripping is the customary technology used by farmers for extraction of abaca fiber. The fiber derived from manual or hand stripping is of lower grade usually “G”, “H”, and “I” (good grades), “JK” (fair grade), and Y (residual grade). These are the grades of fibers being traded by CEFA as shown below.

Table 40. Quality of Abaca Fibers Being Traded by CEFA, August 22, 2018 to September 21, 2018 Fiber

Grades Details of Delivery Total

Vol. (Kg)

% Share to GT

9.21.2018 9.07.2018 8.22.2018 Vol. Price Amount Vol. Price Amount Vol. Price Amount Kg Php Php Kg Php Php Kg Php Php

S2 5 93 465 0 0 0 0 0 0 5 0.04%

I 1772 89 157708 250 96 24000 0 0 0 2022 18.07%

S3 198 60 11880 0 0 0 0 0 0 198 1.77%

G 3266 84 274344 1702 94 159180 1558 97 150386 6526 58.33%

H 118 36 4248 375 50 18625 255 54 13735 748 6.69%

JK 853 73 62269 77 74 5698 0 0 0 930 8.31%

M1 15 35 525 8 42 336 0 0 0 23 0.21%

Y 115 40 4600 121 86 10450 71 92 6532 307 2.74%

O 0 2 0 21 3 63 19 3 57 40 0.36%

T 251 2 502 78 3 234 60 3 180 389 3.48%

Total 6593 516541 2632 218586 1963 170890 11188 100%

Note: Derived from CEFA’s sales receipts.


PhilFIDA study reveals that a stalk of abaca contains fiber equivalent to 3%-4% of its weight depending on the variety, maturity and source of plant. The method of extraction influences fiber recovery. At 3.5% fiber content of abaca stalks, manual stripping yields 1% or 28% of the recoverable fiber; spindle stripping recovers 1.5% or 43% of the total fiber content; while the decorticating process produces 3.34% fiber by weight of the stalk or 95% of the total recoverable fiber. The following table presents the income increase of abaca producers if they shift to either spindle stripping machine or decorticating machine.

Table 41. Income Comparison of Different Abaca Stripping Methods Particulars Manual Stripping Spindle Stripping Decortication Yield (Kg of Abaca Fibers/Ha/Year 450 Kg

at 28% Recovery 619 Kg

at 43% Recovery 1,527 Kg

at 95% Recovery Average Buying Price (Php) 80/Kg (G grade) 95/Kg (S2 grade) 95/Kg (S2 grade) Gross Income (Php) 36,000 58,805 145,065 Production Cost (Php) = 60% of gross income

21,600 35,283 87,039

Net Income Yearly (Php) 14,400 23,522 58,026 Percentage Increase in Income 39% 75%

FGD results revealed that the manner or method of fiber extraction matters in terms of fiber grades, price, and production costs. In this case, a substantial increase in farmer’s income ranging from 39% to 75% will be derived when a producer uses spindle stripping and/or decorticating machines, respectively. With the above computed income of abaca farmers, it is shown that they can earn higher with the introduction of more efficient stripping machines. In terms of output efficiency, a manual stripping technology can only extract an average of 15 to 25 kilograms abaca fiber daily while a spindle stripping machine can extract fiber as much as 80 to 120 kilograms per day. Unfortunately, there was no data secured on the output efficiency of decorticated machine. According to the NARC based at the VSU in Baybay, Leyte, using a spindle stripping machine, four persons can harvest one hectare of abaca plantation in 7-8 days. The machine weighs only 93 kg, can be dismantled and carried in areas not accessible by transportation. It can strip native abaca varieties by replacing stripping blades for variable quality, recovery, and output. While a spindle stripping and/or decorticating machines are much wanted, the issue here is the ability of CEFA /EVPRD and the support institutions to mobilize adequate resources to provide farmers with the needed machines to service all current and potential production areas. Since this idea may not be possible at the moment, the abaca farmers suggested to assist them to improve their existing hand stripping device for better fiber quality and increase output efficiency. Since stripping is an all-male task, the FGD respondents yearned for an improvised stripping device that is women-friendly so that the females can also share their male counterparts in performing this task. EVPRD/CEFA can facilitate the search for a local fabricator who can design this type of stripping device. The expert advice of TESDA can be sought since they have developed prototypes of pre and post-harvest facilities that can be referred to prior to fabrication. It is also important that farmers be involved during the designing of said improved manual stripping tools.

Shifting of Channel from a Traditional Consolidator/Trader to a Developmental Market Channel (CEFA) The marketing margin and income analysis per hectare of abaca farm confirms a net income of CEFA abaca farmers of Php 12,600 which is 16% higher than non-CEFA farmers that only derive a gross sales of Php 10,575 from selling their fiber to traditional traders. However, the higher mark- up price CEFA offers to its


farmers translate to a 43% increase in its marketing cost and a 40% lower profit margin when matched to its traditional local trader counterpart. According to FGD respondents, CEFA buys abaca fiber from the producers at 2-3 pesos/kilogram higher than other local traders. However, CEFA at the moment has limited financial capacity to absorb all the produce of its farmer members and of the other abaca farmers in the municipality. Its current revolving capital for fiber trading is limited only for buying approximately 2-3 MT per delivery. Thus, CEFA farmers and other local producers in the municipality who are interested in selling their produce to CEFA continue to incur income losses. This situation would end when CEFA is assisted to increase its revolving capital for fiber trading. During the FGDs with CEFA officers and members, and the interviews with EVPRD staffs, it was established that a developmental market channel/trader is an important key player in the abaca industry because it aims to provide the women and men small producers the opportunity to reap a bigger share of income from the value chain. CEFA as an evolving alternative to traditional local traders has the following attributes:

o Promotes mutual sharing by ensuring that both CEFA and the women and men small producers recovers their operating/production costs and earns fair benefits and/or income from the abaca enterprise,

o Has profound concern over the economic welfare of women and men small producers in terms of providing better/higher buying price than traditional traders,

o Mobilizes external resources to be able to provide better service facilities, production support, and technologies to benefit the farmer-producers,

o Provides reasonable incentives to barangay consolidators and cluster teams who play important roles in consolidating abaca fibers from farmers within a barangay or cluster of barangays and in classifying, buying, and consolidating abaca fibers from CEFA farmer members in a given barangay or cluster of barangays, and

o Has plans to establish a savings and credit program to support member-suppliers. Turning the enterprise into a cooperative or a non-profit, non-stock corporation whatever is appropriate is being considered.

The table below presents the income loss and benefit when a producer shifts market channel from a traditional local trader to a developmental trader like CEFA.

Table 42. Income and Loss Computation of Producer from Shifting Channels Particulars Scenario 1: Producer Only Sells

the Committed Yield to CEFA Scenario 2: Producer Sells All

His Produce to CEFA Expected yield in kg/year 450 450 Committed yield in kg to CEFA 100 Less: Yield in kg sold to consolidator

350

Price mark-up/kg when sold to CEFA (Php)

3 3

Income Loss (Php) 1,050 1,350 CEFA in this case has financial

limitations in buying farmer’s produce.

CEFA in this case has sufficient capital

In Mondragon alone, approximately 120 MT of abaca fiber are traded monthly according to CEFA officers. Of this volume, only 2-3 MT are being bought and traded by CEFA while about 28 MT are being absorbed by other local traders. This means an aggregated income loss of farmers amounting to at least Php 70,000 monthly or Php 840,000 yearly. This figure also means additional income benefit on the part of traditional local traders. Within CEFA, the estimated annual abaca fiber production of its members is 67.50 MT. Of this volume, only 24-30 MT or 36%-44% is being bought by the association because of limited buying capacity. To scale up CEFA's fiber trading business, the GFIs like LBP and DBP should pave way its credit windows to the


association for increase access to financial capital. CEFA can also explore internal capital build-up through accepting investments from individuals and members.

Taking Over of Functions in the Value Chain CEFA can be transformed into a municipal or provincial marketing organization or cooperative to handle the marketing needs of the members who are currently engaged in abaca production. It can assume the trader’s roles and, to some extent, the consolidator’s role. In order for CEFA to take over substantive roles as a developmental market channel, the FGD and KII respondents presented the following as attributes:

o Must have the financial capacity to absorb the produce of all its farmer-members and expand its enterprise operations to interested non-CEFA members within and outside the municipality;

o Must engage women as leaders of mixed groups. CEFA concretely demonstrates this since 60% of is enterprise members are women;

o Must provide equal opportunities for women and men participation in value chain development;

o Must involve women in enterprise planning, decision making and implementation;

o Regularly initiates consensus building on fair pricing and fair trading;

o Provides capability building to members on basic financial management and abaca production-related trainings as well as social enterprise and advance financial literacy;

o Involves the men and women producers in community enterprise development planning which also integrates gender development program in its overall planning framework and strategies; and

o Envisions that the members of the enterprise will be financially literate and can handle complex business operations.

By the end of the 1st year and beginning of the 2nd year of the proposed subsector development plan implementation, it is assumed that 30%-40% abaca fibers produced by the proposed barangay cluster producers shall be primarily traded to CEFA. This shall include all produce of CEFA farmer members. Starting from the 3rd year and up until the 5th year, CEFA shall assume 60%-90% of the trading functions on abaca fiber in Mondragon and in San Roque to promote fair and efficient marketing systems. Fiber consolidation shall be performed by the respective barangay cluster team leaders. Fiber grading/classifying and baling shall be carried out by CEFA, and delivery system shall be coordinated and carried out by Ching Bee to abate transportation costs. The table below presents the cost and benefit of CEFA after taking over of the trader’s functions.

Table 43. CEFA Cost and Benefit After Taking Over the Trader’s Functions Year % of Annual Abaca

Fiber Volume to Take Over/Trade

Volume of Sales/ Month in

MT

Volume of Sales/ Year in MT

Net Income (Volume of Sales x 1,000 x Php

5.36) First Year 30% 39 460 2,465,600 Second Year 40% 52 624 3,344,640

Third Year 60% 78 936 5,016,960 Fourth Year 75% 97.50 1,170 6,271,200 Fifth Year 90% 117 1,404 7,525,440 Note: For the purposes of computation, 1,560 MT per year was used as base volume of fiber being traded in Mondragon. CEFA’s gain per kg is Php 5.36 based on data secured from the organization. Of the total 1,560 MT abaca fiber that is being traded in Mondragon annually, CEFA only trades an average of 30 MT yearly which is equivalent to 1.92% of the total annual abaca fiber production in the municipality.

Toward this end, CEFA need to have Php 3.9 M capitalization, and satisfy the following industry requirements:

o License as a GBE or Class A Local Trader;

o At least one baling press (manual is ok for Class A Local Trader);

o At least 850 sq.m. storage area (250 sq.m. floor area is enough for Class A Local Trader);


o One metric weighing device with certificate of periodic calibration; and

o At least one licensed classifier with certification of passing the practical examination on fiber classification and grading conducted by PhilFIDA.

Application for Sustainability Certification Bernd Seger, head of the Fiber Competence Center-Fiber Management of Glatfelter’s Composite Fibers Business Unit, explained that “Buyers in niche markets are willing to pay a premium price for sustainably sourced abaca fiber, and smallholder farmers are able to reap the economic benefits. Sustainability certification ensures that they have the income they need.” However, this can only be achieved when farmers are supported to avail the certification program by organizing and training the farmers, paying for the certification audits, and providing medical assistance, educational support, and social programs. The need and importance of certification was supported by PhilFIDA. The agency said that certification helps to ensure that the farm is conserving natural resources and the long-term economic health of the community while increasing demand. Certification will provide added value to the product while providing farms the opportunity to receive better prices and increased income, receive trainings about sustainable production, and receive trainings around social and environmental management practices. The table below presents the tests based on intervention criteria as to how far the identified opportunities for social enterprise and abaca small producers can bring the abaca BDFE and the scale up coverage closer to the six principles of the Benchmarks for Transformational Partnerships and Women’s Economic Empowerment in Agricultural Value Chains (BTP-WEE-AVCs).

Table 44. Tests Based on Intervention Criteria Towards the BTP-WEE-AVCs of Identified Opportunities for Social Enterprise and Small Abaca Producers Opportunities Intervention Categories

Use of HYVR Planting Materials

Time Frame Medium Term Practicability Doable only after several “buy-ins” from leaders &

organizations or after some intermediate interventions like capacity building or passing of an ordinance, etc.

Coverage-Enterprise or Subsector Wide (Wide Area Level)

Can be done at farmer level, enterprise and subsector wide

Type of Intervention (Transactional or Transformative or Both)

Both Transactional and transformative

Resources Needed (Money, Policy Considerations, Dependencies or Assumptions)

Strong policy on the use of HYVR planting materials (PhilFIDA) Financial support for the procurement of HYVR planting materials (GFI/MFI) Availability of licensed suppliers (PhilFIDA)

Biodiversity and Land Use Principles

Have positive impact on biodiversity and environmental sustainability and with positive contributions in mitigating the effects of natural and man-made disasters.

BTP-WEE- AVCs Principles to be Promoted

All BTP-WEE AVCs principles

Better Management of Abaca Farms and Adoption of Sustainability Standards

Time Frame Can be done in the medium-term subject to provision of production capital. This scale up pathway is high capital intensive

Practicability Doable only after some intermediate intervention like capacity building and provision of production capital


Can be done at the farm-level/enterprise vs subsector wide (needing oversight by higher organizations)



Both transactional and transformative


Availability of production support for farmers (GFI/MFI) Farmer’s training on abaca sustainability farming practices and technologies ((PhilFIDA)


Have positive impact on biodiversity and environmental sustainability and with positive contributions in mitigating the effects of natural and man-made disasters.



Shifting from Manual/Hand Stripping to Spindled Stripping or Decorticating Machines

Time Frame Can be done within six months to one-year subject to availability of funds for the purchase and fabrication of spindle stripping machines or decorticating machines

Practicability Doable only after some intermediate intervention like capacity building and provision of capital for procurement of stripping machines


Can be done at enterprise and subsector wide (needing oversight by higher organizations)




Financial supports for the purchase and fabrication of spindled stripping or decorticating machines (GFI/MFI) Farmer’s training on the proper operation and maintenance of Spindled Stripping or Decorticating Machines (PhilFIDA) Availability of licensed suppliers (PhilFIDA)


Have positive impact on biodiversity and environmental sustainability



Shifting of Channel from a Traditional Consolidator/ Trader to a Developmental Market Channel (CEFA)

Time Frame Can be done within six months to one-year subject to financial capacity of CEFA

Practicability Already being done, it is easily doable by the abaca farmers and their organization


Can be done both at the farm-level and enterprise levels




Infusion of revolving capital (GFI/MFI) Warehouse, drying facility, weighing scale, transport facility, stripping machines (PLGU/ PhilFIDA) Licensed classifiers (PhilFIDA)


Has possible future tenurial problems in land use / ownership / rights or threat of changes in tenurial and stewardship arrangements with existing or future holders



Taking Over of Functions in the Value Chain

Time Frame Can be done within 6 months to 1-year subject of financial capacity of CEFA

Practicability Already being done, it is easily doable by the abaca farmers and their organization



Can be done both at the enterprise and subsector wide (needing oversight by higher organizations)




Infusion of revolving capital (GFI/MFI) Warehouse, drying facility, weighing scale, transport facility, stripping machines (PLGU/ PhilFIDA)





Application for Sustainability Certification

Time Frame Can be done in the medium-term subject to provision of financial and technical assistance to farmers on the application for sustainability certification

Practicability Doable only after some intermediate intervention like capacity building and enforcement of certification policies and regulations






Strong policy detailing the advantages and benefits of having abaca sustainability certification (PhilFIDA) Workshop on fulfilling/accomplishing the documentary requirements for sustainability certification (PhilFIDA)


All biodiversity and land use principles



OPPORTUNITIES FOR LEVERAGED INTERVENTIONS

Strategic Cluster of Barangays and Municipalities The poverty sector currently engaged in coconut and abaca production shall be the primary stakeholders of the subsector development plan. This sector is composed of 5/12 abaca-rich producing barangays in the municipality of Mondragon where active members of CEFA are located. These members regularly supply their committed yield to CEFA to sustain the latter’s fiber trading business. The other primary stakeholders are those located in the remaining seven abaca producing barangays of Mondragon where there are no CEFA members. The association has already identified them as potential areas for expansion because farmers in these barangays have already expressed interest of joining the organization and to shift market channel for added income. Added are four barangays in San Roque, a municipality very closed to Mondragon, Northern Samar where abaca producers are also located. They were identified because they are included as project sites of the DAR through its “Links Farms Project” where CEFA will serve as project operator. The table below presents the geographical locations of these preliminary primary stakeholders, the clusters where each target barangays and municipality belong, the total human population/barangay (as of 2015),


the average number of households/barangay estimated at seven persons per household, and the target household population per barangay to be covered by the proposed subsector development plan. For purposes of determining the target number of households to be involved in the BDFE model building process and in achieving a significant level of impact in Northern Samar with particular focused in the municipalities of Mondragon and San Roque, the team computed this by multiplying the household population by 45% to come up with the 1,334 target number of households.

Table 45. List of Proposed Subsector Development Plan Sites Municipality of Mondragon, Northern Samar Cluster No.

Barangays Population Household Population (Ave. family size is 7)

Target Household Population (45% of Household Total)

1 Cablangan 1348 193 87 Nenita 3,470 496 223

2 Cahicsan 832 119 53 Hinabangan 392 56 25

3 Cagmanaba 251 36 16 San Jose 1,072 153 69 De Maria 525 75 34

4 San Antonio 716 102 46 Mirador 1,490 213 96

5 Flormina 512 73 33 Santa Catalina 388 55 25 San Isidro 614 88 39 Sub-Total 11,085 1,584 746

Municipality of San Roque, Northern Samar

6 Ginagdanan 1,342 192 86 Lawaan 790 113 51 Bantayan 5,238 748 337 Pansang-an 1,768 252 114 Sub-Total 9,138 1,305 588 Grand Total 20,233 2,889 1,334

Source of Total Population Data: PSA, 2015 Census

Of the total human population of Mondragon which is 38,726 (based on PSA 2015 census), the proposed subsector development intervention area for BDFE model building represents 29% of the total municipal population while 30% for the municipality of San Roque. The combined intervention areas of the two municipalities represents 5% of the total human population for the province of Northern Samar which is 589,013 based on 2010 Census of Population and Housing (CPH). The preliminary primary stakeholders are grouped in six inter-barangay clusters. The cluster number, the name of barangays under each cluster and the basis of clustering is presented below.

Table 46. Basis of Barangay Clustering Cluster # Name of Barangays Basis of Clustering

Municipality of Mondragon 1 Cablangan and Nenita Proximity to Poblacion, presence of active members of CEFA, w/in

CBFM area, w/ committed yield, w/ substantial volume of production.

2 Hinabangan and Cahicsan

Interior upland areas, presence of active members of CEFA, w/in CBFM area, with committed yield, with substantial volume of production.

3 Cagmanaba, San Jose, De Maria

Interior upland areas, potential areas for expansion, interested to join CEFA membership, ease of organizing because of presence of farmers associations, willing to shift market channel

4 San Antonio and Mirador

Interior-lowland areas, potential areas for expansion, interested to join CEFA membership, ease of organizing because of presence of farmers associations, willing to shift market channel 5 San Isidro, Flormina

and Sta. Catalina


Municipality of San Roque 6 Bantayan, Lawaan,

Ginagdanan, Pansang-an

Proximity to Mondragon. Potential areas for expansion due to the DAR-CEFA Links Farms Project, ease of organizing because of presence of farmers associations or POs, willing to shift market channel

It should be noted that CEFA has no PO members in four clusters belonging to clusters 3 to 6. The barangays in these clusters are also not located within the CBFM area that was awarded to CEFA. The role of EVPRD in this case is very important in facilitating the expansion of CEFA’s membership base in these clusters to cover the target number of households for the implementation of the subsector development plan. Organizing sub-cluster teams in these clusters is deemed necessary to facilitate mobilization, coordination and organizing work. CEFA and EVPRD must join forces and clearly delineate respective tasks to effectively reach out the primary stakeholders for a scaled-up operations. Moreover, CEFA and EVPRD will have to initiate adequate information campaign to non-CEFA members and the target areas to determine their social and political acceptability on the proposed subsector development plan and BDFE intervention strategies and social enterprise opportunities.

Development of a Multisectoral Platform for Subsector Development The abaca industry is confronted with numerous challenges that impede its growth and development in Northern Samar province. More specifically, the primary stakeholders being continually marginalized are always at the losing end because their income and benefits derived from the subsector is not optimized. The proposed subsector development plan for abaca aims to bring together the concerned stakeholders from the national and local governments, business, and civil society/social enterprise sectors towards scaling up the primary and secondary stakeholders to help improve their positions and benefits in the value-supply chain.


In the short term (Year 1-3), the subsector development plan shall aim to carry out the following production-based interventions in preparation or as pre-requisite to marketing-based interventions starting on the 3rd year. On Abaca Plantation Production and Management

o Promote and practice biodiversity friendly abaca farming practices and protected area management.

o Ensure sustainability of abaca fiber supply by introduction of biodiversity friendly and disease resistant plantlets, operation of abaca plantlets nursery, and expansion of farms planted to abaca in production and buffer zones.

o Promote forest protection and conservation to help mitigate damage to abaca plantation.

o Secure abaca plantations from disease outbreak through organized monitoring and disease eradication.

On Abaca Fiber Primary Processing and Transporting

o Investment in common service facilities to improve product quality (i.e. spindle stripping machines, warehouse, drying facilities, and other appropriate technologies at the community level).

o Promotion and adoption of CEFA protocol in abaca fiber harvesting and processing

o Enhance CEFA’s organized production and marketing approach (i.e., cluster organizing, fair trade and social entrepreneurship orientation)

On Abaca Fiber Trading and Consolidation

o Improvement of sharing system and establishment of profit-sharing schemes.

o Enhance CEFA’s structure and trading capacity towards becoming a GBE or at least a class A trader.

o Invest in the necessary equipment (baling press, weighing scale) and personnel (fiber classifiers) to operate as GBE or at least as class A trader doing fiber classifying/grading.

o Infuse capital to CEFA to increase its buying capacity.

o Increase/develop CEFA’s membership prioritizing small farmers, women, and agricultural workers in identified strategic clusters (target is at least 1,334 households).

Figure 28. Barangay Clusters of Proposed Subsector Development Plan. Primary Data.


In the long term (starting on the 3rd year), the development plan shall aim to build a model for scaling up the abaca subsector in Mondragon, Northern Samar through sustaining and expanding the gains of the previously identified short term interventions and venturing into abaca fiber value adding industries such as community-based manufacturing of various abaca products. The end goal is to make CEFA, EVPRD, and their network as major market player by attaining full manufacturing status of intermediate and/or final abaca products. To facilitate the realization of the above goals, the creation of a multi-stakeholder platform for subsector development is deemed necessary. Relevant stakeholders have been identified to play critical roles and their specific responsibilities were defined as follows:

Table 47. Roles of Critical Stakeholders of a Multi-Stakeholder Platform for Subsector Development Potential Roles and Primary Interventions Delivery Time Frame

Within 1 Year

Within 3 Years

Within 5 Years

Category: NGA Name of Stakeholder: PhilFIDA

Spearhead the reorganization/reactivation of the Northern Samar Abaca Industry Development Council as a multi-sectoral platform to oversee the Abaca Industry Development Program in the province.

x

Strictly implement the policy against “all in buying of abaca fiber” and imposed penalties to violators.

x

Strengthen periodic monitoring of traders/exporters/processors to ensure compliance of all industry players on trade regulation

x

Spearhead the conduct of useful researches for the abaca subsector and ensure that results of these researches are effectively and properly disseminated to all stakeholders

x

Regularly conducts field visits, farm monitoring and dialogue among farmers to know their plight, issues and concerns.

x

Provision of pre and post-harvest facility such as drying facilities and user-friendly stripping machines to improve the quality of fiber being produced by farmers.

x

Deploy more field technicians in production areas to serve as mentor for farmers in their agricultural production processes.

x

Regularly conduct learning events/learning exchanges among farmers for sharing of knowledge and best practices commendable for replication

x

Expand community nursery establishments in strategic areas of the province to have ready source of quality and disease-free planting materials for farmers

x

Intensify training and capability building programs to reach out bigger number of farmers especially on courses of disease and pest management, fiber grading, and better/improved practices on abaca farming.

x

Category: NGA Name of Stakeholder: DENR

Strictly enforce forestry laws and regulations to abate continues kaingin-making, as well as timber and wildlife poaching within forestlands

x

Continue implementation of the NGP and encourage farmers to integrate abaca and other intercrops in NGP sites and in the multiple-use zones of forestlands.

x

Strengthen IEC campaigns against destructive activities in forestlands and further promote sustainable forest management strategies in forest-edge communities

x

Organize community-based forest protection sentinels to help safeguard the forestlands from further degradation subject to provision of financial and legal supports

x

Provision of continues technical and financial supports to CBFMA holders to help them develop the forestlands awarded to them.

Category: NGA Name of Stakeholder: DAR


With the introduction/implementation of the Links Farms Project, ensure the provision of adequate technical and financial assistance to partner LGUs and POs to achieve the project goal of direct marketing of producers to final market channel towards increased incomes of primary stakeholders

x

Seek ways to continue provision of land tenure instruments to landless abaca farmers through CLOAs

x

Seek membership to the Abaca Multisectoral Council upon reactivation for provision of land tenure security to landless farmers

x

Category: NGA Name of Stakeholder: DOST

Continue provision of Science and Technology-based solutions to address gaps in the major stages of abaca production

x

Develop value-adding abaca-related social enterprises in Northern Samar in addition to the selling of abaca fiber

x

Contribute to the design and fabrication of farmer-women friendly stripping device to achieve premium quality of fiber and expedite fiber extraction process with increased women’s participation.

x

Assist PhilFIDA in reorganizing/reactivating the AFG in Northern Samar and seek membership to this multi-sectoral group.

x

Category: NGA Name of Stakeholder: DTI

Conduct market exploration and promotion of other potential social enterprises from abaca fiber to potential market outlets.

x

Assist in the formulation of promotional materials and conduct consumers education to popularize the economic and environmental importance of abaca to the public

x

Category: NGA Name of Stakeholder: TESDA

Develop a training regulatory course for abaca that can be availed by farmers free of charge

x

Fabrication of prototype abaca pre and post-harvest facilities as basis for design and reproduction

x

Assist in the creation of Abaca Development Council (ADC) that will push or lobby for the establishment of Abaca Training Regulation – Abaca Production National Certification (NC) II as additional TESDA training course

x

Category: NGA Name of Stakeholder: DPWH/NIA

Improvement of farm to market roads in remote barangays including communal irrigation systems

x

Ensure strict compliance of contractors regarding quality standards of government infrastructure projects and impose stringent penalties to violators.

x

Ensure timely completion of infrastructure projects by streamlining the bidding process of the Agency

x

Category: NGO Name of Stakeholder: EVPRD

Strengthen coordinative functions to mobilize all stakeholders to work and share resources together to achieve a vibrant abaca industry in Northern Samar

x

Strengthen internal and external resource mobilization to augment the limited financial resources for subsector development in Northern Samar.

x

Facilitate the replication of CEFA’s model on organized production and marketing system especially in the expansion areas of Mondragon and San Roque.

x

Serves as project management unit for the BDFE scaling up modelling project in Northern Samar to ensure efficient and effective implementation of the subsector development, investment and operations plans.

x

Assist in the reorganization or reactivation of the Multi-sectoral Platform for Abaca Subsector Development in the Northern Samar

x

Category: LGU


Name of Stakeholder: Provincial LGU of Northern Samar, Municipal LGU of Mondragon Spearhead the establishment of Abaca Eco-Zones as hub for placing important local Industries in Northern Samar

x

Ensure strict enforcement of local policies on LCAs and provide technical and financial supports to ensure functionality and sustainability of the LCA management board

x

Spearhead the conduct of farmer’s conferences and consultations to thresh out issues, problems and challenges affecting the abaca subsector as basis for policy change, planning and budgeting processes of the LGUs

x

Allocate resources for the provision of basic facilities, equipment and infrastructure supports as well as capacity building needs of abaca farmers

x X

Mobilize NGAs and private corporations to access financial resources to support the needs of the primary stakeholders

x

Craft enabling policies and regulations to enhance the production and marketing environment of primary stakeholders and industry players

x x

Ensure funding support for the improvement of transport system for trading abaca fiber from source to markets outside the province, including poor farm-to-market roads

x x

Coordinate with appropriate government institutions and power corporations for the generation of stable power source to support local industries of the province

x

Category: Higher Education Institution Name of Stakeholder: UEP

Strengthen conduct of field research and extension in the areas of agricultural development, capacity building, marketing, agribusiness/ enterprise development and management

x

Make sure that the results of field researches are adequately disseminated to the target clienteles for adoption/exploration.

x

Encourage the involvement of the farmers-clienteles through employing participatory processes in the different aspects of field research.

x

Category: GFI Name of Stakeholder: LBP, DBP

Provide farmers with better access to financial services through partnership building with established association and cooperatives to reach out more clients especially the poor farmers.

x x

Simplify and customize the bank’s documentary requirements to increase farmers’ access to government financial services

x

Extend mentoring and coaching services to assist the farmers in the preparation of documentary requirements

x x x

Conduct massive IEC about the banks’ financial products and services so that key industry players are informed of the available support they can avail for agricultural production, trading and social enterprise development.

x x

Category: MFI Name of Stakeholder: CARD, ASA, PUNLA

Extend agricultural loans/credit services to SEIs at rational interest rates x

Modify the payment terms that would coincide with the cash/income availability of farmers

x

Social Enterprise Development Focused on System Nodes Consolidation and Strengthening of CEFA CEFA is a locally founded organization based in Barangay Cablangan, Mondragon, Northern Samar, a licensed trader of abaca fiber by the PhilFIDA since August 2018. It possesses all the necessary business permits and eligibilities to legally operate in the fiber trading industry in Mondragon, Northern Samar. CEFA is also a holder of CBFMA occupying a large tract of lands as secured production site for abaca. It has around 200 producers where it regularly source abaca fiber being supplied to its buyer, the Ching Bee Trading Corporation.


Despite these strengths and opportunities, CEFA needs to consolidate and expand its membership to have a stronger base in Mondragon and in adjacent municipalities. At present, CEFA only covers 5/12 of the abaca-rich producing barangays in the municipality. CEFA is constrained to scale up its fiber trading business because of limited financial resources to accommodate all the produce of its current and potential members and the provision of financial services to help farmers increase land productivity for increased fiber yield. In addition, CEFA has other resource constraints that hinders the management to scale up operations. These include absence of important facilities like storage, baling, warehouse, and drying facilities affecting the quality of fiber it trades, the limited number of spindle stripping machines to service its producers. Given the broad membership of CEFA, they also need to be equipped with the technical know-how on the GBE operations and the concomitant documentation for accreditation requirements to level up their operations. There is also a need to enhance the organizational and financial management skills of CEFA officers and management staffs to ensure accountable and transparent enterprise operations. Presently, CEFA do not maintain separate accounts for its different businesses such as copra and fiber trading. Although the association has started keeping separate records of its copra and abaca enterprises, they still need more technical support in installing administrative and operations structures, processes, and policies to avoid mixing up resources and functions. It is ideal that the association have separate bank accounts and personnel for each enterprise and for other enterprises that they will engage as result of scaling up. The strategic direction of CEFA needs to be revisited and organizational policies has to be reviewed and in place to ensure that the primary stakeholders are offered fairer price of their produce. CEFA also needs to strengthen its internal and external resource mobilization to increase its capacity to provide production support and financial services to its producers. On top of the above, CEFA should install professional management staff who could run the operations of its businesses more efficiently and effectively. However, caution has to be exercise in staffing the association to avoid installing individuals who might harm or take advantage of the association. Hiring qualified children of officers and members of CEFA is highly recommended. Setting up of a Marketing/Trading Cooperative within the Structure of CEFA CEFA is a registered association with the DOLE. As it is, the association is a major development actor in the municipality of Mondragon. It is an important partner of various government agencies in implementing their projects in the locality. For instance, the association is managing a CBFM area awarded to it by the DENR. It is also currently working closely with DAR in the implementation of the latter’s “Farms Links Project”. When it comes to CEFA’s business operations, the association is not exempted from settling government-mandated local taxes and charges from engaging into its current businesses such as fiber trading and into any other planned social enterprises in the future. As an association, it is not beholden by law to distribute dividends and/or patronage refunds to its members who have actively participated in contributing revenues accrued from business operations. Unlike cooperatives that have several opportunities and entitlements for government subsidies and financial supports, CEFA has limited access because of the form of association it has. Despite the aforementioned business side limitations of CEFA, this subsector study strongly recommends that it should be retained in consideration of its wider role as an association in the development of the locality. It should be noted, however, that CEFA has already initiated steps towards transformation from an association to a cooperative mainly due to external influences and in compliance to some project and/or support requirements. PhilFIDA is cited as the major influencer towards this move. The association requested the Cooperative Development Authority (CDA) for assistance but their request was not acted upon due to lack of CDA personnel in the province. To increase CEFA entitlements and access to financial, technical, and other government supports and services to its business operations, it is advantageous for CEFA to organize a cooperative within its umbrella.


The EVPRD, as assisting NGO may seek the assistance of the CDA or the Provincial Cooperative and Community Affairs Office (PCCAO) to facilitate CEFA registration as an agricultural cooperative. Despite the recognition of the benefits and advantages of cooperative formation, it was found out that some members of CEFA are not in favor of this idea because of their negative experiences as former members of cooperative. These members revealed that most of the cooperatives they have participated ended up bankrupt because of financial mismanagement. Moreover, EVPRD officers and other support groups of the association such as the PGENRO and DAR expressed caution in organizing a cooperative. The main reason they pointed out is the readiness and maturity of the association to deal with documentary requirements, financial necessities, and structural/organizational pre-requisites of CDA. They advised that a period of transition and mentoring has to be effected towards cooperative formation. One way is for CEFA to adopt cooperative practices in their business operations. When the association is ready, the business side of its operations will be registered as a cooperative. Another option other than cooperative formation is the creation of a non-stock and non-profit corporation which also provides exemplary benefits similar to cooperative. An article published by the Balance Small Business website presents the following pros and cons of non-profit Incorporation which CEFA and EVPRD may examine for future decision-making. Pros/Benefits

o Exemptions from corporate income taxes plus certain other taxes. A tax-exempt non-profit also saves on local taxes.

o Tax exempt from public and private donations.

o Protection from personal liability. Board members, officers, and employees of a non-profit organization receive protection from liability for corporate debts or lawsuits. Creditors can only go after the corporate assets, not the personal assets of the people who manage, work for, or volunteer for the non-profit.

o Organizational Perpetuity. The non-profit corporation continues to exist beyond the lifetime or involvement of the people who began it or who have managed it. Because the organization persists in this way, it is more attractive to donors who want to fund a cause for the long term.

o Employee Benefits. Being a corporation opens the door for employee benefits such as group life insurance, health insurance, a pension plan, etc., advantages not available to workers in unincorporated organizations.

o Corporate Structure. Forming a non-profit corporation is not simple. But the preparation requires clarity about mission, operating rules, and procedures for decision making.

o Other Benefits. Other advantages of incorporation include exemptions from country real and personal property taxes; lower postal rates on third-class bulk mailing; cheaper advertising rates; free radio and television public service announcements, and more depending on the organization’s activities.

Cons/Disadvantages

o Disadvantages of incorporation include a lot of paperwork and some expense. For instance, the corporation may need to hire a lawyer to prepare its documents. Then there is the time and energy to comply with regulations and to grow the organization.

o There are restrictions too, such as no pay for the directors and limits on political campaigning and lobbying. And when the organization closes, its assets must be given to another non-profit.

o But if the benefits of incorporating make sense and outweigh the disadvantages, it would be wise to incorporate and apply for tax exemption earlier rather than later.

Establishing of Abaca-related Social Enterprises and New Product Lines

https://www.thebalancesmb.com/right-board-members-nonprofit-2502331

https://www.thebalancesmb.com/board-members-nonprofit-debt-2501878

https://www.thebalancesmb.com/how-to-write-the-ultimate-nonprofit-mission-statement-2502262

https://www.thebalancesmb.com/can-nonprofits-engage-in-political-activity-2501879

https://www.thebalancesmb.com/can-nonprofits-engage-in-political-activity-2501879

https://www.thebalancesmb.com/how-do-you-shut-down-a-nonprofit-2501889


Abaca Tuxy Buying CEFA can explore abaca tuxy buying as a potential enterprise to double their income, ease and lessen by 50% the laborious and tedious tasks of abaca farmers in producing the abaca fibers and will further make them entrepreneurs as a cooperative. According to PhilFIDA, there’s a big difference between abaca fiber trading and abaca tuxy trading as follows:

o The cost of buying abaca fiber is about 1,000% to 1,800% higher than the cost of buying abaca tuxies.

o The operating expenses in fiber trading (hauling, cleaning, tip-cutting, classifying, weighing, baling, and warehousing, etc.) are more than 100% compared to the operating expenses in abaca tuxy trading. The former is very much labor intensive compared to the latter, and

o In abaca fiber trading, management is forced to buy all the delivered abaca fibers thereby incurring inventory issues on the slow-moving abaca grades. In abaca tuxy trading, management produces only the saleable grades like MC I/S2/S3 and G thereby inventory issues are almost non-existent or negligible.

This trading scheme as recommended by PhilFIDA requires the abaca farmers to sell their individual abaca tuxy produce per harvest per day of at least 100 kilos to a maximum of 250 kilos each to their cooperative (in this case it’s CEFA) at least once or twice a week. The latter then do the activities of stripping, drying, sorting and classifying, tying in hanks, baling, carrying, storing, selling/trading, and transporting/hauling or practically processing or turning the abaca tuxies into uniformed quality stripped fibers to its desired abaca grades. Based on PhilFIDA data, 100 kilos of abaca tuxy averages 10 kilos (10%) of dry abaca fiber. One matured abaca stalk averages 800 grams of dry fiber or eight kilos of tuxies. Hence, in order for an abaca farmer to get a minimum of 100 kilos of abaca tuxies per day per harvest, he/she should at least tumble down about 13 to 15 matured abaca stalks in order to earn at least Php 520 to Php 600 per day at Php 5 per kilo of abaca tuxies. CEFA is currently doing trial on this particular enterprise option since October 2018 utilizing the spindle stripping machine granted by Ching Bee. Initially, it buys tuxy at Php 6 per kilogram. The conversion to abaca fiber is 12% and the output is 97% S2 grade (excellent) and 3% JK grade (fair). The JK fibers are those sourced from the outer leafsheaths of the abaca plant. The inner leafsheaths are the source of high-quality fiber. Though FGD, it was learned that abaca farmers are not quite happy with the price of abaca tuxy. According to the respondents, farmers are at the losing end of the trade. The Field Research Team recommended to CEFA to conduct a cost and benefit analysis on its abaca tuxy buying activity. This was conducted in November 2018. The results are as follows:

Table 48. Cost and Benefit Analysis of Tuxy Buying Name of Farm Owner Gloria Estopace

Farm Location Sitio Magkalahog, Barangay Cablangan, Mondragon, Northern Samar

Date of Harvesting November 2018 Land Area Harvested 0.25 Hectare # of Abaca Plants 167 Hills Varieties of Abaca Harvested Alman & Laylay # of Mature Abaca Tumbled/Harvested 162 # of Harvesters 3 Individuals # of Hours Harvesting including Underbrushing

24 Hours (3 Individuals x 8 Hours x 1 Day)

# of People Who Did Tuxying 2 Individuals # of Hours Tuxying 32 Hours (2 Individuals x 8 Hours x 2 Days) Volume of Tuxy Harvested 565 Kg


# of Spindle Stripping Machine Operators 2 Individuals # of Hours of Machine Operation 16 Hours (8 Hours x 2 Days) Volume of Abaca Fiber Output 68 Kg (Fiber Grade: 65.96 Kg-S2, 2.04 Kg-JK)

Tuxy to Fiber Conversion Rate 12% Cost & Benefit CEFA Abaca Farmer

Sales Php 8,064 65.96 Kg x Php 120 = Php 7,915 2.04 Kg x Php 73 = Php 149

Php 3,390 565 Kg x Php 6

Expenses Php 5,117 Labor (Stripping Including Hauling of Machine to Farm Site & vv) Php 1,200 (2 Persons x Php 300 x 2 Days) Fuel: Php 500 (10 Litres x Php 50) Cost of Tuxy: Php 3,390 (565 Kg x Php 6) Transportation: Php 27 (68 Kg x Php 0.40)

Php 2,084 Labor Underbrushing & Tumbling = Php 750 (3 Persons x Php 250 x 1 Day) Tuxying = Php 1,130 (2 Persons x Php 282.50 x 2 Days) Manual Hauling: Php 204 (68 Kg x Php 3)

Net Income Php 2,947 Php 1,306 Net Income as % of Total Sales

37% 39%

In tuxy buying, CEFA’s profit margin is higher when price of abaca fiber is high while abaca farmer’s profit margin is basically unaffected. If CEFA sets a fair and fixed buying price for tuxy, abaca farmers can be assured of fair compensation. This study strongly suggests that CEFA, as a matter of policy, allocate some amount from its net income to cover depreciation cost of spindle stripping machine. It can be computed based on the machine’s acquisition cost and expected years of productive usage. There is no established data on conversion rate of one kg abaca tuxy to abaca fiber using hand stripping method. Nevertheless, since spindle stripping method is known to recover 43% of total recoverable fiber and hand stripping method recovers 28% of total recoverable fiber, it can be derived that the fiber output of 565 kg of tuxy using hand stripping method is 44 kg. The cost and benefit of abaca farmer if he/she elect not to sell tuxies but rather process these tuxies through hand stripping and selling the fibers to CEFA is shown below.

Table 49. Cost and Benefit Analysis of Abaca Farmer (Tuxy Trading vs Hand Stripped Fiber Trading) Particulars Tuxy Trading Hand Stripped Fiber Trading

Sales Php 3,390 565 Kg x Php 6

Php 3,520 44 Kg x Php 80 (CEFA’s Current

Buying Price) Expenses Php 2,084 Php 2,244

Pablo B. Paet, Jr., ISEA’s Field Research Associate (center), gathers relevant information on tuxy buying and abaca plantlet nursery establishment as strategic options for CEFA’s BDFE initiative scaling up during an FGD with CEFA officers and members


Labor a.Underbrushing & Tumbling = Php 750 (3

Persons x Php 250 x 1 Day) b.Tuxying = Php 1,130 (2 Persons x Php

282.50 x 2 Days) Manual Hauling

Php 204 (68 Kg Fiber x Php 3)

Labor (60% of Fiber Output) Php 2,112 (26.4 Kg Fiber x Php 80)

Manual Hauling Php 132 (44 Kg Fiber x Php 3)

Net Income Php 1,306 Php 1,276 Net Income as % of Total Sales

39% 36%

The above table shows that abaca farmers can earn more from selling tuxy at Php 6 per kg than selling hand stripped abaca fibers. Farmers can even earn more if CEFA decides to increase its tuxy buying price. Using the above example, a farmer can earn Php 565 pesos more for every peso increase in CEFA’s buying price. This subsector study recommends that CEFA sets a minimum buying price for tuxy then explore possibilities to increase it depending on price of abaca fiber, specifically the S2 grade since this accounts for 97% of fiber output using spindle stripping machine. To fully engage in tuxy buying, CEFA needs to have at least Php 300,000 capital, a 5m x 10m drying facility per cluster, 12 spindle stripping machines to be stationed in the organized clusters, and 24 trained operators to man and maintain the machines. The association also has to negotiate fair tuxy buying price with farmers using the above data that were generated during the trial operations. Setting up of Community Nursery for the Propagation and Sale of Quality and Disease-Free Abaca Seedlings/ Plantlets. During the FGD, some respondents mentioned about some indications of pests and diseases in their abaca plants. They expressed fears that the abaca bunchy top and mosaic viruses may have started attacking their abaca plantations. An effective measure to this problem is to equip and specialize some farmers on propagating quality and disease-free abaca seedling/plantlets through setting up of community nursery in a strategic location in Mondragon. The profitability of this enterprise is high given the lack of accredited abaca nursery operators and planting material suppliers and the high demand of plantlets necessary for government led rehabilitation and expansion of abaca planted areas in the region, particularly in Leyte and Southern Leyte, in line with the Philippine Abaca Roadmap for 2018-2022. According to PhilFIDA, one piece of tissue-cultured plantlet is priced at Php 15. Other stakeholders such as UEP claim that price of tissue-cultured plantlets can reach up to Php 25 per piece. Farmer FGD participants shared that many farmers are selling abaca suckers within and outside of Mondragon at Php 5-15 per piece depending on hauling distance. However, they said that selling abaca suckers as an enterprise is not sustainable in a larger scale because it will deplete farmers of their preferred planting stocks. The FGD respondents prefer commercial plantlets propagation from seeds because they were already trained by PhilFIDA on the necessary growing techniques. Some of them, mostly women, have background in nursery management because of their participation to DENR’s NGP projects. In order to realize this enterprise, CEFA need to allocate nursery site, preferably accessible by four-wheel vehicle, and closely partner with PhilFIDA, DENR, DOST, UEP, and Provincial LGU for technical assistance and financial support. These agencies can invest resources on field technicians and nursery facilities, as well as farmer’s training on nursery management and the proper method of seedling/plantlets propagation. CEFA also need to secure certification from the Bureau of Plant Industries (BPI) of DA. CEFA can employ men and women nursery workers from the community to manage the enterprise. This could provide additional source of income for the association especially the women in the area.


Initially, CEFA can start commercial abaca plantlets production using seeds as it is more economical and easier for farmers as compared to tissue-culture propagation. It also does not require laboratory and other meticulous structures. The association can explore abaca tissue-culture propagation in the long run when it has the necessary skilled manpower, laboratory, and appropriate nursery structure. The estimated production cost of one abaca plantlet using seed is six pesos. CEFA can sell it at Php 12-15, thus gaining Php 6-9 per piece. Therefore, 1,000 pieces of plantlets can generate Php 6,000 to Php 9,000 income for the association. According to FGD farmer respondents, it will take four months before seed-propagated plantlets can be planted. Engaging into Other Value Adding Products There are several end-products of abaca fiber that local communities or CEFA can engage in such as producing ropes, twines, woven fabrics, making tea bags, sausage casings, pill coatings, paper products, cigarette papers, diapers, bed sheets, surgical masks, insulation for computer chips, among others. Also, abaca fibers do well with native bags because it is strong and will last for a longer use. In Bicol region, especially in Albay province, local people were able to develop high quality products like lampshades, chairs, accessories, furniture, baskets, slippers, and some others. Generally, these products are handmade and can be done manually by skilful people. These native products are mainly used as display and decorations in houses. Local producers have already found their niche in the market since their products are already being distributed to Metro Manila, capital of the Philippines, and in some parts of the country. Besides, fibercraft products like abaca rugs, doormats, hats, coasters, hot pads, linen, and handbags which are very much in demand abroad can also be explored. In fact, government reports reveal that the fibercraft industry fiscal financial contribution became the second biggest foreign exchange earner for the abaca industry, next to raw fiber exports. Since most of these potential end-products need specialized training and skills, support institutions especially PhilFIDA, Provincial LGU, DOST, TESDA, and DTI may consider allocating some of its financial resources for conducting learning-site visits to successful enterprise models, and in providing the necessary service facilities and start-up capital for local organizations and communities who are interested in value adding initiatives. The conduct of feasibility studies asnd market surveys to determine what viable social enterprises to engage in must be supported by the NGAs. Search for other SEIs whether local or overseas like the trending and very popular Sanada weaving and handicrafts in Japan may also be explored.

The type of abaca finished products that CEFA can manufacture is dependent on the quality and grade of abaca fibers that it can produce or trade. At present, around 58% of abaca fibers that CEFA is trading is graded “G”, 18% is graded “I”, 8% is

Merlinda P. Calubaquib, ISEA’s Field Research Team Leader (wearing yellow), notes ideas on fibercraft production as strategic options for CEFA’s BDFE initiative scaling up during an FGD with CEFA officers and members


graded “JK”, and 7% is graded “H”. With its spindle stripping machine, CEFA can produce 97% “S2” or excellent grade, and 3% “JK”. The most appropriate by-products that can be manufactured using these abaca fiber grades should be considered during the conduct of feasibility studies and product designing. Though this study, the following uses of the aforementioned abaca fiber grades are as follows:

Table 50. List of Products that Can Be Produced per Fiber Grades Common in Mondragon Fiber Grade

Uses/Potential By-Products

S2 & G Tea bags, filter paper, mimeograph stencil, base tissue, sausage skin, base paper, cigarette paper, currency paper, chart, file folders, file folders, envelops, time cards, book binders and parchment paper, paper sheets, all-purpose cards, lamp shades, balls, dividers, placemats, bags, photo frames and albums, flowers, table clock microglass, air filters media, x-ray negative, optical lens wiper, vacuum filter, oil filter, ropes, twines, marine cordage, binders, cord, medical gas masks and gowns, diapers, hospital linens, bed sheets, handbags, hammocks placemats, rugs, carpets, purses and wallets, fishnets, door mats, sinamay, pinukpok, tinalak, dagmay, sacks, hotpads, hemp coasters, baskets, furniture, lupis, and bacbac, wall paper, wall cover

I Tea bags, filter paper, mimeograph stencil, base tissue, sausage skin, base paper, cigarette paper, currency paper, chart, file folders, file folders, envelops, time cards, book binders and parchment paper, paper sheets, all-purpose cards, lamp shades, balls, dividers, placemats, bags, photo frames and albums, flowers, table clock, microglass, air filters media, x-ray, negative, optical lens wiper, vacuum filter, oil filter, ropes, twines, marine cordage, binders, cord, medical gas masks and gowns, diapers, hospital linens, bed sheets

JK Tea bags, filter paper, mimeograph stencil, base tissue, sausage skin, base paper, paper sheets, all-purpose cards, lamp shades, balls, dividers, placemats, bags, photo frames and albums, flowers, table clock, ropes, twines, marine cordage, binders, cord, medical gas masks and gowns, diapers, hospital linens, bed sheets, wall paper, wall cover, wire insulator and cable automobile components/composites

H Sacks, hotpads, hemp coasters, baskets, furniture, lupis, and bacbac, paper sheets, all-purpose cards, lamp shades, balls, dividers, placemats, bags, photo frames and albums, flowers, table clock

Note: Adapted from “Value Chain Analysis of Abaca (Musa textiles) Fiber in Northern Samar, Philippines”, by Celestino, Edwin, R., et al., 2016, August, International Journal of Innovative Science, Engineering & Technology, Vol. 3 Issue 8, p. 155-156. Retrieved October 8, 2018, from http://ijiset.com/vol3/v3s8/IJISET_V3_I8_19.pdf.

Local Fabrication and Trading of a Women-Friendly Stripping Device It was disclosed during the FGDs and KIIs that the women only contribute 32.5% of the total working hours in the market supply chain (from tuxying to selling). This is mainly attributed to the stripping device used for extracting abaca fiber which restricts women’s participation in executing this major task. The device entails heavy manual labor which can only be performed by men. The stripping device traditionally used by the households has low-output recovery because of poor speed, besides production of lower fiber grades. This dilemma can be addressed through search of a local fabricator who could properly design and manufacture a women-friendly and high-speed stripping device that also extracts premium quality of abaca fiber. Adequate consultation with men and women farmers must be conducted to come up with the most appropriate design for both users. Application for TESDA Accreditation as a Skills Training Center CEFA, with the facilitation of EVPRD, can establish a training center to impart indigenous and the customary systems of abaca production that is widely adopted by 200 farming households. Essential skills to offer are (1) plant propagation technique, (2) planting method, (3) harvesting system, (4) tuxying practice, (5) fiber extraction method, and (6) drying process. Also, it is very interesting to share the following themes:


o The history of abaca farming in the area does not involve agro-chemical inputs such as synthetic fertilizers and pesticides. The non-application of any chemicals in abaca farms is a strong manifestation of adoption of biodiversity-friendly farming practices in the area.

o The processing of abaca from harvesting, tuxying and extraction/stripping of abaca fiber is also biodiversity- friendly because of non-use of any chemical in all phases of abaca processing. The harvesting of abaca enhances soil fertility because the waste materials (pulp and leaves) are left in the farm to decompose which act as organic matter and source of nitrogen for the plants, thus increases the production of biomass and organic matter.

The establishment of abaca farms using conservation-compatible technologies like intercropping abaca plants and other cash crops within forestlands and coconut plantations are good things to share. Venturing into a training center under the management of CEFA will not only supplement the source of income of the association but also augment the income of competent/skilful farmers who will be engaged as trainers/speakers. These trainers or speakers shall be selected based on their ability to provide practical tips and secrets of their occupation, and who can present actual examples and own experiences. Potential trainees or clients are those graduating students taking up agriculture, forestry, agribusiness, and environmental management courses as well as individuals and institutions who would wish to venture into abaca production and trading enterprises for work, livelihood, personal enrichment and even as hobbies. Should CEFA/EVPRD decide to open a training center, they have to make sure to first register and obtain clearance from the TESDA, to determine that particular skills to offer is under TESDA’s sponsorships. Accreditation as an Agro-Ecotourism Site The Department of Tourism (DOT) offers accreditation services to any person, partnership, corporation or other entity desiring to secure an accreditation to operate an agri-tourism/farm site conducted in the rural area. Based on DOT description, Agri-Tourism/Farm Site is a working farm producing and /or showcasing raw and/or processed products. These include tending to farm animals, planting, harvesting and processing of farm products. It covers attractions, activities, services and amenities as well as other resources of the area to promote an appreciation of the local culture, heritage and traditions through personal contact with the local people. The DOT Region IV Director, Rebecca Labit, cited the importance of educating the non-farming public about farms and farm products, as well as the preservation of the rural landscape. She added that agri-tourism or farm tourism is seen to be an attractive option to the usual sun and beach activities and contributor to sustainable source of income for farmers. In this case, CEFA is qualified to apply for accreditation to showcase its abaca production and social enterprise systems. Through this initiative, another profitable endeavor, a value-adding potential enterprise designed to promote the traditional agricultural abaca farming sites and practices of Mondragon can be explored as income-generating tourist destinations for CEFA and its producers. The table below presents the tests based on intervention criteria as to how far the identified abaca-related social enterprise and new product lines can bring the abaca BDFE and the scale up coverage closer to the six principles of BTP-WEE-AVCs.


Table 51. Tests Based on Intervention Criteria Towards the BTP-WEE-AVCs of Identified Abaca Related Social Enterprise and New Product Lines Enterprise Intervention Categories Abaca Tuxy Buying & Fiber Processing

Time Frame Immediate (within six months to one year Practicability It is already being done, for exploration and

profitability analysis. Just started in October 2018. Coverage-Enterprise or Subsector Wide (Wide Area Level)





Dependent on availability/provision of the following: o Capital for buying tuxies from farmers (GFI/MFI) o Transport facilities (DAR) o Warehouse and common drying facility

(PLGU/PhilFIDA) o Stripping machines (PhilFIDA, Ching Bee) o Accredited/licensed classifiers (PhilFIDA)


Possible future tenurial problems in land use / ownership / rights or threat of changes in tenurial and stewardship arrangements with existing or future holders



Setting up of Community Nursery for the Propagation and Sale of Quality and Disease-Free Abaca Seedlings and Plantlets

Time Frame Can be done in the medium-term subject to provision of production capital.

Practicability Easily doable by the abaca farmers and their organization


Can be done at the farm-level and/or enterprise level




Dependent on availability/provision of the following:

o Nursery lot (LGU/CEFA)

o Irrigation facility (NIA/LGU)

o Nursery farm house/bunkhouse (LGU/CEFA)

o Source of abaca seedlings and plantlets (PhilFIDA)

o Training on nursery establishment, maintenance and propagation (DENR, PhilFIDA, UEP)

o Licenses and certifications (PhilFIDA) Biodiversity and Land Use Principles

Have positive impact of biodiversity and environmental sustainability and with positive effects in mitigating the effects of natural and man-made disasters.



Engaging into other value adding products 1.Rope/Twine Making

Time Frame Can be done in the long-term subject to feasibility study and profitability analysis

Practicability Doable only after several “buy-ins” from leaders and organizations or after some intermediate intervention like capacity building or integration in the PCIP of PLGU



Can be done at enterprise and subsector wide (needing oversight by higher organizations





Twinning machine (PhilFIDA, DTI)

Skills on making abaca twine/rope (DTI, PhilFIDA)

Business operating center for making abaca twine/rope (PLGU/DTI)

Operating capital for making abaca twine/rope (GFI/MFI)





2. Fiber Crafts Making

Time Frame Can be done in the medium-term subject to feasibility study and profitability analysis

Practicability Already done in the past but not sustained, it is easily doable by the abaca farmers and their organization


Can be done both at the farm-level and enterprise levels





o Skills on making fibercrafts (DTI)

o Business operating center for making fibercrafts (DTI/PLGU)

o Operating capital for making fibercrafts (GFI/MFI)

o Technologies and production facilities (DTI/PhilFIDA)

o Accredited/licensed Fibercrafts Designers (DTI) Biodiversity and Land Use Principles

Have positive impact of biodiversity and environmental sustainability and with positive effects in mitigating the effects of natural and man-made disasters.



Local Fabrication of and Trading of a Women-Friendly Stripping Device

Time Frame Can be done within six months to one-year subject of financial capacity of CEFA

Practicability It is easily doable by the abaca farmers and their organization


Can be done both at the farmer level and enterprise





o Prototype machines (TESDA/PhilFIDA)

o Licensed local fabricators (TESDA/LGU)

o Capital for fabrication and trading (GFI/UNDP-SGP5)


o Training on the proper use and maintenance of improved stripping device (TESDA/PhilFIDA)





Application for TESDA Accreditation as a Skills Training Center

Time Frame Can be done in the medium-term subject to completion of required facilities

Practicability Doable only after some intermediate intervention like capacity building and readiness to apply for TESDA accreditation







o Capacity building on how to run a training center (TESDA)

o Competent manpower to run the training center (EVPRD/CEFA)

o Competent trainers/speakers (EVPRD/CEFA)

o Training skills to Offer with defined module/curriculum (TESDA)





Accreditation as an Agro-Ecotourism Enterprise

Time Frame Can be done in the medium-term subject to completion of required facilities

Practicability Doable only after some intermediate intervention like capacity building and readiness to apply for DOT accreditation




Both Transactional and transformative



o Capacity building on how to run the agro-ecotourism enterprise (DOT)

o Competent manpower to run the agro-ecotourism enterprise (EVPRD/CEFA)

o Accredited Tour guides and tour packages (DOT)






Desired Subsector Map of CEFA’s Abaca Biodiversity Friendly Social Enterprise (BDFSE) The following figure shows the current and the desired functions of CEFA in the abaca subsector value chain in Northern Samar specifically in the municipality of Mondragon. Through the several scaling up interventions already presented, CEFA shall be transformed, from being a mere fair trade and BDFE initiative, into a GBE or Class A trader social enterprise that is taking over several functions from planting stocks production to marketing. The abaca farmer producers shall have ample time to concentrate in farm establishment and maintenance, and in taking part in CEFA’s value adding activities such as fiber craft production as result of the association’s expanded functions


.

CEFA-EVPRD BDFSE Management Structure As previously presented, CEFA needs to adopt an enhanced organizational structure and consolidate its partners to realize its functions as a BDFSE. As shown below, CEFA’s current organizational structure is simple and has a centralized management team that supervises and supports three major aspects of its operations, namely micro-financing, agriculture and agroforestry, and livelihood (abaca and copra trading). In terms of financial management, it was learned through interview with CEFA officers that the association is not maintaining separate books for its projects. For instance, CEFA’s copra and abaca buying businesses are lumped into one book. It was only recently, upon recommendation of this study, that the association initiated separate recordings of its different projects. In terms of operations, direct and overall

Figure 29. Current and Desired CEFA’s BDFSE Subsector Map


implementation of CEFA’s projects and activities is performed by the General Manager with the support of three Project Managers.

CEFA’s CURRENT ORGANIZATIONAL STRUCTURE

Presented below is the envisioned CEFA-EVPRD BDFSE management structure. The community development and the business aspects of the association are demarcated. All social operations of CEFA such as biodiversity conservation projects, membership development, IECs, and other related activities shall be spearheaded by the Community Development Department under the direct management of the General Manager. An Operations Unit and a Finance Unit shall be installed within the department. The BDFSE Department, under the supervision of the General Manager, shall lead CEFA’s business operations. It shall have a Department Head who will directly manage the operations of the different enterprise units. A separate Finance Unit shall be installed per enterprise division. Specific to abaca trading, separate committees shall be created for each sub-enterprise. CEFA and EVPRD shall formulate policies, processes and procedures to operationalize their BDFSE. It is highly recommended that this should be done prior the granting of the SGP5 start-up grant.

GENERAL ASSEMBLY

5 BOARD OF DIRECTORS

Chairman (1)

Members (4)

MANAGEMENT TEAM

General Manager

Secretary

Treasurer

Cashier

Bookkeeper

Liaison Officer

MANAGER ON MICROFINANCING

MANAGER ON AGRICULTURE & AGROFORESTRY

MANAGER ON LIVELIHOOD/

BUSINESS

Figure 30. Current Organizational Structure of CEFA


CEFA-EVPRD BDFSE STRUCTURE

GENERAL ASSEMBLY

5 BOARD OF DIRECTORS

Chairman (1)

Members (4)

GENERAL MANAGER

COMMUNITY DEVELOPMENT DEPARTMENT

OPERATIONS UNIT

Community Development Officers/Cluster Leaders

FINANCE UNIT

Cashier

Bookkeeper/ Administrative Officer

Membership & Education Committee

BDFSE DEPARTMENT

Department Head

COPRA & CACAO TRADING UNIT

Unit Head

Cashier

Bookkeeper

ABACA TRADING UNIT

Unit Head

Cashier

Bookkeeper

FIBER BUYING COMMITTEE

Cluster Leaders

TUXY BUYING COMMITTEE

Stripping Machine

Operators

Cluster Leaders

ABACA NURSERY

COMMITTEE

Caretaker

FIBER MANUFACTURING

COMMITTEE

Workers

MICROFINANCE UNIT

Unit Head

Cashier

Bookkeeper

Figure 31. CEFA-EVPRD BDFSE Structure


P A R T 2 . S T R A T E G I C

D E V E L O P M E N T A N D

I N V E S T M E N T P L A N F O R

S C A L I N G U P A B A C A

B I O D I V E R S I T Y - F R I E N D L Y

S O C I A L E N T E R P R I S E O F

E V P R D - C E F A Compendium of Workshop Outputs with EVPRD-CEFA and Abaca Subsector Stakeholders


BACKGROUND This draft is a companion document of the Subsector Action Research study done under the UNDP-GEF SGP5-funded project of the Institute for Social Enterprise in Asia (ISEA), “Model Building for Scaling Up Biodiversity Friendly Enterprise (BDFE) Initiatives. The subsector research started in mid-September 2018 and the first draft was completed 23 October. The results of the subsector action research, focusing on the abaca subsector, value chain and enterprise of Eastern Visayas Partnerships for Rural Development (EVPRD) and Centralized Farmers Association (CEFA), were presented in a series of assessment and strategic planning workshops and validation activities with various stakeholders’ in the whole month of November. The results of the assessment and planning workshops are documented in this draft, Strategic Development and Investment Plan for Scaling Up Abaca Biodiversity-Friendly Social Enterprise of EVPRD-CEFA.

OBJECTIVES AND SCOPE OF DISCUSSION The following are the objectives of this report and its coverage: 1. To present the final validated and enhanced outputs of the series of strategic assessment and

planning workshops undertaken by the stakeholders of the abaca biodiversity-friendly social enterprise (BDFSE) of EVPRD and CEFA. These are: a. Development challenges and opportunities faced by the Northern Samar abaca subsector

and stakeholders o Summary of major findings of the subsector action research and validated by

stakeholders o Identification of development problems, solutions and interventions

b. Strategic Development and Investment Plan: o Phase I: Production-based and Stakeholder-identified interventions, (Year 1 to Year 3);

and o Phase II: Market-driven interventions (End of Year 3-onwards to Year 5)

c. One-year Operations Plan o Investment and budget plan for the utilization of the UNDP-GEF SGP5 grant through

the ISEA project Model Building for Scaling Up BDFE Initiatives 2. To present how the plan, its set of interventions and investments, intends to positively impact

on improving the quality of life and living environment of the poor and small producers in Mondragon, Northern Samar BDFE site and expansion areas by highlighting the following features of the outputs:

a. How the scaling up interventions maintain, expand and/or enhance biodiversity principles

and practices in the Samar Island Natural Park (SINP); b. Social enterprise framing of the set of interventions (i.e., addressing the multiple bottom

lines of pro-poor, profit and planet) and their respective key performance indicators; and c. Alignment to the eight elements of the BTP-WEE in AVCs.

STRATEGIC ASSESSMENT AND PLANNING PROCESS

The outputs were produced in two assessment and planning phases which produced two major parts of the strategic and investment plan:


Processes Outputs WORKSHOP 1: Strategic Assessment and Planning of Abaca Stakeholders: November 8 and 9 PROCESS FLOW: o Presentation of the results and findings of the subsector

action research o Surfacing of problems and solutions on the abaca

subsector, value chain and enterprise from three major stakeholders: o EVPRD and CEFA: Women and small abaca farmer-

members o EVPRD and non-CEFA small abaca farmers and

workers o Enablers: Provincial and municipal LGUs, DENR, DAR,

DA, and others o Consolidation and clustering of major interventions

common to all stakeholders: o Interventions that enable the abaca subsector, value chain

and enterprise scale-up into a BDFSE o How these interventions align with the major elements of

the BTP-WEE in AVCs o Validation, prioritization and enhancement of workshop

outputs: Interventions (with activities, objectives, targets, indicators, time frame; one-year Operations plan) – (Post-workshop 1 activity held 15-16 November)

MAJOR OUTPUT: Stakeholders plan & production-focused interventions that will scale-up the abaca subsector along better abaca production, strengthening CEFA’s capacities in abaca enterprise production, trading and consolidation, enhanced coverage of the KBA & greater women & small farmer involvement in the next 3 years TABLES: o Table 1 Abaca Subsector Plan for

Scaling Up BDFE (Part I) o Table 1.1 Outputs of three (3) groups of

stakeholders (CEFA farmers, Non-CEFA, Enablers)

o Table 1.2 Abaca Subsector Plan for the Identified Strategic Options

o Table 2 One-year Operations Plan

Workshop 2: Market-based and demand-based interventions to strategically move up the Abaca value chain: November 26 and 27 PROCESS FLOW: o Presentation of the abaca subsector market trends at the

national/local, export and global market: o Pulp and specialty paper (food/non-food grade; bleached

and unbleached), cordage, fibrecraft/textiles and others o Aligning EVPRD-CEFA fiber production and investments

needed (now and in the near future) towards the nearest possible pre-manufacturing product form

o Enhanced strategic development plan and intervention from the 3rd year onwards: How to attain high-grade fiber products (from production, classification and certification skills), piloting semi-processed/semi-final pulp processing (biodiversity-friendly & led by or participated in by women and small farmers), investment and budget plan for the next 5 years

MAJOR OUTPUT: Market-based & final (abaca) product demand-based plan & set of interventions that will scale-up EVPRD-CEFA’s abaca fiber production to higher grade and certified fiber and piloting community-based pulp/paper processing technology after the 3rd year-onwards to Year 5 TABLES: Table 3: Abaca product grades to focus on by EVPRD-CEFA by the end of year 3 – onwards, Volume/Frequency, Hectarage and Intermediate Product Form Table 4: Interventions and investments needed to produce the high-grade semi-final, intermediate abaca products Table 5: Proposed Interventions, Investments and Indicative Budget Table 6: Capacity Development Plan

DEVELOPMENT CHALLENGES, STRENGTHS AND OPPORTUNITIES AND EMERGING OPTIONS

This section presents the major outputs of the assessment and planning processes undertaken in Workshops 1 and 2, side-by-side with the findings of the Abaca Subsector Action Research (validated in by stakeholders and supplemented by the Philippine Abaca Roadmap or PAR). The analysis of the alignment of the development challenges: problems/issues/concerns across the subsector channels and stages of the value chain with the evidenced-based results of the action research serves several purposes:


1. The strategic and tactical options in the last column of the comparative analysis serves as

basis for the two thematic cuts of the Phase I Strategic Development and Investment Plan: (a) Consolidated Stakeholder-identified Interventions (Table 1.1) and (b) Abaca Subsector Plan (Table 1.2).

2. Determining consistency of the identified development problems with the findings from the action research, PAR, and expert analysis of the facilitators and key resource persons from the agencies and other stakeholders;

3. Identifying the presence of strengths and opportunities that can serve as countervailing factors that can address the challenges or problems or serve as sources of solutions to address the same; and

4. The resulting comparative analysis between (a) and (b) will test the practicability of the identified strategic and tactical options.

In photos: Abaca Subsector Planning Workshop on November 8, 2018 at Diamond Hotel, Catarman, Northern Samar (Top Left) Merlinda P. Calubaquib, ISEA’s Field Research Team Leader, presents the initial results of subsector study to the planning workshop participants. (Top Right) Jay Lacsamana, Subsector Planning Resource Person, presents and explains the workshop templates and planning tools to the participants. (Bottom Left) Workshop group with EVPRD staffs and CEFA officers and members, identifies abaca subsector problems, solutions, and priority interventions. (Bottom Right) Workshop Group composed of representatives from LGUs, DAR, and DENR, identifies abaca subsector problems, solutions, and priority interventions

Development challenges and

problems

Formal Inputs from Stakeholders Workshops

Findings from Action Research (Validated in the workshops & supported by Abaca Road Map)

Strategic & tactical options to address the

challenges/problems (Synthesis/summary

consensus in workshops) Action Research Findings Strengths and Opportunities

Situation of abaca farms, plantation management and overall productivity Low productivity of abaca farms in Northern Samar, Mondragon and CEFA-managed farms Unanimously raised in the assessment and planning workshop 1 and validated by stakeholders and key informants during the post-workshop caucuses

Low and inconsistent production/MT (quantity & quality) Lack of high-yielding, virus-resistant varieties Productivity suffers when typhoons hit the BDFE areas; continuing threat of natural disasters

National average is 0.60 MT per hectare. PhilFIDA and the Philippine Abaca Roadmap (PAR) estimates that this can be increased to 1MT per ha. (It can even be doubled or tripled (especially if hybrid, GMO and chemical fertilizers are used – an option rejected by Mondragon abaca stakeholders for their BDFE abaca farms) Northern Samar average production per hectare ranges from a low of 0.39 MT/ha to a high of 0.71 MT/ha. Causes: (a) Poor farm management, (b) virus infestation, (c) damage due to natural disasters & continuing threats (abaca farms are located in the typhoon-prone eastern seaboard)

Overall demand for abaca (raw, classified, semi-processed and processed) is high in all levels: local, national, export and global. The lean period during the global financial crisis has ceased and current demand is largely unmet.

Improve and expand abaca plantation alongside CBFM & bio-fence management Cluster organizing around CBFM & BDFE principles Establish abaca nursery that will propagate seedlings Revitalize MOA of UEP with Prov’l Government of Northern Samar (PGNS) on Abaca Tissue-Culture Conduct trainings on Abaca Plant Propagation and Nursery Management

Underutilized CBFM areas that serve as buffer zones to SINP qualified as BDFE areas

BDFE areas can still be expanded to serve as social and bio-fence to enhance and strengthen the protection of the SINP – the largest and remaining lowland forest in the Philippines. Protecting SINP will help reduce vulnerability of the ridge to reef ecosystem from the destructive effects of natural disasters.

Validated in the action research: There are approximately 512 hectares covered by CBFMA areas involving 1,025 farming households can be involved in the EVPRD-CEFA abaca enterprise network

Limited know-how on sustainable farming technologies of abaca farmers (they tend to forego plant management after initial planting); lack of capital to plant abaca

Manifested feedback by farmers, women leaders and key informants in the action research field work; PhilFIDA has provided for abaca replanting after Typhoon Nona.

CEFA protocol1 has proven to be effective in managing abaca farms. In areas where the protocol was followed, production is better. PhilFIDA has come up with the Abaca Sustainability Manual

1 The EVPRD and CEFA abaca production and marketing enterprise requires farmers to comply with relevant production protocols:

o Adoption of organized production pattern (the farmers need to pass the farm inspection being required by EVPRD, and they should have an approved farm lay-out and production plan); o Planting stocks must only be sourced within the municipality of Mondragon to prevent possible pest and disease outbreak (e.g. bunchy top, mosaic); o Producers are not allowed to open forest areas/kaingin for planting abaca; o Abaca farms should only be established within the multiple use zones; o Integrated farming must be practiced/adopted (i.e. intercropping of abaca with coconut, endemic forest trees, root crops, and vegetables); and

o Planting of hedgerows for soil and water conservation is a must for sloping farms.


problems



Strategic & tactical options to address the challenges/problems

(Synthesis/summary consensus in workshops)

Action Research Findings Strengths and Opportunities

Abaca harvesting & processing technology Lack of access to higher-level harvesting technology & inadequate support services (i.e., transport network & facilities, common services facilities (drying, warehousing, etc.) Unanimously raised in the assessment and planning workshop 1 & 2 by all the groups

Lack of transportation facilities and poor farm-to-market roads Lack of stripping machines Absence of a common drying facility Lack of skills in abaca by-product processing & other value-adding products

Transport cost: P 20 transportation cost per bundle of abaca fiber being paid by local traders, 1 bundle is 50 kg (P 2-6 transportation cost of farmers per kg gathered through FGD) Stripping machines (“spindle-type”) can triple or quadruple the output of fiber compared to manual hand stripping.

Hand stripping: 15-25 kgs of fiber/day compared to spindle stripping: 80-120 kgs fiber/day; income can increase by 39% with machine stripping Out of the 11,188 kg of fiber produced by CEFA in Aug-Sep 2018, only 5 kg is high grade S2 od 0.04%. There is an on-going cost-benefit analysis of tuxy processing and buying being done by CEFA and abaca farmers. In general, there are income increases for CEFA (buying) and farmers can earn more from selling tuxy than selling hand-stripped fibers. The piloting of the system continues to determine best margins for both CEFA and farmers. Drying facilities are also crucial in producing high value abaca fiber. Sun drying takes 8-9 hours, exposes the fiber to various elements like dirt and uncontrolled exposure may affect fiber quality (i.e, tensile strength, etc.)

Presence of CEFA product consolidation system: CEFA Cluster leaders are paid one peso per kg of abaca fiber by CEFA. They do not incur transportation expenses because CEFA is in-charge in hauling the products from the consolidation points. Ching Bee has provided for a stripping machine to CEFA and has committed to add more if CEFA experience is positive. DA’s PRDP and DAR has committed to prioritize the abaca industry of N. Samar, Mondragon and EVPRD-CEFA PhilFIDA has extensively promoted tuxy buying program. EVPRD and CEFA officers have committed to produce the following counterparts: (a) Location for the drying facility (5m x 10m), (b) Maintenance and upkeep of the equipment and facilities

Improve harvesting technology, procure stripping machines, drying and warehousing facilities: Maintain system and at the same time mobilize resources to invest in transport facility (truck and system) either through grants or assistance from government agencies (i.e., DAR’s Links Farm Project, DA’s PRDP, etc.) Investment in stripping machines (9-12 units) Pursue the product differentiation strategies: Tuxy buying or processing (depending on results of the cost-benefit trials and other variants) Fiber classification Fibrecraft manufacturing and trading Abaca rope and twine making


problems




challenges/problems (Synthesis/summary consensus

in workshops) Action Research Findings Strengths and Opportunities

Challenges to the Social Entrepreneur with the poor as primary stakeholders Scaling-up SE practice of CEFA as producer-trader-consolidator Unanimously identified by all the groups in the two assessment and planning workshops

Limited financial capital of CEFA for fiber buying/trading CEFA’s lack of access to credit from formal financial institutions Absence of internal resource mobilization to increase capital assets Unclear profit-sharing among CEFA members Decreasing interest in abaca production (inadequate promotion of abaca)

CEFA has accumulated savings from its involvement as a DENR partner in the National Greening Program (NGP). It’s abaca buying started with the savings from this endeavor but is limited to P100,000. CEFA at the moment has limited financial capacity to service the rest of its members and other abaca farmers in the municipality: Current revolving capital is limited only for buying 2-3 MT per delivery.

CEFA buys abaca fiber from the producers at 2-3 pesos/kilogram higher than other local traders. Abaca farmers, both CEFA and non-CEFA, want CEFA to increase its buying capacity

“Scale-up the fiber trading operations of CEFA” Increase capital and buying capacity: Tuxy buying Increase (double) CEFA’s fiber buying/trading capacity Membership expansion Upgrade CEFA in to Class A or Class B Trader with bigger transaction capacity of 50 MT to 75 MT a year

Marketing and trading system Marketing and trading system: Fragmented and current sharing system needs improvement (fairer trade for the benefit of all stakeholders, particularly to both farmer-cultivators and farm workers)

Fragmented marketing and victim of unfair trading (“kanya-kanya” system) Unfair sharing system 30% of net sale/net income goes to farm owner-cultivator while 70% goes to farm workers Unclear profit-sharing among CEFA members

The unorganized network of abaca farmer producers has been taken advantage of by middlemen: (1) Information on price and buying levels are not disclosed; (2) certain price mark downs are imposed by unscrupulous traders; and (3) overall situation of farmers as price takers has been exploited by the buyers. All-in buying is still practiced; enforcement of PhilFIDA’s directive to cease all-in “pakyaw” buying is expected end of 2018.

CEFA has made in-roads in organizing a marketing system that empowers small abaca farmers. It is open to dialogue and review profit sharing schemes to realize a more equitable system that takes into consideration motivation of abaca farmer cultivator-owners improve their farming technology Policy on prohibiting all-in buying has been issued. Enforcement is expected by end of 2018.

EVPRD and CEFA, in coordination with PhilFIDA, will take the initiative to promote an organized abaca market system by piloting this within its current and future scaling up operations. Profit-sharing within CEFA and among abaca farmers will be reviewed. The review will enable a more equitable profit-sharing scheme, encourage women and small farmers to participate.


problems




challenges/problems (Synthesis/summary consensus

in workshops) Action Research Findings Strengths and Opportunities

Support Services to the Abaca Subsector Weak convergence and coordination with abaca subsector enablers

Lack of assistance from PhilFiDA: Price monitoring, enforcing fair trading systems like prohibiting “all-in” buying), capacity building and training, promoting abaca farming and industry especially among the youth Lack of training support: plant management, harvesting & fiber classification Lack of provincial oversight body to oversee development of the subsector Better coordination and engagement of EVPRD-CEFA with agencies that can provide support services and common service facilities

The action research has extensively laid down the diverse roles of various enabling institutions from government (national and local), service and development non-government organizations and microfinance institutions, and private companies.

PhilFIDA’s Philippine Abaca Roadmap (PAR) 2018-2022 has set forth the priority activities that will revitalize the abaca industry. PhilFIDA has also come out with the Abaca Sustainability Manual (ASM) in August 2016 which details abaca production technologies. (The ASM is yet to be adopted by abaca farmers in Mondragon).

DA’s PRDP has made abaca the priority commodity for assistance under the WB-assisted project for the province of Northern Samar.

DAR’s Links Farm Project has committed to provide for transport facilities.

DENR’s CBFM program has supported the expansion of BDFEs and areas with agreements, enhancing the security of the resource base of biodiversity-friendly livelihood and enterprises

Provincial government is moving to revive the abaca oversight body and the promotion of abaca scholarships. Municipal LGU is set to prioritize abaca in its local investment program.

Strengthen partnerships with PhilFiDA, DENR (national and local) and other relevant agencies to provide biodiversity-friendly technologies in abaca farming and suitability assessment in their capability-building and training programs. Engage agencies for capacity building, training, technical assistance, advocacy & promotion: Provincial Govt, DENR, DTI, DOST, UEP, DPWH, etc. Engage agencies that can provide common service facilities and grants: DA, DAR, DOST, PhilFIDA, etc.

STRATEGIC DEVELOPMENT AND INVESTMENT PLAN (PHASE 1): STAKEHOLDERS AND ABACA SUBSECTOR PLAN (YEAR 1 TO 3) This section presents Phase 1 of the strategic development plan outlining the interventions and investments that are needed to scale up: (a) the primary social enterprise stakeholder, EVPRD-CEFA and the abaca small farmer-members under its ambit, and (b) the abaca subsector and value chain where the EVPRD-CEFA operates its business. (A complete matrix is shown below: Table 1: 1.1 & 1.2).

Stakeholder-Based Interventions: EVPRD-CEFA, EVPRD and Non-CEFA Abaca Stakeholders and Abaca Industry Enablers

The figure above schematically presents the various plan objectives of the stakeholders at each stage of the abaca value chain. At the start of the value chain (i.e., Abaca plantation and production), the interventions revolve around protection and conservation of the ecological resource base. This ensures that the enhancement and/or expansion of the abaca plantation and the source of raw materials (of good quality and desired volume), start with maintaining biodiversity and ecological integrity of the CBFM or Key Biodiversity Area in the SINP. The leading role of the principal stakeholder, EVPRD and CEFA (and its members) is emphasized. Expansion of its network to include more non-CEFA abaca farmers under its fold and scale-up its outreach and increase coverage, is a key feature of the scale up plan in each and every stages of the value chain. The support interventions of abaca industry enablers, principally government agencies at the national and local government levels, is also outlined. Support services are vital in all stages of the value chain until the major final outcome is reached: EVPRD-CEFA and its network of abaca farmers attain GBE or near-GBE status by the end of year 3.


Production-Based Interventions: Abaca Subsector Plan of CEFA (in partnership with EVPRD) This section presents the Abaca Subsector Plan of CEFA. It revolves around improving its various abaca products and by-products. The plan is prioritized according to the perceived product lines that exhibit and capture the highest value added – Fiber trading and classification. 1. Fiber trading – larger scale of operations

o CEFA certifications internal organizational and financial capacity o CEFA’s and farmer-members and women technical capacity in higher-value product output

and classification o Better management and oversight by CEFA

2. Tuxy buying program focus o Establish the value-added of the program o Appropriate management structure to oversee the program

3. Plantlets and seedling propagation o MOA with UEP on abaca tissue propagation o Establish nursery with BPI o Training of nursery managers

4. Fibrecraft o Develop markets o Design improvement o Review cost of labor to improve price competitiveness o Encourage community-based organizations for fibrecraft o Improvement of equipment: high speed sewing machines

5. Abaca Ropes o Develop steady market for abaca ropes (to counter dominance of synthetics) o Capacitate rope-making skills to improve quality of ropes o Improve technology by sourcing or procuring twining machines

In photos: Abaca stakeholders of Mondragon and Northern Samar had workshops to enrich the draft EVPRD-CEFA abaca subsector plan and operations plan, November 15, 2018 at Sophie’s Farm, Mondragon, Northern Samar.

Table 1. ABACA SUBSECTOR PLAN FOR SCALING UP BDFE (PART 1) Date Validated/Enriched: November 15-16, 2018 Venue: Sacred Heart Institute for Transformative Education (Shift) Foundation, Mondragon, Northern Samar Table 1.1 ABACA STAKEHOLDER-IDENTIFIED INTERVENTIONS

Group 1: EVPRD-CEFA and CEFA-Affiliated Abaca Farmer Members

Problems

Solutions Prioritized Intervention

addressing major problems

BDFE Enhancement (Transactional and

transformative)

Moving towards the 8 benchmarks for

women and small producers for

economic empowerment

Time Frame, target and Key Performance Indicators

1. Limited financial capital of CEFA for fiber buying/trading CEFA has Php 100,000.00 revolving capital that can only accommodate and buy 1,000 kgs of abaca fiber

Increase CEFA’s access to government financial services to increase its financial/working capital

Seek financial assistance from local and international donor agencies and benevolent individuals and groups Application of credit facility from financial and/or lending institutions that offers reasonable interest rates

Ensure that CEFA and its members will only avail of credit services from lending institutions and donor agencies that offers reasonable interest rates, payment schemes and customized requirements and procedures favorable to women and small abaca farmers

Encourage women and small abaca farmers of CEFA to form their own cooperative for increased access to government and private financial services

Target/KPI: 60% of cooperative members are represented in by women Time Frame: Year 2 Target/KPI: Increased in capital to P3.9M Time Frame: Year 1

2. Absence of internal resource mobilization to increase capital assets of CEFA (e.g. collection of share capital, fees and dues)

Adoption of cooperative practices and principles on capital assets mobilization and profit distribution. Transform CEFA into agricultural cooperative once they are ready or mature enough to deal

Identify CEFA and non-CEFA members joining CEFA cooperative and provide them pre-membership seminar on cooperative Set indicators on the readiness of CEFA to cooperative2

Orient members on cooperative values, principles and practices Ensure that members thoroughly understand the importance and benefits of transforming CEFA into cooperative

Increase women’s membership in the cooperative; 50% of the management positions as board directors, management staffs and heads of functional/working committees are occupied by women

Target/KPI: CEFA is transformed into a functional agricultural cooperative and CDA registered Time frame: Year 3-5 Target/KPI: 50% of the Cooperative members and management positions are occupied by women

2 The transformation of CEFA into a cooperative is still being evaluated.


with the documentary requirements, financial necessities and structural/organizational pre-requisites of CDA

Time frame: Year 1 Target/KPI:100 % of the CEFA membership supports cooperative formation Time frame: Year 2 Target/KPI: 30 % increase in farmers income as result of cooperative practices implementation Time frame: Year 3

3. Lack of transportation facilities and poor farm-to-market roads Abaca farmer pays P3.00/kg for hauling of abaca fiber from farms to main road/highway and additional of P 1.00/kg for motorcycle or ‘habal-habal’ from main road to buyer/trader

Improvement of transportation facilities from farm to market/trading center Provision of transport facility (draft animals) as alternative to the costly manual hauling

Seek assistance of relevant government agencies for the provision of appropriate type of draft animals (can be carabao or horse) for hauling from farms to main roads to reduce transportation costs of fiber per kilogram Lobby to LGU/DPWH to improve the quality of farm-to-market roads to facilitate transportation of abaca fiber from farm to market/trading centers Secure draft animals from national government agencies and local government units with program on animal dispersals and orient the recipient farmers on proper care and management of livestock

Orient CEFA members and non –members on how to check a quality- constructed and properly -maintained farm to market roads Capacitate recipient of draft animals on proper care and utilization of draft animals as transport alternative

Adoption of transportation facility appropriate to women and small farmers Encourage women and small abaca farmers of CEFA to form a lobby group to: increase their chances to secure draft animals from NGAs and LGUs monitor the quality and maintenance of farm to market roads that were constructed by DPWH and private contractors

Target/KPI: Secured ____ draft animals from NGAs and LGUs for distribution to ___ cluster barangays Time frame: Year 1 & Year 2 Target/KPI: Formed Lobby group within CEFA with clear advocacy and monitoring plan Time frame: Year 1

4. Absence of a common drying facility that can be used

Provision of a drying facility (preferably

Tap donor agencies in putting up drying facilities in strategic cluster barangays

Encourage women and small farmers to increase volume of harvests during

Adoption of harvesting, drying and storing/ warehousing

Target/KPI: A drying and storage facility established and properly maintained


especially during rainy season which usually results to decrease volume of harvests and poor fiber quality of lower price Climate/ Weather Pattern October – January are the wet months in Northern Samar that affects volume of harvests and quality of abaca fiber. This limits abaca harvesting to March until September only.

measuring 5m x 10 meters)

Establishment of drying and storage facilities in strategic cluster barangays

rainy season ensuring good fiber quality and better price Orient women and abaca farmers on the proper techniques of harvesting, drying and storing abaca fibers especially during rainy/wet season

technologies appropriate to women and small farmers Encourage women and small farmers to develop a practical plan to ensure proper use and maintenance of shared drying and storing facilities

Time frame: Year 1-Year 3 Target/KPI: 100 % of abaca farmers oriented on proper harvesting, drying and storing technologies Time frame: Year 1 - Year 2

5. Lack of assistance from PhilFiDA in promoting the importance and economic benefits of abaca including price monitoring

Adequate support and assistance from PhilFiDA in promoting the importance and economic benefits of abaca Periodic price monitoring through installation of appropriate market information system

Request PhilFiDA for IEC materials including personnel to conduct IEC and price monitoring PhilFiDA to provide training to improve management practices and shift from 1 cycle harvesting per year to quarterly harvesting

Strengthen partnerships with PhilFiDA to provide biodiversity-friendly technologies in abaca farming and to include suitability assessment in their capability-building and training programs Request IEC materials from PhilFIDA and engage them to conduct regular IEC in abaca farming communities to increase the appreciation, interest and dedication of women-and small farmers on the importance of abaca farming in local and national economy building

Adoption of biodiversity-friendly technologies and suitability assessment in abaca farming that is appropriate to women and small farmers Adoption and continuous practice of organized production and cluster marketing approach Biodiversity and social entrepreneurship are incorporated in the capacity building programs and IEC campaign and IEC materials of PhilFIDA

Target/KPI: 100% of CEFA members have deepened their appreciation on the importance and benefits of abaca Time frame: Year 1 Target/KPI: 70% of CEFA women members are involved in biodiversity-friendly technologies and suitability assessment Time frame: Year 1 Target/KPI: 70% of women members are involved in organized production and cluster marketing approach Time frame: Year 2 Target/KPI: 100% coverage of training program Time frame: Year 3


Ensure that existing and new abaca farms do not encroach protected areas Improve fiber quality to command better price for increased income of small farmers Adoption of fair-trade practices

6. Unfair sharing system 30% of net sale/net income goes to farm owner-cultivator while 70% goes to farm workers

Improvement of sharing system between farm owners and farm workers

Negotiate with farm workers to have a 50%-50% sharing arrangement

Facilitate series of consultative meetings and dialogues with farm owners and farm workers to improve the prevailing sharing system from 30%:70% to 50%:50% in favor of small farm owners-cultivators

Adoption of a fair and just sharing system that would both benefit the farm owners and farm workers Explain the rationale and the advantages of increasing the net sale/net income of farm owners to motivate them improve farming technology and increase production volume

Target/KPI: A signed Memorandum of Agreement (MOA) between and among farm owners and farm workers adopting a fair and just sharing system Time frame: Year 1 Target/KPI: 50%:50% sharing system adopted in favor to small farm owners-cultivators Time frame: Year 1 Target/KPI: 100% of CEFA members adopts 50%: 50% sharing system Time frame: Year 3

7. Unclear profit-sharing among CEFA members

Establishment of profit-sharing scheme between CEFA and abaca farmer/suppliers

Examine the possibility of a fair/just profit-sharing between CEFA and abaca farmer/suppliers; study appropriate sharing scheme

Facilitate series of consultative meetings and dialogues with CEFA and abaca farmer/suppliers to establish an equitable profit-sharing scheme on CEFA net profits/revenue derived from fiber trading

Encourage women and small farmers to elevate an equitable profit-sharing scheme that would increase their income benefits

Target/KPI: A board resolution adopting an equitable profit-sharing scheme approved by CEFA general assembly Time frame: Year 1 Target/KPI: 100% of CEFA members enjoy equitable sharing system Time frame: Year 3


Group 2: Non-CEFA Abaca Organizations, Enterprises and Farmers Problems

Solutions Prioritized Intervention

addressing major problems BDFE Enhancement (Transactional and

transformative)

Moving towards the 8 benchmarks for women and

small producers for economic empowerment

Time Frame, target and Key Performance

Indicators

1.Fragmented marketing and victim of unfair trading (kanya-kanya system) Certain percentage are deducted by middlemen/local traders aside from the amount borrowed from traders)

Promote an organized production and marketing approach to observe fair trading practices

Seek application for membership with CEFA to avail of higher price margin of 2-3 pesos per kilogram Undergo pre-membership seminar Fill-up membership application form Undergo character check through the membership screening committee Pay membership fee and dues Issuance of membership certificate Join/participate in regular, special and annual meetings and assemblies

Extend membership to women and small farmers Orient new members on organizational policies, members’ roles and obligations and benefits of being a CEFA member Revisit the vision, mission and goals including the criteria/basis for membership recruitment

Expansion of CEFA members in Bgys. Hinabangan, Cahicsan and De Maria in Mondragon including 4 barangays in the Municipality of San Roque Improve/enhance membership criteria that both favors women and small farmers Installation/development of internal policies and systems that promotes fair trading favorable to small farmers

Target/KPI: 400 new active members Time frame: Year 3 Target/KPI:100% of CEFA members are involved in improving membership criteria and expulsion of members Time frame: Year 1 Target/KPI: 100% of women participated in the drafting and implementation of CEFA’s manual of operations Time frame: Year 1

Participate in CEFA’s cluster and organized marketing Participation in SE planning, evaluation sessions including policy making workshops, organizational meetings and business affairs

Orient new members on the principles and values of social enterprise, fair trade and cooperative practices

At least 60% women are participating in SE, fair trading and coop practices

Target/KPI: Functional and clear SE monitoring and marketing system Time Frame: Year 1 Target/KPI: Reviewed and updated business manual of operations Time frame: Yearly Target/KPI: 100% of CEFA members adopts organized marketing schemes

2. Limited knowledge on sustainable farming technologies of abaca since most trainings

Equip non-CEFA farmers on the proper techniques of abaca farming

Apply membership with CEFA to avail of their training packages on proper abaca farming technologies

Involve new women in various trainings such as abaca farming technologies, financial

Ensure that the women and small farmers participate in various trainings on abaca farming, financial

Target/KPI: 60% or 240 women are participating in SE, fair trade and cooperative practices;


conducted by government agencies/LGUs and NGOs are through POs/associations

Participation of new members in trainings- workshops and in BDFE operations planning and evaluation sessions

management and marketing, fibrecraft development and SE operations

management, fibrecraft development and business operations

200 women are involved in financial management and marketing, fibrecraft development and SE operations Time frame: Year 2

3. Lack of capital to enhance abaca production

Increase access of new members/non-CEFA members on credit services

Apply membership with CEFA to avail of their credit services Inclusion of new members especially women as recipient of credit services Orient new members on the policies and systems for availing credit services

Capacitate women and small farmers to access credit services for increased financial capacity Ensure that customized documentary requirements and systems of availing credit favors the women and small farmers

Encourage women to access credit services from CEFA and other lending institutions Adoption of reasonable interest rates on credit that favors women and small farmers

Target/KPI: 60% or 240 women have access to credit and production facilities Time frame: Year 2

4. Lack of skills in abaca by-product processing and other value-adding products

Improve the skills of women and small farmers in abaca by-product processing and other value-adding products

Apply membership with CEFA to avail of skills in abaca by-product processing and other value-adding products

Ensure that skills in abaca by-product processing and other value-adding products will take into consideration the strengths and opportunities of women and small farmers

Adoption of skills training that recognized the strengths and opportunities of women and small farmers

Target/KPI: Established 1 abaca by-product processing and other value-adding products Time frame: Year 3-4


5. Absence/lack of facilities (improved harvesting device, stripping machines, drying facilities, etc.)

Improve the quality and efficiency of harvesting device, stripping machines, drying facilities, etc. of abaca farmers

Apply membership with CEFA to avail of basic facilities such as improved harvesting device, stripping machines, drying facilities, etc.) Engage PhilFIDA and PLGU to provide the basic facilities to improve raw material quality, volume and price margin for abaca farmers

Ensure that fabricated/provided facilities consider the limitations of women and small farmers

Adoption of women-friendly harvesting device, stripping machines, drying facilities, etc.

Target/KPI: 50% of CEFA members provided with improved harvesting device, stripping machines, drying facilities Time frame: Year 2-3

6. Lack of training support from government agencies on plant management, harvesting and classifying

Equip new members with relevant training such as plant management, harvesting and classifying

Seek membership with CEFA to avail of training supports on plant management, harvesting and classifying PhilFIDA and PLGU to provide training on plant management, harvesting and classifying

Capacity building and training applied to all CEFA members to enhance abaca production and trading in favor of women and small abaca farmers

Biodiversity and social entrepreneurship are incorporated in the capacity building programs on plant management, harvesting and classifying

Target/KPI: 100% coverage of training program Time frame: Year 2


Group 3: NGAs, LGUs, Academe, GBEs, & Private Sector

Problems

Solutions

Prioritized interventions

addressing major problems

BDFE Enhancement (Transactional and

transformative)

Moving towards the 8 benchmarks for women and

small producers for economic empowerment

Time Frame, target and Key Performance Indicators

1. CEFA’s lack of access to credit from lending/financial institutions

Improve CEFA’s access to credit facility of government financial institutions

Identify/mapping of financial institutions with credit windows for abaca production and facilities Engage the Provincial Government of Northern Samar (PGNS)-Provincial Community Cooperative and Community Affairs Office (PCCAO) and DAR to capacitate CEFA to become credit worthy PO

Orient CEFA on the basic requirements and steps to facilitate accessing of credit services from financial or lending institutions Mentor CEFA in fulfilling the documentary requirements for accessing of credit facilities of banks

Biodiversity conservation and social entrepreneurship incorporated in the training programs geared towards accessing credit and financial services Ensure that financial or lending institutions simplify their lending processes and documentary requirements Encourage women to form a credit lobby group to influence financial/lending institutions to lower their interest rates and abridge their lending processes and requirements

Target/KPI: 100% of CEFA members are familiar with banks protocols and lending requirements Time frame: Year 1 Target/KPI: P 1 M credit fund accessed Time frame: Before the end 3rd quarter of 2019 Target/KPI: CEFA becomes a credit worthy PO Time frame: Year 2

2. Absence of multi-sectoral structure to oversee abaca development program of Northern Samar

Reactivate the Abaca Focal Group/Abaca Multisectoral Council (AFG/AMC) in Northern Samar with the proper representation of women and small farmers

PLGU-NS and PhilFIDA to take the lead in re-organizing the AFG/AMC with clear plan of action and membership composition that include women and small farmers group

Revisit the vision, mission, goals and objectives of the AFG/AMC and ensure that the development agenda of the women and small farmers are considered in the reactivation of AFG/AMC Ensure that the AFG/AMC have membership from women’s group and small farmers and orient them on the advantages/benefits of

Expansion of AFG/AMC membership in Mondragon through CEFA, 50% of which are seats occupied by women

Target/KPI: Reactivated/functional AFG/AMC adopting a multisectoral membership with approved EO of Governor and with annual budget allocation for sustained operation Time frame: Year 1 Target/KPI: 50% of seats in the AFG/AMS represents the women and small farmers Time frame: Year 1


having a seat in the AFG/AMC Strategic and annual planning sessions and regular reviews and updating of plans are conducted with active participation of women and small farmers

Target/KPI: Developed AFG/AMC manual of operations that includes membership composition, roles and responsibilities of members, schedule of meetings and planning sessions, etc. Time frame: Year 2

3. Low production of quality abaca fiber

Provision/Accessing of pre and post- harvest facilities such as improved harvesting device, stripping machines, drying and transport facilities, etc.

PhilFIDA and LGU to provide training on proper care and maintenance on the use of harvesting device, stripping machines, drying and transport facilities, etc.

Pre and post- harvest facilities accessed prioritizing women and small producers as target recipients/users Capacity building and training is applied by target clients of CEFA to ensure longer and optimized use of facilities

CEFA is included as beneficiary of the World Bank funded-Philippine Rural Development Project (PRDP) in Northern Samar that focus on abaca as a priority commodity which will include infrastructure support under I-Build component, enterprise development under I-Reap Component. CEFA is assisted to prepare business proposal/business investment plans to PRDP through the PPDO-PRDP Focal Person. Integrating the development concerns and programs concerns of abaca subsector in the CLUP of LGU Enabling policies/support developed by LGUs to enhance abaca subsector development in Northern Samar

Target/KFI: Inclusion of CEFA as target client in PRDP of PLGU; partnership MOA for the PRDP forged by PLGU and CEFA Time frame: Year 1 Target/KPI: Abaca is the priority commodity in the Provincial Commodity Investment Plan (PCIP); Abaca subsector plan is integrated in the Comprehensive Land Use Plan (CLUP) and the Provincial Physical Development and Framework Plan (PPDFP) of LGU Time frame: Year 1

4. Lack technical know-how of abaca farmers on advance farming technologies

Equip abaca farmers with the following trainings on abaca plant management and production technologies

PhilFIDA and PLGU to provide training on abaca plant management,

Capacity-building programs are undertaken giving priority to women and small producers

Women-friendly abaca production technologies are adopted

Target/KPI: 100% coverage of training program involving women Time frame: Year 1 and 2


including harvesting and classifying

harvesting and classifying

Capacity-building and training is applied to target clients of CEFA to enhance abaca production and trading in favor of women and small abaca farmers

Biodiversity and social entrepreneurship is incorporated in the capacity development programs in both existing and expansion areas of CEFA

5. Decreasing number of farmers engaged in abaca production due to aging population

Promote the PLGU scholarship program for students enrolling in Agriculture courses

Identify students who are interested to enroll in BS agriculture courses and help them access the PLGU scholarship program PLGU to customize the procedures and requirements to ease the application process for availing PLGU scholarship program

Orient the new scholars/students on the importance of abaca subsector and its contribution to the local and national economy Develop a mechanized production technology to encourage the youth to engage in abaca farming and industry development

Encourage young women and men to avail of PLGU scholarship program and form their own associations to influence the youth to take up agricultural courses and ultimately engage in abaca farming Biodiversity and social entrepreneurship is incorporated in the development and adoption of a mechanized production technology for abaca farming

Target/KPI: 200 young women and men availed of the scholarship program of PLGU Time frame: Year 1 to Year3 Target/KPI: Production technology mechanization plan for abaca Time frame: Year 3

6. Lack of high-yielding and virus-resistant abaca varieties

Provision of high yielding and pest resistant varieties through tissue-cultured plantlets Propagation of abaca through seeds and suckers

Establishment of abaca nurseries for distribution and commercial purposes

Good planting materials are propagated and provided to small abaca farmers in a timely manner Capacitate the women and small farmers on the proper technique of propagating abaca through seeds and suckers

Engage more women in the operation and management of abaca nurseries and tissue culture laboratory

Target/KPI: One (1) functional Tissue Culture laboratory established Time Frame: By end of 2019 Target/KPI: 50% of Abaca nurseries are managed by women Time frame: Year 2 Target/KPI: Revitalize partnership of UEP with PLGU for the re-establishment of Tissue Culture Laboratory Time frame: Year 1


Target/KPI: 1 community nursery established in strategic cluster barangays Time frame: Year 3

Table 1.2 ABACA SUBSECTOR PLAN FOR THE IDENTIFIED STRATEGIC OPTIONS

Problems Solutions Prioritized interventions BDFE Enhancement Moving towards the 8

benchmarks for empowerment

Timeframe, targets/KPI

A. Bigger fiber trading operations of CEFA partnering with EVPRD

CEFA is a class D Trader with limited transaction/trading capacity of only 25 MT yearly CEFA BDFE operations is limited to buying and selling fibers

Upgrade CEFA in to Class A or Class B Trader with bigger transaction capacity of 50 MT to 75 MT a year

Review of PhilFIDA’s policies and documentary requirements on upgrading of Trader’s classification Seek PhilFIDA assistance to fulfill CEFA documentary requirements for a Class A trader Application (once ready) into Class A or B to entitle CEFA to engage into larger transaction capacity and undertake fiber classification and grading

Ensure that CEFA/EVPRD is ready and business maturity enough to engage into bigger fiber trading operations Ensure that CEFA/EVPRD BDFE upgrading initiatives is favorable to women and small farmers

Sustain adoption of fair-trading practices that would benefit small farmer/producers Adoption of classifying and grading technology that are favorable women and small farmers

Target/KPI: CEFA is classified as Class A or B; trading 50MT to 75MT yearly; classifying and grading are undertaken Time Frame: Year 4-5

Fibers of lower grades and of lesser buying price are supplied to buyer

Equip CEFA cluster team leaders with the proper skills in classifying & grading abaca fibers Request NGA and LGUs to provide common drying

Seek PhilFIDA assistance for conducting training on fiber classifying and grading Improve fiber quality through use of fiber stripping machines that can produce premium quality of fiber,

Capacity building and training is applied by CEFA participants to enhance fiber grades that commands higher price Engaging NGA and LGUs to help

Women and small farmers acquired competence on classifying & grading abaca fibers for better fiber quality and increased HHs income

Target/KPI: 80-90% of abaca fiber produce with excellent fiber grade commanding higher price Time Frame: Year 2-3


facilities and construct/establish them in strategic barangay clusters

including drying and warehousing facilities

contribute on improving the abaca fiber quality and encourage them invest on abaca pre-& post- harvest facilities to benefit the small farmers

Inclusion in the Provincial Commodity and Investment Plan (PCIP) and Philippine Rural Development Program (PRDP) investment opportunities like machineries to improve fiber quality and increase income of small abaca fibers

Absence of a separate management structure to manage abaca trading business with entrepreneurial and financial management skills

Form a separate management structure to manage the abaca fiber trading business of CEFA Need to conduct training on financial management and mentoring to capacitate CEFA in handling bigger business operations

Installation of a functional and competent management structure to manage the fiber trading enterprise of CEFA

Ensure that women acquire seats in the management structure for CEFA’s fiber trading

Inclusion of women in the management structure and equip them with leadership, financial management and entrepreneurial skills

Target/KPI: Installed management structure with competent operations units and key finance sfaffs Time Frame: 1-2

B. Tuxy Buying Buying price of tuxy is not well established yet

Conduct trial/test run on tuxy buying and assess the profitability and viability results

Determine the profitability and viability of tuxy buying

Ensure that fair pricing and fair-trading practices are adopted

Tuxy buying is benefitting the women and small farmers

KPI: Increase in volume of tuxy bought adopting fair price Timeframe; Year 1

Absence of appropriate management structure for tuxy buying operations

Form/set-up a management structure for tuxy buying operations

Identify and capacitate CEFA officer to lead the operating management structure for tuxy buying

Women are represented/ seated in key positions of the management

Women are involved in decision and policy-making processes for

KPI: More women are sitting in key management positions


with clear administrative and operational policies, plans, and responsibilities

structure for tuxy buying

effective and efficient tuxy buying operations

Timeframe: Year 1

C. Plantlets Propagation/Seedling Production

Limited source of excise (tissue-cultured) abaca plants

Revitalize MOA of UEP with Prov’l Government of Northern Samar (PGNS) on Abaca Tissue-Culture Laboratory operations

Conduct consultation-meeting with the new Prov’l Gov’t of NS Administration/ Provincial Agriculture Office (PAO)

Virus-free abaca plantlets are planted through Elisa Testing Method Genetic pool of native/endemic abaca species are conserved

Small farmers and women are involved and benefited in virus-free abaca plantlets propagation

Target/KPI: MOA is revitalized/ signed Timeframe: Year 1

Lack of Bureau of Plant Industry (BPI)-accredited abaca nursery operators and planting material suppliers

Establish abaca nursery that will propagate seedlings from seeds, suckers and excise abaca

Conduct cost-benefit analysis/ feasibility study on abaca nursery operation Preparation of business plan Processing of business permit/ certification Preparation of detailed engineering design of abaca nursery by PPDO-PRDP

POs/small abaca farmers are managing and operating abaca nurseries with government accreditation

More women are involved in nursery management and operation

Target/KPI: One (1) BPI-accredited abaca nursery established; Timeframe: Year 2

Lack of skills in nursery management and plant propagation

Conduct trainings on Abaca Plant Propagation and Nursery Management

Conduct training by LGU of Mondragon with UEP as resource persons Provision of starter kit by LGU of Mondragon

Women are priority participants in skills trainings

Women are benefiting from the skills trainings

Adoption of nursery management and plant propagation technology that is appropriate for women

Target/KPI: 150 women participating in nursery management and operation

Timeframe: Year 2


D. Fibrecraft Manufacturing and Trading Absence of community-based abaca fiber manufacturing enterprise in the province

Develop good markets for abaca fibrecrafts

Marketing exploration through linking with potential markets and local manufacturers like in Bicol

Ensure that women serve as dominant player in market linking and in managing the manufacturing enterprise

Adoption of marketing and manufacturing technologies that consider the strengths and weaknesses of women

Target/KPI: 1 established community-based abaca fiber manufacturing enterprise Timeframe: Year 3

Unaware of unique fibrecraft designs that can create potential market niche

Tap concerned agencies such as DTI and DOST and private design developers for establishing a unique brand of fibrecrafts Product promotion

Conduct training on modernized fibrecraft design making and product branding Participation in local and national trade fairs to introduce/promote product designs/brands

Ensure that women are given priority in design making trainings, brand development and product promotional activities

Women are benefitting from the skills training, product design development, brand development and promotional activities

Target/KPI: Developed unique fibrecraft designs & brands for Northern Samar Timeframe: Year 2

Price is not competitive/ High labor cost

Conduct simulation workshops on labor costing and pricing

Request from DTI training on labor costing and pricing

Fair trade practices are adopted in price setting

Women are properly consulted for establishing competitive prices for abaca fibrecrafts based on quality and designs

Target/KPI: Sales of fibrecrafts increased adopting a competitive pricing scheme Timeframe: Year 2

Lack of competent group to take lead in abaca fiber manufacturing enterprise

Form a community-based association/group to take lead in the management of a fiber manufacturing enterprise

Organizing a community-based association/group and equip them with basic leadership and entrepreneurship skills

Orient the group on the proper values of community-based and managed social enterprises

Creating an all- women’s group to take on the management tasks to optimize their potentials and benefits

Target/KPI: An all-women’s group formed and registered with DOLE with entrepreneurial skills Timeframe: Year 2-3


Absence of high-speed sewing machine

Secure high-speed sewing machines

Apply with DTI as beneficiary of their Shared Service Facility Project (SSFP) and orient them on the proper machine operation and maintenance

Women-friendly fibrecraft machines are provided with training and mentoring sessions

More women are involved in fibrecraft production and operation of fibrecraft machines

Target/KPI: Two (2) high-speed sewing machines are secured and operated by women Timeframe: Year 3

E. Abaca Rope/Twine Making

Synthetic fibers/ nylon ropes are readily available in the market compared to abaca rope

Develop/identify potential market for abaca ropes/twines as alternative to synthetic fibers/ nylon ropes Determine the viability and profitability of twine/rope manufacturing enterprise

Link with abaca-based ropes/twine manufacturers and buyers Conduct of market survey and business planning workshops

Ensure that abaca ropes have market potential and niche in the local and national markets Small producers and women are involved in market survey and business planning workshops

Women and small producers are benefiting from the ropes/twine manufacturing enterprise Designing a market survey and business planning design and methodologies that can be handled by women

Target/KPI: Developed markets for abaca ropes; Prepared market analysis and business plan Timeframe: Year 3

Lack of skills on rope/twine making

Capacitate the women and small producers in rope/twine making

Conduct training on rope/twine making

Small producers and women are capacitated in rope and twine making

Women and small producers are priority participants from the rope/twine making skills training

Target/KPI: 160 women are trained and producing ropes/twines Timeframe: Year 2

Absence of twining machines

Secure twining machines

Make letter request to DTI for twining machine

Women are involved in twine/rope making

Women and small producers are benefitting from the enterprise

Target/KPI: Four (4) units twining machines secured and operated by women Timeframe: Year 2

STRATEGIC DEVELOPMENT AND INVESTMENT PLAN (PHASE 2): Interventions and Investments to Respond to Market- and Product-based Demand (by the end of Year 3 onwards)

Trajectory of the Strategic Plan Phase 1 and Development Scenario at the Onset of Phase 2:

Phase 1 of the strategic development and investment plan will bring the abaca subsector/value chain/enterprise of its primary stakeholder (i.e., EVPRD, CEFA and abaca farmers under its fold) to the following outputs: 2. Improve the quality and quantity of abaca plants

o Quality – brought about by the promotion and adoption of the CEFA protocol and additional capacity building on proper abaca cultivation, plantation management, and maintenance. The expected value addition of the scale-up project: (i) abaca cultivation in a biodiversity landscape and ecosystem that serves livelihood and environmental sustainability and protection of the SINP protected zone, and (ii) implementation of the abaca sustainability manual (ASM) that has been commissioned by PhilFIDA but has yet to be run on-ground;

o Quantity – new abaca plant stocks are expected to be added under the CEFA fold brought about by opening new clusters in the already awarded CBFM areas and KBAs in the SINP and the migration of erstwhile unorganized and/or non-CEFA abaca farmers. The abaca plantation that have been rehabilitated under the auspices of PhilFIDA (after the Typhoon Nona’s devastation) are also expected to be harvestable within the plan implementation period.

3. Improve the capacity of the abaca farmers in plantation/cultivation and management

4. Expand the BDFE, promote CBFM and KBA advocacies, organize clusters and encourage

abaca farmers membership in CEFA

5. Abaca harvesting, raw material processing, hauling/transport/bundling: o Improve harvesting and compliance to protocols and good practices o Improved technology and facilities o Improve transport and handling, warehousing and consolidation systems

19. Upgraded and scaled up enterprise capacity of CEFA:

o Improved financial capacity, form of organization/legal status and organization of CEFA (decision on cooperative formation or other viable and acceptable alternatives)

o Upgraded its capacity in abaca consolidation, classification and certification Thus, at the end of phase 1, on year 3 of the strategic plan, CEFA shall have attained GBE or near-GBE status. Its pursuance of the abaca subsector plan will bring its operations to the following key performance indicators:

1. It shall have attained a larger scale in its fiber operations; 2. It has mustered the benefits of tuxy buying; 3. It has established its stable source of raw materials through plantlets and seedling

propagation, including establishing and viably operating its abaca seedling nursery enterprise (or through its partner abaca farmer POs/microenterprise);


4. It has improved on the quality, quantity and marketability of its fibrecraft and cordage ancillary industries and successfully help establish the micro and small enterprises of abaca farmer POs along these product lines.

Location in the Value Chain EVPRD-CEFA abaca enterprise shall have attained GBE or near-GBE status by the end of Year 3 of the strategic plan-phase 1. They have moved up the value chain but still short of attaining community-based abaca manufacturing status and still much farther from being a major market player as high-end abaca manufacturer. The figure below locates the status of EVPRD-CEFA and the abaca enterprises under its umbrella. Attaining GBE status at a level of having the capacity to produce three stripping levels and several grades of abaca. Beside the table showing EVPRD-CEFA’s grading status is the Philippine Abaca Roadmap’s (PAR) standard grading table of abaca fibers and the classes per grade. It shows the fiber grades that correspond to certain final abaca products shown on the rightmost table under the “Major market player-High-end Manufacturing”.

Abaca Market and Final Product Demand Based on the action research and PAR, in Eastern Visayas alone, the combined demand for fiber by two (2) pulp and paper processing plants based in Leyte is already pegged at 42,200 MT/year. One of the processing plants (which is the biggest in the region) has a capacity of 36,000 MT of fiber or 12,000 MT of pulp a year. Of this demanded capacity, only 1,938 MT or 5.38 percent of the fiber requirement is met. Majority of the fiber supplied to this pulp manufacturing plant comes from Northern Samar. Due to the shortfall in fiber supply, the pulp manufacturing plant sources its fiber from Catanduanes, Mindanao and even resorts to importing fiber from Ecuador. According to PhilFIDA, the annual fiber demand deficit in the country is 59,000 MT.


The table above shows the structure of demand for abaca fiber to produce high-end/high-value final and customized abaca products. The global and national market indicate the following: 75.2 percent of fiber demand goes to high grade fiber for pulp and paper (final products include tea bags, coffee pads, filters, specialty paper for currency, wraps, adhesive tapes, medical masks, lens cleaner, tobacco paper, vacuum filters, wet wipes, stencil, etc.); 17.2 percent goes to cordage (ropes), and 7.6 percent goes to fibrecrafts.

Imperatives to Move Up the Value Chain, Produce Intermediate Abaca Products and Attain Major Player Status at the Community Level To further move up the value chain, EVPRD-CEFA needs to scale up from being a GBE to a first-class fiber certifier. By doing so, it paves the way for it to become a candidate manufacturer of intermediate/semi-final abaca products. This will entail preparing itself by the end of year 3 to pilot (and, if viable, eventually transform itself) community-based pulp and paper manufacturing. The figure below shows the desired major final outcome of EVPRD-CEFA Enterprise Network: Becoming a major market player consolidator-processor at the community level. It will pilot and, if feasible, eventually attain near-manufacturing status of intermediate and/or semi-final abaca pulp and paper products for the local & export market. The key factor is being able to produce, classify and become a certified fiber producer of S2 (and other high grade) fiber. The foundations of the foregoing originate from the major interventions already identified in the first phase of the strategic plan.

AD, EF, S1, S2

I, G, H

Fiber/Pulp Specifications Final Product / Quality Specifications

Food grade Bleached Tea bags Coffee pods/ filters

Non-food grade/Unbleached

Specialty paper. 75.2% - Currency Wraps Adhesive tapes Medical masks Lens cleaner Tobacco paper Vacuum filters Wet wipes Stencil paper

Cordage 17.2%

Fibrecrafts 7.6%

In photos: EVPRD and CEFA officers, and abaca stakeholders identify targets related to marketing aspects of the EVPRD-CEFA abaca subsector plan and operations plan during the strategic investment and development planning workshop, November 26, 2018 at Sophie’s Farm, Mondragon, N. Samar.


Strategic Development and Investment Plan Phase 2: End of Year 3 onwards The figure below shows the graded abaca products that will be concentrated on by EVPRD-CEFA to prepare itself to become a major market player in Mondragon, Northern Samar. This will signal the start of the phase 2 of the EVPRD-CEFA development and investment plan end of year 3 onwards to year 5.


In photos: CEFA-EVPRD officers present their outputs from the group workshops on November 27, 2018.

Phase II Investments and Interventions Pre-positioned at Year 1

The following tables show the needed interventions and investments at the outset (year 1 onwards) in order for EVPRD-CEFA to position itself implementing the trajectory by the end of year 3:

Needed Interventions & Investments

No. of Women involved

No. of Agri-

workers

No. of Small Farmers

Total Household

(HHs)

Agency Involved

1. Procurement of 12 stripping machines and baling machine

140

200 Existing

400 Expansion

200 Existing 400

Expansion Total: 600

600 NARC-VSU

2.Training on operation and maintenance

25 60 60 60 Trainor from Chingbee will

be tapped 3.Training on abaca by-product development

120 70 70 70 DOST, DTI, PLDO

4. Construction of drying facility cum trading center

120 200 200 200 DPWH)

5. Procurement of digital weighing scale (500 kg capacity)

240 400 400 400 DTI

6.Acquisition of pulp paper production tools

240 400 400 400 DOST, PLDO

7. Registration/ business permit as pulp manufacturer

360 600 600 600 DTI and PhilFiDA

8. Application for certification as fiber trader from PhilFiDA

360 600 600 600 DTI and PhilFiDA

9. Application as fiber classifier from PhilFiDA

2 trained women

classifier awaiting

issuance/accreditation from

PhilFiDA

12 12 12 PhilFIDA

10.Training on fiber classification and grading

50 140 140 140 PhilFiDA

Development & Investment Plan 2nd

Phase: End of Yr 3-onwards


11.Training on pulp production and test run

50 140 140 140 DTI, DOST, PLDO

12. Registration as Class A trader

With digital metric weighing scale

With licensed classifier Having a transaction

capacity of 75 MT and above per year

360 600 60 600 PhilFiDA

13. Procurement of baling machine (4-5 years)

50 600 600 600 PhilFiDA

14. Conduct of training need assessment (TNA)

140 600 600 600 EVPRD

15. Production testing (food and non-food product)

50 50 50 50 DTI, DOST, PLDO

16. Product development, packaging

100 100 100 100 DTI, Design Center of the

Phils.; Community

Crafts Association of

the Phils

Investment and Budget for Year 1-2 (Utilization of the UNDP-GEF SGP5 Grant)

Indicative Budget (Year 1-3)

Priority Intervention Budget 1. Procurement of stripping machines @ 70,000/unit x 12 units Php 630,000.00 2. Establishment of drying facility (5 x 10 M) 500,000.00 3. Procurement of weighing scale (500 kg capacity) 120,000.00

4. Additional capital for: 1. Fiber trading 2. Tuxy-buying

480,000.00 210,000.00

5. Truck (second hand) 560,000.00 6. Management Cost and Capability Building Program 500,000.00

Total Php 3,000,000.00 Note: revised estimates based on the result of the stakeholders’ consultation on December 7, 2018


STRATEGIC DEVELOPMENT AND INVESTMENT PLAN: Outreach Among Women and Small Farmers The table below sums up the plan’s total outreach in terms of total population, women and agricultural workers and additional hectarage or hectarage covered across the different programs, projects and activities of the strategic development plan and investment program. A total of population of approximately 62,500 persons will be reached by the various programs, projects and activities of the plan. This covers 3,802 women, 3,230 agricultural workers (majority of whom are also women) or a total of around 7,898 small farming households. This represents a coverage of around 1,000 hectares of abaca-farmed land.

PROGRAMS, PROJECTS, ACTIVITIES TARGET OUTREACH AMONG THE POOR ADDL HECTARAGE

WOMEN AGRI WORKERS

SMALL FARMER HHS

TOTAL PERSONS

HA COVERED

STAKEHOLDER’S PLAN

Coop or Enterprise Formation 40 140 460 3,220

Increase coop membership 70 210 530 3,710 Lobby for support services 80 70 230 1,610

Biodiversity and SE IEC 100 180 500 3,500 Maintenance of facilities 140 140 460 3,220

Sharing benefits of fair trading and distribution system 100 180 500 3,500 Expansion of CEFA members 134 100 266 1,862

Additional hectarage 200 Participants in fair trading & coop devt 80 70 230 1,120

Hectares 155 Participants in various trainings on abaca farming, financial mgt, fibercraft

80 70 230 1,610

Hectares 155 Access to credit 134 100 166 1,162

Hectares 200 Improve the skills of women and small farmers in abaca by-product processing

100 80 200 2,240

Hectares 190 Adoption of women-friendly harvesting device, stripping machines, drying facilities

134 100 166 1,162

Hectares 200 Encourage women to form a credit lobby group to influence financial/lending institutions

140 140 320 2,240

Hectares 300 Expansion of AFG/AMC membership in Mondragon through CEFA, 50% of which are seats occupied by women

50 50 80 560

Hectares 90 CEFA is included as beneficiary of World Bank funded PRDP in N. Samar, participation in business planning

140 140 320 2,240

Hectares 300 Biodiversity and SE is incorporated in the development and adoption of a mechaninized production technology for abaca farming

50 50 80 560

Hectares 91

Engage more women in the operation and management of abaca nurseries and tissue culture laboratory hectares

100 80 200 2,240

Hectares SUBSECTOR PLAN FOR THE IDENTIFIED STRATEGIC OPTIONS

Adoption of classifying and grading technology that are favorable to women and small farmers

140 140 320 2,240

Hectares 300

Women and small farmers acquire competence on classifying & grading abaca fibers

50 50 80 560

Hectares 90

Inclusion of women in the management structure and equipping them with leadership, financial management and entrepreneurial skills

80 70 160 1,120

Tuxy buying benefits the women and small farmers 140 140 320 2,240


Hectares 300 Women are involved in decision and policy making processes for effective and efficient tuxy buying operations

80 70 160 1,120

Hectares 155 Small farmers and women are involved and benefit from virus-free abaca plantlets propagation

100 80 200 2,240

Hectares 190 More women are involved in nursery management and operation

100 80 200 2,240

Hectares 1,090 Adoption of nursery management and plant propagation technology that is appropriate for women

100 80 200 2,240

Hectares 190 Adoption of marketing and manufacturing technologies that consider the strengths and weaknessss of women

100 80 200 2,240

Hectares 190 Women are benefitting from the skills training, product design development, brand development and promotional activities

200 80 100 700

Hectares 190

Women are properly consulted for establishing competitive prices for abaca fibercrafts based on quality and designs

100 80 200 2,240

Hectares 190 Creating an all-women’s group to take on the management tasks to optimize their potentitals and benefits

200 - - -

Hectares 100 More women are involved in fibercraft production and operation of fibercraft machines

200 - - -

Hectares 100 Designing a market survey and business planning design and methodologies that can be handled by women

100 80 200 2,240

Hectares 190 Women and small producers are priority participants in the rope/twine making skills trainings

100 80 200 2,240

Hectares 190 Women and small producers are benefitting from the enterprise twining

200 80 100 700

Hectares 190 TOTAL 3,802 3,230 7,898 62,356 90-1,090 has


P A R T 3 . S T R A T E G I C

D E V E L O P M E N T A N D

I N V E S T M E N T P L A N F O R

S C A L I N G U P A B A C A

B D F S E O F E V P R D - C E F A

Synthesis of Outputs of the Strategic Development and Investment Planning Process


EXECUTIVE SUMMARY The strategic plan to scale-up the abaca BDFSE of EVPRD-CEFA is anchored on increasing abaca farm productivity through intensified farm management and expansion of abaca farmlands under the stewardship of the additional 1,435 farming households in CBFM areas, using the biodiversity-friendly farming. This will allow sustainable supply of raw abaca that will be processed using appropriate and women-friendly technology and facilities to produce high-value fiber, enabling abaca farmers and CEFA to progressively increase their share in the value chain, become major players and increase household incomes. The total investment cost for the next 5 years is P61.6 million or P42,959 per household.

STRATEGIC PLAN FOR SCALING UP THE ABACA BDFSE OF EVPRD-CEFA

A. Program Description

A.1. STATEMENT OF STRATEGIC PROGRAM OBJECTIVES The overall objective of this strategic plan for the abaca subsector where EVPRD-CEFA partnership operates is to scale-up the depth and outreach of CEFA’s abaca BDFSE, without compromising environmental sustainability and biodiversity conservation, and in the process, increasing the share of value added of women, small abaca farmers and farm workers from the ensuing subsector and enterprise scaling-up, by accomplishing the following specific objectives in the next five (5) years:

Income and Productivity

a. Deepen and/or expand the impact of the abaca BDFE on the household incomes of the following abaca primary stakeholders: Existing CEFA-members numbering around 200 abaca farming households: Double or

increase by 150 percent their average baseline income of P30,000 a year to about P45,244 additional income a year by the end of year 5; Incremental increases per year: Year 1 P25,823, Year 2 P29,141, Year 3 P34,877, and Year 4 P38,333;

Additional 200 abaca farming households in Mondragon: Additional income of P9,429 by end of year 2, P18,013 by end of year 3, P19,410 by end of year 4. By the end of the plan, an additional income of P21,825 per household shall have been attained;

Additional 1,025 abaca farming household in four (4) barangays in the Municipality of San Roque: Additional incremental income of P30,732 by the end of year 4 and P34,556 by the end of year 5; and

Additional 210 CEFA members from the farm/agricultural workers: The plant targets to increase CEFA membership from the ranks of farm workers yearly by recruiting 42 new members a year until year 5 for a total of 210. The following are the income benefits per individual farm worker recruited yearly: P11,900 for year 1, P13,300 for year 2, P14,700 for year 3, P16,100 for year 4 and P18,200 for year 5.

Supplemental income for CEFA (engaged in by women- and farm worker-members) from the following projects: (a) Abaca Plant Propagation and Nursery Management, (b) Fibrecraft making, (c) Abaca rope and cordage making, (d) Intercropping and diversification of crops in abaca farms (as part of CEFA farming protocol).

b. Progressively increase abaca farm productivity from 0.45 MT of fiber per hectare to 0.9 MT of fiber per hectare by the end of Year 5: Income increases depends heavily on increasing the volume of high-grade fiber extracted and efficiently processed from the harvest stocks of abaca plants. Thus, overall productivity of abaca farmlands would have to go beyond the Mondragon-wide average of 0.45 metric tons and above the national average of 0.6 metric


tons of fiber per year. The increase will be brought about, not by chemical-dependent abaca plant fertilization process of GMO stocks, but through the environment- and biodiversity-friendly abaca farming protocol of CEFA. (The annual increases in yield per hectare ranges from a minimum of 7% to a high of 13%, based on level of maturation of existing plant stocks, replacement rate of plants and plant care and management that is biodiversity-friendly.)

Environmental Sustainability and Biodiversity

c. Expand the coverage of social and biodiversity protective fencing of the Samar Island Natural Park (SINP) through the enhancement and establishment of 762.5 hectares of abaca BDFEs under EVPRD-CEFA using the CEFA-protocol of sustainable, biodiversity-friendly abaca farming. About 250 out of the 990 hectares or 25% of abaca farms in Mondragon – 150 hectares

of existing CEFA-managed abaca farms plus the 100 hectares of expansion farms within the Municipality of Mondragon;

Additional 512.5 hectares of abaca farms for expansion under the CEFA umbrella and protocol located nearby Mondragon (but already within the jurisdiction of the Municipality of San Roque)

For a total of 762.5 out of the 12,040 hectares or 6% of abaca farms in Northern Samar

Empowerment of Women and Small Farmers

d. Recognition/full development of women as leaders and members of CEFA with a gender-transformative perspective: resolution of gender issues in the value chain and the BDFE system; development of women as equal stakeholders in the value chain and BDFE system with equal access to services, opportunities and benefits There is a high rate of participation of women (60 percent) in CEFA board and other

leadership and organizational activities; There are no clear and purposive policies on women and gender initiatives across the

activities of the organization (CEFA) and in the value chain of the BDFE.

A.2. DESCRIPTION OF OUTCOMES AND OUTPUTS

Income and Productivity Outcomes:

Higher income for abaca farming households stems from the production of high-grade fiber (i.e., S2), which is highly in-demand and commands the highest price among abaca fiber grades. Production of high-grade abaca fiber at a volume demanded by the market can only be attained by abaca farmers through mechanical stripping via spindle type device or by the larger decortication machine (the latter extracts more but affects the fiber’s tensile strength). Outputs to outcomes:

Inputs to Outputs Major Final Outputs Outcomes

CEFA planting protocol: Increased production of raw fiber per hectare via: better farm management, disease control, proper maintenance and use of

High yield of raw fiber from the abaca plant per hectare is harvested either: Harvesting, cutting and then mechanical stripping and extraction of S2;

S2 is produced in desired volumes and

Baseline Average Year 1 Year 2 Year 3 Year 4 Year 5

0.45 MT (Mondragon-wide)

0.619 0.667 0.75 0.8 0.9


organic or biodiversity-friendly fertilizers, etc. Increased production of raw fiber by looking for new areas with existing and mature or harvest-ready abaca plants and entice these areas/farmers to join CEFA’s enterprise Increased future production by opening new areas to prepositioning and plant of new abaca batches, observing spacing and hill maintenance and cleaning

Tuxying – topping and tumbling of mature abaca stalks then the stems are sold to CEFA or a coop-consolidator who then takes care of mechanical stripping to produce S2 S2 produced is dried and bundled; inventory is built-up Increased abaca farmlands in CBFM areas (within and adjacent to Mondragon, SINP) that will replicate biodiversity-friendly abaca farming and serving as bio-fence protecting the SINP

sold to fiber traders / consolidators / Grading and Baling Establishments (GBEs) at a premium price of P90 to P120 per kilogram

KPI: From 0.45 MT to 0.9 MT of fiber per hectare per year

KPIs: 97 percent conversion rate of fiber to S2 through skilled use of mechanical stripper or organized tumbling and selling-buying of tuxies from farmers to coop-consolidator on a regular and consistent basis (volume and correct raw material)

Higher income margin captured by the farmers and their enterprise organization

Environmental Sustainability and Biodiversity Outcomes Environmental sustainability and biodiversity outcomes result from the following outputs: (1) Enhancement of the biodiversity and productivity features of the abaca BDFE areas, (2) Expansion of BDFE/CBFM areas that leads to the expansion of the protective buffer zones surrounding the Samar Island Natural Park or SINP – the largest remaining lowland forest of the Philippines, and (3) Preservation of the endemic species in the BDFE/CBFM areas through the promotion of the CEFA abaca planting protocol (see table below comparing the CEFA protocol versus the traditional farming method). The overall result is a comprehensive and environmentally-sound ridge to reef ecosystem that sustains the various BDFEs supported by UNDP GEF: abaca BDFEs in the buffer zones of the SINP, the rice duck enterprise of another partner in the productive lowlands and the seaweeds BDFE of an NGO in the coastal reefs of the ecozone.

Comparison of EVPRD & CEFA Abaca Production Protocol with Traditional Abaca Farming Method

Production Aspect EVPRD & CEFA Protocol Traditional System Farm planning Farm lay-out and production plan are required

and need to be approved by EVPRD and CEFA No written farm plan

Opening new kaingin farm for abaca farming

Not allowed Usual practice of farmers

Location of farm Should be within multiple use zones, must pass farm inspection by EVPRD and CEFA

Farmers decide where to open or establish farm

Planting stock Should be sourced within Mondragon to prevent possible disease outbreak

Farmers sourced planting stocks within Mondragon

Crop integration Required Farmers’ discretion

Planting of hedgerows Required for soil and water conservation Not usually practiced Planting distance 3m x 5m to allow intercrop Farmers’ discretion

Frequency of brushing Monthly within the first six months from planting; quarterly from the 7th month onwards

Quarterly, usually before harvesting


Empowerment of Women and Small Farmers The desired outcome in relation to empowerment of women and small abaca farmers is the incorporation of a gender transformative perspective in the participation of women and small farmers in the following systems: (a) CEFA organizational bodies and systems, and (b) BDFE and abaca value chain systems. One of the major outputs that will lead to this desired outcome is a gender mainstreaming assessment and formulation of a gender program that is integrated in the scaling-up plan and in the policy making and organizational systems of CEFA and the abaca value chain. About 100 women members of CEFA (existing), and an additional 612 women from the expansion areas and 210 farm workers will attend and be trained on various programs by end of year 5. These programs are aimed at having them acquire basic organizational skills and know-how on the workings of the abaca value chain. These are then used in day-to-day operations of the organization and its enterprise.

A.3. INTERVENTION PLANS: ACTIVITIES AND INPUTS The table below presents the abaca scaling-up endeavor’s “building blocks” that are lined up to produce the desired outputs that lead to the effects or outcomes. The activities are taken from the workshop outputs as identified by the EVPRD-CEFA stakeholders. These activities are then clustered into major project inputs that will be used in producing a set of outputs across the following scaling up components: (a) abaca farm productivity that is consistent and compatible with BDFE and CBFM context, (b) Enhancing and upgrading abaca processing for higher margins and promoting fair trading system, (c) scaling-up’s contribution to environmental sustainability and biodiversity conservation in SINP, and (d) women’s and small farmer’s empowerment.

Components Interventions

Activities identified by the stakeholders Major Inputs

Abaca Farm Productivity along BDFE & CBFM context

Enhancement of productivity and expansion of abaca farms – existing and prospective adopters of the CEFA BDFE system

Improve and expand abaca plantation alongside CBFM & bio-fence management Cluster organizing around CBFM & BDFE principles Establish abaca nursery that will propagate seedlings Revitalize MOA of UEP with Provincial Government of Northern Samar (PGNS) on Abaca Tissue-Culture Conduct trainings on Abaca Plant Propagation and Nursery Management

Abaca farming technology and know-how: CEFA protocol farming technology plus the biodiversity-friendly aspects of the Abaca Sustainability Manual (ASM) as a major project input to produce the desired output of enhanced productivity per hectare and expansion of biodiversity-friendly abaca farms Replication of CEFA Best Practices in BDFE and CBFM: Promotion and expansion program of CEFA among adopters in Mondragon and in nearby barangays in the municipality of San Roque CEFA capital build-up and resource mobilization for abaca farm expansion and cultivation: CEFA in partnership with other enablers (PhilFIDA, mainly) need to establish a credit facility to finance the planned abaca farm expansion using the CEFA protocol and cultivation technology that is appropriate for the BDFE and CBFM areas


Enhancing/upgrading abaca processing for higher margins & promoting fair trading system (income effects) Increasing productivity by increasing efficiency of abaca processing: (a) Sustaining enhancements from abaca plant upkeep to harvesting & intermediate processing for higher grade fiber & maximizing use of lower grade fiber for other product lines, and (b) Organization and operationalization of a fair-trading system

Improve harvesting technology, procure stripping machines, drying and warehousing facilities: Maintain system and at the same time mobilize resources to invest in transport facility (truck and system) either through grants or assistance from government agencies (i.e., DAR’s Links Farm Project, DA’s PRDP, etc.) Investment in stripping machines (9-12 units, initially) Pursue the product differentiation strategies that increases price of processed products or minimize cost of producing fiber: Tuxy buying or processing (depending on results of the cost-benefit trials and other variants) Fiber grading and classification Fibrecraft manufacturing and trading Abaca rope and twine making “Scale-up the fiber trading operations of CEFA” Increase capital and buying capacity: Tuxy buying Increase (double) CEFA’s fiber buying/trading capacity Membership expansion Upgrade CEFA in to Class A or Class B Trader with bigger transaction capacity of 50 MT to 75 MT a year EVPRD and CEFA, in coordination with PhilFIDA, will take the initiative to promote an organized abaca market system by piloting this within its current and future scaling up operations. Profit-sharing within CEFA and among abaca farmers will be reviewed. The review will enable a more equitable profit-sharing scheme, encourage women and small farmers to participate.

Procurement of and capacity building on appropriate community-based, women-friendly abaca harvesting and processing technologies and facilities Investment and budget for the utilization of the project grant under UNDP Estimated investments and resources to be mobilized to service the replication and expansion areas for biodiversity-friendly abaca farms Capacity building program, fibrecraft and cordage production and product improvement and pilot testing of product diversification using both high grade and residual abaca fiber Adoption & promulgation of a fair and just sharing system that would both benefit the farm owners and farm workers: Ensure incentives to both (a) farm owner-cultivators to improve & invest in farm technology and (b) farm workers rightful share Enforcement and monitoring of a Fair-Trading System: Policy on prohibiting “all-in” buying has been issued. Ensuring price monitoring and transparency in price levels and trends

Environmental Sustainability and Biodiversity Conservation in SINP Extend the social/bio-fence of SINP through enhancement and expansion of abaca BDFE coverage in CBFM areas employing the CEFA protocol and other sustainable production approaches

CEFA follow-up activities, negotiation and forging of agreements with the prospective BDFE-CBFA expansion areas: 200 abaca farming households within Mondragon holding 100 hectares of CBFM areas who manifested interest in joining CEFA; and 1,025 farming households in 4 barangays of Municipality of San Roque holding 512.5 hectares of CBFM areas who are potential expansion areas for abaca Community and enterprise organizing along abaca cultivation using the CEFA protocol and orientation on the abaca value chain and enterprise, and CEFA business model and system

Enhancement and establishment of CEFA protocol in about 250 out of the 990 hectares or 25% of abaca farms in Mondragon – 150 hectares of existing CEFA-managed abaca farms plus the 100 hectares of expansion farms within the Municipality of Mondragon Additional 512.5 hectares of abaca farms for expansion under the CEFA umbrella and protocol located nearby Mondragon (but within the jurisdiction of Municipality of San Roque)

Women’s & small farmer’s empowerment through gender mainstreaming in CEFA BDFE system and value chain


Recognition and development of women (and small farmers) as leaders & members of CEFA with a gender-transformative perspective: Resolution of gender issues in the value chain and the BDFE system; development of women as equal stakeholders in the value chain and BDFE system with equal access to services, opportunities and benefits

Conduct of gender mainstreaming assessment and evaluation to determine the extent of women (and marginalized sectors) recognition and role in the BDFE value chain and in the CEFA enterprise organization Training needs assessment and identification of various training and skills development courses along organizational development, enterprise policy and operations, value chain Conduct specific livelihood and enterprise skills enhancing programs, including product and market development

Gender mainstreaming assessment and program design Various capacity building and empowerment of women in CEFA and abaca enterprise and value chain activities: 17 organizational development activities for abaca stakeholders and 16 activities under CEFA subsector/value chain development

A.4. LOGICAL FRAMEWORK OF OUTCOMES RELATED TO THE PRIMARY STAKEHOLDERS The table below shows in the plan’s logical framework particularly focusing on the set of inputs that lead to major outputs and finally to outcomes that are attributed to the plan’s primary stakeholders.


Logical Framework of outcomes related to the primary stakeholders of abaca farmers, women and farm workers engaged in the abaca subsector in Northern Samar

Strategic Objectives / Specific Component

Objectives

Baseline / Assumptions

Subsector Interventions and Investments

(Inputs)

Intermediate Outputs and Output

key performance indicators

Projected Overall Project Final Outputs of Scaling Up Interventions

Desired Development Outcomes by end of

Year 5

Abaca Farmers: Income and productivity

Doubling or additional 150% income (from baseline of P30,000 per annum) of CEFA Farming Households from initial set of interventions: (a) productivity / hectare increases, and (b) S2 fiber production through machine stripping

200 abaca farming households earning an annual average of P30,000 (Year 0) Members remain to be active members of CEFA They are trained on abaca farm maintenance and modern methods of harvesting and fiver extraction and handling

Overall additional income from brought about by strategic and major interventions 1-6:

Additional Average Income per household

Y1 Y2 Y3 Y4 By end of Year 5: Additional net income of P45,244 average per abaca farming household (each of the 200 CEFA member households)

25,823 29,141 34,877 38,333

150 hectares of abaca farms in BDFE areas coming off from an average annual fiber production of 0.45 MT of fiber/hectare (Mondragon-wide) From very minimal to no maintenance of abaca plants

Major Interventions: Enhanced abaca plantation and cultivation management using CEFA protocol and the biodiversity-friendly guidelines of the abaca sustainability manual (ASM) to maximize maturation of abaca stocks (2-7-year peak plant productivity) and prevent/mitigate/minimize damages to abaca plants due to diseases, pest infestation and other

CEFA protocol and ASM compliance of all abaca farmlands covered Inventory of abaca plant stocks: (a) maturity, (b) health, (c) growth and others

Fiber production/hectare/year

Y1 Y2 Y3 Y4 By end of Year 5: 0.9 MT/ hectare of fiber produced in a year (97% - S2)

0.619 0.667 0.75 0.8


From manual hand stripping

1.2 Availability of adequate number of striping machines (spindle-type, women-friendly) and training

22 units per cluster (50% are women friendly) x 5 clusters

From largely unorganized harvesting, bundling and transporting process with limited common services facilities

1.3 Availability of common service facilities that are women-friendly and appropriate to the community and BDFE context: (a) drying facilities, (b) hauling trucks, (c) weighing machine, (d) baling machine, (e) warehouse facilities

5 drying facilities; 8 trucks

Increasing CEFA’s record on S2 production: From 0.04% production of S2 in 2018 to 97% in year 1

1.4 Adequate training on mechanical harvesting and fiber stripping technology

Various training & capability building programs

Prices of S2 or high-grade abaca remains at P95/kg to P120/kg

1.5 Improvement and enhance of trading system and capacity (buying) of CEFA to service its members’ increased fiber production

Credit capital for production: P16.9M; Capital for trading: P5.3M

1.6 EVPRD and CEFA to ensure new policies and programs of PhilFIDA are enforced and implemented (i.e., banning of all-in buying, transparent and efficient pricing, pricing information-dissemination and price monitoring system, implementation of various capacity building programs, etc.)

100% compliance to PhilFIDA regulations: (a) Banning of “all-in” buying, (b) enforcement of price monitoring & disclosure, (c) enforcement of grading & certification standards


Strategic Objectives / Specific Component Objectives

Baseline / Assumptions

Subsector Interventions and Investments (Inputs)

Intermediate Outputs and Output key performance indicators (KPIs)

Projected Overall Project Outputs of Scaling Up Interventions

Desired Development Outcomes by end of Year 5

(a) Expansion of CEFA enterprise membership to cover 1,435 new abaca households (with 612.5 hectares of abaca farms) reached through various interventions (small farmers, women, farm workers)

Breakdown of 1,435 new abaca households:

200 HH within CBFM in Mondragon, having 100 hectares Expressed interest in joining CEFA Already farming abaca 1,025 abaca farming HH in CBFM areas outside Mondragon (4 barangays in Municipality of San Roque), having 512.5 hectares With secure land tenure through CBFMA Identified as expansion areas who can be potentially engaged CEFA membership expansion among agricultural / farm workers: 210 farm worker-households P350/day wage Membership fees

Same interventions and project inputs cited in #1

Y1 Y2 Y3 Y4 Y5 - 9,429 18,013 19,410 Additional income of

P21,825 per household by year 5

Same interventions and project inputs cited in #1 Membership recruitment among small farm workers

Y1 Y2 Y3 Y4 Y5 42 farm workers recruited yearly or a total of 210 by year 5 Employed in CEFA-managed farms at P350 per day wage

11,900

13,300

14,700

30,732

16,100

Additional income of P34,556 per abaca household by year 5 18,200 210 new CEFA members from the farm workers sector employed as workers in CEFA abaca – managed farms


(b) Supplemental income from diversified intercropping & livelihood activities of CEFA

Number of days working with CEFA-managed farms increases per year

Wage benefits of 42 workers recruited per year: Year 1: P11,900, Year 2: P13,300, Year 3: P14,700; Year 4: P16,100 and Year 5: P18,200

Supplemental income for CEFA (women- and farm worker-members) from the following PO-assisted projects: (a) Abaca Plant Propagation and Nursery Management, (b) Fibrecraft making, (c) Abaca rope and cordage making, (d) Intercropping and diversification of crops in abaca farms (as part of CEFA farming protocol).

Expansion of nursery enterprise; intercropping in abaca and coconut areas as mandated under the CEFA protocol; procurement of sewing machines for fibrecraft & twining machines for ropes/cordage

Extend the social/bio-fence of SINP through enhancement and expansion of abaca BDFE coverage in CBFM areas employing the CEFA protocol and other sustainable production approaches

Baseline: Existing CEFA coverage is 150 hectares Additional hectarage with existing CBFMA in Mondragon is 100 hectares Additional hectarage with existing CBFMA outside Mondragon (adjacent barangays in San Roque): 512.5 hectares

Enhancement and establishment of CEFA protocol in about 250 out of the 990 hectares or 25% of abaca farms in Mondragon – 150 hectares of existing CEFA-managed abaca farms plus the 100 hectares of expansion farms within the Municipality of Mondragon Additional 512.5 hectares of abaca farms for expansion under the CEFA umbrella and protocol located nearby Mondragon (but within the jurisdiction of Municipality of San Roque)

A total of 762.5 out of the 12,040 hectares or 6% of abaca farms in Northern Samar are developed into sustainable, biodiversity-friendly enterprise zones through the CEFA protocol A total of 762.5 hectares of buffer zone protecting the SINP

150

150

100

150

100

150

100

512.5

Protection of SINP-largest lowland forest in the Philippines—is enhanced through the BDFE & CBFM areas Enhanced and intensified abaca farming using CEFA protocol for the pre-existing 150 hectares, serving as demonstration of biodiversity-friendly farming enterprise Additional 100 ha from year 2-5 Additional 512.5 ha from year 4 & 5


Recognition/full development of women as leaders & members of CEFA with a gender-transformative perspective: resolution of gender issues in the value chain and the BDFE system; development of women as equal stakeholders in the value chain and BDFE system with equal access to services, opportunities and benefits

Sixty percent participation of women in organizational leadership bodies, committees and in membership activities but no clear policies and initiatives on gender

Gender mainstreaming assessment and program design Various capacity building and empowerment of women in CEFA and abaca enterprise and value chain activities: 17 organizational development activities for abaca stakeholders and 16 activities under CEFA subsector/value chain development

Assessment of the gender implications of the scale-up plans and interventions of EVPRD-CEFA Attendance & insights gained of women leaders and members in CEFA affairs and in the whole abaca value chain

100

100

100

100

612

Gender mainstreaming program integrated into the scaling-up plan and operations of CEFA and its management of the value chain About 100 women members of CEFA (existing) and 612 additional women trained by various programs by end of year 5 are applying the knowledge gained from the various training and capacity building programs.


B. Desired Abaca Subsector Map in the Two Plan Phases (Year 1 to Year 5) The figure below presents a graphic representation of the desired development pathway or subsector roadmap of EVPRD, CEFA and the abaca subsector and enterprise stakeholders in Mondragon, Northern Samar (shown by way of an objective tree). The subsector map is divided into the various stages of the abaca value chain (horizontal, left to right) and the different roles / layers of the subsector actors: (a) EVPRD-CEFA (as the principal enterprise holder), (b) the abaca farmer households from the expansion areas (near the existing BDFE and in potential areas where there are existing CBFM agreements), and (c) enablers (local and national government agencies, academe and private sector).

B.1. Phase 1: Towards becoming a GBE or near-GBE status, Year 1 to Year 3

The figure above schematically presents the various plan objectives of the stakeholders at each stage of the abaca value chain. At the start of the value chain (i.e., Abaca plantation and production), the interventions revolve around protection and conservation of the ecological resource base, initially starting with the existing BDFE area of CEFA and its members. This ensures that the enhancement and/or expansion of the abaca plantation and the source of raw materials (of good quality and desired volume) start with maintaining biodiversity and ecological integrity of the CBFM or Key Biodiversity Area in the SINP. The leading role of the principal stakeholder, EVPRD and CEFA (and its members) is emphasized. Expansion of its network to include more non-CEFA abaca farmers under its fold and scale-up its outreach and increase coverage, is a key feature of the scale up plan in each and every stage of the value chain. The expansion areas for abaca BDFE will come from the CBFM areas and abaca farming households who already signified their interest in joining the CEFA abaca BDFE system. Other potential expansion areas are those whose abaca and coconut farms are covered by existing CBFM agreements in the four (4) barangays in the adjacent Municipality of San Roque. In Phase 1 of the strategic plan, the objective of the principal enterprise holder, which is EVPRD-CEFA, is to attain near-GBE or full-blown GBE status as major abaca stakeholder. To reach this destination, the following are the critical paths:

a. Model and On-ground Demonstration: Enhance production of existing abaca farms of CEFA as demonstration and model farms for: (a) abaca fiber productivity, (b) source of sustainably-


harvested fiber supply for processing into high-grade fiber, (c) social inclusion and empowerment of women and small holders, (and d) biodiversity conservation;

b. Promotion and Expansion of Abaca BDFEs: In the action research consultations, there have been

manifestations by abaca farmers in nearby CBFMs (in Mondragon and in 4 barangays of adjacent Municipality of San Roque) of their willingness to join the CEFA abaca enterprise. This is a crucial path for CEFA in attaining its final destination of becoming a major player in the abaca enterprise as a GBE. The expansion under the umbrella of CEFA will maintain the CEFA protocol, ensure biodiversity conservation, and commit to an enterprise system that will propel productivity and increase income. As a trader-consolidator and GBE, CEFA will realize the needed volume and desired quality of high value fiber grade;

c. Investment in common service facilities critical to the production of high-value abaca fiber

(women-friendly and strategically deployed): The procurement of common service facilities notably mobile, women-friendly stripping machines, transportation and appropriately-sited fiber drying facilities are three of the most critical equipment and facilities that will realize the processing of high-value fiber, bundling and hauling to consolidation nodes and classification into fiber grades so that these will command the best farm-gate prices;

d. Fair trading and enforcement of buying, trading and pricing guidelines: The foremost intervention

that need to be enforced in relation to abaca fiber trading is the strict compliance of all stakeholders in the prohibition of the “all-in” buying which is up for enforcement by the last quarter of 2018, according to PhilFIDA. The other critical intervention that will promote fair prices and transparency in trading is the monitoring and information and dissemination of abaca price trends per fiber grade at various pricing points of the market -- global, national, processor and farm-gate prices. Internally, CEFA also committed to review its buying price and polices as well as profit sharing among its members, balancing the interest of farmer cultivators and farm workers.

e. Support interventions of abaca industry enablers: The stakeholders in the assessment and

planning workshops were unanimous in identifying PhilFIDA as the primary agency that is in charge of enabling the abaca industry. The other government agencies at the national and local levels (including LGUs) also have significant roles to play in as far as helping the abaca farmers meaningfully participate in the abaca value chain and derived greater share of the value created. The following table itemizes these needed support interventions in direct relation to this strategic development and investment plan for the abaca subsector in Mondragon and the rest of the covered SINP areas:

Agency Interventions needed from enablers to realize plan outputs and investments PhilFIDA 1. Abaca plantation and propagation, particularly appropriate for BDFE and CBFM areas;

2. Common service facilities, specifically gender-friendly stripping machines, dryers, trucks, warehouse facilities;

3. Enforcement of the ban on “all-in” buying and trading; price monitoring and information and dissemination to farmers organizations;

4. Immediate implementation of the Abaca Sustainability Manual in Northern Samar, particularly abaca plant management and other productivity measures appropriate to BDFE areas;

5. Capability building programs, particularly for women abaca farmers DA 1. Support to abaca subsector under the Philippine Rural Development Program project

funded by World Bank; 2. Capability building programs

DAR 1. Provision of a truck under the its banner program of “Links Farm Project” 2. Capability building programs for agrarian reform beneficiaries, particularly in cooperative

building and development DENR 1. Enforcement of laws and regulations governing the SINP;


2. Continue strong support to the CBFM program to ensure security of tenure of the resource base under the framework of conservation and protection of the SINP

DTI 1. Provision of shared service facilities; 2. Provision of high-speed sewing machines and twining machines upon submission of

proposals by EVPRD-CEFA; 3. Capability building programs to improve product competitiveness of abaca fibrecraft and

textiles, ropes and cordage (cost of production, design and branding, etc.); 4. Business development services and operations of micro and small enterprises

DOST 1. Provision of women-friendly stripping machines; 2. Provision of S&T solutions needed in the development of the abaca industry: Abaca pulp

and paper, fibrecraft, cordage, textile UEP 1. Forging of MOA with EVPRD-CEFA on abaca tissue propagation;

2. Establishment of an Abaca Tissue Culture Laboratory with the Provincial Government; 3. Lending of experts as resource persons in various abaca production training programs

LGU Provincial and offices under it: PAO, PENRO, PPDO, etc.

1. Provincial Community Cooperative and Community Affairs Office (PCCAO) and DAR to capacitate CEFA to become credit worthy PO;

2. Reactivation of the MOA with UEP on abaca tissue culture laboratory and operations; 3. Reactivation of the provincial abaca oversight bodies (abaca focal group and abaca

multisectoral council) and provision of abaca scholarships to sustain the youth’s interest and involvement in the industry

4. Abaca to be a top priority in the Provincial Commodity Investment Plan LGU Municipal 1. LGU Mondragon to incorporate abaca program in its annual investment program;

2. Conduct of training on abaca plant propagation and nursery management; 3. Provision of abaca starter kit for nursery management; 4. Sponsorship of abaca training programs in partnership with UEP resource persons

Landbank-DAR 1. Provision of credit to abaca farmers agrarian reform beneficiary organizations and cooperatives through the Agrarian Production Credit Project

Private Sector 1. Ching Bee: Provision of four (4) more stripping machines (in addition to pilot 1-unit stripping machine provided to CEFA);

2. Private sector partners of DTI to provide inputs in designing and making available shared service facilities to abaca farmers and communities

B.2. Phase 2: End of Year 3 onwards to Year 5

Phase 2 of the strategic abaca subsector development plan envisions EVPRD-CEFA enterprise becoming a major player in the community value chain as a consolidator-processor attaining near-manufacturing status of intermediate and/or semi-final abaca products for local and export market. To realize this role and level of operations, EVPRD and CEFA will build on the momentum it has gained in attaining the key performance targets of phase 1. This is hinged on becoming a grading and baling establishment (GBE) and Class A trader. Essentially, EVPRD-CEFA will have to attain the needed volume and quality of fiber demanded by the abaca fiber market. The next stage after this for EVPRD-CEFA BDFSE-GBE, is to move towards processing (on a pilot basis) high-grade and certified abaca fiber products to produce certified fiber for transformation into various final product lines -- pulp sheets, tea bags, coffee pods, coffee filter, specialty paper, food casing, currency, etc. Demand for tea bags, for instance, is 206 billion annually (Source: Philippine Abaca Roadmap, page 19). This direction is anchored on the recognition that abaca pulp and paper subsector will continue to command the majority of the demand for abaca fiber, currently placed at 75.2 percent. The second in-demand abaca commercial product is cordage with a market share of 17.2 percent (with abaca ropes getting stiff competition from synthetic cordage) and this is followed by fibrecrafts at 7.6 percent.


Partnership Opportunities with Social Enterprises

Attaining this level of operations in the abaca value chain in Phase 2 of the plan brings EVPRD-CEFA enterprise into a position to partner with other social enterprises that have common product linkages and community constituency. For instance, Tsaa Laya, a social enterprise that produces tea through community-based tea leaf growing of women urban poor re-settlers, is excited to partner with EVPRD-CEFA in making use of abaca tea bags. Tsaa Laya demand for tea bags is currently placed at 100,000 (2018). It projects that demand for 2019 will double to about 200,000 tea bags and 400,000 tea bags by 2020. They currently source imported tea bags. There are also other opportunities to tie up with SEs in the community coffee business for coffee filters and coffee pods. Social enterprises that have attained commercial market-level sales (like Tsaa Laya and several other SEs in the food and beverage business) are natural partners of EVPRD-CEFA since they have common sources of enterprise growth and stakeholdership which are the marginalized poor communities.


Promoting Diversification of Crops and Income Sources Apart from the above abaca-based income sources, EVPRD-CEFA have also identified other sources of production and income that goes side-by-side with the abaca enterprise:

1. Coconut production and processing – this has been the traditional crop and long-time primary income source of the farmers in the region. In fact, abaca farmers still consider copra production and trading as their main source of income – they turn to abaca production particularly when copra prices are low.

2. Nursery management and propagation – apart from propagating abaca plantings, EVPRD and CEFA have experience in managing nursery under the National Greening Program of DENR. This can be expanded from abaca to other suitable crops and orchard in the SINP.


2. INVESTMENT PLAN

A. INVESTMENTS NEEDED TO ACHIEVE THE DESIRED ABACA SUBSECTOR MAP

The investment plan is based on the following parameters attendant to putting on-ground the needed resources in order to: (a) increase abaca farm productivity through effective farm management and expansion of BDFE abaca farmlands in CBFM areas using the CEFA protocol, (b) increase income though efficient harvesting and fiber processing aided by investments in appropriate machineries, facilities and technologies, (c) management costs, feasibility studies/business plans for future plan phase, and gender mainstreaming. The total investment cost of this plan is P61.6 million or an average cost of P42,959 per household (covering 1,435 abaca farming households and farmworkers). The table below shows how the plan components and investments lead to specific plan outputs:

Plan Component Investments Outputs 1. Increasing productivity in existing farmlands and opening of abaca farmlands for expansion

1.1. Existing CEFA abaca

a. Management cost of abaca plant care, management and cultivation

b. Credit capital for production: Cost of replanting and replacement of mature stocks

c. Training and capability building cost

Increase harvest of abaca hills/stems per hectare

Increase abaca plant inventory for harvesting in year 3, 4 and 5

Sustaining biodiversity conservation and protection of SINP

1.2. Expansion areas (POs signified interest to join and existing CBFM areas)

a. Management cost of organizing and transferring the technology of CEFA protocol

b. Credit capital for production: Cost of planting abaca in suitable areas in the expansion farms


Increase of BDFE areas for abaca Additional harvesting from existing

abaca plantation in the expansion areas

Increase of harvestable stocks for year 3, 4 and 5

Additional BDFE areas protecting the SINP and conserving biodiversity

2. Increase income from upgraded technology and facility of extracting abaca fiber

2.1. Existing CEFA abaca a. Mechanical strippers for men and women

b. Drying facilities (5 facilities strategically placed and shared by the existing clusters)

c. Weighing, Baling machines and trucks (shared and strategically located)

d. Trading capital: Fiber and tuxy buying

Increase income brought about by harvesting more high-grade fiber in desired quantities

Basic Investment Cost (Phase 1) Estimated Cost in PhP

Feasibility Studies for Processing and Diversification 2,000,000 Truck (8; 1 committed by DAR) 4,480,000 Stripping machines (regular; 1 committed by Ching Bee; 11/cluster X 5 clusters) 3,850,000 Women-friendly stripping machines (DOST fabricated & 1 committed); 11/cluster X 5 clusters 5,500,000 Credit capital for production (PhP22,000/hec) 16,900,000 Capital for trading (tuxy and fiber) 5,300,000 Training and Capacity Building (PhP2.0 M/year) 10,000,000 Drying Facilities (5 clusters @P500,000/cluster) 2,500,000 Sub Total 50,530,000 Management Costs (17%) 8,590,100 Gender Mainstreaming (5%) 2,526,500 TOTAL INVESTMENT COST 61,646,600

Average Cost Per Household (1,435 HHs) 42,959


e. Training and capability building cost 2.2. Expansion BDFE areas

(see 1.2) a. Mechanical strippers for men and

women b. Drying facilities (5 facilities

strategically placed and shared by the existing clusters)

c. Weighing, Baling machines and trucks (shared and strategically located)

d. Trading capital: Fiber and tuxy buying e. Training and capability building cost


Year 1 – 5 for existing abaca plants in CEFA expansion areas

Year 3-5 for areas still waiting for abaca maturation in CEFA expansion areas

3. Feasibility studies for high-end abaca processing and diversification 3.1 Studies Cost of studying the feasibility of high-end

abaca processing at the community-level and diversification of income sources in abaca BDFEs with the view of partnering with SEs

Feasibility studies showing cost and benefits

3.2 Piloting Piloting and prototyping letter (a) Results of piloting and prototyping 4. Gender Mainstreaming Program

4.1 Gender assessment a. Cost of the assessment Assessment report on the gender issues that are not being addressed

4.2 Integrating gender in organizational policies and operations and in the BDFE/abaca value chain systems

b. Cost of integration Revised and adopted policies and operations manual integrating gender and a system of monitoring its compliance and evaluation of performance

A.1. Towards the Abaca Subsector -The table below disaggregates the investments solely towards

the abaca subsector:

Plan Component Investments Outputs 1. Increasing productivity in existing farmlands and opening of abaca farmlands for expansion

1.1. Existing CEFA abaca

a. Management cost of abaca plant care, management and cultivation

b. Credit capital for production: Cost of replanting and replacement of mature stocks


Increase harvest of abaca hills/stems per hectare

Increase abaca plant inventory for harvesting in year 3, 4 and 5

Sustaining biodiversity conservation and protection of SINP

1.2. Expansion areas (POs signified interest to join and existing CBFM areas)

Management cost of organizing and transferring the technology of CEFA protocol Credit capital for production: Cost of planting abaca in suitable areas in the expansion farms Training and capability building cost

Increase of BDFE areas for abaca Additional harvesting from existing abaca plantation in the expansion areas Increase of harvestable stocks for year 3, 4 and 5 Additional BDFE areas protecting the SINP and conserving biodiversity

2. Increase income from upgraded technology and facility of extracting abaca fiber

2.1. Existing CEFA abaca Mechanical strippers for men and women Drying facilities (5 facilities strategically placed and shared by the existing clusters) Weighing, Baling machines and trucks (shared and strategically located) Trading capital: Fiber and tuxy buying Training and capability building cost


2.2. Expansion BDFE areas (see 1.2)

Mechanical strippers for men and women Drying facilities (5 facilities strategically placed and shared by the existing clusters) Weighing, Baling machines and trucks (shared and strategically located) Trading capital: Fiber and tuxy buying Training and capability building cost

Increase income brought about by harvesting more high-grade fiber in desired quantities Year 1 – 5 for existing abaca plants in CEFA expansion areas Year 3-5 for areas still waiting for abaca maturation in CEFA expansion areas


3. Feasibility studies for high-end abaca processing and diversification 3.1 Studies Cost of studying the feasibility of high-end

abaca processing at the community-level and diversification of income sources in abaca BDFEs with the view of partnering with SEs

Feasibility studies showing cost and benefits

3.2 Piloting Piloting and prototyping letter (a) Results of piloting and prototyping

A.2. Towards Women as Key Player in the Subsector

The table below disaggregates the investments towards women as key player in the abaca subsector. The gender mainstreaming cost is estimated at P2.5 million, has been included as part of the whole investment package.

Plan Component Investments Outputs

Women-friendly technology and facilities

a. CEFA areas Women-friendly stripping machines 100 women provided with the facility/equipment

b. Expansion areas Women-friendly stripping machines 718 women provided with the facility/equipment

Gender Mainstreaming Program Gender assessment a. Cost of the assessment Assessment report on the gender

issues that are not being addressed

Integrating gender in organizational policies and operations and in the BDFE/abaca value chain systems

b. Cost of integration Revised and adopted policies and operations manual integrating gender and a system of monitoring its compliance and evaluation of performance

B. Investments from the Government

B.1. National

Agency Committed investments Investments identified as possible

assistance

DAR Truck – 1 unit under the Links Farms Program Capability building programs for ARBOs/cooperatives Facilitation of access to credit to Land Bank of the Philippines

DOST Women-friendly stripping machine – 1 unit Science and technology solutions to develop the abaca subsector

DTI High speed sewing machines (2 units) Provision of shared service facilities Capacity building and product development programs Business development services

PhilFIDA Baling machine and drying facilities Abaca seedlings and plantlets

Training and capability building (around cost P3.3 million for Northern Samar

DA Economic and physical infrastructure to support the abaca as the provincial value chain commodity

Committed to provide capital investments for the procurement of common service facilities and infrastructure under the World Bank-assisted Philippine Rural Development Project (PRDP)

DENR Enforcement of laws and regulations governing the SINP Continue strong support to the CBFM program

Agency counterpart budget (by administration)


B.2. Local Government and Academe

Agency Interventions needed from enablers to realize plan outputs and investments

Investment cost

UEP Establishment of an Abaca Tissue Culture Laboratory with the Provincial Government; Lending of experts as resource persons in various abaca production training programs

Counterpart of UEP and Province

LGU Provincial and offices under it: PAO, PENRO, PPDO, etc.

Provincial Community Cooperative and Community Affairs Office (PCCAO) and DAR to capacitate CEFA to become credit worthy PO; Reactivation of the MOA with UEP on abaca tissue culture laboratory and operations; Reactivation of the provincial abaca oversight bodies (abaca focal group and abaca multisectoral council) and provision of abaca scholarships to sustain the youth’s interest and involvement in the industry Abaca to be a top priority in the Provincial Commodity Investment Plan

Counterpart in-kind of the Provincial local government unit Cost of the land where the drying facility in Mondragon will be established (5 meters x 10 meters)

LGU Municipal

LGU Mondragon to incorporate abaca program in its annual investment program; Conduct of training on abaca plant propagation and nursery management; Provision of abaca starter kit for nursery management; Sponsorship of abaca training programs in partnership with UEP resource persons

Counterpart in-kind of the Municipal local government unit

B.3. Investments from the Business Community

Business Commitment Investment Cost Ching Bee Provision of four (4) more stripping machines (in

addition to pilot 1-unit stripping machine provided to CEFA);

P70,000 per one-unit stripping machine or a total of P280,000.00 for four (4) additional units

B.4. Investments from UNDP-GEF SGP5 The table below show the investment plan for the utilization of the grant from UNDP GEF SGP5 which will be coursed through ISEA and downloaded to EVPRD-CEFA. The investment cost is a subset of the total investment plan and cost of the abaca subsector which was shown above.

Priority Intervention Budget 1. Procurement of stripping machines @ 70,000/unit x 9 units* Php 630,000.00 2. Establishment of drying facility (5 x 10 M) ** 500,000.00 3. Procurement of weighing scale (500 kg capacity) 120,000.00 4. Additional capital for:

Fiber trading* Tuxy-buying

480,000.00 210,000.00

5. Truck (second hand) 560,000.00 6. Management Cost and Capability Building Program 500,000.00

Total Php 3,000,000.00


* Revised estimates as per results of the Dec 7 consultation with stakeholders **Location and facility will have counterpart cost from PLGU and PhilFIDA


R E F E R E N C E S


BIBLIOGRAPHY OF SECONDARY DATA SOURCES Websites Agrimac. Coalition aims to boost local abaca industry. http://agriculture.com.ph. 2018/08/09. By Julio P. Yap, Jr. Retrieved on September 29, 2018.

ASA Philippines Foundation. ASA Philippines - A Microfinance-NGO https://web.facebook.com/pg/asaphilippines/about/?ref=page_internal. Retrieved on October 10, 2018.

ASA Philippines Foundation. ASA Profile. https://www.entrepreneur.com.ph/directory/suppliers-directories/financial-services/asa-philippines-foundation. Retrieved on October 10, 2018.

Balinkbayan. Overseas Filipinos One Stop Online Porta l for Diaspora Engagement. Abaca Products, Profile, Uses and Technical Assistance. https://balinkbayan.gov.ph. Retrieved on September 28, 2018.

Business Mirror. Market demand, competition test strength of PHL’s abaca. https://businessmirror.com.ph/market-demand-competition-test-strength-of-phls-abaca-2/. Arcalas, Jasper. February 26, 2018. Retrieved on September 29, 2018.

Business Mirror. PhilFIDA needs P5.63B to triple abaca output. https://businessmirror.com.ph/philfida-needs-p5-63b-to-triple-abaca-output/. Arcalas, Jasper. February 11, 2018. Retrieved on September 29, 2018.

Business Mirror.DOT accredits 14 more farms for agri-tourism destinations. https://businessmirror.com.ph/dot-accredits-14-more-farms-for-agri-tourism-destinations. By Ma. Stella F. Arnaldo. April 8, 2017. Retrieved on October 12, 2018.

Business World. CARD releases P451M micro-loans in 20 provinces. https://www.bworldonline.com/card-releases-p451-m-micro-loans-in-20-provinces/.September 12, 2018 | 9:47 pm. Retrieved on October 9, 2018.

Ching Bee Trading Corporation. Abaca in the Philippines. http://www.chingbee.com/abaca-in-the-philippines/. 2018. Retrieved on September 26, 2018.

Ching Bee Trading Corporation. Company Profile. http://www.chingbee.com. Retrieved September 28, 2018.

Department of Agrarian Reform. About Us. Mandate, Mission and Vision. http://www.dar.gov.ph. Retrieved on September 27, 2018.

Department of Agriculture - Philippines. REPOST: ACPC Releases PUNLA Loans to Members of 2 Farmers Cooperatives in Benguet. By Rudyard Roxas, DA-Agricultural Credit Policy Council

Department of Agriculture. Philippine Crop Insurance Corporation. PUNLA. http://pcic.gov.ph/punla/. Retrieved on October 10, 2018.

Department of Agriculture. Philippine Fiber Industry Development Authority /Publications/PNSBAFS180:2016. Philippine National Standard (PNS) for Abaca Fiber Handstripped and Machine Stripped.pdf http://www.philfida.da.gov.ph. Retrieved on September 29, 2018.

Department of Agriculture. Philippine Fiber Industry Development Authority. Abaca Helps in Global Environment Conservation. From http://www.philfida.da.gov.ph. Retrieved on September 27, 2018.

Department of Agriculture. Philippine Fiber Industry Development Authority. Abaca varieties now registered with the National Seed Industry Council. http://www.philfida.da.gov.ph. Date Posted December 2017. Retrieved on September 27, 2018.

Department of Agriculture. Philippine Fiber Industry Development Authority. History-and-mandate. http://www.philfida.da.gov.ph. Retrieved on September 27, 2018.

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A N N E X E S


ANNEX 1. RESULTS OF VALIDATION OF CANDIDATE BDFE

INITIATIVES

Selection Criteria for Pilot BDFE

SUMMARY OF FINDINGS SPPI (Seaweeds) EVPRD (Abaca)

Rating Justification Rating Justification 1. Market potential for scaling up

3 High demand, available markets, fluctuating price, limited volume of production of current producers, low ability to satisfy market demand in terms of volume, current product has limited potential for value adding that local producers can do themselves

5 High demand, available market, stable and increasing price, increasing production of current producers, can already meet market demand in terms of volume, current product has potential for value adding with the finished product having ready market (i.e. abaca fiber to twine/rope)

2. Significance in terms of number/critical mass of poor/marginalized households to be potentially engaged

3 158 current active producers in eight municipalities of Northern Samar & Eastern Samar; potential adopters 510 HHs in Northern Samar; no data yet for Eastern Samar

5 200 current active producers in five barangays of Mondragon, Northern Samar; potential adopter 200 additional HHs in Mondragon and 1,025 HHs in other CBFM areas of Northern Samar

3. Start-up capacity of leadership and team

3 Engaged barangay and municipal consolidators, not POs; limited manpower with overlapping functions

5 With strong partner PO (CEFA); with adequate manpower support with separate management and finance unit

4. Presence of support institutions and enabling organizations

3 Support are mostly technical assistance and provision of materials for seaweed production (i.e. materials & boats from BFAR

5 Supports are technical, inputs, policy and equipment (i.e. truck from DAR, stripping machine from Ching Bee)

5. Strategic value of the site for model building

5 Project has high potential in strengthening the seaweed industry in Samar Island

5 Project has high potential to influence abaca industry in Northern Samar

6. Resource base security of tenure (public land, stewardship, etc.)

3 Current project is within marine protected areas; expansion sites are still to be zoned

5 Current and potential BDFE sites are within CBFMA located within critical watersheds of Northern Samar

Total 20 30

SELECTION CRITERIA FOR PILOT BDFE

DETAILED FINDINGS

SPPI (SEAWEEDS) EVPRD (ABACA) 1. MARKET POTENTIAL FOR SCALING UP

A. Product or services marketing plan



DETAILED FINDINGS SPPI (SEAWEEDS) EVPRD (ABACA)

Product description and plan including its biodiversity proposition

Current Product Traded: Dried seaweeds (spinosum and cottonii varieties). Traded seaweed varieties are important sources of raw materials for carrageenin for food and non-food uses (i.e. cosmetics) Planned Future Products: On-going trial by seaweed farmers in producing seaweed chicharon, pickles and jam. Description of Product Plant Source and Cultivation Method: Spinosum is known for its climate resilience and disease resistant while cottonii is sensitive to climatic conditions and diseases. Majority of seaweed farmers are using traditional farming system which can still be improved through adoption/application of tested/improved production technologies. Biodiversity Proposition: Seaweed farming is a simple technology which does not require high capital input; it is not extractive. Instead, it contributes to improved marine biodiversity (i.e. scallop, danggit, squid and fish feeds on seaweeds and seaweed farms serve as their habitat and breeding grounds. Therefore, farmers can earn additional income and have ready food source for the households.) Seaweeds farming contributes to environment protection because it does not co-exist with dynamite fishing and use of synthetic chemicals. Some illegal fishers are already engaged in seaweed farming.

Current Product Traded: Abaca fibers (thread like); color white or brown, at least 1.5 meter or more in length bundled in 40-60 kg weight. Planned Future Products: Abaca twines/ropes, and mushrooms to be grown utilizing abaca plant residues after being stripped of its fibers. Description of Product Plant Source & Cultivation Method: Abaca fibers are obtained from abaca plants of the alman and laylay varieties, both are suitable to agro-climatic conditions of the area and are resilient to diseases. Alman variety has long and stout stalk and can yield one (1) kg of abaca fibers per stalk. Laylay variety has shorter and slimmer trunk compared to alman and can yield 350 g of abaca fibers per stalk. Majority of abaca farmers are using traditional farming system which can still be improved through adoption/application of tested/improved production technologies. Biodiversity Proposition/Plan of the BDFE: The existing BDFE contributes to biodiversity conservation by serving as a social fence to prevent upland farmers in encroaching to protected areas. It is easier to implement protection policies when there is organized group. Abaca farming is low cost and farmers know the indigenous production technology (inherited industry). Abaca is endemic, part of the natural environment, serves as moisture holding plant, provides shade and habitat especially for tarsier and birds, and organic matter - residues can be used for mushroom growing. Note: EVPRD’s Partner PO – the CEFA is the lead organization of the present BDFE from (production to marketing). EVPRD provides technical support such as organized production planning and marketing, organizational development, and enterprise management

Product has been produced according to market standards

Product Quality: 95% of dried seaweeds being traded passes the market standards as follows: less than 30% moisture content; no debris such as sand, plastic straws, stones and dirt; properly dried which takes about two (2) to three (3) days elevated sun drying)

Product Quality: Presently, 10% of abaca fibers being traded are graded by buyers as S2 (excellent) – the highest quality standard in the market, while 90% are graded lower, mostly G (good) and JK (fair). Factors that Contribute to Current Product Quality: Abaca farmers have difficulty in meeting excellent quality of abaca fibers due to the stripping




technology that they are using which is manual stripping. S2 & S3 grades (excellent) of abaca fibers can be obtained through the use of spindle stripping machine. Development Towards Product Quality Improvement: One (1) spindle stripping machine was granted by the buyer (Ching Bee Corporation) in support to improving product quality. This machine will be tested and when the results are positive, Ching Bee will grant four (4) additional units.

Product is being marketed to target customers

Marine Colloids Philippines, Inc. (MCPI) – halal exporter and seaweeds processor based in Mandaue City, Cebu. Demand is 20 tons monthly but can also buy smaller volume. Easy to transact with especially on payments. Provides incentives to SPPI based on quality and volume of products delivered. MCPI President, Mr. Maximo Ricohermoso is also the Chairman of Seaweed Industry Association of the Philippines (SIAP). MCPI is the no. 1 market choice of SPPI. Out of the 20 tons monthly market demand, SPPI currently delivers 3-5 tons quarterly. Tong Meng Acquatics – a company based in Cebu. SPPI sells to this market if their price is higher than MCPI. Company does not set quota per delivery. TVK based in Tacloban City, Leyte – this market is the least choice of SPPI because it requires product samples before delivery, buys at lower price compared to MCPI and Tong Meng Aquatics, and difficult to transact with especially on payments. Company does not set quota per delivery.

Ching Bee Corporation based in Davao City with satellite plant in Leyte. It is the biggest buyer of raw fiber in the Philippines. CEFA engaged Ching Bee in 2018 and is now their preferred market because it accommodates all delivered abaca fibers regardless of grade. Ching Bee’s volume demand is 10 tons per week but it can buy more. Ching Bee pick up products at the site provided that the minimum volume should at least be 2,000 kg/pick up. The buyer pays 80% of total amount one (1) day after delivery. The remaining 20% will be paid after all the abaca fibers are graded by their quality control officer(s). Payments are deposited to CEFA’s bank account. S.C. Tan – a family corporation based in Catarman, Northern Samar. This is the first buyer engaged by CEFA in 2017. S.C. Tan also pays as good as Ching Bee but with stricter quality control. Reject abaca fibers are being returned to farmer group.

Product sales performance is monitored

Volume of Products Being Traded & Sales Performance: SPPI prepares monthly procurement and sales report and is shared to Board of Trustees. Presently, SPPI does not generate positive income from the business due to low volume of products being traded (3-5 tons quarterly). SPPI calculated that based on their current mark-up price (5 pesos per kg), they would need at least eight (8) tons of products per month for the social business to be viable/profitable. Challenges Toward Profitability Desired Volume to be Viable 8 tons/month

Volume of Products Being Traded & Sales Performance: CEFA keeps record of sales and procurement. Their trading activity started in 2017. The initial average volume of abaca fibers they traded is one (1) ton/month graded G (good) & JK (fair). CEFA incurred around 60,000 pesos losses in 2017 due to strict market quality standard (EC Tan) which resulted to some fibers not being paid. Starting March 2018 to present, CEFA is trading abaca fibers to Ching Bee at an average of two (2) tons/month. Their record shows that from March 31, 2018 to September 5, 2018, they were able to trade 12.143 tons of abaca fibers with a




Current Capacity of Producers to Supply 1 to 1.7 tons/month Current # of Farmer Producers 158 HH Needed Gap to Fill 6.3 to 7 tons/month # of Additional Farmers to Engage at least 1,000 HH These assumptions are based on current seaweed farming practice. In Northern Samar, there are existing 668 seaweed farming households. The 158 current active producers of SPPI only constitutes 24% of the total seaweed farming households in the province (668). Therefore, 76% or 510 seaweed farming households are potential producers for SPPI in Northern Samar alone. Data for Eastern Samar is currently being established by SPPI. Note: From existing data, 158 seaweed farming households actively producing for SPPI can produce 3-5 tons of dried seaweeds quarterly. Assuming that SPPI can engage the remaining seaweed farming households in Northern Samar, estimated increase in volume of dried seaweeds for trading is between 9-16 tons quarterly. This would translate into average of 4 to 7 tons dried seaweeds per month which is still 1-4 tons lower than the estimated volume requirement of 8 tons monthly for the social business to be viable. Considering that these potential producers for SPPI still need to undergo training, the deficit may still increase. However, other seaweed farmers can still be engaged in Eastern Samar. Current Constraints: Lack of capital for initial investment – based on SPPI’s production protocol (14m x 35m), the start-up capital is 14,000 pesos. To be able to engage at least 1,000 farmers to produce the needed volume of the enterprise, the social business needs to raise 14,000,000 pesos for initial support capital considering that they are poor or poorest of the poor. Additional investment for boats is not yet included. Looming Losses on the Part of SPPI – with the current volume of seaweeds being traded and pricing set-up of the social business, SPPI would continue to incur losses until the desired volume of eight (8) tons per month is achieved. If

total gross sales of 962,502 pesos. The total amount paid to abaca farmers within this period is 856,837. The gross income of CEFA within this same period is 93,165 pesos. From their gross income, 12,500 covered operating and administrative costs which leaves 93,165 pesos as net income. Current Income of an Abaca Farmer per Hectare/Year (conservative assumptions) – manual stripping method Yield (abaca fibers)/ha/Year 2,000 kg Average Buying Price (G grade) 80 pesos/kg Gross Sales/Income 160,000 pesos/year Production Cost (67% of Gross Sales) 106,667 pesos/year Net Income 53,333 pesos/year or 4,444 pesos/month Projected Income of an Abaca Farmer per Hectare/Year (conservative assumptions) – w/ spindle stripping method Yield (abaca fibers)/ha/Year 2,000 kg Average Buying Price (S2 grade) 85 pesos/kg Gross Sales/Income 170,000 pesos/year Production Cost (50% of Gross Sales) 85,000 pesos/year Net Income 85,000 pesos/yr. or 7,083 pesos/month With the above computed income of abaca farmers, it is shown that they can earn higher with the introduction of spindle stripping machine. This estimated income of farmers can still increase if CEFA increase its buying price of excellent grade abaca fibers (S2 & S3 grades are mostly attained with spindle stripping machine). This will be done after trial of granted spindle stripping machine to determine its operational cost. Current Constraint Lack of capitalization for buying abaca fibers – at present, CEFA can meet 10 tons/month demand of buyer (Ching Bee) because abaca fibers being produced in Mondragon is around 12 tons/month. However, CEFA cannot buy more than two (2) tons/month because




SPPI lowers its buying price to mitigate losses, some seaweed farmers (especially the current producers) might be demoralized and discontinue production. Seaweeds Farming is Seasonal – seaweed farmers cannot produce seaweeds year round due to changing climatic conditions. Favorable seasons to produce seaweeds overlap with favorable fishing seasons and outbreak of seaweed diseases. During seasons wherein seaweeds farming is difficult, fisherfolks go to upland and lowland to work as farm workers.

their existing capitalization is not enough. As result, abaca farmers opt to sell to a consolidator/middlemen in the area at three (3) pesos lower than the buying price of CEFA. This means abaca farmers and CEFA cannot maximize their income potential from the BDFE. For instance, in Barangay Nenita, Mondragon there are 15 abaca farmers with estimated yield of 2.3 tons of abaca fibers for the period of September to October 2018. Farmers only committed to sell 1.12 tons of this approximate yield to CEFA due to the current constraint. If 1.18 tons will be sold to the other consolidator/middleman in the area at three (3) pesos lower than CEFA’s buying price, the 15 abaca farmers will loss 3,540 pesos of potential income.

Feedback is used for product improvement and pricing

Written Feedback of Buyers: Market provides written and detailed feedback on quality of products based on standards and % of rejected products to SPPI per delivery. SPPI prints the feedback and shares it to their consolidators who then disseminates to seaweed producers in their respective areas. This feedback mechanism has already contributed to product improvement (from maximum of 20% rejects during initial delivery to 5% per delivery at present). This also helped SPPI in establishing quality control mechanisms and formulating training interventions to their consolidators and seaweed farmers. For instance, SPPI now implements sack color coding per source for traceability and monitoring of effectiveness of consolidators in sharing the market feedback and conducting quality control training and coaching to the seaweed farmers through regular inspection of seaweed farms and drying facilities.

Written Feedback of Buyers - Written feedback is provided by the buyer to CEFA. This include the final volume per grade of abaca fibers traded which is done by the buyer’s quality control officer(s). This is the basis for computing the total payment to be paid to CEFA. The feedback is being shared to abaca farmer producers during monthly cluster meetings. The feedback helps CEFA in improving their quality control system at their own level before being picked up by the buyer. On-going Effort to Improved Grading of Abaca Fibers at CEFA’s Level – CEFA has engaged the Philippine Fiber Development Authority (PhiFIDA) and TESDA for the training and accreditation of selected CEFA abaca fiber classifiers. The process of NCII Certification is on-going. The provided spindle stripping machine by Chingbee is expected to address issues on poor product quality of abaca fibers

B. Buyership (Client/Customers) development Buyers identified Refer to previous section Refer to previous section Buyers are existing and monitored

Refer to previous section Refer to previous section

Buyers are retained and/or repeat orders recorded

SPPI monitors prices of each buyer before selecting and engaging them for deliveries.

Ching Bee Corporation is the current buyer of abaca fibers from CEFA. There is a newly signed MOA between Ching Bee and CEFA on marketing which states that CEFA will exclusively sell their abaca fibers to Ching Bee Corporation. The MOA is signed on September 20, 2018.




New buyers and market segments are identified

SPPI currently does not actively engage in identifying new buyers because they cannot still satisfy the volume requirements of existing buyers. The nature of product which is raw materials limits market segmentation possibilities.

CEFA has no current effort to explore other buyers because of already secured market in Ching Bee Corporation.

2. SIGNIFICANCE IN TERMS OF NUMBER/CRITICAL MASS OF POOR/MARGINALIZED HOUSEHOLDS TO BE POTENTIALLY ENGAGED A. Rapid assessment and mapping of current BDFE stakeholders Total stakeholdership and influence areas identified

Current Stakeholders & Influence Areas Seaweed farmers (actively producing for SPPI) – 158 households in Northern Samar spread in eight (8) out of the 24 municipalities of the province, 20 of which are coastal towns. There are also farmers in two (2) municipalities of Eastern Samar (Salcedo & Guiuan) who are currently negotiating to sell their seaweeds to SPPI. However, their number is not yet established. Area consolidators – nine (9) barangay consolidators and four (4) municipal consolidators (total of 13). Consolidators can also be seaweed farmers Hired labor for planting, cleaning, drying and manual hauling per production sites Nursery operators for seedlings Input dealers of production materials (i.e. floater, poly rope, etc.) Transport operators (boat, motorize vehicles, shipping) Existing markets channels/buyers Existing organizations who are also consolidating dried seaweeds particular in Eastern Samar wherein there are three (3) existing players. These players also sell to SPPI. Policy, input and technical support groups such as University of Eastern Philippines (UEP), BFAR, LGUs, DOLE, SIAP, DTI, TESDA (NCIII Certification on Seaweed Production), DOST.

Current Stakeholders Abaca Farmer Producers (actively producing for CEFA) – 200 households spread in three (3) barangays of Mondragon, Northern Samar, namely: Cablangan, Flormina and Nenita. Average total production area of the current 200 abaca farming households is 150 hectares. Sixty eight (68) hectares out of the 150 hectares current production area is owned by CEFA wherein 80 out of the current 200 farming households are located and are the current caretakers of the site. The total area being directly managed by CEFA alone is 200 hectares which means that 132 hectares are potential expansion sites. Workers (planters, harvesters, strippers, haulers, classifiers, consolidators) – these are also mostly abaca farmers. They are preferred due to their familiarity with the production and post-harvest protocols. Buyer(s) – i.e. Ching Bee Corporation Other consolidator/middleman in Mondragon (1) Policy, input and technical providers (University of Eastern Philippines or UEP, DTI, TESDA, DOST, DAR, DA, PLGU, DENR, PhiFIDA, Chingbee) Influence Areas Identified – The influence area of the BDFE initiative are ten (10) upland and lowland barangays of Mondragon, Northern Samar namely: Cablangan, Nenita, Flormina, Cahicsan, Hinabangan - these five (5) barangays are the areas where the 1,050 hectares CBFMA # 45019 awarded to CEFA is located; Mirador, De Maria, San Jose, Cagmanaba and Talolora – these are the barangays bounding the aforesaid CBFMA area. There are 24 barangays of Mondragon (12 are upland/lowland, 12 coastal). The current BDFE influence area covers 41% of all barangays of the municipality and 83 % of all the upland/lowland barangays.




Stakeholders are classified: a. Poor and non-poor: social economic profile b. Gender disaggregation)

Seaweed farmers are poorest of the poor (average monthly income of 3,000 pesos). Area consolidators, hired laborers, transport providers are also considered poor or poorest of the poor.

Sex disaggregation in seaweed farming is deemed irrelevant by farmers because the enterprise is family oriented which means that male, female and even children have equally important roles and contributions.

Abaca farmers are poorest of the poor. Their average monthly income of is 3,000 to 4000 pesos. Similarly, sex disaggregation in abaca farming is deemed irrelevant by farmers because the enterprise is family oriented which means that male, female and even children have equally important roles and contributions. Hard tasks (i.e. stripping) are done by male. Other works are done by both sexes.

B. Information and assessment of scale-up potentials of product/service Identification of more adopters from within existing BDFE areas

In Northern Samar, there are existing 668 seaweed farming households. The 158 current active producers of SPPI only constitutes 24% of the total seaweed farming households in the province (668). Therefore, 76% or 510 seaweed farming households are potential producers for SPPI in Northern Samar alone.

Within the BDFE influence areas (Mondragon only), there are additional 200 farming households that can be engaged for abaca production and marketing.

Expansion areas and communities identified: a. Poor and non-poor: social economic profile b. Gender disaggregation)

Expansion areas eyed is Eastern Samar coastal municipalities. Data is currently being established by SPPI.

There are 42 CBFMA areas in Northern Samar (including the one awarded to CEFA) with at least 25 farmer members (at least 1,025 farming HHs). All of these are potential adopters of the BDFE initiative. The CBFMA holder POs are federated into the Northern Samar Federation of CBFMA POs. Other farmers with individual land tenure within the province are also potential adopters.

3. START-UP CAPACITY OF LEADERSHIP AND TEAM Organization has existing board and manager

There is Board of Trustees, Management Staffs and 12 incorporators (6/12 incorporators are farmers) Composition of Board of Trustees Three (3) professionals from UEP, two (2) are farmers, one (1) from DepEd, one (1) PPDO – Eastern Samar (Chairman), one (1) BLGU official, one (1) ex-officio member (former Executive Director-Joelyn Biag) The professional members of the BOT provide technical support to the social business such as trainings, research and extension. They are also active policy advocates for the development of seaweed industry in Samar Island. For instance, there is an advocacy of SPPI for LGUs to integrate seaweed production sites or seaweed farming zones in their coastal resource use map. Through forums, these professional BOT members also present and pull support for the seaweed industry to/from various agencies and

EVPRD as Technical Support Provider to CEFA BOT is composed of five (5) persons – one (1) lawyer, one (1) medical doctor & three (3) academicians Management Staff – There are three (3) full-time staffs - Executive Director, Administrative and Finance Staff, and Project Officer. There are also on-call staffs (training officers and specialists, and Bookkeeper. One (1) BOT member (the Chairman) is also serving as marketing expert. CEFA as Lead of the BDFE – CEFA is an established PO with BOT and management staffs.




stakeholders. One strategic advantage for SPPI is that seven (7) out of the nine (9) BOT members are based in Northern Samar which contributes to easier mobilization for meetings and consultations. All of them are the providers of technical support to seaweed farmers. The BOT members also set policy and planning/direction setting of SPPI and initiates linkaging with other support groups such as funding agencies/donors. Management Staffs (for Seaweed Trading/Social Business) Presently, SPPI management staffs is composed of two (2) persons, one Acting Operations Manager (AOM) and a Bookkeeper. The functions of the AOM include marketing, monitoring, training, mobilization/ engagement of dried seaweed farmer producers and consolidators, cashiering. The Bookkeeper maintains financial records and reports and manages consolidators’ fund for procurement of products. Note: The existing organizational set-up of the current scale of the social business is functional. However, the area consolidators, although not part of the management staffs, play critical role in the operations of the social business. Relative to scaling up of the social business, these existing consolidators can be tapped to assist in identifying potential areas and farmers/groups for expansion and training seaweed farmers and consolidators subject to provision of additional incentives and allowances.

Finance unit organized Note: The existing finance unit is also composed by the AOM (as cashier) and Bookkeeper. However, this set-up is more of a result of strategizing because the social business is not yet profitable. Subject to financial position, the BOT expressed willingness to hire finance personnel.

Finance unit of EVPRD is composed of the Administrative and Finance Officer as the Cashier and an on-call Bookkeeper. CEFA also has finance unit and an accountant.

BDFE management team have received training on enterprise and BDFE

The management staffs has undergone trainings on business planning, financial management, value chain analysis, sub-sector action research, seaweed production planning, seaweed production technologies, among others. The BOT members expressed confidence in the capacity of the management staff to run the social business.

EVPRD and CEFA BOT members and management staffs are trained on business planning, value chain, BDFE development, sub-sector research and basic financial management, among others.




Presence of operations manual, financial policies and systems

There is in-placed operations manual, financial policies and systems. SPPI also is compliant to government reports, policies and organizational housekeeping (annual external audit, SEC report submission, taxes, business permits). System with consolidators is also in place. Production protocols is also developed and being implemented. There is existing business plans but not fully implemented and funded.

EVPRD has manual of operations, financial policies, organizational structure, and audited financial reports. CEFA also has policies on operations and finance. However, formulation of other policies are still on-going (i.e. allocation of net surplus, pricing policies). CEFA is a licensed Abaca Fiber Trader by PhilFIDA. Both EVPRD and CEFA are compliant to government mandated corporate/association housekeeping.

4. PRESENCE OF SUPPORT INSTITUTIONS AND ENABLING ORGANIZATIONS BDFE has tie up with an NGO or development institution

SPPI maintains tie-up/strong partnerships with academic institution (UEP), government agencies (i.e. BFAR), and LGUs at the municipal to provincial level. SPPI is a member of the PDC-Economic Development Committee of the province

EVPRD and CEFA maintains tie-up/strong partnerships with academic institution (UEP), government agencies (i.e. DAR, DA, and PhiFIDA), and LGUs at the municipal to regional levels. EVPRD is also a member of the PDC, Provincial Land Use Committee, and Provincial Infrastructure Committee.

BDFE organization has MOA or written project partnership with a development NGO or enabling institution (private and government)

SPPI has existing partnership MOA with UEP on land-based seaweed propagule production and development of improved seaweed farming and marketing protocols. SPPI has tri-partite partnership MOA with UEP and DOST seaweed research and technology development.

EVPRD has MOA with LGU Mondragon regarding EVPRD’s technical support. CEFA has MOA with Ching Bee Corporation regarding marketing of abaca fibers.

Organization track record on project implementation

Founded in 2007, SPPI started to implement projects in 2008. There was a project on sustainable agriculture implemented by SPPI but it was not sustained. Since 2013, SPPI engaged in seaweed social business. At present, it is recognized as the major marketing organization of dried seaweeds in Samar Island. It is also being recognized as seaweed production resource organization/training provider and policy advocates. SPPI is recipient of various awards and citations because of its seaweed social business. Because of its engagement in trading dried seaweeds, the seaweed industry in Northern and Eastern Samar is starting to be revitalized.

EVPRD have substantial track record in project implementation since 2004. It has implemented 11 major projects (mostly in the field of agriculture and forestry) in partnership with 11 donor agencies (mostly foreign). The total amount of these projects is 19,356,000 pesos. CEFA also has outstanding track record in implementing projects with CSOs, LGUs and government agencies

5. STRATEGIC VALUE OF THE SITE FOR MODEL BUILDING BDFE site ranks high in biodiversity conservation as per national policy, government (i.e. DENR, national agencies, LGU, PAMB) and environmental NGOs

Yes. Four (4) coastal municipalities covered by the operations of SPPI, namely: Biri, Lavezares, Rosario and San Jose are declared marine protected area governed by a PAMB. Other coastal municipalities which are not declared marine protected areas are being engaged by SPPI to designate

BDFE site and influence areas rank high in terms of biodiversity conservation because they are at the buffer zone of the Samar Island Natural Park.




seaweed farming zones through coastal resource use mapping.

BDFE site has high potential for demonstrating sustainable value chain

Market demand for dried seaweeds is high however price is unstable.

The price of abaca fiber is stable and increasing. Market demand is high both local and international.

BDFE site has high potential for replicability in other areas

The model established can be replicated in many areas. However, it requires high capital and technology improvement with support facilities (i.e. drying facility, boats)

The model established can be replicated in many areas. However, it requires careful site assessment and planning to suit environmental conditions of other sites. It also requires technology improvement with support facilities (i.e. drying facility, storage house)

6. RESOURCE BASE SECURITY OF TENURE (PUBLIC LAND, STEWARDSHIP, ETC.)

Area where the product or service is produced or obtained have security of tenure or rights to use (tenurial) arrangements that will allow the BDFE and the household influenced continued use and enable enterprise scale up

Coastal communities, by law, is given preferential rights to utilize marine protected areas for livelihood especially seaweed farming. This is deemed as the only enterprise which can be integrated in protection activities. Seaweed farmers, as long as they are registered fisherfolks with BFAR, and have permit from LGU can utilize coastal resource. Seaweed cannot be put up in areas with fair to excellent coral cover and dense seagrass vegetation, transport routes and outside of seaweed zones established by LGUs.

Existing and potential production sites are covered by CBFMA. (Refer to previous sections) Abaca farmer members of the BDFE are required to comply with the following production protocols: Organized production (farm inspection by EVPRD, with farm lay-out, and production plan) Utilize planting stocks within Mondragon to prevent disease outbreak (bunchy top, mosaic) They are not allowed to open forest areas/kaingin for planting abaca. Abaca farms should only be within multiple use zones. Practice integrated farming (i.e. coconut, endemic forest trees, root crops, abaca, vegetables) Planting of hedgerows for soil and water conservation

Area or resource base have room for expansion of production area without generating environmental and/or tenurial or usufruct issues

Area or resource base have room for expansion but only within LGU designated seaweed farm zones. Usufruct issues are not a major concern because the seaweed farm zone is shared area and management policies are in-placed. For instance, farmers are required to have their own production plan wherein production area will be allocated based on it.

There are many CBFM areas in Northern Samar wherein the BDFE model can be expanded. It helps in preventing usufruct issues because it serves as a social fence against encroachments in protected areas.


ANNEX 2. KII RESPONDENTS

No. Name

Gender Position in Organization/ Value Chain

Organization

Date and Place Interviewed

Interviewer Male Female

1 Maybelle Camps

X Managing Director

Nortehanon Access Center, Inc. (NAC)

21 September 2018/ Catarman, Northern

Samar

Merlinda P. Calubaquib

2 Gregorio Sarmiento

X Executive Director

EVPRD 21 September 2018/ Catarman, Northern

Samar


3 Edwin R. Celestino

X Chairman, Board of Trustees

EVPRD 21 September 2018/ Catarman, Northern

Samar

Pablo B. Paet, Jr.

4 Roberto Estopace

X Chairman CEFA 21 September 2018/ Brgy Cablangan,

Catarman, Northern Samar

Pablo B. Paet, Jr.

5 Nonito M. Bayrante, Jr.

X Board Director/ Barangay Consolidator

Hinabangan Multipurpose Association (HMA)

5 October 2018/ Cablangan, Mondragon,

Northern Samar


6 Felisino Sagonoy

X Abaca Farmer CEFA 5 October 2018/ San Jose, Mondragon, Northern Samar

Pablo B. Paet, Jr.

7 Ricky Macquian

X Abaca Farmer CEFA 5 October 2018/ De Maria, Mondragon,

Northern Samar

Pablo B. Paet, Jr.

8 Jeffrey Sagonoy

X Abaca Farmer Non-CEFA Member

6 October 2018/ Cahicsan, Mondragon,

Northern Samar

Pablo B. Paet, Jr.

9 Lodi Aguilardo

X Abaca Farmer

Non-CEFA Member

6 October 2018/ Cablangan, Mondragon,

Northern Samar

Pablo B. Paet, Jr.

10 Paquito Dabuet

X PENR Officer DENR-Northern Samar

4 October 2018/ DENR-PENRO Office,


Mateo G. Aleria

11 Iris Mae Creer X Bank Manager DBP 4 & 10 October 2018/ DBP Office,


Mateo G. Aleria & Evelyn Acibar-Bandal

12 Engr. Ralph Bandal

X Provincial Director

PhilFIDA 5 & 16 October 2018/ PhilFIDA Office,


Evelyn Acibar-Bandal

13 Engr. Veronica Laguitan

X Provincial Director

DOST 5 October 2018/ DOST Office,



14 Necifuro Rubenecia

X Provincial Agriculturist

Provincial LGU-PAO

8 & 16 October 2018/ Provincial LGU-PAO

Office, Catarman, Northern

Samar

Mateo G. Aleria & Evelyn Acibar-Bandal

15 Silvio P. Abella

X Assistant Provincial Planning &

Provincial LGU-PPDO

8 October 2018/ Provincial LGU-PPDO

Office,

Mateo G. Aleria


Development Coordinator


16 Victor A. Buenconcejo

X Assistant TESDA Supervising Specialist

TESDA 9 October 2018/ TESDA Office,



17 Engr. Jose Balberde

X Officer In-Charge, Provincial Agrarian Reform Program Officer

DAR 9 October 2018/ DAR Office,



18 Camila C. Sarmiento

X Provincial Government Environment & Natural Resources Officer

Provincial LGU-PGENRO

10 October 2018/ Provincial LGU-PGENRO

Office, Catarman, Northern

Samar

Mateo G. Aleria

19 Editha Adalla X BOD Chairwoman

AWEMPC 10 October 2018/ AWEMPC Office,

Dalakit, Catarman, Northern Samar

Mateo G. Aleria

20 Evelyn Mengullo

X Municipal Agriculturist

Municipal LGU- Mondragon

15 October 2018/ Municipal Agriculture Office, Mondragon,

Northern Samar

Mateo G. Aleria

21 Merlita Salutan

X Manager S.C. Tan Export Corporation

15 October 2018/ S.C. Tan Office, Dalakit, Catarman, Northern

Samar

Mateo G. Aleria

22 Rowena De Guia

X Local Abaca Fiber Trader

16 October 2018/ Poblacion, Mondragon,

Northern Samar

Mateo G. Aleria

23 Rosario Chin X Local Abaca Fiber Trader


Northern Samar

Mateo G. Aleria

24 Lawrence Estopace

X Business Manager

CEFA 17 October 2018/ Cablangan, Mondragon,

Northern Samar

Mateo G. Aleria

25 Rodelyn De Asis

X Local Abaca Fiber Trader


Northern Samar

Mateo G. Aleria

26 Nelly Buque X Local Abaca Fiber Trader

18 October 2018/ Nenita, Mondragon,

Northern Samar

Mateo G. Aleria

Total 15 11


ANNEX 3. LIST OF FGDS CONDUCTED

Name of Barangay

Nature of FGD Place Conducted Date Conducted

Gender Total

Male Female

1. Sitio Crystal, San Jose

Market & market channels, gendered map enabling environment and support services

CEFA Office, Barangay Cablangan, Mondragon, Northern Samar

October 3, 2018

5 1 6

2. De Maria Key industry players in the value chain, gendered map enabling environment and support services


October 3, 2018

1 3 4

3. Cablangan Stakeholder’s analysis & institutional mapping; producer’s cost & returns analysis


October 4, 2018

6 3 9

4. Hinabangan Household and community profiling; gendered map enabling environment and support services


October 4, 2018

1 2 3

5. Nenita Subsector description and scope, gendered market supply flow map, producer’s cost & returns analysis


October 5, 2018

3 13 16

6. Mirador Natural resources, biodiversity and climate change risks, gendered production flow map


October 6, 2018

2 2 4

7. Cahicsan Worksheet 1. Functions and technologies, critical factors and seasonal calendar


October 6, 2018

3 3 6

8. Inter-barangays

Presentation and validation of FGD results


October 10, 2018

20 24 44

9. Inter- barangays

Strategic options and deepening on identified SE interventions through SWOT analysis and the 8 benchmarks – tuxy buying and abaca plantlet nursery

Barangay Hall, Nenita, Mondragon, Northern Samar

October 27, 2018

4 7 11

10. Inter- barangays

Strategic options and deepening on identified SE interventions through SWOT analysis and the 8 benchmarks – fiber crafts/manufacturing


October 29, 2018

9 10 19

Inter- barangays Strategic options and deepening on identified SE interventions through SWOT analysis and the 8 benchmarks – abaca fiber trading & rope/twine making


October 30, 2018

3 9 12

Inter- barangays Presentation and validation of FGD results


November 13, 2018

22 25 47


ANNEX 4. GENDERED MARKET SUPPLY CHAIN AND PRODUCTION

FLOW MAPS

Gendered Market Map: Enabling Environment Enabling

Environment (+) Access (-) No Access

1. Governance, Policy and Regulations

PhilFIDA recently conducted dissemination of their policy on eliminating the "all-in buying/straight buying" practices of traders in the barangays to help double the income of farmers and encourage them to produce high- quality fiber with better prices.

Lack of government policy for setting abaca buying price. The trader is usually the ones who sets the price for abaca. The abaca farmers are usually price takers.

LGUs and NGAs have Gender and Development (GAD) Plan and have allocated annual budget for GAD projects

Local communities esp. the women are not aware of GAD, and if there are GAD plans already integrated in Agency Annual Plans. They also do not know how they can avail of the GAD budget/program. They are not also aware of the requirements since they have not attended any training and orientation about GAD.

Defined areas for abaca production (e.g., within multiple use zones of forestlands/CBFM), within buffer zones of watershed areas

2. Associations and Cooperatives

All abaca producing barangays in Mondragon/NS have existing people’s organization (e.g. CBFM-PO and farmer's association organized by NGAs, LGUs and NGOs)

Presence of CEFA in Mondragon that serves as consolidation point for abaca producers. Has effort to expand membership to reach out more barangays to promote an organized production and marketing system for abaca.

Existing people's organizations that can participate in the abaca value chain

Existing organizations at all levels have active linkages with other development organizations and agencies

3. Land Property Rights

DENR has granted CBFM agreement to CEFA that entitles the POs and their members to utilize the forestlands for forestry and agricultural purposes for 25 years renewable for another 25 years. Likewise, DAR has distributed CLOAs to farmers within the ARCs as land tenure security. Others who are occupying A&Ds lands have tax declaration

Selling of land rights is prevalent within CBFM areas

4. Natural Environment and Resources

There is on-going program of DENR like the National Greening Program (NGP) that engaged forest occupants to plant forest trees in idle and degraded forest lands. The program do not only rehabilitate forestlands but also created employment to local communities as their labor from participating to the project are being paid by the government.

Unsustainable/destructive agricultural practices in forestlands remained unregulated due to limited number of forest protection officers doing monitoring and forest patrolling works

DENR allows local communities within NGP/CBFM areas to plant abaca plants as intercrop.

Uncontrolled collection/gathering of hardwood/premium forest tree species like narra and lauaan

Large areas in NS/Mondragon that are potential expansion sites for abaca production

Hunting of wildlife, like tarsier and other edible birds still exists despite the DENR policy prohibiting the hunting and collection of wildlife and birds.

PhilFIDA distributed abaca planting stocks/suckers in some municipalities of NS to help farmers recover from the effects of ABTV

Mondragon abaca farmers refused to accept the planting stocks/suckers distributed by PhilFIDA because they


Gendered Market Map: Enabling Environment Enabling

Environment (+) Access (-) No Access

DSWD provided cash for work (Php 2,500.00) for those farmers who participated in the planting of abaca suckers distributed by PhilFIDA

presumed they are infected with ABTV that may cause pest outbreak in the locality.

5. Gender Perception

There is a general perception that abaca production and trading are shared tasks and responsibilities between males and females

Abaca production is a male-dominated work. Most of the production processes require heavy labor like bundling, stripping and hauling which could hardly perform by women

Absence of women-friendly machineries and technologies that impedes women's participation in the abaca industry Absence of developed social enterprises other than trading of abaca fiber to increase productive work of women in the industry

6. Finance and Credit

Presence of microfinance institutions (e.g. ASA, CARD, PUNLA Foundation) that are operating in the locality that provide financial services for loans for agricultural production and enterprise developments.

Only a few women and men are availing financial products and services of government financing institutions and MFIs due to unaffordable interest rates. They also require numerous documentary requirements and collaterals which are difficult to comply by poor and less educated people like farmers

Gendered Market Map: Support Services

Support Services (+) Access (-) No Access

1. Business Development Services

DTI has conducted livelihood development trainings like handicraft making mostly attended by selected women's group. DTI has also helped them find local market for selling their abaca bags and baskets.

Most of the services of DTI are mostly in the form of training and market support. Their activities lack follow up and monitoring

Women's groups are more active in attending trainings than their male counterparts because the males usually attend the productive work in the farm.

Limited number of NGAs/NGOs with initiative to reach out remote barangays to provide abaca business development services and training for women. Local communities perceived that these agencies especially their field technicians do not want to experience the muddy roads and the heat of the sun, thus limits them to do extension works to teach and advise the farmers. PhilFIDA has promised local farmers with stripping machines and other needed facilities to improve their quality of fiber but these promises have not been fulfilled/delivered until this time.

2. Research and Development

Presence of UEP that can support research and development needs of abaca farmers. UEP has also conducted a Value Chain Analysis (VCA) of Abaca (Musa textiles) Fiber in Northern Samar in 2016

Local communities are not aware of the results and findings of government researches due to lack of dissemination.

PhilFIDA in collaboration with other national agencies have continuing research and development programs on the development of disease-resistant and high-yielding planting materials

Lack of field technicians to share R&D initiatives of NGAs, thus local farmers do not benefit much of these research efforts

3. Transport Services

DAR through its "Links Farms Project" has committed to provide transport vehicle to CEFA to

Poor farm to market roads in remote areas consuming much time on the part


Gendered Market Map: Support Services

Support Services (+) Access (-) No Access

facilitate consolidation and delivery of farmer's produce directly to buyer/Ching Bee. This DAR project shall be implemented in partnership with MLGU Mondragon, UEP, DOST, among others to reduce market channel or middlemen in the value chain. Links Farms project orientation was conducted last September 27, 2018 attended by CEFA men and women officers

of farmers for manual hauling just to reach the local trading center.

All areas are accessible including inner barangays.

4. Business Development Services (Market Information)

There are secured and increasing market outlets for abaca fiber because of increasing demand both local and international.

Absence of market information system for abaca farmers. It’s only the local traders who knows the market price. Sometimes this situation is often used by local traders to take advantage on the farmers for higher profits

Handicraft-making was introduced to CEFA in the past, market-trial of their handicrafts was done locally. However, this related abaca enterprise was not sustained due to set high-priced making the products less competitive in local market.

Marginalized sector do not have access and control over prices Except selling of abaca fiber, no developed abaca related enterprises in Northern Samar/Mondragon

5. Communication Services

Only a few designated areas have good communication signal mostly located in urbanized areas

Some networks have limited coverage

Used of improvised communication system like radio to access communication

Generally, remote barangays have poor communication system, most have no network coverage

6. Infrastructure All barangays have access farm to market roads. Poor farm to market roads.

Some barangays use motorboats to bring their products in the consolidation point

Unfinished road construction due to expired contracts

Government procurement process like bidding scheme usually delays the implementation/completion of infrastructure projects of government Most government infrastructure projects (e.g. roads) do not last long because they are constructed using sub-standards materials

7. Financial Services

Presence of microfinance institutions (MFIs) within the project area

Marginalized sector have less access on financial services due to high interest rates, numerous documentary requirement, lack of collateral among others

MFIs such as PUNLA, ASA and CARD extend loans without collateral.

Marginalized groups do not want to apply for loans because of fear that they cannot pay

The rich who have land and materials assets as collateral are the ones availing and benefiting from the financial products and services of MFIs and large financial institutions. Besides, they can easily comply with and process their documentary requirements because of better/higher educational attainment. Some MFIs do not extend loans for agricultural production because they don't want to take risks.


ANNEX 5. GENDERED PRODUCTION PROCESS FLOW

Gendered Production Process Flow

Factors to Consider Production Process No. 1

Selection of Planting Site (usually with pre-planning done already)

Time of the Day 7AM-8 AM

Length of Time 1 hour

Role of Women Recommend and help decide the husband on what type of site should be selected for planting.

Knowledge, skills and attitudes of women required to perform this task

Knowledge on the criteria and basic characteristics of a good planting site like the soil type and topography

Cost and Expenses Not applicable

Returns & Pricing Not applicable

Barriers and risks to women Snake and insect bites (e.g. centipedes) including wild bees


Gathering of planting materials (usually gathered from own-farm or from neighbor's farm)

Time of the Day 6 AM to 5 PM

Length of Time 10 hours a day but duration of work depends the farm size and the # of planting stocks/suckers needed.

Role of Women Selection of planting stocks (suckers, uprooting of suckers and assist in hauling suckers to the farm


Knowledge on selecting good and healthy planting stocks like suckers, knows how to use the tool for uprooting the immature sucker from the mat/hill to prevent damage to the mother abaca plant.



Barriers and risks to women Snake and insect bites (e.g. centipedes) including wild bees, possible hand/foot injury when uprooting tool is not used properly


Land clearing and land preparation

Time of the Day 6 AM to 10 AM

Length of Time 4 -8 hours a day but duration of work depends on the farm size

Role of Women Assist in weeding and strip brushing. Cutting of shrubs, bushes, and grasses


Knows how to use bolo properly, Use of proper working clothes.



Barriers and risks to women Possible injury when weeding/strip brushing tool was not used properly, Sickness due to stress, and effects of extreme weather condition like if the work schedule was done during a sunny or a rainy day


Hole Preparation and Planting (usually done simultaneously)

Time of the Day 6 AM to 10 AM

Length of Time 4 hours a day but duration of work depends on the # of holes to dug and farm size

Role of Women Hole digging and planting simultaneously


Knows how to determine the depth and height of holes to dig that is suitable to the height and size of suckers to plant. Knows the best time to plant abaca



Barriers and risks to women Accidental injury due to improper use of farming/planting tools




Fertilization

Time of the Day Respondents do not apply fertilizer especially synthetic or chemical fertilizers. They note that their abaca farms are still fertile and do not entail fertilization yet.

Length of Time

Role of Women

Knowledge, skills and attitudes of women required to perform this task Cost and Expenses

Returns & Pricing

Barriers and risks to women


Maintenance (limited to strip weeding/brushing, cleaning and removal of dried leaves and outer leaf sheath of abaca plant)


Length of Time 9-10 hours a day but duration of work depends on the farm size and status of the farm.

Role of Women Removal of weeds on the whole length of the row and in between hills on both sides of the plants. The cut weeds are left to rot to add to the organic matter content of the soil.


Should wear proper working clothes.



Barriers and risks to women Possible heat stroke. Snake and insect bites (e.g. centipedes) including wild bees, spiders


Harvesting, Tuxying and Stripping. (first harvest can be done between 16 to 24 months from time of planting). Stripping is done within a day after harvesting and tuxying.

Time of the Day 6 AM -5 PM or until works are done

Length of Time 12 hours but work duration depends on the # of matured abaca stalks to harvest and to be stripped

Role of Women Tuxying. Stripping work is a male-exclusive work because it requires heavy labor and energy.


Knows the proper method of separating the outer layer of the leaf sheath called the tuxy from the inner layer.



Barriers and risks to women Possible hand injury due to improper use of tuxying knife


Drying


Length of Time 8-9 hours

Role of Women Spreading of abaca fiber in the bamboo hanger until they have reached desirable moisture content. Collecting the dried abaca fiber


Knows how to do sun-drying and air-drying properly. Knows how to determine if the fiber have already reached desirable moisture content before collecting them for bundling. Should ensure that the tips of the fresh fibers must neither touch the soil nor mixed with foreign matters to preserve their cleanness.



Barriers and risks to women Possible heat stroke




Bundling, Hauling and Transporting to Consolidation Point/Trading Center

Time of the Day 4 PM to 5 PM

Length of Time 30 minutes to 1 hour depending on the amount/volume of fiber to bundle

Role of Women These production processes are exclusively male-works.

Knowledge, skills and attitudes of women required to perform this task Cost and Expenses

Returns & Pricing

Barriers and risks to women


Retailing/Trading

Time of the Day 4 PM to 5 PM, early morning of the following day or anytime of the day after bundling

Length of Time 30 minutes to 1 hour depending on # of people who are selling their produce to the trader

Role of Women Weighing, computing and recording

Knowledge, skills and attitudes of women requiredto perform this task

Knows how to use weighing scale, knows how to determine if the weighing scale is accurately calibrated, knows how to do simple calculation



Barriers and risks to women Risks from wicked people who might take their sales away. Motorcycle accident when accompanying their husbands in bringing their products in the trading center


T H E P R O J E C T T E A M

Project Coordination Team

Dr. Marie Lisa Dacanay, Project Director Ms. Catherine Tiongson-Intalan, Project Coordinator

Jay Bertram Lacsamana, Subsector Investment Planning and M&E Consultant

Abaca SAR Field Team

Ms. Merlinda Calubaquib, Team Leader Mr. Pablo Paet, Jr., Research Associate

Mr. Mario Aleria, Research Associate Ms. Evelyn Acibar, Research Assistant

Market Research Team

Ms. Miriam Arnelle Azurin, Market Research Consultant

Manual Development Team

Ms. Carmela Jessica Corado, Manual Development Consultant Ms. Dorothy Mae Albiento, Content and Lay-out Artist

Support Staff

Mr. Lito Barrientos, Accountant Ms. Dolores Marcial, Administrative and Finance Assistant

Photos: Pablo Paet, Jr. & Dorothy Mae Albiento