Enabling the small farmers to break through the market

Representatives from networks of rural NGOs and people's organizations from nine countries in Southeast and East Asia gathered in Cagayan de Oro City from June 28 to July 2 to discuss how the small farmers and farmerholders can hurdle the extremely difficult challenges of entering and participating competitively in the market. They are united in the belief that small farmers and farmholders can survive and compete in the market if they are organized as commodity-based associations of small producers.

The event, organized by AsiaDHRRA, is the third of a series of ASEAN-level workshops implemented under an ASEAN Foundation project entitled "Linking Small Farmers to Market" which aims to establish the mechanisms that will help commodity-based associations of small producers achieve economies of scale and a stronger bargaining strength in the market. PhilDHRRA, the in-country anchor for LSFM in the Philippines, hosted the event and provided a festive welcome dinner featuring a traditional Manobo dance number and the participants' diverse backgrounds and cultures.

The participants of the workshop realized how difficult the situation of small farmholders had become over the last 15 years due to various factors. Regional and bilateral agreements on the removal of tariffs have pushed down the prices of highly-subsidized agricultural imports from highly-developed countries, to the detriment of small farmers in Asia. Consumer preferences have increasingly shifted from fresh farm products to processed food due to increasing urbanization. Small farmers who have not been able to claim their space in agricultural sectors and industries will now have to face the additional hurdle of increasing market segmentation.

Yet models of commodity-based small producers association in the more advanced countries in Asia, such as Korea and Taiwan, provide the way to a better future. The associations in these countries have grown so big that their small farmers actually earn more than salaried professionals. Mr. Seo Dong Woo of Korean Producers Association and Dr. Wen-Chi Huang of Taiwan Wax Apple Development Association (TWADA) presented how they reached this stage by narrating their history, marketing strategies, and how they have been able to address the challenges related to economies of scale, product quality, and food safety. The successful experience of small cassava farmer in Agusan in dealing with an established food and beverage corporation, narrated by Agnes Bolaños of Agri-Aqua Coalition for Development, provided significant insights about how small farmers dealt with the challenges of dealing with a huge, established, and stable market, and the opportunities in engaging the private sector.

Participants from various ASEAN countries identified the key factors to ensuring success in this endeavor. Government support will definitely be helpful, as well as the leadership provided by people's organizations in breaking through the market. Quality control and product promotion, systematic consolidation for greater bargaining power, the identification of competitive advantage, and thorough work on internal organization strengthening and development will all help push commodity-based small producers associations to success.

Underlying these elements is the commitment to the principles of holistic, diversified, and sustainable agriculture as the foundation of any and all economic undertakings of commodity-based associations of small producers. The basis of their engagement with various players, especially the business/private sector, remains the same as the fundamentals guiding their advocacies for agrarian reform and rural development-- that is, social justice, environmental protection, sustainable agriculture.

A visit to the Northern Mindanao Vegetable Producers Association (Normin Veggies) in Barangay Dahilayan, Manolo Fortich, Bukidnon was done on the last day so that the participants will have a common community-based experience as one reference for concretizing their learnings and insights.

The LSFM Third Regional Training Workshop had a total of 65 participants from Cambodia, Indonesia, Laos, Korea, Taiwan, Vietnam, Myanmar, Thailand, and the Philippines. Mr. Nestor Carbonera, Chairperson of PhildHRRA Mindanao, gave the welcome address. Keynote address was given by Ms. Lealyn Ramos, Regional Director for Regional Field Unit 10 of the Department of Agriculture. Ms. Nyla Prieto delivered a special message from the ASEAN Foundation.

In implementing LSFM, AsiaDHRRA has entered into partnerships with the Center for Study for the Development of Agriculture in Cambodian (CEDAC), the Philippine Partnership for the Development of Human Resources in Rural Areas (PhilDHRRA) and the Vietnam Farmers Union (VNFU) and BinaDesa to implement the regional project in four countries in Southeast Asia, namely, Cambodia, Philippines, Vietnam and Indonesia.

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Workshop Objectives, Design, Methodologies, and Output

The third training workshop is focused on the study of specific cases of successful engagement in the market by small farmholders who have organized themselves into commodity-based associations. It looked into the advanced experiences of Taiwan Wax Apple Development Association, Korean Pear Producers’ Association, and the Northern Mindanao Vegetable Producers Association in directly linking with the market.

The workshop aims to enable the participants to:

  1. Review of three basic important elements required in the engagement of small farmers with formal markets;
  2. Learn from the experiences of market engagements from commodity-based associations in Asia, and visit a particular case of the Normin Veggies in the province of Bukidnon.
  3. Provide inputs on formation of commodity clusters/groups to achieve economy of scale, enhance bargaining strength and for systematic delivery of crop-specific agricultural training and extension to enhance yields of specific commodity, improve product quality and windows of opportunities with ASEAN and FAO.
The following outputs are expected to be produced from this workshop:
  1. List of identified marketing issues and challenges confronting small farmers and producers;
  2. Summary of experiences of commodity-based groups associations of small farmers in their engagements with markets.

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Brief Background of the Workshop

This training workshop is the third in a series of workshops that established the importance, for small farmholders, of engaging the markets and of complying with market requirements in food safety and product quality. It has been established that directly linking with markets is the way to go in ensuring a better income for small farmholders, and in acquiring for them expanded opportunities and prospects for the comprehensive and sustainable development of their farms. The constraints of their participating competitively in the market are serious but experiences in developed countries in Asia have shown that these can be overcome when small farmholders are able to consolidate their products in linking with the markets. Consolidation and organizing will also enable them comply with the generally costly requirements of food safety and product quality.

This third training workshop aims to generate a deeper understanding of LSFM by looking into the potentials of commodity-based associations of small producers for achieving economies of scale and in getting a stronger bargaining strength in the market. In particular, this training workshop envisions to catalyze the stage of forming structures and mechanisms that will facilitate the productive, successful and sustainable engagement of small farmers with markets.

LSFM is implemented by AsiaDHRRA in partnership with the Center for Study for the Development of Agriculture in Cambodia (CEDAC), the Philippine Partnership for the Development of Human Resources in Rural Areas (PhilDHRRA), the Viet Nam Farmers Union (VNFU), and Bina Desa/InDHRRA to implement the project in four pilot countries, namely: Cambodia, Philippines, Vietnam, and Indonesia.

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Workshop Participants and Guests

The participants consisted of LSFM implementers from Indonesia (Bina Desa/ InDHRRA), Cambodia (CEDAC), Vietnam (VNFU) and the Philippines (PhilDHRRA). AsiaDHRRA members from Thailand (SorKorPor), Taiwan (TaiwanDHRRA), Vietnam (VietDHRRA), and Myanmar (MyanDHRRA) also attended.

Also present were resource persons and guests from PDAP and AADC. A big number of participants from the recently-launched network of calamansi producers in the Philippines, which included NGOs and people’s organizations from all over the country, also attended. Welcome remarks was given by Ms. Nestor Carbonera, Chair of PhilDHRRA Mindanao which hosted the training workshop.

ASEAN Foundation sent a representative to deliver an inspirational message in behalf of Dr. Filemon Uriarte Jr . Keynote address was given by the director of Department of Agriculture Region X, Ms. Lealyn Ramos. Archbishop Tony Ledesma hosted the closing ceremonies in his residence.

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Welcome Remarks - Nestor Carbonera

Respected guests, participants, and, organizers, a pleasant morning to all of you.
Let me first extend my deepest gratitude to all of you for attending this worthwhile event.

I will read for you a statement of Fr. Djekstra during the 1974 DHRRA Workshop. And I quote, “small groups become big groups when linked together by a common purpose and their strong potential is seen within the perspective of small autonomous units pursuing their own development in their own localities and among their own people and communities.” Fr. Djeskstra is one of the founders of the DHRRA Networks.
It is that concept of unifying small groups that gave solid foundations for the DHRRA networks today. Indeed, we can say that the 1974 DHRRA Workshop have gone so far from simply collating small partnerships to bringing together stronger and bigger networks in Asia. I believe representatives of some DHRRA networks are present today. And, these networks are now assisting small groups of farmers for their sustainable development.

It is my sincerest hope that our legacy and enthusiasm as DHRRA networks be passed on to these groups of small farmers gathered here with us today; that these small groups of producers may become bigger and more developed.

Today we will have presenters who will talk about the importance of commodity-based associations in successfully engaging with the market. Let us be inspired of their stories. Let the desire of achieving greater position in the mainstream market drive us to become self-reliant, more productive and efficient.

On behalf of the Philippine Partnership for the Development of Human Resources in Rural Areas, I warmly welcome you to this event. I wish that your stay will be fruitful and productive. We are fortunate to have this meaningful event here in Cagayan de Oro City, which is known for being the City of Golden Friendship. I do wish that more than friendship, we can facilitate stronger linkages and mechanisms that hill facilitate development of our small producers.

Before I end, allow me to greet you the way Filipinos usually greet our guests, mabuhay po kayong lahat! That means, long live. Long live all your missions and dreams.

Again, thank you and good day!

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Overview of Challenges Experienced by Small Farmers in Engaging with Markets

Overview of Challenges Experienced by Small Farmers in Engaging with Markets, by Mr. Nonoy Villas, presented the rationale behind supporting small farmers’ commodity-based associations. He started with the definition of terms to illustrate that the small farmers have the weakest link in both the supply and the value chains.

He added that small farmers are much weaker now than 15 years ago due to many changes such as changes in the global agricultural market, changes in national government, increasing urbanization, emergence of new market segments, and the ever-increasing challenges of economies of scale. He enumerated the various types of small-farmer commodity organizations, their roles and functions, and some of the specific challenges (for instance, the investment requirements governing cooperatives) that each of them might soon have to address.

Mr. Villas concluded with a discussion on the emergence of pockets of changes and possibilities (some in advanced stages, some new ones) that can serve as models in inspiring and encouraging more initiatives to consolidate commodities and scale up operation so that the small farmholders can have a strong voice in the market.

Download the Overview of Challenges Experienced by Small Farmers in Engaging with Markets

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High Quality Products at Higher Prices: The Experience of TWADA

High Quality Products at Higher Prices: the Experience of TWADA which was presented by Dr. Wen Chi Hwang, General Secretary of the said organization, explained about the experience of marketing based on product strength, quality, and competitive advantage. She narrated the history of TWADA as already having started with not just individual farmers but with small, organized groups of wax apple growers.

The technology for product development and improvement was already there, developed with huge government support. TWADA was organized specifically for the purpose of expanding the market. Dr. Hwang narrated TWADA’s marketing initiatives which included joint marketing with the top three biggest consumer market in Taiwan, door-to-door marketing, direct marketing through the internet, and export trading. She narrated the benefits received from these strategies, which included, among others, higher and more stable farm gate price for farmers, and generally a higher income for all of them.

Dr. Hwang further discussed the challenges and issues confronted by TWADA in marketing their product, and how these are being addressed. The challenges include seasonality of export, economy of scale, professional grading of product, and packaging. TWADA’s biggest buyers are its local markets, while its biggest buyer abroad is China. TWADA is also trying enter the Singaporean and Hongkong market, and recently, it has been able to break into the Canadian market.

Download High Quality Products at Higher Prices: The Experience of TWADA

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Addressing Product Consolidation to Achieve Scale, Product Quality and Food Safety and Marketing

Addressing Product Consolidation to Achieve Scale, Product Quality and Food Safety and Marketing by Mr. Seo Dong Woo of Korean Pear Producer’s Association discussed about the history of the said organization, and its structure and support systems. He explained that in Korea, village-based commodity units are organized into commodity associations by Nong Hyap national cooperative to gain negotiating power in the market and to get more technical inputs and support. Government helps promote their activities by giving subsidies, investing money, and providing machines for farms.

Mr. Woo proceeded to explain the Korean market conditions and strategy, including online selling and the establishment of a storage facility for each of the commodity association. He said that their production strategy is similar to the GAP system in Taiwan in terms of practices in quality control. He added that the Korean Pear Producers’ Association undertakes continuous effort to improve their product quality, tie up with government services, and diversify markets.

Download Addressing Product Consolidation to Achieve Scale, Product Quality and Food Safety and Marketing (English)

Download Addressing Product Consolidation to Achieve Scale, Product Quality and Food Safety and Marketing (Korean)

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Summary of Basic Requirements for a Successful Small Farmers Engagement with Markets

Summary of Basic Requirements for a Successful Small Farmers Engagement with Markets resulted from a collective effort of the participants, upon facilitation by Ms. Lany Rebagay. In developed countries, a key factor is government support.

But for those countries whose government provide only little, if not almost no, assistance, the farmers themselves should organize and consolidate to attain bargaining power. Other basic requirements for a successful small farmers engagement with market include: high product quality (internal quality controls) and product promotion, scientific methods in linking with and positioning in the market (eg identification of one’s competitive advantage), production efficiency, volume, large area for expansion, business systems for efficient administrative and finance operations, and human resource development (especially democratic leadership).

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Experiences of Small Cassava Farmers in Bukidnon

Experiences of Small Cassava Farmers in Bukidnon, presented by Ms. Agnes Bolaños, Executive Director, Agri-Aqua Coalition for Development- Mindanao, related about the case of Balugo farmers’ Multi-purpose Cooperative in supplying cassava chips and by-products to San Miguel Corporation, one of the biggest food and beverage processing company in the Philippines.

She explained the scope and volume requirements of the trading and how the small farmholders are organized to meet this market’s demands. Ms. Bolaños said that the farmer s have proven that the use of organic farming method (due to its low-cost inputs and nourishment of soil) is the most beneficial, profitable, and reliable method of production.

She also said that commodity consolidation is very important as it is very difficult to negotiate if one could not comply with the volume requirements of the market. Finally, she related that the private sector has been showing interest in developing communities but don’t know how and where to begin. Civil society can help in providing linkage, direction, and concrete proposals that the private sector can consider.

Download Experiences of Small Cassava Farmers in Bukidnon

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