Modernizin

&Industrializing

Philippin
es

of the

Dr. WILLIAM D. DAR

President, InangLupa Movement

Paper presented during the 2016 Philippine Cacao Summit and Exposition on May 27 29,

Outline
Share of players in the sales of an average chocolate bar
Current statistics (Philippines & Mindanao)
Framework for modernizing and industrializing Philippine
agriculture
10 action points for a competitive & market-oriented
agriculture
Challenge: Intensive yet sustainable production
Key players & functions

Share of Players in the

Sales of an Average
Chocolate
Bar
(100 grams = $ 0.91, P 41.86)
Note: $ 1 = P 46

17%

Retailers

7%
Intermediaries

6%

70%
Cocoa & chocolate
companies

ource: Make Chocolate Fair website

Cacao
farmers
(1980=16%)

Current Statistics
By 2020, Philippines will
require
100,000 MT dried cacao
beans
= almost 50-70 M trees
= area of approx. 120,000Philippines
is a net
150,000 ha
importer with annual
consumption =
50,000 MT dried cacao
beans
Share of Philippines to
global cacao production is
less than 1%
Mindanao produces 90% of the
countrys cacao production; its
target production in 2020
is 100,000 MT (global ave annual

By 2020, world market

demand for cacao
beans is projected at 4.7
5 M MT
Cacao producing
countries unable to
fulfill the growing
demand worldwide
Certification of cocoa
beans
(follow certain social and
environmental guidelines)

Current Statistics:
Mindanao
TOTAL PRODUCTION

4,366.52 MT
88% from Davao Region
5% from Northern Mindanao

NURSERIES
167 nurseries in Davao
Region
11 are accredited
7 are located in Davao
Region
40-50 nurseries in
Zamboanga
2.8 3 M seedlings per

AVERAGE YIELD =

590 kg/ha

PRODUCTION FEATURES
Takes 3-5 years for yields to peak
Climate of Mindanao highly suited
Theobroma cacao spp. thrives well in
humid tropical lowland
Rainfall reqt: 1,150 - 2,500 mm
Temperature reqt: 21 30 C
Expansion of cacao farming thru
intercropping

Philippine Cacao Production, 2013

Production
Volume (in
MT)

% Share to
RP
Production

Luzon

293.60

6%

Visayas

215.47

4%

Mindanao

4,366.52

90%

TOTAL

4,875.59

100%

Island
Group/Region

Vision
A Modern and
Philippine
Agriculture
Industrialized

Strategy: People-centered, Innovation-based and MarketOriented Development (PIMOD)

4 Pillars
Inclusive
Science-based
Resilience
Market-oriented

4
4 Major
Development
Objectives
Sustainabl
Goals
Security
e on:
Productivity
Food
Economic
Nutritional
Environmental

Enabling Mechanisms
Plans and Programs
Legislative Agenda

Profitability
Competitiveness
Sustainability

Irrigation

Credit &
Infrastructur
other risk
e & other
managemen
logistics
t tools

Mechanizati
on

Marketing &
agribusines
s

10 Action Points for a Competitive & Market-Oriented

Agriculture

Sustainable Research &

land
developmen
managemen
t
t

Adaptation
to climate
change

1
0

Empowerme Reformation
nt
of the
&
Bureaucracy
institutional

Challenge: Intensive yet Sustainable Production

Priority Areas for Action in the next 5
years

Action Points

1. Increased access, availability and use of

good quality clean planting materials of HYVs

2. Improved access to and availability of inputs

including efficient nutrient management

3. Enhanced flow and quality of extension

services for cacao farming to facilitate
adoption of good agricultural practices and
sustainable farming practices

4. Improved access to good manufacturing

practices (GMP) compliant postharvest
facilities and extension services

Research & development

Accredited nurseries
Credit & other risk
management tools
Irrigation
Credit & other risk
management tools
Empowerment &
institutional capacity
development
Sustainable land
management
Mechanization

Challenge: Intensive yet Sustainable Production

Priority Areas for Action in the next 5
years

Action Points

5. Judicious utilization of existing coconut and

banana farms through cacao intercropping to
increase areas planted to cacao with priority
given to contiguous areas

6. Improved physical/infrastructure linkages to

input, support, and product markets

7. Enhanced organizational capacity of farmer

groups to become effective economic players

8. Improved flow and transparency of

information at all nodes of the chain including

basic traceability system
9. Improved access to facilities and resources to
catalyze value addition and lay the

Sustainable
intensification
Increase potential
production areas in
Luzon, Visayas &
Mindanao
Infrastructure & other
logistics
Market
Empowerment &
institutional capacity
development
Reformation of the
Bureaucracy
Credit & other risk
management tools

Key Players & Functions

Department of Agriculture / SUCs

Development of new varieties and hybrids

Private Accredited
Provision of better planting materials via existing nurseries
Nurseries:

Short Term
Acquisition of new planting materials or
improvement of existing materials to
maintain competitiveness
Subsidized cost of planting materials
Training on nursery management
Push for accreditation of all nurseries
Long Term
R&D investment to appropriate partners in
the light of new challenges such as climate
change and quality requirement of

Key Players & Functions

Cooperative, Corporation, &

Corporative
Market Players:

Farming

With secured markets, farmers are more

willing to invest

Improve the system of block farming where

farmers come together to cut down
transaction cost & delivery of extension
services (Range in area: 50 to 400 ha)

Take great caution in the selection of planting

materials

Provide and support to credit facilities (e.g.

CSF)

Cont

Farming
Crop Diversification &
Practices
Intensification

Highly suitable/compatible under

different production systems
(Intercropping e.g. coconut or
banana; multistory; agroforestry
farming)
Skills enhancement
Resolving land tenure status since
many are sharecroppers or tenants
(explore innovative ways of
partnership)

Technical Support

Provision of pool of technical

experts and master farmers

ICT-mediated technical support

Key Players & Functions

Soil Mapping
Determine soil health and produce soil
maps
Soils are not only thirsty but also
hungry
(effects of micronutrients)
Organize farmers and service providers
to minimize transaction costs (this will
abate inefficiencies in prices
nationwide)
Efficient nutrient management is critical
in cacao farming to produce 2 t/ha from
590 kg/ha

Key Players & Functions

Processors: Post Harvest & Processing

a.
27 fermentation facilities in Davao Region
Fermenting
Proper fermentation and drying to remove unpleasant
&flavors
Drying

Reduces weight of beans by 7-8%

Not done by farmers because of no access to facilities and
skills
Requires good facilities: fermentation box, mechanical
dryer, bean sorter and storage to maintain the quality
of the beans
Since this basically home-based,
provision of village type grinding
facility

b. Grinding/Processing
c. Manufacturing

Manufacturing is a billion peso

industry
Production system must improve and
provide support to entire value chain
to benefit farmers

Trading
Traders/Manufacturers:

Key Players & Functions

Davao as the center of trading

(70-80 traders)
Need for organizing the farmers for bulk trading
to minimize transaction cost
Targeting the international market, multinational
companies can take over exporting operations
directly to farms or thru agencies, which calls
for farmers organization

Export Marketing
Exporters:
12 Exporters based in Davao
Farmers organization is very important so that they
themselves can process the beans, serve as
integrators or consolidators at the same time
to directly deal with multinationals
Integrators & exporters are the two major parties
oiling the market chain because they provide prefinancing or working capital to farmers and even
act as facilitators to loans.

Successful Cases in Cacao Industry

Rob Crisostomo, exports
loads
of Philippine cacao to
Barry Callebaut, the
worlds largest supplier of
high quality chocolate

Malagos 65% Dark Chocolate

won a Silver award at the 2015
International Chocolate
Awards World Drinking
Chocolate Competition in the
Dark Drinking

Thank
you!
Yes, the
Filipino
Email me at:

Become an InangLupa volunteer, register at :

w.dar38@yahoo.com

http://inanglupa.weebly.com/become-a-volunteer.html