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Monday, October 20, 2003
Marketing deal to boost calamansi, passion fruit harvest
MINDANAO calamansi and passion fruit growers have been assured a more reliable market for their commodities after recently signing a Memorandum of Agreement (MOA) with an export-oriented fruit processor based in Davao City.
The MOA sets a supply-delivery system developed by the Mindanao Fruit Industry Council (Minfruit), whose primary aim is to help local growers obtain better prices for their commodities even during the oversupply months in Luzon and Visayas.
More than 100 local growers from six provinces in Mindanao are now supplying Profood Corporation, one of the country's largest tropical fruit puree and dried fruit processors, a committed delivery of 457 tons of calamansi fruit.
Passion fruit totaling 1060 tons are scheduled for delivery from July to October next year.
Better prices
"By pursuing this supply agreement, we decided to take an active part in finding reliable markets for Mindanao's agriculture products and ultimately, increase the incomes of our local fruit growers," said Antonio Partoza, Minfruit president, during the signing ceremonies.
Under the MOA, Profood committed a buying price of P18 and P14 per kilo, respectively, for calamansi delivered to their Cebu and Davao plants. For passion fruit, the company committed a buying price of P8 per kilo. The growers will shoulder the packing and transport costs of the commodities through their respective consolidators.
"With the agreement, farmers would be encouraged to produce bigger volumes and further improve the quality of their produce," Partoza said.
Cornering the Luzon market
Industry experts point out that local growers can produce calamansi year-round because of Mindanao's favorable agro-climatic conditions. However, growers often fail to capitalize on this major advantage due to the lack of dependable markets outside Mindanao.
"Local calamansi growers' incomes are high for four months during the dry season in Luzon and Visayas," explained Agnes Luz, a GEM agribusiness specialist who has been assisting local fruit associations improve production and gain access to more established markets.
It is during this dry period when the price of calamansi may reach P25 per kilo. However, when the market centers in Luzon and Visayas are flooded with the commodity, Mindanao growers are at a disadvantage due to high shipping costs.
"Prices of calamansi can in fact hit rock bottom prices of P1.50 per kilo, which is a total giveaway for farmers," she added. This situation has discouraged some local growers to continue producing the crop.
Expanding production
Prior to the MOA signing, passion fruit growers in Tupi, South Cotabato, organized themselves into an association to enable them to consolidate their commodity.
This product consolidation scheme, developed with technical support from the USAID-funded Growth with Equity in Mindanao (GEM) Program, will allow the Passion Fruit Growers Association of Tupi to cope with the expected volume requirements of institutional buyers such as Profood and other Manila-based fruit processors.
The association is composed of approximately 150 passion fruit growers with over 50,000 plants to harvest.
With each plant capable of producing around 30 kilos of fruit, the association expects to produce more than 1,500 metric tons next year.
The passion fruit is a very profitable side crop. While the fruit is easy and economical to produce, it commands a good price both in its fresh and processed forms in export markets. It is widely used as flavor enhancer for mixed juices, jams, marmalades, fruit cocktail syrup, and other gourmet applications.
Forging partnerships
Minfruit and GEM initiated talks with Profood and helped the growers to finalize the details of a supply-delivery arrangement favorable to all parties, particularly the growers who needed crucial marketing support.
"A majority of the growers' fruit plantations were located in Mindanao's conflict-affected areas," Luz pointed out. This, she added, became one of the main considerations for Minfruit in providing technical assistance to the growers.
After agreeing on the appropriate pricing scheme and delivery schedules, the terms of reference of the deal were drawn-up, and the signing of the agreement followed.
Addressing the farmers during the MOA signing, Profood President Justin Uy said that their Davao plant would set-up a "dedicated line" for calamansi processing once the local growers are able to deliver their committed volumes.
"We will also be factoring-in market demand for the products," he added.
Uy noted that plans are underway to increase the production capacity of Profood's Davao and Cebu plants in the next few months to meet the growing demand of markets in Europe, Canada, Middle East and the United States.
Participants to the MOA signing were the Davao del Norte Fruit Industry and Development Council Inc., Passion Fruit Growers Association of Tupi, University of Southern Mindanao, Northern Mindanao Lemon Growers Multi-Purpose Cooperative, Batu Farmers MPC, Balucanan Farmers Association Inc, Minfruit and GEM.
The GEM Program works in partnership with the Mindanao Development Council.
(October 20, 2003 issue)
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