Bacaoco: Making your niche and closing the economic loop

DURING the mid-80s when world sugar prices crashed and Negros Occidental’s economy crumbled, thousands of sugar workers were displaced and their families faced hunger. Media highlighted the malnourished children of Negros, prompting donor countries to pour in much-needed aid.

Non-government organizations mushroomed to help distribute the aid to the recipients. Almost three decades later, you can’t find a shadow of most of these NGOs while one stands out from among the rest – Alter Trade Corporation (ATC).

ATC works with farmers organizations, mostly agrarian reform beneficiaries, and helps them produce and market organic muscovado sugar and balangon bananas, primarily for export.

From an initial 700 partner-households in Negros, ATC now serves 10,000 partner-producer families not only in Negros, Panay and Bohol Islands but also in other provinces from Northern Luzon up north to Mindanao down south.

ATC celebrates its 25th anniversary this July 27. A closer look at how ATC survived and prevailed, while remaining true to its mission for a quarter of a century already, can give insights to government and NGOs in re-examining their development approaches towards poverty alleviation.

rPeople-to-people trade

Two groups which were at the forefront of relief efforts for Negros in those dark years were the Japan Committee for Negros Campaign (JCNC) and the Negros Relief and Rehabilitation Center (NRRC).

JCNC, spearheaded by Masahiko Hotta, Naoe Akiyama and Rev. Maijema, was under the umbrella of the Japan Committee for Philippine Concerns (JCPC), a Philippine solidarity network in Japan organized to help the displaced sugar workers and malnourished children of Negros.

NRRC, headed by Norma G. Mugar, was a regional office of the Citizens Disaster Response Center (CDRC) established to provide relief assistance and rehabilitation support to the displaced sugar workers.

In late 1986, the Kyoseisha Cooperative (a large consumers cooperative in Kyushu, Japan), the Tokushima Association of the Betterment of Life (a consumer group in Tokushima Prefecture in Shikoku Island) and the Chubu Recycling Citizens’ Group (an influential citizens’ organization in Nagoya concerned with the environment and direct consumer–producer linkage, held a conference.

The meeting, which was held aboard a boat that visited an island where Japanese farmers were starting to grow indigenous banana on a trial basis, later became known as the “banana boat conference”.

Among the participants were consumers’ cooperatives, environmental activists and organic agriculture movements, including JCNC. JCNC invited NRRC which sent Allan B. Sy as its representative.

When the relief effort for Negros was discussed, the participants realized that food and other forms of assistance are not sustainable without providing the farm workers with the means to earn for themselves and thus empower them to feed their families.

Farming was what the displaced Negrense workers know best so farming it has to be. However, the group also realized that it will be futile to encourage the farmers to grow an agricultural product if there is no assured market for their produce.

These realizations led to the “trade, not aid” concept which eventually gave birth to ATC as the marketing arm for the people’s products in Japan.

ATC was founded on the principle of “people-to-people” trade wherein the producers know that their consumers will pay a fair price for their produce while the consumers are happy to pay a premium, knowing that utmost care is taken by their partner-producers to ensure that the products are of very high quality.

Fair trade seeks to empower marginalized producers and improve the quality of their lives. This leads to a strong producer-consumer bond which goes beyond the vagaries of purely profit-oriented businesses.

Eventually registered with the Securities and Exchange Commission in 1988, ATC was composed of Allan Sy, Reinzi Soliguen, Roberto Hilado, Art Teruel and Nomer Enriquez as core officers and the late Bacolod Bishop Antonio Y. Fortich as spiritual adviser.

Presently, ATC is headed by Makoto Ueda as Chairman of the Board; Gilda Caduya as President; Atty. Edmundo Manlapao as Corporate Secretary; and Arnel Ligahon, Norma Mugar, Fr. Ronald Quijano and Masahiko Hotta as members of the Board of Directors.

Making its niche in organic products

In line with its environmental advocacy and its thrust for sustainable agriculture which does not damage the soil, ATC decided to niche in organic products, particularly muscovado sugar and, later, balangon bananas.

ATC’s muscovado sugar undergo the rigid organic certification standards of the IMO (Institute for Marketecology), Bio Suisse and the United States Department of Agriculture National Organic Program (USDA NOP).

Before any organic product can enter the European Union market, it has to be certified by IMO that such product is truly organic and was produced in an eco-friendly and socially-responsible manner. USDA NOP regulates the standards for any farm, wild crop harvesting, or handling operation that wants to sell in the US an agricultural product as organically produced.

Switzerland, known for its high quality chocolates, has become fond of using muscovado, including ATC’s muscovado, in its chocolate brand called MASCAO (Mas means ATC’s Mascobado and cacao from Bolivia). Mascao is the first organic and fair trade certified chocolate distributed by Claro, ATC’s fair trade partner.

ATC called its its brand of muscovado sugar as “Mascovado” from the word “mas” or the masses,… the ordinary people whom ATC wanted to serve. The play with the term is also aimed at differentiating ATC’s sugar from centrifugal sugar.

ATC’s Mascovado is also fair trade certified by the Fairtrade International (FLO), an organization which develops and reviews fair trade standards, assists producers in gaining and maintaining fair trade certification and capitalizing on market opportunities.

ATC first shipped P50,000-worth of mascuvado sugar to Japan in 1987. Last year, ATC generated P126 million in muscovado sales, mostly in exports to Japan, Korea, Europe, Australia and the US.

In 1989, ATC initially shipped 79 tons of balangon to Japan. Last year, it exported 1,863 tons. Its largest volume of balangon export was registered in 2008 at 2,278 tons.

Balangon is distributed to nine consumers’ cooperatives in Japan through Alter Trade Japan whose president is also ATC Chairman of the Board Makoto Ueda. Consumer members consumes balangon not only because it is chemical–free and it has a sweet–sour taste but, more importantly, because it is grown by small farmers. For Japanese consumer-members, consuming ATC’s balangon bananas means contributing to small farmers’ economic independence and self–reliance.

From a work force of less than 10 employees in 1988, the Alter Trade Group (ATG) to which ATC belongs now provides full-time employment to around 500 workers not only in Negros but in areas all over the country where ATC operates with its partner communities.

By making its niche in organic mascovado and balangon and by closing the economic loop from the producers-manufacturer to their partner-consumers in the fair trade market, ATC has lived up to its mission of helping thousands of small farmers and their families.

(For reactions and suggestions, email bbacaoco@yahoo.com)

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