DAVAO CITY-based Kennemer Foods Int'l, Inc. entered a cacao production and purchase agreement with the local government of Marihatag in Surigao del Sur on Wednesday at Seda Abreeza Hotel.

The agreement was signed by Kennemer president Simon Bakker and Marihatag Mayor Alan A. Pelenio in the presence of Mindanao Development Authority (Minda) chair Sec. Luwalhati R. Antonio.

The agreement was made possible after Marihatag sought assistance from Minda to look for a tie-up for technical, financial, marketing and other assistance to ensure the success and sustainability of the LGU's cacao production, which is funded through the Mindanao Rural Development Plan (MRDP).

Minda has tapped Kennemer Foods to become the buyer of the LGU's cacao.

According to the agreement, Kennemer will not only be purchasing cacao from the LGU but is also obliged to provide the LGU and its farmers’ high quality planting materials, cacao-optimized fertilizer, and farm inputs at pre-agreed prices.

They are also obliged to provide intensive training and technical assistance to farmers and producers for the growing of cacao. Kennemer may also provide facilitation to the producers who are seeking access to financing.

Aside from the obligations, the buyer will be the one setting the buying price of the cacao beans, subject to quality standards.

Meanwhile the LGU, is obligated to direct their MRDP staff or personnel to identify, organize, strengthen, manage and provide any form of assistance to the producers.

They are also obliged to acquire seedlings and other farm inputs from the buyer as required for the planting, rejuvenation and growing of cacao trees on the farm.

Finally, the producers are obligated to comply with and practice the protocol in the growing of cacao trees and harvesting of cacao beans and implement all recommendations made by buyer and its representatives; participate in all training programs and producer meetings when required; and exclusively sell the cacao beans to the buyer.

The producers are also mandated to "commit to produce at least 75 percent of the average volume during each harvest."

"The term of this Agreement commences from the date of execution and shall run concurrent with the term of the most recently executed Participation Agreement by a grower cluster of for a period of ten years, whichever period is longer," the agreement states. Parties may also extend the agreement.

Bakker told reporters on Tuesday that they will initially planting only a few hectares this year and will then plant another 5,000 hectares next year. He said two tons can be produced per hectare.

Pelenio, for his part, said the agreement between the LGU and Kennemer Foods International, Inc. will be beneficial to their cacao farmers.