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Making technology profitable: jatropha

March 14, 2010

By Ernesto Ordoñez
Inquirer
First Posted 04:50:00 01/26/2007

THE Alyansa Agrikultura [Agricultural Alliance], composed of 42 federations and organizations covering all major agriculture and fishery sectors, has identified profitable technology as its main thrust for 2007.

Among the key technologies the Alyansa is advocating this year — aside from initiatives such as the System of Rice Intensification (SRI), organic farming, and sustainable community managed fishery systems — is jatropha cultivation. Omie Royandoyan, Alyansa president and Centro Saka executive director, is targeting the completion of 100,000 hectares of inter-cropped newly planted jatropha between coconut trees in the Visayas and Mindanao.

Royandoyan has already made arrangements for 15,000 hectares of land of the Coconut Farmers of Southern Leyte (Cofasl) led by Emi Laviña and Rudy Junio in Hinondayon, Southern Leyte; 20,000 hectares, Tandaya Foundation and Caritas Foundation led by Luisito Uy and Father Ceasar Aculan, respectively, in Calbayog and Catbalogan, Samar; 5,000 hectares, Toril Coconut Farmers Organization led by Francisco Pepito in Toril, Davao, and 2,000 hectares, Surigao del Sur Federation of Agricultural Cooperative (Sufac) led by Ayro Medrano in Tago, Surigao del Sur.

Why jatropha?

Jatropha cultivation was considered an Alyansa Agrikultura priority because of its high positive impact on millions of poor farmers. In the coconut sector alone, this means 3.7 million coconut farmers and farm workers.

Aside from looking at alternative uses of coconut and taking advantage of the recent strong demand for virgin coconut oil, the best way for a poor coconut farmer to improve his life is inter-cropping crops such as cacao and coffee.

But jatropha requires no fertilizer and, therefore, practically no investment. It is easy to grow, even on barren land. Jatropha also has a big market demand, because it is a raw material source for biofuel.

As for potential income, Royandoyan says: “In one hectare, 25,000 plants yielding 1 kilogram of jatropha nuts each can be grown. At the prevailing P10 per nut, this would be P25,000.00 a hectare. But in some places where the nuts sell at double this price, it is P50,000.00 a hectare!”

Small: Beautiful but dead

However, the jatropha cultivation technology may end up in losses rather than profits if a business systems methodology is not used.

As far back as 1981, we did a survey that showed that potentially effective technologies used by farmers in a “small but beautiful” approach ended up in massive losses. This was because each individual farmer myopically acted on his or her own, without looking at the complete seed-to-shelf agribusiness system using economies of scale.

The correct method, later identified as the “anchor approach,” proposed that an anchor group with an anchor project is needed to help manage the production and marketing of several farmers producing the same product, using economies of scale.
Just imagine several farmers using jatropha cultivation technology effectively, but not being able to sell the nuts profitably because there is no processing plant in the area to absorb the nuts. Or these same farmers finding a very strong demand for these nuts, but not having the seeds to grow the jatropha to fill this demand.

Anchor applied to jatropha

The first necessity is to find the correct economies of scale production level to make a jatropha business globally competitive and profitable. In my literature search of the jatropha program in India, which has been very successful, the optimal economic scale of one jatropha cluster is 2,000 hectares. This is what it would take to justify the setting up of an anchor processing plant that would provide the market for the jatropha nuts.

In addition, the anchor group should also set up an anchor nursery to provide the farmers with the appropriate seeds and cultivation technology to ensure the quality and consistency of the nuts delivered to the plant.

This approach is absolutely necessary to make the jatropha technology profitable.

Centro Saka is helping organize the 2,000-hectare modules with farmer cooperatives. The Coconut Industry Investment Fund (CIIF) led by Danilo Coronacion is providing the funds to set up the processing plants and the nurseries, as well as looking for competent business managers for the anchor groups. Though jatropha can be planted in places other than coconut lands, the business infrastructure in using the anchor approach is already in place with Centro Saka and the CIIF playing their respective critical roles. For more information on this, please call or send a message to Royandoyan at +630917 8205026.

The author is chairman of Agriwatch, former Cabinet secretary for Presidential Flagship Programs and Projects, former undersecretary of agriculture and former undersecretary of trade and industry. For inquiries and suggestions, e-mail agriwatchphil@yahoo.com or call or fax +632 8522112.

http://business.inquirer.net/money/topstories/view/20070126-45724/Making_technology_profitable%3A_jatropha

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