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Amazing agricultural profits

March 15, 2010

By Ernesto Ordoñez
Inquirer
First Posted 00:50:00 09/14/2007


MANILA, Philippines — From Sept. 5 TO 7, I attended an international conference involving 12 countries in Chengdu, Sichuan, China.

During breaks in sessions, while we talked about stricter mandatory standards on items such as toys, candies and cement for consumer safety, we heard some of the best words of wisdom from the Chinese.

One is a Chinese saying that reveals the secret of true happiness: “To be happy for an hour, take a nap. To be happy for a day, go fishing. To be happy for a year, spend all your inheritance. But to be happy for a lifetime, help someone.”

Sustainable self-help
There are many ways to help someone. One is to provide whatever is needed to start a cycle that will result in sustainable and profitable self-help.

This is similar to the saying that, it is good to give a person a fish, but it is better to teach him how to fish. It was in this spirit that Alyansa Agrikultura conducted a search for such a project.

Omy Royandoyan, executive director of Centro Saka (02-9287464), and author of the book “The Long and Tortuous Road to Coconut Levy,” identified a project with amazing profits that could significantly help impoverished coconut farmers: The innovative copra dryer that could cost only P50,000.

12-fold return on investment
An average coconut farmer today earns a P10,000 annual income from the average one-and-a-half hectares he works on. If the copra, with its wet or high moisture content (pasada) is sold to an oil mill, it will get an average of P0.80 less than when it is sold in its dried form (resecada). Usually, the farmer sells the wet copra for P0.40 less to the cooperative, which in turn sells it for P0.40 less to the oil mill, for a total of P0.80.

One copra dryer can support 200 farmers covering 300 hectares. The national average of 933 kilograms harvested per hectare occurs three times a year. Thus, 200 farmers harvest 839,000 kilos a year.

Assuming the cooperative charges a P0.05 per kilo service fee to the farmer, and returns all its profits from the increased value of dried versus wet copra to him or her, then the net revenue advantage of dried versus wet copra to the farmer is P0.75 per kilo. This results in an increased income for the 200 farmers of P629,250 a year. This is 12.6 times the value of the copra dryer investment of P50,000.

For each farmer, this means that, while the cost allocation of the dryer is only P250 each, his or her additional net return is P3,146. Thus, from this small project, the farmer will have a 31-percent increase from the average P10,000 annual income.

Initial project beneficiaries
As Senator Edgardo Angara said in the MAP-Agri Business and Countryside Development Forum chaired by Ramon Ilusorio last Aug. 20, there is a great need for post-harvest facilities for agricultural growth and farmer welfare improvement. This cannot happen without industry’s role.

Following this direction, the Cement Manufacturers Association of the Philippines (CeMAP) has donated the cement portion of the copra dryers in eight proposed Centro Saka sites. The rest of the project cost will be shouldered by other groups, such as church organizations, NGOs, LGUs and the farmers themselves. These sites, with the contact persons whom you may call, are listed on the table.

It is hoped that projects with amazing agricultural profits like this will finally be recognized. Today, many of them are not even in the radar screen for investments because of the unfortunate traditional bias against agriculture. But with these projects, amazing profits can be achieved, together with the greater benefits of helping someone, and being happy for a lifetime.

(The author is chair of Agriwatch, former Cabinet secretary for Presidential Flagship Programs and Projects, and former undersecretary for Agriculture, and Trade and Industry. For inquiries and suggestions, e-mail agriwatchphil@yahoo.com or telefax 02-8522112.)

http://business.inquirer.net/money/features/view/20070914-88456/Amazing-agricultural-profits

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