1. Mindanao Microfinance Council 4th Microfinance Best Practices Forum AGRI-BUSINESS VALUE CHAINS AND MICROFINANCE CHALLENGES AND OPPORTUNITIES Rolando T. Dy, Ph. D. Executive Director, Center for Food and Agri Business ( Former Dean, School of Management) Fellow, Filipino Integritas Development Institute UNIVERSITY OF ASIA AND THE PACIFIC June 9, 2011 Cebu City

6. THE AGRICULTURE FISHERY CONSTITUENCY Source: NSO 3.5 226,195 Aquaculture 25.1 1,614,368 TOTAL FISHERY 21.3 1,371,676 Small Fishers 0.3 16,497 Commercial fishers 20.6 2,160,875 1,323,994 Others 74.9 9,670,793 4,822,739 TOTAL AGRI 1.0 362,877 67,490 Sugarcane 10.6 1,364.438 679,183 Corn 21.0 2,467,164 1,351,678 Rice 21.7 3,325,449 1,400,394 Coconut Share to Total Farmers and Fishers, % Physical Area (ha) No of Farmers and Fishers Commodity

9. RICE

10. BENCHMARKING RICE, 2010 Phil has no competitive advantage * Figure in parenthesis are imports Source: FAO Data 2009l USDA Data 2010/11 Estimates Mekong 6.0 25.0 7.44 5.23 Vietnam 10.0 1.2 (1.0) (1.8) (1.9) Export* M tons 2010/11 Chao Phraya 20.4 10.96 2.87 Thailand 5.02 1.6 37.5 10.4 Milled rice production M tons 2010/11 Mekong 2.68 2.84 Cambodia Various 0.67 3.73 Malaysia Various 12.88 5.00 Indonesia Various 4.53 3.59 Philippines Key Water Source Harvest area (M ha)* Ave yield palay ton/ha* Country

11. PALAY CHAIN GAPS Low mill recovery (ave: 60%); old mills Cost-effective, farm-based dryers Water management Farm mechanization Quality seeds use Fertilizer use Inputs, Production, PH FMR quality Irrigation O&M FMR quality Irrigation maintenance Infra Others POST HARVEST LOGISTICS LOGISTICS Preference for well-milled rice vs. brown rice leads to low recovery (10%) and poor nutrition MARKET MILLING Extension services PRODUCTION Credit INPUT GAPS CHAIN

12. CORN

13. BENCHMARKING CORN, 2009 Trailing badly… Source: FAO *2008 670 12 4.4 4.0 Vietnam 4,231 252 163.1 5.4 China 673 nil 107 nil Export* (‘000 tons) 2,100 nil 5.6 Malaysia 434 286 100 Import* (‘000 tons) 4.6 4.2 Thailand 17.6 7.0 Production ( M tons) 4.2 Indonesia 2.6 Philippines Ave Yield (ton/ha) Country

14. CORN CHAIN GAPS Others Infra Inputs/Production/PH Cost effective dryers Yield Mechanization Quality seed adoption Fertilizer use FMR quality FMR quality POST HARVEST MARKET LOGISTICS High share of low yield white corn, extension PRODUCTION LOGISTICS Credit INPUT GAPS CHAIN

15. COCONUT

16. OIL PALM: OLD AND NEW PLANTINGS

17. BENCHMARKING COCONUT AND OIL PALM Phil lags behind… CNO = crude coconut oil; CPO = crude palm oil Source: FAO 2008 ** at 20% recovery from Fruit bunches nil nil 10.9 1.9 5.6 India nil 0.4 1.9 0.5 20.0 Thailand Nil 0.65 19.5 3.0 6.6 Indonesia nil nil 2.2 0.4 5.6 Sri Lanka (0.3) nil 0.06 0.022 13.0 Philippines Nil 14.3 17.0 5.0 17.0 Indonesia (0.7) 14.1 16.6 3.9 21.2 Malaysia Coconut: 0.84 Export (M tons)* CNO/CPO Oil Palm: Nil Import (M tons)* CNO/CPO 15.3 Production (M tons)** CNO/CPO 3.4 4.5 Philippines Harvested Area (M ha) Average Yield (ton/ha) Country

18. COCONUT CHAIN GAPS Others Infra Inputs, Production, PH Low yield Limited replanting Fertilization, seed nut supply MARKET MILLING LOGISTICS PRODUCTION LOGISTICS INPUT CHAIN FMR quality FMR quality Losing market share 60% capacity utilization due to low production Unorganized producers Senile trees Lack of strategic focus (coco levy recovery syndrome) Poor genetics in 95% of 300 million trees GAP

19. BANANA flbg.org

20. BENCHMARKING BANANA, 2009 Phil stands tall among peers! (e) Author’s estimate Source: FAO Author’s estimate for Phl * export in 2008 1,696 2,020 74 27 Colombia 2,052 5,271 1,907 Export (‘000 tons) * 2,127 7,637 2,600 Production (‘000 tons) 43 50 Costa Rica 216 35 Ecuador 65 40 Philippines (e) Harvested Area (‘000 ha) Ave. Yield (ton/ha) Country

21. CAVENDISH BANANA (Globally Competitive) World class management Tissue-cultured clones Input, Prod, PH Built to specs Drip and micro-sprinkler irrigation Infra Others Refrigerated ships, or containers MARKET Cold chain; pier-side cold storage LOGISTICS PACKING HOUSE Cableways LOGISTICS PRODUCTION LOGISTICS INPUT STRENGTHS (NOT GAPS) CHAIN

22. RUBBER treepicturesonline.com

23. BENCHMARKING RUBBER Trailing…. e = Author’s estimate Notes: Concentrated latex export converted to drc at 60% recovery ** Large areas under senile trees for future conversion into oil palm. Source: FAO * 2008 195 660 632 1,044 Vietnam* 898 2,292 2,498 34 Export 2008 drc ‘ 000 tons 857 2,922 3,090 70 Production (000 tons) 1,237 693 Malaysia** 2,898 1,008 Indonesia* 1,856 1,665 Thailand 100 700 Philippines (e) Harvested Area (‘000 ha) Average Yield (kg drc/ha) Country

24. RUBBER CHAIN GAPS Low capacity utilization Low quality products Low yield Limited replanting RRIM 600 (Good clone but “getting old”) Input, Prod,PH FMR quality Infra Others Large global market, low export MARKET LOGISTICS PROCESSING LOGISTICS Lack of long-term financing PRODUCTION LOGISTICS Supply of root stocks INPUT GAPS CHAIN

25. CROP HARVEST CYCLE *Plant crop ** Ratoon Every 10-14 days 3 years Oil palm 18 months** 18 months * Pineapple 5-6 years 24 months 12 months 6 years –tall 3 years - dwarf 4 months 4 months FROM PLANTING TO FIRST HARVEST 12 months Coffee Every two days Rubber 12 months Sugarcane 2 to 3 months Coconut - Corn - Rice REGULAR HARVEST PRODUCT

27. LIVESTOCK AND POULTRY HARVEST CYCLE Almost every day ~20 weeks Chicken eggs 120 days 120 days Hog fattening 32-35 days 32-35 days Chicken broiler REGULAR HARVEST DAYS TO FIRST HARVEST PRODUCT

28. FISHERY HARVEST CYCLE 60 days Seaweeds 4 months Bangus cage culture 4 months Tilapia cage culture PERIOD TO HARVEST PRODUCT

34. CHALLENGES FOR SMALL ORGS High rate of non-performing loans? Risks Leader uses his own resources, or…. Leadership Difficulty in collecting dues Organization Small, fragmented, dispersed farms Scale Why? Challenge