Integrated Rural

Development Foundation

ABOUT THE PROJECT

RATIONALE

Context and Challenges: In the Philippines, which is the world’s top 2 producer of coconuts, 3.5 million (m) coconut smallholder farmers (CSHF) and 23m people depend on coconut for their livelihoods. However, over 60% live below the poverty line (i.e. < $400/year) deprived of financial and technological resources. Farms yields are low (down to 43 nuts per tree and year) and so are farmers’ revenues. There is an urgent need to increase and diversify income in local communities beyond the sale of whole coconut nuts to secure their livelihoods.

In 2016, the Philippines produced 13.8m tons (t) 5 of coconut, but also tremendous amounts of husk biomass (4.8mt) which is dumped as waste into rivers or community surroundings or burnt in open air releasing greenhouse gases (GHG) and polluting the surrounding soil. Only 5-10% of the husks produced in the country are further processed and commercialized. Lacking information on the economic benefits brought by valorized coconut by-products and markets in which to sell, much of the value inherent in coconuts is wasted.

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How the project idea came about:

The Integrated Rural Development Foundation (IRDF) is implementing a 5-year project to build resilient livelihoods of coconut farmers in Magsaysay, Makilala and Kidapawan (Mindanao). The project links poor farmers to Franklin Baker’s supply chain (a whole nut processing company) & promote an intercropping system that produces higher sustainable incomes for beneficiaries. This initiative targets 25 barangays, 4,130ha of coconut farms, 4,154 farmers and 848 farmworkers (623 male and 225 female) on year 1. Complementary to this, the IRDF wants to further develop the coconut industry through husk valorization to expand economic opportunities available to poor farmers and farmworkers, especially women and youth, so that they can diversify their incomes, set up viable community businesses from their own savings.

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Coherence with national policies

This project supports the vision of The Philippine Coconut Authority (PCA) and addresses 2 of their 3 priorities: 1) “Poverty Reduction and Empowerment of the Poor and Vulnerable” through the promotion of coconut by-products processing at community/household level; and 2) “Rapid, inclusive, and sustained economic growth” by bringing infrastructure, capital, market development services, and non-food product development, and by helping to create an entrepreneurial environment.
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Relevance of the partnership:

This alliance aims to leverage Biogrow’s need for sourcing coconut husks and expanding their current production capacity to establish the first network for valorizing coconut by-products and manufacturing cocopeat substrates in the Philippines. This will create an enabling environment and facilitate sectoral inclusive growth. Private sector investment will be critical to establish the adequate technical infrastructure, industrial organization and to build strong linkages with international markets that will unleash the full potential of the industry. Non-commercial and public organizations are key partners to secure local engagement and support training and capacity building activities.

Project Objectives

The overall objective of this project is to establish a coconut-based enterprise to valorise waste streams from the coconut industry (mainly to coconut husk) and expand economic opportunities available to poor farmers and farmworkers (especially women and youth) so they can diversify their incomes, set-up a viable community business from their own savings, and promote a more socially-inclusive economic growth in 3 municipalities in Mindanao (Magsaysay in Davao del Sur, Makilala and Kidapawan City in North Cotabato). Specific project objectives:

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1. Help farmers create structure that can produce coco peat and coco fibre.

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2. Connect farmers structure to market thanks to trainings on defibring units management and partnership with Biogrow.

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3. Include and empower women and youth through dedicated, professional organisations.

Project Summary

The overarching goal of this project is to promote sustainable and socially-inclusive economic growth in Mindanao by establishing a new enterprise focused on the production and commercialisation of otherwise un-valorised coconut waste (husk). This partnership and associated business case will support the establishment of a network between CSHF and key actors within the coconut supply chain.

This business case will bring added-value to 150,000 coconut husks/day (valued at 0.3 Philippine Peso (PHP) per husk) that will be transformed locally into 21,000kg of fibre and 18,000kg of peat (valued at 8.5 PHP/kg and 0.6 PHP/kg, respectively). Subsequently, that will lead to 18t of 5kg bales and 10,000 twinned 15m fibre ropes (valued at 8,9 PHP/kg and 3.5 PHP/rope, respectively) to be transformed at Biogrow local production facility into 900 kg of growbags (valued at 20 PHP/kg) and 1,850m of coco-net (39 PHP/net) from fibre processors. According to this, the total economic value brought by this partnership (from husk to final product) will be 1.35m PHP/day. Also, by project closure this project will have helped: 1) 3,000 local CSHF to diversify their livelihoods, come out of deep poverty, and increase their income by 1,125 PHP/month/farmer; and 2) to create min. 700 new jobs in Biogrow plant and subcontractors (60% women, and 25% youth) and a business opportunity through defibring, peat and chips production units for 1,890 women and 990 young people.

Targets & Results Framework

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Output 1:

By project closure (year 3) 3,000 CSHF are organised in 9 clusters and are selling husks to 9 small defibring units in the project’s 3 target municipalities (Makilala, Magsaysay and Kidapawan). Project scale-up to 5,000 farmers will take place within 2 years after project completion.

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Output 2:

1,890 women and 990 young people are trained on managing coconut defibring units.
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Output 3:

3,000 women are organised into self-help organisations that promote sustained economic growth while providing members basic services. Self-help groups will include additional income-generating activities empowering additional ca. 1,000 women
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Output 4:

Biogrow coco substrate production facilities can operate thanks to stable supply of high-quality coco fibre & peat and qualified local workforce.
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Output 5:

Project outcomes (including project success and added-value brought to local communities) are known and understood at all project levels.

PROJECT PARTNERS

IRDF was established in 1989 as a social development foundation and has since worked with poor farmers, fisherfolk, rural women, agricultural workers and youth in local communities in the Philippines. It was incorporated with the Securities and Exchange Commission (SEC) of the Philippines in 1989 for a 25 year-life (maximum allowed by the SEC). In 2013, it was incorporated again for another 50 years. During this period, IRDF received support from the National Anti-Poverty Commission, a government agency of the Philippines for its program that aimed at strengthening the capacity of Civil Society Organizations (CSOs) so they could become active partners in development and poverty reduction. They likewise received grants from international donors for their various programs and projects. IRDF has implemented several projects similar to the one presented in this concept note in Mindanao and the Visayas region. The action of IRDF is organized in 4 main areas of intervention:

1. Empowering small-scale farmers, women, fisherfolks and other vulnerable sectors towards reducing rural poverty.

2. Supporting Livelihood Initiatives of Partner Communities and People’s Organizations to augment household incomes and secure food for poor households.

3. Livelihood Rehabilitation in Disaster Stricken Communities.

4. Policy Advocacy towards small farmer-oriented Agriculture and Agrarian Policy.

For all these areas IRDF has a long track record working with international donors such as (but not limited to): CCFD, OXFAM, AUSAID, UN World Food Programme, etc. IRDF’s strategic interest in this project is to leverage the existing partnership with L3F to reach larger impact and consolidate the actions already implemented. This project would allow IRDF to have an integrated impact at farm and associations level, hence reinforcing the realization of its mission, especially on its first area of intervention.

The brand name Biogrow belongs to the SARL Vila, a French family company, based in the South West of France. The company has historically been and is still growing vegetables (with a speciality for ancient tomatoes species). This long experience as grower has been enriched by the practice of hydroponic culture and extensive research for organic substrates. Therefore since 1997 the company has developed a wide range of highly technical cocopeat based substrates.

Those clean and renewable substrates have been a revolution for professional growers and the market has boomed for the past 20 years, resulting in the establishment of 4 productions sites to keep up with the demand. Each of those sites are employing between 150 to 300 people on full time basis, while our French head office is focusing on market development, sales, and customer satisfaction. We are now distributing our product in about 50 countries all around the globe.

The next step for us is then to develop new sources of raw material supply in order to catch up with our steady growth of sales and with the increasing demand and expansion of hydroponic culture, especially in developing countries. And of course, the development of new products to keep ahead of competition.

In their own production sites in Brazil, India and Sri Lanka, they keep developing efficient and completely renewable substrates in collaboration with biotechnology researchers. These substrates satisfy consumers’ growing requirements for eco-responsibility since they are the cleanest and most renewable substrates to be found in the market. In addition, their quality assurance, their greatly appreciated “custom-made” approach and their growers-to-growers coaching program have made Biogrow the most reputed brand on the market. In their journey for achieving highest customer satisfaction, they find it important to have production facilities spread in different countries and continents to limit the potential impact of seasonal weather events on our production chain.

Founded in 2011, Livelihoods Venture (LV) is a private corporation providing project sourcing, structuring, management services, and day-to-day operational support to the Livelihoods Funds, a family of funds supported by European and American private sector leaders committed to sustainable development and sustainable business practices. We support the implementation of large-scale projects around sustainable agriculture in emerging countries and promote an integrated landscape approach to restore natural ecosystems and improve the livelihoods of rural farming communities. We act as a platform and a catalyst to transform supply chains and landscapes through a business model that tackles the interconnected issues of economic development, poverty reduction, climate change mitigation & adaptation, and ecosystem protection and/or restoration. The private sector acts as risk-taker and main investor in long-term initiatives reaching thousands of local communities, smallholder farmers and their families, and bringing new job opportunities, increased access to market, and higher levels of women and youth empowerment along agri-food chains. To date, LV has set in motion 15 large-scale projects across Asia, Africa, and Latin America.

In 2018 the Livelihoods Fund for Family Farming (L3F – managed by LV) has partnered with IRDF and Franklin Baker to implement a large-scale project for Mindanao coconut farmers.The project intends to enhance coconut farmers livelihoods through the adoption of sustainable agriculture practices, intercropping and direct supply to Franklin Baker. L3F fund is providing funding to IRDF to implement these activities. During project design it has been identified that coco coir transformation was a strong lever for additional revenue increase for farmers as well as a strong mean to further include women and youth in income-generating activities. Thanks to DANIDA funding a coco coir project could be implemented. Both projects will mutually reinforce each other, hence securing impacts on beneficiaries.