Large food firms urged to engage small farmers

MANILA, Philippines–Big business is called on to help bring small farmers closer to the more dynamic segments of the supply chain as experts in rural development from across Southeast Asia gathered in Makati City for the 2nd International Conference on Agricultural and Rural Development.

During Wednesday’s opening plenary, economics professor and conference coordinator Cielito Habito urged large food companies to directly engage farmers as a way of promoting inclusive growth.

“Nestle (Philippines) and Jollibee (Foods Corp.) are doing this in their own ways,” Habito said during the event organized by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture. “Jollibee, for example, directly buys onions from farmer cooperatives instead of having their own large-scale production activities. By doing so, large firms can allow farmers to take part in the growth of their business.”

Also, Tin Htut Oo, chair of the National Economic and Social Advisory Council (Nesac) in Myanmar, said a key mode in promoting an inclusive value and supply chain is contract growing.

“Contract farming is an effective institutional mechanism for small farmers’ participation in modernizing agri-food systems,” Tin said.

The Nesac chair said contract farming could help poor farmers gain access to a broader market and overcome market factors that exclude them from the supply chain.

In a related development, Nestlé Philippines Inc. (NPI) has set aside at least P50 million to beef up its resources related to seedling nurseries in line with efforts to ramp up domestic production of coffee beans.

Edith de Leon, NPI senior vice president, said that the planned investment would be laid out in 2015.

The seedlings are meant for distribution to growers at cost price. Nestle estimates that 3,300 farmers can sell their green coffee beans at the center’s buying station each year.

“We are distributing 3.5 million seedlings this year from 1.5 million previously,” De Leon said. “The plan is to bring the volume up to seven million seedlings by 2018. Locally grown coffee beans now represent more than 30 percent of the 64,000 tons needed yearly.”

She said that coffee beans produced in the Philippines used to account for just 25 percent.

“But we expect to see the proportion to reach 75 percent by 2020,” De Leon added.