Each bean they grow for a cup of Nescafe
DAVAO CITY—After growing world-class coffee beans and selling them at premium prices to the nearest buying station of Nestle, Jacinta Arabejo, 78, ends up buying Classic Nescafe in container cups for breakfast.
She says it’s easier for her that way. Roasting her coffee beans and carrying them to the next town of Barobo in Surigao del Sur where there is grinding machine is already too much work for her.
“I’d rather buy them ready-made and let them do most of the work,” she says, referring to Nestle, the company where she sells her coffee.
Arabejo came from the coffee-growing town of Tagbina, Surigao del Sur, where she keeps a three-hectare coffee farm in Barangay Kahayagan since she and her husband arrived from Bohol in the 70s. She remembers the old days then when they used to sell their coffee beans in the neighboring town of Barobo, where Chinese merchants buy them at P4 per ganta (roughly one and a half kilo).
When Nestle Philippines finally opened its buying station in San Francisco town in Agusan del Sur in the 1990s, she started selling her coffee beans to Nestle, which buys them at prevailing world market prices, usually much higher than the prices local middlemen offer.
San Francisco is a good 75 kilometers from where Arabejo grows her coffee in Tagbina.
Rey Bongato, head of Nestle’s purchasing department, says Nestle started opening buying stations among major coffee-growing areas in the country to reach out to farmers, bringing them the “benefits of good pricing, good quality and technical expertise” in coffee growing and handling.
Nestle set up its first buying station in Tagum, Davao del Norte in 1986, servicing the Davao coffee farmers two years after the opening of its factory in Cagayan de Oro City producing the coffee brand Nescafe. The factory, which produces Nescafe at peak capacity of 19,000 tons a year, still relies 75 per cent of its coffee bean requirements on imports from Vietnam and Indonesia, a trend that Nestle executives want to reverse in 2020.
The number of buying stations ballooned in 1994, when the company opened 14 buying stations across the country from Bicol to Mindanao. Now, there are only eight buying centers in the Philippines, which includes those in Tuguegarao, Nueva Viscaya, Silang Cavite, Iloilo, Bacolod, Davao, General Santos and San Francisco, where Arabejo sells her coffee beans.
Bongato says Nestle prices in the Philippines follow world market prices; and that, price information has always been open to farmers, with the company initiating text brigades to keep them updated.
In October this year, for instance, when world prices of coffee hovered between P100 to P110 a kilo, Arabejo was just harvesting her coffee in Kahayagan. When hired farmworkers hauled her three sacks of coffee beans and unloaded them in the Nestle buying station in San Francisco, Arabejo was able to sell at a premium price of P109 a kilo. She made roughly P7,000 in that sale alone, which allowed her to buy rice, food and school supplies for her grandchildren.
David Findlay, Nestle Philippines executive vice president and technical director, says the Nestle satellite buying station will continue to connect farmers to world coffee pricing.
Nestle Philippines top executives thanked coffee growers for producing the quality of coffee beans that made Nescafe beloved to millions of consumers worldwide.
“Each Robusta bean in your farm is a testament of your dedication to your crop to where we are grateful,” says Christopher Sterne, Nestle executive vice president and business executive for coffee.
“If not for your support, we won’t have the coffee we have every morning,” says Findlay.
Sterne adds the proof of consumers’ gratitude is reflected on the growing number of Nescafe consumers.
“Our avid Nescafe drinkers may not be able to personally tell you how much they value your contribution in their everyday life,” he says. “We thank you for it.”
But while the company embarks on capacity upgrading of existing coffee factories, Nestle still relies as much as 75 per cent of its coffee bean requirements from imports from Indonesia and Vietnam.
Edith de Leon, Nestle senior vice president, says the company plans to reverse this trend in 2020, to allow Filipino coffee farmers share in the P5 billion coffee market.
Nestle, which corners 80 per cent of the country’s 650,000 metric tons domestic demand for coffee beans every year, has inked a partnership with the government to encourage investments in coffee farming and improve farmers’ access to coffee technology.
Findlay said that coffee growers’ access to technology, particularly on the high yielding coffee varieties of Robusta, will help boost coffee production so that the country would rely less on coffee imports in the coming years.
He says the company would focus its resources and expertise on the development of its Nescafe brand, with a dedicated team of agronomist to give their assistance to farmers.
Another coffee grower and trader in Butuan City, Lito Mahubay started with a four-hectare coffee farm he bought in 1983, found a very big difference between the Nestle prices and the usual buying price by other traders.
His four-hectare coffee farm used to yield 300 cans of green coffee beans per hectare, which he used to sell to a trader who also sells them to Nestle. Years later, when he started direct selling himself, he realized that the price difference between Nestle and the traders in Butuan can reach as high as P9 a kilo. In 2003, he started growing Falcata in between rows of his coffee trees, which earned him an additional P300,000 proceeds when he harvested the fast-growing timber trees after five years.
He says his coffee farm was so profitable he was able to buy a Forward truck and a Delica van in 2010.
Nestle, however, buys only top quality coffee beans, so, there are times when coffee farmers fail to meet the quality demanded of their goods.
Agronomist Art Baria, head of Nestle’s agriculture services, however, says those failing the Nestle standard tests are getting smaller as more farmers learn the technology how to produce top quality coffee beans, their bean quality improving through the years.
Arabejo and Mahubay were among other Mindanao coffee growers who joined the Nestle’s Nov. 29 celebration this year, to mark the opening of Nestle’s first satellite buying station in Magdum, Tagum City 25 years ago.
What used to be just a buying station in Tagum is now an integrated experiment station and demonstration farm which Nestle formally launched in 1994. The 11-hectare integrated farm features a germ-plasm facility, a mother plant garden, where one can source coffee cuttings; a nursery, a trial site for different clones or selections of coffee plants, and a training center, where Nestle agronomists hold free training to farmers on coffee growing and coffee handling.
Since Nestle is not in the business of selling seedlings, the facility is the company’s way of providing coffee farmers access to quality seeds at cost and other technology that will help them improve production, Baria says.
“We want to help them get the best seedling and the best technical assistance, that’s why we put up our buying stations, and commit to always pay farmers at world market prices,” says Sterne.
“We owe you this success, that’s why, we give you this support,” Sterne tells the coffee farmers.
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