Bernardo M. Villegas
Articles  >> more topics
Harnessing Economies of Scale in Agriculture (Part 5)

               Another interesting model was that of the Jollibee Group Foundation that was presented by Ms. Ma. Laize Ar Cruzat,  Director for Partnership and Innovation.  The objective of this approach to helping small farmers is to address food access and achieve the United Nations Sustainable Goal of Zero Hunger through systemic collaboration.  Through the Farmer Entrepreneurship Program (FEP), smallholder farmers are helped to become agro-entrepreneurs capable of performing collective marketing and supplying institutional markets like the Jollibee Group.  Working with these agro-entrepreneurs, the Foundation utilizes an 8-step. 3-phase clustering approach.  Phase 1 consists in organizing and information gathering followed by Phase 2 which involves agro-enterprise planning  to be capped with Phase 3 that is the stage of implementation and improvement through feedback. Through partnerships with academic institutions like the Xavier University in Cagayan de Oro City,  JGF provides a comprehensive training program on agro-entrepreneurship which includes fundamentals of management, skills training, and trainer certification.  Before the FEP, the small holders lacked institutional market access and utilized individualistic, traditional methods.  Post-FEP, they started working with partnership networks with forecasted demands and Good Agricultural Practice (GAP) certifications.

              Since 2009, 30 farmer groups across 15 provinces and 45 municipalities/cities have supplied over 12,000 metric tons of vegetables directly to the Jollibee Group, totaling some P700 million in sales.  To address the rapid ageing of Filipino farmers, the Jollibee Group established through its Foundation, the Agro-Enterprise Resource Center, to provide scholarships and foster interest in agriculture  among young farmers.

              The Honorable Eduardo Guillen, current Administrator of the National Irrigation System (NIA) and formerly Mayor of Piddig, Ilocos Norte, where he organized rice farmers in well-performing cooperatives that established record highs in productivity, emphasized that harnessing economies of scale is impossible without the trust of the people. Drawing from his experience as a local leader, he argued that good governance must begin with respect for traditional “social institutions.” He reminded the audience what is obvious from the very term itself:  Agriculture is a culture and that any reform that ignores history will always feel like domination. He then described what he called the Zanjeras model.  Zanjeras are traditional farmer-managed irrigation cooperatives found mainly in the province of Ilocos Norte.  They are among the oldest self-governing irrigation institutions in Asia,  dating back to the Spanish colonial period (17th to 18th centuries).

              A zanjera (a Spanish term) is an organization of farmers who collectively build, maintain, and manage irrigation canals that divert water from rivers to rice fields.  Members contribute labor, materials or money to construct and repair dams and canals.  Participation is obligatory for members.  Water rights are linked to land shares.  Farmers hold shares in the irrigation system which determine how much water they receive; their responsibilities for maintenance; their voting rights within the organization.  Zanjeras typically elect their leaders and follow customary rules governing water allocation, conflict resolution, and collective work schedules.  They are resilient local institutions because they rely on strong community norms and mutual cooperation.  They have operated successfully for centuries without heavy government management.  Because of this feature of their culture, Ilocanos have always been regarded as exceptions to the reputation of Filipinos in general as being unorganized, indolent and individualistic, unconcerned for the common good.

              The Zanjeras helped make the Ilocos region one of the most productive rice-growing areas in northern Luzon, despite difficult terrain and seasonal rivers.  Scholars often cite them as classic example of successful indigenous collective resource management.  They can be compared with equally successful irrigation models in Israel (the kibbutz and moshav water associations); in Spain (traditional acequia irrigation communities); and Indonesia (the subak system in Bali). To his credit, Ed Guillen built on this strength of the Ilocanos when he organized Zanzeras among farmers when he was Mayor of the town of Piddig,  Ilocos Norte, helping  them to produce rice at very productivity levels.  Now as the Administrator of the National Irrigation Administration, he is contributing significantly to the food security efforts of the BBM Administration.

.             NIA is transforming Irrigators’ Associations into cooperatives to provide farmers with “legal personality, economic strength, and local ownership.”  There are the “Three Rights”:  To rebuild confidence in the agency, Guillen anchors projects on the “Right Project” what farmers actually need; the “Right Price” (transparent and defensible); and the “Right Quality”.  NIA now utilizes a command center for weather forecasting and scales “solar power irrigation systems” to decentralize power, combining “modern governance” with “tradition”.  He concluded his talk by saying that “trust is not a soft concept; trust is infrastructure.” 

              One of -the most interesting models is that of Lionheart Farms, an integrated coconut farm of three thousand hectares in the town of Rizal, Palawan about three hours of very good road from Puerto Princesa.  Successive provincial governments of Palawan over the last twenty or so years should be complimented for their very effective farm-market-road programs.  Lionheart Farms is owned and operated by a corporation that was established by Christian Moeller, a citizen of Denmark married to a Filipina, who painstakingly worked for some seven years to consolidate three thousand hectares through three of the approaches mentioned by the speakers in the conference on harnessing economies of scale in agriculture:  the cooperative approach, the nucleus estate  model perfected by the Malaysians for palm oil and the conversion of denuded forests into commercial plantations.  By attaining economies of scale, Lionheart Farms can combine the most advanced technology like AI and Data Analytics with labor intensive approaches gathering the sap using workers from the Indigenous People (IP) communities that proliferate in the island of Palawan.   Ms. Ma. Lourdes Bambalan, Manila Branch Manager of Lionheart Farms, gave  the presentation.   She addressed the transition from fragmented small holder farming to a vertically integrated ecosystem, emphasizing consolidation “with” rather than “of” farmers.

              Ms. Bambalan described the predominantly Nucleus Estate Model which integrates a central company-managed plantation with a network of integrated smallholder partners to ensure scale and quality.  The model focuses on regenerative farms, community enrichment, and a “Farm to You” network that connects Palawan-based sap products to global consumers.  Lionheart is aiming to develop the next generation of farmers by offering well paid careers in farming  enhanced by advanced technology and modern management practices.  By 2025, Lionheart reported collecting 6.22 million kg of coconut sap (a 285 % increase vs. 2024) and a 44 % increase in revenue.  The Model significantly increased the farmer’s income.  A Lionheart tapper earns a monthly average of P22, 701, which is nearly double the regional monthly minimum wage (P 11, 310) and significantly higher than the earnings of the average Philippine coconut farmer (P8,806.72).   There is also the very important improvement of quality of the product with consolidation which allows for Centralized Quality Assurance, achieving international standards such as Grade A+ BRCGS score and various organic certifications (USDA, JA and Canada  Organic.) For comments, my email address is Bernardo.villegas@uap.asia .