DETAILED INVESTMENT PLAN FOR UPSCALING THE LEYTE COCONUT

COPRA INDUSTRY

I. RATIONALE AND OBJECTIVES

The coconut expansion plan under the approved Detailed Investment Plan of the
Provincial Coordination Unit of Leyte is proposed to cover more coconut farmers that
will be assisted under the coconut sector in the province of Leyte. Currently, the
approved investment plan caters to 860 farmers equivalent to 21% of the provincial
target and 30% of the regional target as specified in the National Economic and
Development Authority (NEDA) RAPID Growth Project Logical Framework. These
figures are represented by coconut farmer associations who will sell 80% of their
whole nuts to KAMMPIL Agricoop as stipulated in the Commercial Partnership
Agreement (CPA) signed by both parties. Subsequently, the coop will serve as
consolidator and processor of Desiccated Coconut to be forwarded to SC Global
Coco Products, Inc., for further processing (VCO) and delivery to export market.

The most prominent coconut value adding activity performed by the farmers in the
province is copra production which is sold to barangay and municipal level copra
traders. Based on the 2022 Philippine Coconuts Authority VIII List of Registered
Copra Traders, 56 are located in the province of Leyte, 44 of which are in the 2nd
district of Leyte. This data further supports the accessibility of copra market for the
small coconut farmers. However, due to unpredictable copra price fluctuations and
lack of consolidation from these small coconut farmers and individual copra traders,
they cannot directly access and or sell their product to oil millers, specifically,
Tacloban Oil Mill, Inc. (TOMI) which offers higher price as compared to barangay-
level and municipal-level traders.

The following are the price differences between farm-gate and mill-gate prices.

Farmgate Price Millgate Price Price

No. Date
(per kg) (per kg) Difference
28-Feb-
1 ₱37.00 ₱48.00 ₱11.00
22
28-Feb-
2 ₱42.00 ₱55.00 ₱13.00
22
01-Mar-
3 ₱36.00 ₱52.00 ₱16.00
22
08-Mar-
4 ₱40.00 ₱60.00 ₱20.00
22
08-Mar-
5 ₱49.00 ₱58.00 ₱9.00
22
Average ₱40.80 ₱54.60 ₱13.80

Note: based on PCA, Difference on last years price

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With the Rural Agro-Enterprise Partnership for Inclusive Development (RAPID)
Growth Project, this investment expansion plan aims to expand the reach of small
coconut farmers and selected individual copra traders. Through consolidation of
their copra supply they will be able to qualify for the contract and deposit scheme
which offers better and more predictable copra buying prices from the big oil millers
– TOMI. Further, the consolidation of copra supply from the identified small coconut
farmers’ organizations and individual copra traders will help them meet the quality
and volume requirement of TOMI and be able to avail the preferential copra buying
prices offered by this oil mill.

This investment plan specifically aims to:

1. Increase income of 3,082 farmers’ stakeholders to 60% at the end of the

project by improving market access to big institutional buyer (oil millers)
through interventions of productive investments, matching grants and market
and financial facilitation services.
2. Increase the copra trading volume of farmers’ association and MSMEs by
25%
3. Address the issues on price fluctuations through increased trading volume of
copra (contract and deposit-scheme of oil millers)
4. Strengthen capability and gender sensitivity of men and women farmers and
MSMEs by providing tailored-fitted business development services.
5. Improve resiliency through adoption of environmentally sustainable, climate
resilient innovative technologies and practices.
6. Generate 2,500 incremental jobs by end of the project

During the project stakeholders profiling and firm level consultations, there were
three (3) pre identified MSMEs from the first approved DIP that would still be
included in the model as forward linkage and the forty-four (44) municipal-based
Copra Traders in District 2. In its initial implementation there are six (6) farmer
organizations, two (2) association and four (4) cooperative that will participate in the
expansion project, with a total membership of 1,650 farmers and sex aggregated
data of 803 (49%) males and 856 (51%) females and a consolidated total land
holding of 841 Has. (Table 1. Investment Plan Value Chain Actors)

The target value chain actors of this investment plan include the following
enterprises and association/cooperative:

Table 1. Investment Plan Value Chain Actors (MSMEs)

Name of Sex Value Chain Products Address
Organization Male Femal Function
e
1. Tacloban Oil Mills -NA- -NA- Processor CNO, Copra Meal Brgy. Opong,
(TOMI) Tolosa, Leyte
2. KAMMPIL -NA- -NA- Processor Desiccated Jaro, Leyte
Agricoop Coconut, Copra,

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 Vinegar, Coir-
based Products
3. Local Copra 20 24 Trader Copra District 2
Traders in District 2 Leyte
of Leyte, Province
TOTAL 20 24

Please see attached Annex I for the list of traders

Table 2. Investment Plan Value Chain Actors (Farmers Organizations)

Name of Number of Members Value Products Address
Organization Total Male Female Chain
Function
1. Amahit Coconut 82 25 57 Processor Copra Brgy.
farmer’s Barugo,
Multipurpose Leyte
Cooperative
2. Binibihan 80 28 52 Processor Copra and Brgy.
Agriculture Wholenuts Binibihan,
Cooperative Carigara,
Leyte
3. Brgy. Esperanza 31 10 21 Processor Copra and Brgy.
Organic Farmers VCO Esperanza,
Association Burauen,
Leyte
4. Macalpi 76 15 61 Processor Copra and Brgy.
Community Wholenuts Macalpi,
Multipurpose Carigara,
Cooperative Leyte
5. Brgy. San 46 35 11 Producer Wholenuts Alangalang,
Francisco West Leyte
Farmers
Association
6. Agricultural Small 1300 670 630 Processor Copra and Lapaz,
Coconut Farmers Wholenuts Leyte
Federation-
Lapaz
7. Farmers 1,423 853 570 Processor Copra and Buraun,
Associations of Wholenuts Leyte
Burauen Leyte
TOTAL 3,082 1,656 1,426

Please see attached Annex II for the complete list of Farmers Organizations.

The aggregate production capacity of these associations/cooperative/individual

farmers total to 2,161.66 MT of nuts. Table 3 Summary of Annual Production
Capacity of FOs.

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II. SCOPE AND MARKET DEVELOPMENT APPROACH

In the expanded investment plan, the scope will cover initially in District 2 of Leyte,
with the municipalities listed as follows: Alangalang, Barugo, Jaro, Carigara, Lapaz
and Burauen. These municipalities have organized farmer associations and
cooperatives that are engaged in Copra production. This proposed market
development approach will promote small coconut farmers organization to
consolidate their copra and collaborate with selected and existing copra traders to
meet the quality and volume requirement of TOMI which offers preferential copra
buying price. This forward linkage to anchor firm TOMI ensure better and more
predictable copra buying prices thus, improves profitability of their copra production
and trading business. This proposed scheme is presented in Fig 1. as the market
development model.

To accomplish the end goal of increasing the income of our smallholder farmers, this
plan will consolidate the copra produced by these identified farmer’s organizations
and selected copra traders to qualify the contract and deposit scheme offered by big
oil mills like TOMI. In order to achieve this scheme, involved small coconut farmers’
organization and selected individual copra traders will be assisted through capacity
development, financial facilitation for additional working capital, and productive
investments i.e. mechanical copra dryer, warehouse and even hauling trucks. These
proposed interventions are critical in helping small coconut farmers in building their
capacity and provide option to directly sell copra to TOMI. With the new market
requirement for European countries, TOMI will assist those interested farmers for
their coconut farms to be organically certified. Tec assistance will be provided by
TOMI. Once certified , tomi will offer premium price for xxxxx.

Generally, the expanded DIP is designed to attain the contract and deposit scheme
which is expected to provide a more predictable copra buying price from the big oil
mills as institutional markets/buyers. As to the contract scheme, the farmers or
traders will enter into a contract with the oil millers wherein the farmers will commit to
deliver a certain volume of copra in a certain period of time at a fixed agreed price.
On the other hand, deposit-scheme requires the copra traders to deposit their copra
to the oil millers and liquidate it whenever the traders want to close the contract with
the current price. At least 2 MT per month per trader.

Indicative list of BDS are the following but not limited to Capacity on 1. Adaption of
Low Cost Semi Direct Type Copra Dryer 2. Optimization of Copra Products using
direct and indirect dryer. (List of BDS listed in Table 7). Thus, the plan aims to invest
on the following actors:

FINAL PROCESSORS

Local MSME Traders

The local traders will serve as alternate market for the Farmer Organizations. In the
whole of District 2 of the province of Leyte, there are a total of 44 copra traders
registered with the PCA. These copra traders are nearest to the FOs. Their operation

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involves processing, consolidating and trading of copra and then delivery to TOMI.
The Local traders will play a vital role in the business development model in terms of
gathering the required volume to avail of the contract and deposit-scheme of oil
millers. During the firm level consultation conducted, it was found out that the
average tare weight deduction of their delivered copra to TOMI averages 3-5% every
100kg of copra. With this, copra traders will be provided capacity development
interventions on optimal drying to reach desired moisture of the anchor firm. The
local municipal traders to participate in the investment plan are the following:

Table 2. Municipal-based Copra Traders

Business Business Line of Annual
Market
Name Address Business Capacity
P.M.
BRGY.
MADALINA
PATOC, COPRA
COPRA AND 180 MT TOMI
DAGAMI, TRADING
PALAY
LEYTE
TRADER
BRGY.
TULFO
CALIPAYAN, COPRA
COPRA 252 MT TOMI
DAGAMI, TRADING
DRYING
LEYTE

Tacloban Oil Mills (TOMI)

Tacloban Oil Mills Inc. (TOMI) located at Brgy. Opong, Tolosa, Leyte produces crude
coconut oil. The company buys copra from farmers and consolidators from Eastern
Samar, Leyte and Southern Leyte provinces. With more than 100 personnel
including the administrative staff, TOMI normally processes 300 MT of copra daily,
producing 60 MT of coconut oil with copra cake as the by-product. In buying copra,
TOMI considers 8% and below moisture content as good quality copra.

Most of the finished products for the first half are traded locally and the second half
production is for foreign trading. TOMI’s foreign buyer includes US-based company
Procter and Gamble. Most of their local buyers are located in Luzon with a demand
of more or less 1000 MT of oil and a highest recorded order of 3000 MT.

SC Global Coco Products Inc.

SC Global Coco Products, Inc. is based in Baybay, Leyte. The company

manufactures organic coconut-based products such as Crude Oil, Bleached and
deodorized Oils, Cooking oil, Flours, Shortenings and Copra. Their current monthly
production capacity is approximately 12,300 MT of wet coconut-based products
(coconut oil, cooking oil, virgin coconut oil and unsaturated fat distillate). Meanwhile,
1,100 MT of dry products such as coconut flour and coconut shortening and 3,300

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MT of copra. Further, moisture acceptability is at 8-10%. The company have the
following certifications: Organic, Halal, GMP, Kosher, BRC and Fairtrade. These
certifications are essential for their export market listed as follows: USA, Korea,
Germany, Netherlands, Australia and Malaysia.

COCONUT AND COPRA PRODUCTION

KAMMPIL Agricoop

The Kalipunan ng Maliliit na Magniniyog ng Pilipinas Agriculture Cooperative

(KAMMPIL AgriCoop) is the recipient of the matching grant from the already
approved Leyte Coconut Detailed Investment Plan amounting to Php 1,500,000 for
productive investments intended to expand their desiccated coconut production.
Alongside desiccated coconut, the agricoop produces pared copra, coconut sap
vinegar, coco coir fiber and other products from its by-product. For the copra
production, their annual capacity is at 48-MT and planned expansion of 60MT of
copra per year.

With the improved operations and product diversification of the cooperative, more
coconut farmer associations can partner with the cooperative to supply their
increasing need for raw material. KAMMPIL will be the forward linkage of other
coconut farmers. With this, raw material requirement for Copra or whole nuts can
potentially be supplied by the San Francisco West Farmer Association in Alangalang
situated in the next town from Jaro, Leyte and the 8 farmers organizations.

Agricultural and Small Coconut Farmers Federation

Agricultural and Small Coconut Farmer’s Association (ASCFA) is a coconut farmers’

federation in La Paz Leyte organized to improve small coconut farmers’ livelihood by
mobilizing resources and support from relevant government agencies such as
Philippine Coconut Authority (PCA), Department of Agriculture (DA) and the Local
Government Unit (LGU). The federation was registered with the Department of Labor
and Employment (DOLE) in 2018. The federation is currently transitioning into a
cooperative. These farmers are engaged in Copra, VCO, charcoal processing and
whole nut trading. The total active membership of the federation is over 1,300
Coconut Farmers or an average of 1,450 farming households that covers almost
863.4 hectares of coconut plantation as shown in the table below.

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Table 3. Members Association of Agricultural and Small Coconut Farmers
Federation
Name of Number of members Existing Hectares
Association Total Male Female Area of for new
Productio plantation
n (in (in
hectares) hectares)
1. Brgy. Quiong 12 7.2
SCFA 24 16 8
2. Brgy. Sta.Ana 66.9 14.7
SCFA 49 18 31
3. Brgy. Tarugan 37.2 18
SCFA 60 27 33
4. Brgy. Buracan 60 38.4
SCFA 53 30 23
5. Brgy. Mag-Aso 26.7 6
SCFA 50 19 31
6. Brgy. Bagacay
East SCFA 0
7. Brgy. Limba 34.6 18
SCFA 60 41 19
8. Brgy. District 4 36 15.3
SCFA 51 36 15
9. Brgy. 12.5 7.5
Gimenarant
East SCFA 25 23 2
10. Brgy. Caltayan 5 3
SCFA 10 10
11. Brgy. Luneta 35.5 21.3
SCFA 71 48 23
12. Brgy. Cogon 12.5 7.5
SCFA 25 25
13. Brgy. Lubi-Lubi 28.9 15.9
SCFA 53 25 28
14. Brgy. Piliway 63.2 15.3
SCFA 51 27 24
15. Brgy. Pawa 80.7 15
SCFA 50 23 27
16. Brgy. Duyog 48.6 16.5
SCFA 55 27 28
17. Brgy. Bongtod 60.9 18.3
SCFA 61 25 36
18. Brgy. 6.5 17.4
Calahjusan
SCFA 50 18 32
19. Brgy. Sta. Elena 12.5 7.5
SCFA 25 3 22
20. Brgy. Rizal 10.9 12
SCFA 40 33 7
21. Brgy. District 1 16.7 15.6
SCFA 52 16 36

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 22. Brgy. Cacao
SCFA 0
23. Brgy. District 3 35.1 14
SCFA 64 38 26
24. Brgy. San 27.5 16.5
Victoray SCFA 55 16 39
25. Brgy. Canbanez 25 15
SCFA 50 25 25
26. Brgy. Pansud 14.5 8.7
SCFA 29 14 15
27. Brgy. Moroboro 47 28.2
SCFA 94 49 45
28. Brgy. 17.5 10.5
Caabangan
SCFA 35 15 20
29. Brgy. Bucawon 29 17.4
SCFA 58 58
Total 1,300 670 630 863.4 400.7
Above list is the 2023 updated list of membership. Data for area existing and new
plantation was gathered during the 2021 Stakeholders profiling of the federation.

During firm level consultation it was found out that the federation has an average
aggregate copra production capacity of 374.82-MT (Table 3) annually and that
farmer members are operating individually selling their copra to barangay level copra
traders. Most of the associations excluding barangay Districts 1-4 are in the outlying
areas of Poblacion. Hence, presence of barangay level copra traders is beneficial for
the farmers as it reduces transportation cost. When the federation transitions to a
cooperative this year 2023, the member associations will buy the whole nuts from
the association members and process it to copra to which the federation will become
the consolidator.

The federation also engage in other value adding activities such as VCO and coir
production. In 2017, the federation was a recipient of the decorticating and charcoal
briquetting machine by PCA8 to support augment their income. For the charcoal
briquetting, related capacity enhancement is enrolled in the DIP.

As compared to copra production over whole nuts selling, most of the farmer
members are into whole nut trading due to higher cost of copra production and low
farm productivity. The latter can be attributed by (1) low or lack of knowledge on farm
productivity and good agricultural practices, (2) increasing hectare of senile
plantation and (3) presence of strong typhoons in the area. These problems
encountered can be addressed by capacity building training on Good Agricultural
Practices (GAP), Sloping Agricultural Land Technology (SALT), the federation will
also be enrolled in the organic farming program of TOMI to qualify to the premium
pricing scheme as compared to the regular copra. Series of capacity development
programs proposed are in Table 6. Planned expansion of the federation is reflected
at Table 4. (Summary of Annual Production Capacity of DIP FOs)

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Amahit Coconut Farmers Multipurpose Cooperative (ACFMC)

The cooperative is located in Brgy. Amahit, Barugo and was organized in 1992, with
active registration with the Cooperative Development Authority (CDA), Business
permit and licensing office (LGU) and Bureau of Internal Revenue (BIR) up to
present. Their total active membership is 82 with sex dis aggregation of 25 Male and
57 Female. The coop offers lending services and consolidation of their farmer
members’ produce such as tuba or coconut wine and coconut vinegar. These
products are displayed in their DSWD funded Sari-sari store through the Sustainable
Livelihood Program (SLP) amounting to 320, 000 funded in the year 2021. Their
other product is copra that is processed individually by their farmer members. Their
annual capacity is at 19.68MT and planned expansion at 23.43 MT. Copra are sold
to Carigara or Tunga, Leyte. In this investment plan, the cooperative will consolidate
the copra of their members and forward it to Binibihan Agricultural Cooperative
(BAC) for faster and accessible market. To increase the production of their coconut
plantation and likewise enhance their knowledge in improved agricultural practices,
the cooperative will be participating in the Capacity development proposed in this
investment plan.

Binibihan Agricultural Cooperative (BAC)

The Binibihan Agriculture Cooperative (BAC) is an organization duly registered with

the Cooperative Development Authority (CDA) in the year 2019 with official address
at Brgy. Binibihan, Carigara, Leyte. The coop has 80 memberships. The cooperative
offers lending services and engage in vegetable production, food processing,
coconut processing such as VCO, Copra and Charcoal. The cooperative’s total land
holding is 78 hectares planted with coconut inter crop with banana. The cooperative
procures raw materials (whole nuts and coco shells) from their members to produce
VCO and charcoal products. Further, these products are displayed in their Kadiwa ni
Ani Trading Store, a Php 270,000.00 project grant by the Department of Agriculture
Agribusiness and Marketing Assistance Division (DA-AMAD). The coop also
expanded their business operations by consolidating copra from their members.
Currently the cooperative’s capacity is at 14.4-MT annually. The cooperative only
limits their copra processing and consolidation for the time being until they have a
warehouse to store their copra stock. Their existing facility is only for their food
processing and cannot be used as copra storage. The cooperative can source and
consolidate an expanded rate of 45.71-MT of copra annually from their other
members and 36.46MT from Amahit and Macalpi Cooperative and other individual
farmers when invested with the proper storage and facilities (Form 1).

Just this year, the cooperative qualified for the provision of financial assistance
amounting Php 250,000.00 from CDA under the Coconut Farmers Industry
Development Program (CFIDP) for their facility renovation and procurement of
additional equipment such as Moisture meter, platform weighing scale, semi direct
copra dryer and hauling truck with a total matching grant amounting to P672,000.00
and proponent’s counterpart at P448,000.00.

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With the help of DTI-RAPID Growth Project and other partner government agencies,
the cooperative aims to expand the production of copra in order to assist more
farmers’ producers and meet the demand of existing buyers in the municipal or
provincial level.

Brgy. Esperanza Organic Farmers Association (BEOFA)

The association covers 35.3 hectares of coconut plantation in Brgy. Esperanza,

Burauen, Leyte with 33 active farmer members operating for almost 16 years. The
farmers’ group process VCO, Charcoal and Copra. The group’s copra production
capacity is at 20.9 MT annually. On the other hand, during the last quarter of 2022
the association started their charcoal processing and up to date their current
production is at 10,000 shells per week. The association procure their whole nuts
from their members at a premium rate, processing of their products is performed at
their common service facility. The association operates as a business entity
supported by their complete legal identity and registration from Department of Labor
and Employment (DOLE), Local Government Unit (LGU) and Bureau of Internal
Revenue (BIR). Their copra production is scheduled twice a week within a limited
volume due to the current capacity of the coconut dryer at 2,500 nuts per production.
Furthermore, the association being located in the outbound and neighboring other
barangays who are active copra processors as well, BEOFA can serve as copra
buyer and consolidator. With this, the association can reach approximately 422 small
holder coconut farmers who has an aggregate annual copra volume of 125.5MT. To
support the proposed copra production expansion, the association propose for a
storage facility to store consolidated copra. The main challenge of the association as
observed is the high moisture content of their copra. During copra grading,
approximately 3-4kg is deducted from its tare weight. To ensure copra product is
within the acceptable moisture content, value should be between 8-10%. hence, a
copra dryer and moisture content meter is proposed to ensure the quality. In
summary, the productive investment proposed are the following; Storage facility,
Moisture meter, platform weighing scale, semi direct copra dryer and hauling truck.

Macalpi Community Multipurpose Cooperative (MCMC)

Macalpi Community Multipurpose Cooperative in Carigara, Leyte is an active

cooperative organized in the year 2005 with 75 members at present. The
cooperative covers 29.25 hectares of coconut plantation, aiding them in their coconut
based livelihood. The cooperative manufactures food and non-food products made
from coconut, non-food products such as coco coir and copra. For their coir
production, they are one of the 16 cooperatives in the province that benefited the
complete decorticating machine assistance from PCA. Meanwhile, copra and coco
shells are sold to barangay level traders. Their annual copra production is at 12.8MT,
although the cooperative can increase their copra manufacturing, only that, traders in
the barangay seldom buy due to fluctuating prices. In this investment plan, Macalpi

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being the next barangay located next to Binibihan, BAC will serve as the forward
linkage or market of their copra and coco shells to absorb 100% of their volume.

Brgy. San Francisco West Farmers Association

With a total membership of 46 active farmers, this farmer association covers 116
hectares of coconut plantation intercrop with coffee and is operating for 10 years as
of today. Currently, the group is also engaged in the production of banana covering
30 hectares. The association produces copra but due to the fluctuating buying price
and higher cost of production, the association opt to sell whole nuts in the public
market. With their current coconut plantation, the association are able to produce an
average of 4,640 nuts annually or 110.57 MT. With the availability of raw materials,
the association is identified as potential supplier of whole nuts for the copra
production of KAMMPIL Agricoop. The association was already pre-identified by
PCA8 in 2020 to supply the raw materials to the planned VCO Processing Center to
be established in Jaro, however due to some circumstances the plan was temporary
on hold. KAMMPIL will pick up collated whole nuts in Alangalang provided the
association meet the required volume.

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12
III. PRODUCTION PROFILES

Table 4. Summary of Annual Production Capacity of DIP FOs

Existing
Areas of
Producti Project Annual Yield per Annual Planned
on Expans Total producti year in Copra Copra
(in ion bearing on for MT (45 Producti Expansio RM
hectares Area coconut copra nuts/ on n Needed
Name ) (Has) trees (w.nuts) tree) (MT) (MT) (MT)
Binibihan Agriculture
Cooperative 39 11 1,267 140,400 81.45 12 24 11.42
Brgy. Esperanza Organic
Farmers Association 35.33 14.67 1,830 140,000 117.64 12 24 11.42
San Francisco West Association 115.65 23.00 1,935 87,075 124.39 - - -
Agricultural and Small Coconut 1,475,86
Farmers Association 863.40 400.70 32,797 5 2,108.38 421.68 457.94 2,289.71
Amahit Coconut Farmers
Multipurpose Cooperative 57.40 41 1722 68,800 110.70 22.14 13.03 65.14
Macalpi Community
Multipurpose Cooperative 29.25 22.80 1120 50,400 72.00 14.40 23.43 117.14
TOTAL 1,140.77 513.17 40,671 1,962,540 2,614.56 442.70 542.40 2,494.83
Shown above is the existing and projected supply capacity of the farmer’s association. As agreed on the initial partnership
agreements, these coconut farmers’ organizations will supply their produce to the FO consolidator, and identified municipal based
copra trader.
MARKET DEVELOPMENT MODEL

To achieve the goal of increasing the income of our smallholder farmers, this plan will be implemented focusing on Copra.

Figure 1. Leyte Coconut Industry Proposed Business Model

VC FUNCTIONS

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 VC ACTORS Municipal Level
Production Copra Processing Final Processing Market
Trading

 Amahit Coconut Cooperative Barugo, Leyte Export

SC Global Coco
 Macalpi Community Cooperative- Market
Carigara, Leyte Products Inc
Dagami, Leyte
PM Madalina Copra
Trading and Baybay, Leyte
 Binibihan Agriculture Cooperative
Capacity: 2MT/ Month
Tulfo Copra Trading 42 MT/ Tacloban Oil Mill
36 MT/month month Inc (TOMI)
300MT/day
 Agriculture and Small Coconut Farmers 7,200MT/ month Local Market
Federation (29 Member Assoc)-
Tolosa, Leyte

 Brgy. Esperanza Organic Farmers

Association
Capacity: 2 MT/ Month
La Paz, Leyte
Burauen, Leyte
Brgy. San Francisco LEGEND
West Farmers KAMMPIL Jaro, Leyte
Association and 8 other Agricoop Expansion: 5MT/ Copra
FOs connected to Whole Nuts
Exsiting cap: 4 MT month
KAMMPIL Finished Products
Alangalang, Leyte Charcoal
Number of players and their
corresponding volume 3,082 Farming HHs 44 Copra Traders (2 MSME w existing BPs)
(74.35% of the Provincial Targets of 4,145 HHs) (86% of the Provincial MSME Targets of 51
3 Cooperatives & 31 Associations MSMEs)
(340x% of the Provincial Targets of 10 HHs)
1,589.97 Hectares 2 SME
(32% of the Provincial Targets of 5,000 HHs) Demand:
2,161.66 MT of Coconut 300 MT of Copra/ Day

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Table 5. Potential Markets for Copra
Market Address Product Needed Demand
Tacloban Oil Mills Tolosa, Leyte Copra 7,200 MT/ month
PS Madalina Copra Brgy. Patoc,
Copra 15MT/ month
Trading Dagami, Leyte
Brgy. Calipayan,
Tulfo Copra Buyer Copra 21 MT/ month
Dagami, Leyte

The two Farmer Organizations BAC and BEOFA are the proponent for matching
grant in this investment plan. They proposed for productive investment for the
expansion and quality improvement of their current copra production. The other
players or partner organizations will engage in the supply of raw materials (whole
nuts) and copra production. BAC will absorb 100% copra production of MCC and
ACC. BEOFA on the other hand, with their existing capacity, and the supply from the
neighboring barangays can accumulate a volume of 50 MT annually. ASCFA will also
act as consolidator of their member association’s copra produce at 374.82 MT
annually directly delivered to TOMI or SC Global.

The role of the selected municipal based copra traders (PM Madalina Copra Buyer)
is to bridge the gap in the supply/ volume requirement need of TOMI or the anchor
firm to qualify for the deposit scheme contract. Hence, the forward linkages of the
farmer organizations/ consolidators are the municipal-based traders, SC Global and
TOMI with their respective demands noted in the table above.

The marketing strategy is to ensure quality and volume of supply to the market
partners as this will ensure a higher level of competitiveness of the entire value chain
by providing copra with moisture content between 8-10% to be considered as good
quality.

PRODUCT

Whole Nut and Copra

On the farmers level, they could sell both wholenuts and copra. In terms of value
addition, wholenuts yields a higher value added that copra processing. This is true
for San Francisco West Farmers Association, due to the increased cost of further
processing wholenuts into copra, the association prefer to trade their whole nuts . On
the other hand, although wholenuts can be relatively profitable than copra
processing, processing of wholenuts into copra cannot be avoided for some reasons
including: 1) only small portion of coconut farmlands has an access to road
infrastructures, and 2.) it is more practical to process wholenuts into copra if the
location of the farmland is far from the access roads.

Being the top traded coconut-based product in the province, copra production would
be the priority revenue-generating activity that would be considered in this
investment plan. To produce and trade copra, its process starts from coconut
production from the farmers. The farmers will also be the one that would process
such product through traditional process namely: smoking, sun drying and kiln

15
drying. Farmers may supply their copra and wholenut produce to village-level copra
traders, municipal-level copra traders and directly to oil millers. Village copra traders
consolidates copra at the same time process copra through kiln drying or smoking
then delivers it to the municipal-level copra traders or directly to oil mills. The same
with village-level traders, municipal/ city-level copra traders consolidate copra and
process wholenuts into copra through kiln drying or smoking and directly sells it to
the oil mills.
Big oil mill companies will the process the copra further into edible coconut oil, crude
coconut oil as well animal feeds using the copra cake.

Coco Charcoal

After extracting the kernel used for copra production the shell will be further
processed to charcoal as a by- product. Both BEOFA and BAC have already been
capacitated in charcoal processing to yield, quality charcoal acceptable to bulk
buyers situated in Baybay, leyte. This available raw material will provide opportunity
to small coconut farmer organizations to increase their income. Coconut charcoal is
made by exposing coconut shells to high temperatures without oxygen in order to
carbonize it.

IV. Proposed RAPID Interventions

This investment plan will prioritize Business Development Services through a

modular design capacity development and technology transfer to all FOs. This is to
equip them with skills to improve productivity and their farming practices in general,
most importantly, increase quality acceptability of their copra, and business
management training to hone entrepreneurial mind set. On the other hand,
productive investment to Binibihan Agriculture Cooperative (BAC) and Brgy.
Esperanza Organic Farmers Association (BEOFA) will be proposed to improve their
trading volume and quality by providing them the following interventions with their
indicative cost.

Table 6. Proposed Productive Investments

Intervention Total Project Matching Loans (C/O

Equity
s Cost Grant SBC)
Productive
₱425,500.00 ₱255,300.00 ₱170,200.00
Investments
Copra Dryers 100,000.00 ₱60,000.00 ₱40,000.00
Weighing
₱15,300.00 ₱10,200.00
Scale 25,500.00
Warehouse 300,000.00 ₱180,000.00 ₱120,000.00
Business
Development ₱3,287,000.00 ₱173,000.00
3,460,000.00
Services
Financial ₱1,502,233.45 ₱668,740.74 ₱833,492.71
Facilitation
for Working
Capital (c/o

16
SBC)
Farm-to-
₱30,000,000.0 ₱28,500,000.0
market ₱1,500,000.00
0 0
Infrastructure
₱35,387,733.4 ₱32,042,300.0
Total ₱668,740.74 ₱2,676,692.71
5 0
Percentage
100% 90.55% 1.89% 7.56%
Share

Strategic Productive Investment

The consolidator farmer organization and municipal traders as the immediate market
of the Copra, their absorption capacity should be prioritized to be strengthened.

With the high copra demand of the identified anchor firms and the desire to reach a
volume to qualify for their deposit scheme contract, the FO proposed to have
additional resources and facilities to execute this business model. The productive
investment includes the platform weighing scale with high capacity for weighing
large volume of copra, installation of additional semi direct dryer for processing of the
increased copra supply that will need more drying. The semi direct copra dryer will
follow the design of the National Coconut Research Center attached in Annex 1. .
The warehouse will avoid contamination and insect infestation to yield a quality
copra. Lastly the hauling truck to pick up copra from farmer suppliers to lessen FO
supplier transportation expense and encourage patronage to the FO consolidator.
Meanwhile, the copra traders who signified to participate in the project who qualified
in the matching grant have proposed the following additional equipment for their
expansion. Overall, the strategic investment cost is ₱35,387,733.45.

17
 Table 7. Proposed Business Development
Interventions

Timeli
Activity Budget Beneficiaries
ne
Business Trainings
2023- 44 MSMEs
Strategic Business Planning 150,000.00
2025 and All FOs
Strategic Supply Chain 2023- 44 MSMEs
150,000.00
Management Training 2025 and All FOs
2023- 44 MSMEs
RAPID Market Appraisal 150,000.00
2025 and All FOs
E-Negotiations and Digital 2023- 44 MSMEs
150,000.00
Marketing 2025 and All FOs
Internal Control Systems Training
44 MSMEs
(Production and Financial 150,000.00 2023-
and All FOs
Recording) 2025

Financing Facilitation and

Assistance
2023-
SBC Financing Forum 225,000.00 2025 44 MSMEs
Credit Facilitation Training for 2023- Credit
Credit Cooperatives 225,000.00 2025 Cooperatives

Marketing Assistance
2023- 44 MSMEs
B2B Meetings 150,000.00 2025 and All FOs
Innovation and Good Manufacturing 2023- 44 MSMEs
Practices 150,000.00 2025 and All FOs
2023-
Organic Certification 300,000.00 2025 All FOs

Technical Trainings
Copra Production Training using
44 MSMEs
PCA Recommended Dryers and 2023-
and All FOs
Moisture Content Meters 1,210,000.00 2025
2023-
All FOs
Charcoal Production 300,000.00 2025
2023-
All FOs
Charcoal Briquette Production 150,000.00 2025

TOTAL 3,460,000.00

Farm to Market Infrastructure Projects

Investment in farm-to-market infrastructures is a great factor in the improvement of
the agricultural-based development. In the past decades it is shown to improve

18
business activities and improve services. Such infrastructure is also known to be the
artery of the nation as it connects rural business activities to the mainstream.

With the aim of increasing the access to markets and increasing the production
capacity of our partner farmers, the following farm to market infrastructures were
proposed:

Table 8. Farm to Market Infrastructure Projects

Proposed Locatio Specifications
Project n
Rehabilitation and improvement of Brgy. Brgy. Calahjusan, 2 km FMI
Calagjusan-Pansud Access Road Lapaz, Leyte
(For validation)

The rehabilitation of these access roads will lead to accelerated agricultural

production. With almost 2,000 (for validation) hectares of agricultural land covered in
Brgy.Calahjusan, and its vicinity, there is projected increase of agricultural business
activity caused by the rehabilitation of these access roads. The areas and the nearby
places in the proposed road rehabilitation are composed of coconut, corn, and
banana and other crop plantations. These areas would benefit most through the
increased access to market, reduction of cost of transportation, increased
productivity by facilitating farm inputs, improving access to farm inputs like fertilizers
and seeds as well as opening employment opportunities in other off-farm activities.
With these rehabilitations, there is an expected increase in the cultivated agricultural
lands in the area.

During the consultations, it was found out that these proposed areas are critical in
the transportation of their products to the market. Some of their produce were
damaged during the transportation leading to products being salvaged and thereby
losing its value. It was also emphasized that the cost of transporting their produce is
high that it negatively affect their income. To address these issues, the 2-kilometer
farm-to-market infrastructure was proposed.

The expected economic benefits that these farm-to-market infrastructure

rehabilitation includes increase of yield from various agricultural produce of the
farmers in the area, savings of wastage in their production, introduction of new
business activities in the areas covered, savings on vehicle operating costs and
increase employment opportunities to the partner farmers and other value chain
actors

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 V. Detailed Investment Plan Implementation Activities and Timelines

Table 9. Schedule of Implementation of the RAPID Growth Project Interventions

2022 2023 2024 2025
Project
Cost Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
Interventions
2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Productive ₱425,500.
Investments 00
Business
Development 3,460,000.
Services 00

Rehabilitation of
Farm-to-Market ₱30,000,0
Infrastructures 00.00
Financial
Facilitation (loan ₱600k
amount)
Monitoring
Activities -
Total
Priority for expansion of operation will be given to the strategic productive
investments to the Farmer Organization and selected municipal based copra traders
to trigger the demand for copra. Such strategic productive investments should be
implemented in 2024.

Monitoring activities and business development services like training, consultations

and other non-financial interventions will be implemented throughout the entire
project life. This is to provide tailor-fitted services that would help strengthen the
participating firms in terms of managing their farm businesses as well as their
operations.

In the rehabilitation of farm-to-market infrastructures, documentary requirements and

process should be started early in the second quarter of 2023 in order for it to be
implemented on the ground starting the fourth quarter of the year. Its target
completion date and project turnover to the stakeholders would be on the 1st quarter
of the year 2025.

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VI. Risk Assessment

With such number of interventions given by the project, there are a lot of risks
associated with its implementation. These risks were identified during the series of
consultations with the investment plan’s stakeholders. The following were the
identified risks associated in each intervention in the project implementation.

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The abovementioned risks were assessed by its impact on the project’s objectives as
well as its likelihood of occurrence. As a result of the assessment and prioritization of
such risks, the following were the results.

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Using the Impact vs. Probability matrix as shown in Figure 4, the following risks
scored greater that 0.14 as shown in Table 11 are high risks and should be
considered for immediate action and be prioritized since it has a pervasive effect on
the project goal and implementation:

 Natural Disasters
 Lead time for the Supply of
Machineries
 Availability of Smallholder
Farmers Counterpart
 Availability of Anchor Firm's
Counterpart
 Weather during On-site
Construction
 Malversation of Funds
 Quality of Materials
 Participation and Commitment
of Participants
 LGU's Level of Participation

The risk mentioned above has a high impact on the implementation and on the
achievement of the objectives of the project. Mismanagement of these risks would
have a pervasive effect on the project implementation.

In addition, since this project is market-driven, development and strengthening the

market for the produce of the smallholder farmers should also be prioritized, hence
risks associated with such intervention should be properly safeguarded and be
managed properly. It has been identified in the consultations that the lead time for
the production of the machineries to be procured for the expansion of the operation
of the anchor firm would take almost a half year and there is also a limited monetary
counterpart by the anchor firm. Failure to manage this risk would result to a delay on
the implementation of the commercial partnership agreements undertaken by the
parties involved. This would in turn affect the goal of increasing the sales of the
MSMEs involved as well as the goal of increasing the income of the smallholder
farmers.

To strengthen the value chains and to address the gaps between, this project needs
the participation and collaboration of all the value chain actors in the said industry.
Low degree of participation between value chain actors means a weak value chain.
The project should also focus on improving the capacity and capability of the value
chain actors to participate on the activities that the project will give to them. Improved
participation and collaboration between value chain actors will lead to a more
efficient and effective implementation of the said interventions.
On the other hand, the following risks pose moderate to low effect in the
implementation of the project:

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Table 11. List of Moderate and Low Risks

Moderate Risks Low Risks

(Impact vs. Probability Matrix Score (Impact vs. Probability Matrix Score
between 0.05 and 0.14) of less than 0.05)

 Contractor's Efficiency on the  New Technology

Implementation
 Approval Lead Time of Farm-to-  Procurement Documentation
market Infrastructure (Productive Investments)
 Procurement Documentation
 FMR Specification
(FMR)
 Quality of Machines  Land Industrialization
 Availability of Stocks from Supplier  Change of Anchor Firms
(Machine) Management
 Machine Specifications
 Availability of BDS Providers
 Level of Participation of Government
Agencies
 Quality of Service
 Production Technology/ Agricultural
Practices
 BDSPs Legal Requirements
 Procurement Documentation (BDS)

Although these risks are considered moderate and low, these cannot be set aside
since these can still affect the implementation of the project and still will affect the
achievement of the project’s objectives. As shown in the Risk Register, safeguards
and responses to these risks were identified in order to mitigate the adverse effects
of these risk

VII. Investment Summary

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The total project cost is Php 2,090,000.00 with Php 1,040,000.00 Productive
Investment for BEOFA and BAC with their counterpart amounting to Php 208,000.00
per Farmer Organization. Business Development Services amounting to Php
1,050,000.00. Total matching grant is 1,621,500.00 or 78% of the cost sharing
percentage as presented below.

Sources
Total
Particular Matching Cooperator’s
Amount
Grant counterpart
Business Development Services 1,455,000.00 1,455,000.00 -
Productive Investment 2,903,000.00 1,741,800.00 1,161,200.00
30,000,000.0 28,500,000.0
Farm to Market Road
0 0 1,500,000.00

34,358,000.0 31,696,800.0
Total Project Cost 0 0 2,661,200.00

100% 92% 8%

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