Wednesday, December 30, 2015

Caraga Agriculture in the Age of APEC

Carmen Mango Processing Center Carmen Mango Processing Center Nasipit Port Nasipit Port Nasipit Port

As the Philippines and the Caraga region enter the “age of APEC”
it is important to think about what exists here in the region that can and should be marketed aggressively and what needs to be improved.

The Caraga region is a place that has undergone many changes just during the last few generations.  A land that was once covered with hardwood forests with rich biodiversity has been transformed into a place of coconut trees, falcate (fast growing softwood), oil palm and rice fields.  Extensive mangrove forests have been converted to fishponds and other areas, rich in minerals, look like moonscapes as metal ores are mined and taken to China by ships awaiting offshore. 

Many people have made their fortunes here in the Caraga region from exploitation of these natural resources.  One can still see the remnants of some of this activity when taking a cruise down the Agusan river from Butuan port to the sea.  One can pass by many inactive mill sites, one of which used to be the largest saw mill in Southeast Asia.  If the wind is blowing in the right direction, when you land at the Butuan airport, the airplane vantage point offers a good view of a plywood plant located not far from the airport and ocean that to this day continues to export plywood made here from local resources.  A trip to the port of Nasipit, which used to be primarily for shipping logs, offers a prime view of export products from the area, primarily plywood and bulk shipped banana – all going out weekly to the populous markets of Cebu, Manila and beyond.

The Philippine Cold Chain project ( has been working in the Caraga region, to promote production for high value perishable commodities and improved marketing for these same commodities.  We have learned a lesson that improving production is a much easier task than connecting producers with improved markets for these same commodities.  Middle men engaged in product marketing also do not want to give up their techniques or sources, wanting to make sure their cut in the process is enough to stay in business. 

We have observed that to really get to a point where this region becomes a regional hub to rival the logging boom days, there needs to be a coordinated effort to create or connect to markets for regional products that are of sufficient volume, value, quality and availability.  There are a couple of Caraga based industries that do connect to international markets currently.  One would be Celebes Corporation that processes dried banana chips that are exported to the USA.  They also export coconut water and dessicated coconut.  Celebes does a good and regular business abroad.  While they do not have a farmer outreach program and don’t profit share, they do complain of short supply of raw materials.   They could process and sell more if more bananas were available to them (at their price of course).  HJR is another example of a company located here in the region that has been able to crack the international market for shrimp.  They source product from around Mindanao, process, freeze and ship to buyers outside of the Philippines.  There is also an ongoing effort to raise eels (locally known as igat) commercially near Magallanes town in Agusan del Norte,  since the market for eels in China seems to be insatiable and the price for eels remains constantly high.  Not far from the eel ponds near Cabadbaran  City, there is also a large building that stands empty that was formerly used for processing shrimp.  It was called INTAQ, but this plant went out of business due to a shrimp disease called white spot.  The plant itself could and should be used to move the fish processing industry forward here in Caraga, if the right group of people could just figure out the production and marketing puzzle in the region.PCCP has also found several ongoing enterprises here in the region that deserve more support to bring them up to a level where they could regularly market quality products in container-sized lots. Building confidence for a food processing and value added business to expand is not easy as many business owners just don’t relish the risks involved in expansion.  For example, JIDA, a local processor of boneless bangus and bottled bangus that offer quality product, would be more than suitable for the export market.  However, there remains a gap between supply, processing and capacity to store and ship.  While there is ongoing expansion of fish cages in Butuan bay, other potentially available fishponds suffer from lack of maintenance, capital, or a general fear of poor water quality due to local pollution issues.  Another case in point is Ocean Bounty of Surigao, a company whose owner would like to expand his fish processing business. The company has been hampered not only by regularity of supply but also a very slow processing of a couple of loan applications from a bank that is undergoing a merger.  The mango processing plant in Carmen town, Agusan del Norte offers an excellent product but also suffers from too much demand and not enough capacity to process, store and ship produce in container-sized lots.  The local food company 3-Star Ice Cream produces a great and tasty product in Butuan City, especially their mango variety, but international requirements keep them from shipping products to Japan.  The seaweed pickle made in Lianga, Surigao del Sur is a great local product, too. However, while it is popular at food trade shows and can command a high price, processing activities that can handle volumes needed to make international trade arrangements viable remains to be an area where the existing group fears to tread.

PCCP producer groups raising lobsters and mud crabs are starting to realize that their products have great potential in the marketplace.  Consistent high price and high demand make it worthwhile to deal with the challenges of farming these species.  In fact, lobster and mud crab show a big potential for taking advantage of #GoodAgriculturalPractices traceability requirements as I have yet to see these high value species marketed in the Philippines using relationship marketing.  There is a great organic restaurant in Little Rock, Arkansas that promotes all of their farmer suppliers by providing customers information about producer farms and farmers.  This same idea could be used at high end restaurants here in the Philippines where customers could learn about who produced the seafood that they are eating and what benefit it offers to the farmer and consumer.

PCCP partner #DTI ( promotes marketing of Caraga region products with their “Buy Caraga, by Caraga” program.  PCCP will continue to do all we can to help producers realize their full potential by getting the best prices for their high value products.  In the meantime, more needs to be done to market “Buy Caraga” in places like Manila and in other #ASEAN countries once sufficient volumes of quality food products can be attained in the area.