1 / 24

PAICOR

PAICOR. The “Corporative” Way of Providing Access to Post Harvest Infrastructure for Small Rice Farmers in Panabo, Southern Philippines An Option for Financial Institutions in Analyzing & Financing Value Chains presented by: Alex V. Buenaventura 3 rd AFRICAN MICROFINANCE CONFERENCE

nhi
Télécharger la présentation

PAICOR

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. PAICOR The “Corporative” Way of Providing Access to Post Harvest Infrastructure for Small Rice Farmers in Panabo, Southern Philippines An Option for Financial Institutions in Analyzing & Financing Value Chains presented by: Alex V. Buenaventura 3rd AFRICAN MICROFINANCE CONFERENCE Hosted by AMFIU & Supported by The Ministry of Finance of Uganda Speke Resort Munyonyo, Kampala, Uganda, 20-23 August, 2007

  2. PRESENTATION OUTLINE • THE FIRST AGRI CREDIT STRATEGY: ACCESS TO A “CORPORATIVE” POST HARVEST • WHAT IS A “CORPORATIVE” ? • PAICOR: THE FIRST “CORPORATIVE” POST HARVEST • CORPO FOUNDATION: TO REPLICATE “CORPORATIVES” • DASURAICOR: THE SECOND “CORPORATIVE” • PRODUCTIVITY: A NEGLECTED INGREDIENT FOR FARMERS PROFITABILITY & SUSTAINABILITY • SUPERVISED PRODUCTION: ONB’s NEW AGRI CREDIT STRATEGY • ONE AGRI PROGRAMS OF ONB • HOW TO REPLICATE SUPERVISED AGRI- PRODUCTION FINANCING SCHEMES

  3. THE FIRST AGRI CREDIT STRATEGY:ACCESS TO “CORPORATIVE“ POST HARVEST TO COLLECT RICE PRODUCTION LOANS, THE RURAL BANK OF PANABO FELT THE NEED TO PROVIDE ACCESS TO A “FRIENDLY” POST HARVEST FACILITY TO ASSURE FINANCED FARMERS A READY MARKET FOR THEIR PRODUCE AND TO ENABLE THE BANK TO COLLECT IN KIND FROM THEIR FINANCED FARMERS (CIRCA MID 80’s)

  4. WHAT IS A CORPORATIVE ? A CORPORATIVEIS A • PRIVATE STOCK FOR-PROFIT CORPORATION • ORGANIZED AND CONTROLLED BY ACREDITOR BANK/INSTITUTION • IN PARTNERSHIP WITH ITSSMALL BORROWERS/PRODUCERS • FOR NEEDED BUT CAPITAL INTENSIVE SUPPORT FACILITIES • LIKEA VENTURE CAPITALIST, THE CREDITOR BANK THROUGH TIMEDILUTES OR DIVESTS MAJORITY CONTROLIN FAVOR OF ITS PARTNER BORROWERS; AND • ULTIMATELY, THECORPORATION IS CONVERTED INTO A COOPERATIVE

  5. PAICOR: The 1stCORPORATIVE • PANABO AGRO-INDUSTRIAL CORP., INC. • PRINCIPAL PURPOSE: RICE TRADING/MILLING • REGISTERED ON FEBRUARY 1986 • INITIAL CAPITAL STRUCTURE: SUBSCRIBED PAID-UP 1 BANK (RBP*) 40 % $ 8,696 $ 8,696 43 BANK OWNERS 15 % $ 3,261 $ 869 185 RICE FARMERS 45 % $ 9,783 $ 435 TOTAL 100 % $21,740** $ 10,000** *RURAL BANK OF PANABO (now One Network Rural Bank) **EXCHANGE RATE: PhP 46 : US$ 1 • BECAME PAICOP, A COOP, ON APRIL 22, 1992

  6. PAICOR BENEFITS FOR FARMERS • INSTANT ACCESS TO OWNED RICE MILLING COMPLEX • PROFESSIONAL MANAGEMENT BY BANK • TIMELY/ADEQUATE LOANS • ASSURED MARKET • LOWER COST OF INPUTS BOUGHT IN BULK • YEAR END DIVIDENDS • ASSURED OWNERSHIP INCREASE

  7. PAICORBENEFITS FOR THE BANK • MORE PRODUCTION LOANS • MORE FIXED ASSET LOANS • MORE WORKING CAPITAL LOANS • COLLECTION-IN-KIND CAPABILITY • YEAR END DIVIDENDS

  8. CORPO FOUNDATION: TO REPLICATE “CORPORATIVES” • CORPORATIVE SYSTEMS FOUNDATION,INC. • A NON-STOCK, NON-PROFIT CORPORATION • Registered in January 7, 2000 • ORGANIZED BY ONE NETWORK BANK (a consolidation of 3 banks: Rural Bank of Panabo, Network Rural Bank & ProBank) • TO REPLICATEPAICOR • CORPO soon created DASURAICOR

  9. DASURAICOR: The 2nd PAICOR • DAVAO DEL SUR AGRO-INDUSTRIAL CORPORATION, INC. • Registered on March 8, 2000 • INITIAL CAPITAL STRUCTURE: SUBSCRIBED PAID-UP 1 BANK (ONB*) 59 % $ 257,283 $ 257,283 1 LAND BANK** 40 % $ 173,913 $ 173,913 182 RICE FARMERS 1 % $ 3,587 $ 3,587 TOTAL 100 % $ 434,783*** $ 434,783*** * One Network Bank ** LAND BANK “ACCESS “ PROGRAM: A Venture Capital Facility ***EXCHANGE RATE: PhP 46 : US$ 1 • CORPORATE BY LAWS PROVIDE FOR AUTO DIVESTMENT OF COMMON EQUITY SHARES INITIALLY BY LAND BANK AND THEN BY ONB IN FAVOR OF FARMERS • TO DATE, DASURAICOR HAS NOT BEEN CONVERTED TO A COOP YET SINCE FARMERS EQUITY IS STILL MINORITY

  10. CHALLENGES FOR SUSTAINABILITY ACTUAL # # NET INCOME PERFORMANCEFARMERS HECTARESAFTER TAX PAICOR: 1986 229 354 ( $ 49 ) AVE: 1987-1990 227 350 $ 2,539 1991 222 335 ( $ 4,379 ) PAICOP: 1992 274 393 $ 4,089 1993 275 394 $ 4,988 AVE:1994-1998 274 410 $18,034 AVE:1999-2002 270 440 ( $21,223 )* 2003 239 421 $ 4,277 2004 225 170 ( $19,089 )* 2005 176 104** $ 9,2`94 2006 35 56** ( $22,214 )* DASURAICOR:2000 182 321 $15,831 2001 192 378 $ 279 2002 207 385 ( $28,515 )* 2003 102 226 ( $19,956 )* 2004 141 248 ( $12,375 )* 2005 219 383 ( $15,882 )* 2006 257 444*** ( $34,545 )* *NET LOSSES IN OPERATIONS OF BOTH PAICOP AND DASURAICOR **71 % DROP IN PAICOP FARMERS’ RICE PLANTED HECTARAGE ***76 % INCREASE IN DASURAICOR FARMERS’ RICE PLANTED HECTARAGE

  11. SOLUTIONS TO NET LOSSES IN OPERATIONS • LOSSES DUE TO PADDY SPOILAGE (2001-2005) IS NOW SOLVED BY SHIFTING AWAY FROM “SOLAR PAVEMENT” TO “ RICE HULL FED MECHANICAL “ DRYERS • LOSSES DUE TO DEPRESSED MARKET PRICES (2001-2003 ) IS NOW MINIMAL WITH THE DROP IN REPORTED SMUGGLING OF RICE

  12. WHY 71 % DROP IN NUMBER OF PAICOP FARMERS’ HECTARAGE ? BECAUSE OF UNPROFITABILITY OF RICE FARMING CAUSED BY PERENIAL CROP FAILURES & LOW PRODUCTIVITY!!! AS A CONSEQUENCE THERE IS MIGRATION TO A MORE PROFITABLE CROP (CAVENDISH BANANA)

  13. PRODUCTIVITY:A NEGLECTED INGREDIENT FOR FARMERS PROFITABITY & SUSTAINABILITY • INSPITE OF FULL FINANCING SUPPORT FROM THE BANK • INSPITE OF MARKETING SUPPORT FROM THE CORPORATIVE RICE MILLS • PARTNER FARMERS REMAINED POOR BECAUSE THEIR PRODUCTION LEVELS REMAINED LOW !!! • THE SOLUTION: ONE RICE PROGRAM or “ORP” --- A SUPERVISED PRODUCTION- CUM-CREDIT SYSTEM WHERE FARMERS ARE UNDER GROWERS CONTRACT TO ADOPT BEST PRACTICES AS PRESCRIBED BY BANK AGRI TECHNICIANS AND TO PRODUCE A MINIMUM OF 6 TONS PER HECTARE EACH HARVEST OTHERWISE BE EXPELT FROM ORP

  14. WHY 76 % INCREASE IN NUMBER OF DASURAICOR FARMERS’ HECTARAGE? BECAUSE RICE FARMING IS NOW MADE PROFITABLE BY THE ONE RICE PROGRAM — A SUPERVISED PRODUCTION TECHNOLOGY THAT IS: • RISK FREE (STEMBORER PROBLEM IS ELIMINATED BY TIMING PANICLE EMERGENCE DURING THE LAST QUARTER MOON WHEN THE NIGHT IS TOO DARK AND THE NOCTURNAL STEMBORERS CANNOT MATE AND MULTIPLY); AND • HIGH-YIELD (CURRENT AVERAGE IS 7.2 TONS PER HECTARE PER HARVEST VS. PREVIOUS AVERAGE OF ONLY 4.4 TONS; TARGET IS 8.3 TONS); AND • LOW COST (HARDLY ANY USE OF PESTICIDES)

  15. SUPERVISED PRODUCTION: ONB’s NEW AGRI CREDIT STRATEGY ONB AGRI TECHNICIANS WILL SUPERVISE THE PRODUCTION PRACTICES OF FINANCED FARMERS TO ENSURE THEIR PROFITABILITY WITHIN THE FOLLOWING CRITICAL VALUE CHAIN FACTORS: • TECHNOLOGYIS RISK FREE • GLOBALLY COMPETITIVE IN TERMS OF YIELD • PRODUCT HAS AN ASSURED LONG-TERM BUYER • PROCESSING INFRASTRUCTURE IF NEEDED, IS PUT UP AND CO-OWNED BY THE FINANCED FARMERS THE “CORPORATIVE” WAY

  16. ONE AGRI PROGRAMS OF ONB • ONE RICE PROGRAM ------ EXISTING • ONE BANANA PROGRAM ---- EXISTING • ONE SUGAR PROGRAM ------ ON PILOT • ONE CASSAVA PROGRAM -- ON PILOT • ONE PINEAPPLE PROGRAM- FOR PILOT • ONE PALM OIL PROGRAM -- ON STUDY • ONE RUBBER PROGRAM --- ON STUDY

  17. One Rice Program EXISTING: • PRODUCTION - STANDARD: 8 TONS PER HARVEST/HECTARE - TECHNOLOGY: ORP TECHNOLOGY DEVELOPED BY CORPO FOUNDATION • LONG-TERM BUYER: DASURAICOR CORPORATIVE @ PREVAILING MARKET PRICES • QUADTRI-PARTITE CONTRACT: FARMER-CORPO FOUNDATION- DASURAICOR-ONB(ORPCMA:One Rice Purchase, Credit & Mktg Agreement) • COLLECTION SYSTEM: DASURAICOR PAYS FARMERS THRU ONB • FARMER’S NET INCOME/YR: $ 2,306* PER HECTARE ( $1,153/HA/HARVEST X 2/YR ) *at actual ave yield of 6.9 tons/ha/harvest $ 2,963**PER HECTARE ( $1,482/HA/HARVEST X 2/YR ) **targetted yield of 8.3 tons/ha/harvest

  18. One Banana Program EXISTING: • PRODUCTION -STANDARD: 5,000 CLASS-A BOXES(13.5 KGS/BOX) PER HA/YR -TECHNOLOGY: MATURED CAVENDISH BANANA GROWING TECHNOLOGY DEVELOPED OVER 35 YEARS BY LONG-TERM BUYERS • LONG-TERM BUYERS: ONB-ACCREDITED BUYERS: DOLE Del Monte/Lapanday SUMIFRU UNIFRUTTI @ US$ 2.40 PER BOX (FIXED FOR 10-15 YEARS) • TRI-PARTITE AGREEMENT: FARMER – BUYER – ONB (BPPA: Banana Production & Purchase Agreement) • COLLECTION SYSTEM: BUYER PAYS FARMERS THROUGH ONB • FARMER’S NET INCOME/YR: $ 3,600 ACTUAL AVE PER HECTARE (MONTHLY NET INCOME RANGES FROM $ 150 TO $ 500 PER HA)

  19. One Sugar Program UNDER PILOT TEST: PRODUCTION -STANDARD: 100 TONS CANE PER HA/YR (MIN LSTC= 2) -TECHNOLOGY: DEEP-PLOWING TECHNOLOGY DEVELOPED BY SUGAR MILL/BUYER • LONG-TERM BUYER: COTABATO SUGAR CENTRAL COMPANY @ PREVAILING MARKET PRICES • TRI-PARTITE AGREEMENT: FARMER - BUYER – ONB (OSPCMA: One Sugar Purchase, Credit & Marketing Agreement) • COLLECTION SYSTEM: BUYER PAYS FARMERS THROUGH ONB • FARMER’S NET INCOME: $1,370 AVE. PER HA. PER YR.

  20. One Cassava Program UNDER PILOT TEST: • LONG-TERM BUYER : SAN MIGUEL FOODS, INC. • MATURE & RISK-FREE TECHNOLOGY • PRODUCTION STANDARD: 51 M. TONS/10 MONTHS • AVE. NET INCOME/HA/YR: $ 1,080

  21. One Pineapple Program UNDER NEGOTIATION FOR PILOTTING: • LONG-TERM BUYER : DOLE & Del Monte • MATURE & RISK-FREE TECHNOLOGY • PRODUCTION & INCOME STANDARD/HA: 90 M. TONS & $ 1,800/HA-PLANT CROP 65 M. TONS & $ 1,240/HA-RATOON CROP

  22. OTHERONE AGRI PROGRAMS UNDER STUDY W/ LONG-TERM BUYERS: • ONE PALM OIL PROGRAM --- AGUMIL (A MALAYSIAN PALM OIL MILLER) • ONE RUBBER PROGRAM --- LOOKING FOR AN INTEREST LONG-TERM BUYER

  23. HOW TO REPLICATE INTEGRATED AGRI-FINANCE SCHEMES • LOOK FOR A LONG-TERM BUYER • VALIDATE IF PRODUCTION TECHNOLOGY IS MATURE & RISK-FREE • ESTABLISH WITH LONG-TERM BUYER WHAT PRODUCTION VOLUME STANDARD SHOULD BE • COMPUTE IF FARMERS WILL MAKE GOOD MONEY • ORGANIZE FARMERS & CREATE A CORPORATIVE PROCESSING FOR THEM IF NEEDED • BANK DEPLOYS A LOAN OFFICER WHO IS AN AGRI TECHNICIAN MAINLY RESPONSIBLE FOR FARMERS ACHIEVING PRODUCTION VOLUME STANDARDS RATHER THAN PURELY SCREENING & PROCESSING LOANS • MAKE A WELL CRAFTED MULTI-PARTITE AGREEMENT BETWEEN FARMER, BUYER, CORPORATIVE PROCESSOR & BANK

  24. THANK YOU UGANDA END OF PRESENTATION

More Related