Private sector-led strengthening of agricultural cooperative partners key to sustainable value chains

29-03-2021

PHILIPPINES - The agriculture sector contributed 23% of the national labor force in 2020. Majority of the farmers within this sector are smallholders, with farm holdings under one hectare. 

Additionally, farmers remain as one of the poorest labor forces in the country. They are often food insecure, and living in rural communities with limited access to markets and services. They also engage in other livelihoods in the informal economy to add to their income from farming. Despite these, smallholder farmers produce food for a substantial proportion of the population. They try to help themselves by participating in and organising through cooperatives, but they also encounter problems in running these cooperatives properly. This becomes problematic for large cooperative enterprises and agribusiness companies that need reliable agricoop partners as suppliers in their value chains.

It is for this reason that Agriterra linked with like-minded organisations such as East West Seed (EWS) as one of its partner local resource organisations under the Generating Rural Opportunities by Working with Cooperatives (GROW-Coop) Project which is funded by the United States Agency for International Development (USAID). 
 
Under GROW-Coop, Agriterra delivers high-impact interventions that strengthen the capacity of large cooperatives, federations and private companies like EWS to become local resource organisations. In turn, these organisations provide in-depth mentoring, capacity development, and support participation in value chains to smaller agri-based cooperatives whom they work with. Local resource organisations are envisioned to become hubs for ideas and resources,  and to act as connectors and influencers that smaller agricultural cooperatives go to for help, advice, or expertise.

EWS saw the challenges experienced by the smaller cooperatives whom they engaged with in their supply chain. Most of these challenges are related to business continuity, financial management and product quality.  
Agriterra trained EWS in conducting a cooperative assessment to evaluate the cooperatives’ business in terms of finance, governance, and reputation. Together with experts and advisors from Agriterra, EWS conducted cooperative assessments for three of its six partner cooperatives. 
At the end of the assessment, EWS and the cooperatives agreed on areas of collaboration that will be implemented during the GROW Coop Project.  This included a partnership with Landbank Countryside Development Foundation, Inc. (LCDFI)  and Landbank to evaluate and assist the cooperatives in improving their financial capacity to become eligible borrowers from its credit facility.  

Partnership Agreement

In 2019, Agriterra entered into a partnership agreement with LCDFI to provide development support to selected borrowing agricultural cooperatives of Landbank and to eventually assist other agricultural cooperatives in the country for further expansion. The partnership is crucial to meet the financing needs of many of the small agri-based cooperatives that are part of GROW Coop. 

According to Alfred Bautista, Cooperative Specialist of EWS, what makes GROW-Coop significant is that it empowers growth-oriented cooperatives to lead and implement their own solutions by providing training, mentoring, and business advise. Despite the limitations caused by the COVID-19 pandemic, EWS and GROW-Coop ensured that monitoring and consultations with the cooperatives were sustained through virtual communication. Bautista added: 

“Many cooperative officers and staff have shown interest and support to the interventions of East West Seed, Agriterra and USAID. GROW-Coop helped cooperatives identify and clarify their Big, Hairy, Audacious Goals (BHAG) and provided them the tools and training to attain these goals by professionalising their business operations, governance, and financial management.” 

Bautista also shared that the experts and business advisors of Agriterra imparted valuable ideas and local and international good practices in cooperative entrepreneurship. 

With its continued partnership with GROW-Coop, EWS is strengthening its relationship with the cooperatives who serve as their partners in providing farmers access to high-quality vegetable seeds. In turn, this will enable EWS to further fulfill their mission to improve the lives of more smallholder farmers in the Philippines and promote the growth and quality of the country’s agriculture industry.