ARDCI - Agricultural and Rural Development for Catanduanes, Inc.

 

 
Profile Overview

The Agricultural and Rural Development for Catanduanes, Inc. (ARDCI), with office address at Sta. Elena, Virac, Catanduanes, registered with the SEC in 1998, is a non-government organization engaged in microfinance operation providing financial and non-financial services such as savings, micro-lending and micro-insurance to its members. 

Presently, ARDCI’s microfinance operations covers the provinces of Catanduanes, Albay, Sorsogon and Camarines Sur (all of Bicol region) with 14,000 members, a loan portfolio of P85M and a savings generated amounting to P40M.  Its total asset to date is P145M.  It has 14 branches and 1 rural microfinance-oriented bank, the Vision Bank, Inc.

As the microfinance sector continuously find ways to provide additional services to its members, now called as microfinance ++, ARDCI introduces new services. One of which is the livelihood interventions and assistance as ARDCI ventures into the marketing of LASA (tiger grass) grown and processed by our members in the Province of Catanduanes. This enterprise is in connection with the organization’s five priority plan that birthed last 2006 with its objective to create a business and marketing arm sustainable for self-generating income and responsible of innovating more ways to give its clienteles better service and benefits.

ARDCI embarked on the livelihood development mission to enhance its effort of helping poor sectors in the community knowing the fact that the natural resources are present and need to tap its potential. Indeed, majority of ARDCI members are farmers and fisher folks or with dual occupancy and this something seen with direct impact on them, venturing as major buyer of their products at reasonable price. ARDCI will function not only as direct buyer of raw and finished products, it will likewise design trainings that will fit and improve the craftsmanship of the workers in close coordination of government agencies support like DTI, TESDA and FIDA. Instead of once all out disperse outside the province of volumes of raw LASA, and sadly lately noting it as the tampered product owned of Baguio or other provincial industry, this province will be proud to flaunt that quality soft brooms are coming from this island as this enterprise will continue to support worried LASA producers on their pursuits. Reasonable price for the producers they never met from local and outside buyers, appropriate business plan, sure workforce and capital inputs shall be the edge of this organization to complete the ingredients of marketing arm towards a more sustainable development for its members.

The Production and Marketing Officer, a special person designated in the entire operation has already initialized the enterprise and now prospecting from its lists possible buyers after its first selling mission held on Visayan provinces and cities including Cebu and Ilo-Ilo. He is constantly updating suggested designs through the internet and the buyers as a quality standard prospect for importation.

As ARDCI ventures to the marketing of processed lasa, it introduces the ARDCI Catanduanes Quality Brooms and Novelty Items.

The following are the two types of softbrooms offered:
    1. ORDINARY BROOMS
    2. DECORATIVE BROOMS sugbo or lasa (tiger grass).  Both are sold as raw materials but between the two, farmers and entrepreneurs have been able to add value to the lasa and successfully market them in the form of SOFT BROOMS as compared to abaca fiber, which is largely traded unprocessed, although graded.

ORDINARY brooms are used as cleaning material and are further classified into three (3) categories according to the thickness of the lasa being used and of quality and designs applied, such as ordinary, semi-special and the special.

DECORATIVE brooms can be used for wall decors, gifts, souvenir items, or as cleaning material if desired. The materials used here are natural twines like nitto, rattan and abaca.

Table duster as the name implies is used for cleaning dusts on table, computers cabinets, etc.

These are of different designs from flat to round, bare or covered handles, colored or natural, rattan or bamboo handles.


Provided below is the study survey conducted prior to the initialization of this enterprise.

I.    Introduction

In our desire to provide people with better income, and in consonance with the objectives of the Plus 1 Project, we have identified tiger grass (lasa) as the most promising product that should provide our people with livelihood opportunity.  Secondary data from different reliable sources will show that lasa is the second major product of the province next to abaca. Unlike abaca, however, lasa has more potential for value-adding, which can actually provide employment and additional income to people, hence our preference for lasa for our Plus 1 Project.

To ensure success of our chosen project, however, we had to have an updated data on the indicators that will tell us whether our interventions are making any difference or not. And since there is no particular government office that takes care of this product being unique to few provinces in country, we had to initiate our own activities to make our objective a reality. 

Foremost of these data are the baseline information on the number of people involved and their activities in this industry, the existing land area it occupies, their volume of production, their market destination, the potentials of the industry and the problems they encounter that deter the industry development. With these information in hand, we will be able to move and plan ahead based on the actual needs of the industry.

II.    Executive Summary

As soon as the Plus 1 Project has been identified, planning for its development ensued. Realizing that the office has no sufficient funding support to execute the plan, an Inter-Agency Committee composed of different government agencies that have a stake in lasa development has been organized. Simultaneous with it was the conduct of series of dialogues with lasa farmers, processors, and traders, the purpose of which was to initially gather information as to the real needs of the industry.

From that activity, we were able to decipher that one of the problems facing the industry is a stable marketing system that will benefit the farmers and not only the traders. We also learned that expanding the market base  for finished products would also provide benefit not only to farmers but to other people in the surrounding areas through value-adding.

These information became the basis for the identification of major projects that should support the industry. Hence, a Project Proposal for Lasa Grass Development has been prepared and proposed to the member-agencies for funding.  One of the project components  was the Profiling of the Lasa Industry that should jumpstart its development. The purpose of this project component is to establish a baseline data which we can use as benchmark in measuring the success of our proposed interventions.

The member-agencies that supported this component are the Office of the Provincial Agriculturist (OPAg), the Catanduanes Agricultural Support Programme (CatAg) and the Local Government Units (LGUs) of the concerned municipalities. DTI on its part would hire enumerators that will gather the needed data from 180 target barangays. This target, however, would be supported with additional funding from OPAg for supplies, and additional travelling expenses from LGUs. CatAg would be incharge of gathering market-related information outside the province. The target project completion was December 2001.

The DTI’s share of P15,000 was released as early as July 2001. When the counterpart funding from OPAg and LGUs were followed-up, however,  said funding were not available and in fact, were not released until the end of the year, thus, we had to make do with the extant amount that we had in hand.

Therefore, instead of the 180 target barangays at P50 each, which amount was proposed considering a counterpart funding from the LGUs for travelling expenses and subsistence, and in order that the project would be completed despite limited funding, the P15,000 was re-aligned where the enumerators would be paid P150/day plus P100 for subsistence. Three enumerators were hired. To speed up mobility, and to cover more barangays as the budget would warrant, a motorcycle was hired for use by the enumerators. Instead of hiring encoders, the DTI office has to do the encoding and the report preparation.

The baseline data was prepared before the end of the year and was already included to the report submitted to the attached Plus 1 Accomplishment Report for 2001. It has in fact been made a basis for the preparation of the 2002 Plus 1 Workplan in Logframe which was submitted to the office of Assec Zeny Maglaya copy furnished the Regional Office. It has been made an integral part of the Lasa Industry Profile which was attached to the liquidation papers for the P15,000. However, since the proposal was not for an Industry Study, the format used in the report was the Industry Profile, BOI format.
 
There were eight (8) municipalities covered by the survey. Three of which yielded primary data while five were secondary data. The three municipalities had a total of 229 respondents, an average of 19 respondents per day.

Below is the basic data generated from the survey that we deem necessary benchmarks for our planned interventions. Some of the data were taken from the primary data gathered from respondents. Others were secondary data taken from the Municipal Agriculture Office of concerned municipalities.

 

Of the 229 respondents,  212 are farmers, 12 of them triple as farmer-processor- traders at the same time. Meaning, they produce raw materials, process part of it and sell the others as raw materials direct to end users outside the province. Four of the 212 double as farmer-processors and four double as farmer-traders. 12 of the 16 non farmers double as processors - traders and the remaining 4 are straight traders.

As to the market, it turned out that Bataan is the largest buyer of raw lasa and Batangas for lasa brooms.  Other markets identified are mainland Bicol and Metro Manila. There are four major traders of raw lasa and seven processors of lasa brooms. Two of the traders are also farmers while the processors are also traders of lasa brooms. It will also be noted that the traders and processors are concentrated in Caramoran.  These traders buy the produce of the neighboring municipality of Pandan, San Andres  and Bagamanoc. The products of Panganiban, Viga and San Miguel are being processed and sold at the local market.

As far as land area and production are concerned, Caramoran is still the highest at 616 hectares, which is 68% of the total yielding 384,836 kilos followed by San Andres at 150 hectares yielding 94,349 kilos and Pandan with 95.5 hectares yielding 61,044 kilos. All the others has a very minimal production area and production capacity. The total land area as of December 2001 is 905.95 hectares and the total production was 563,465 kilos. These figures is a far cry from the 1989 figures gathered by the Department of Agriculture.

The potential area above was the figure gathered by the team from the Central Office of Department of Agriculture in 1989. This was the time when the price of lasa grass went up to P60/beer size (kilo). The farmers opened new plantation areas and produced million kilos.

IV.    Problems Encountered

The following were the major problems identified by the respondents:

1.    Low Price of raw lasa

The common problem shared by the lasa farmers is the very low price of raw lasa.  They still  recall the time when the price of  raw lasa went up to P60 per beer size (kilo).  They would like to know why the price dropped to as low as P10 and has never went up from P20. 

This problem forced them to abandon their lasa farms and concentrate in abaca farming instead. However, abaca nowadays is also problematic due to the infestation in most areas of the province. Aside from this, the price of abaca has not also improved from its 1990 level despite the  appreciation of dollar.

2.    Lack of Capital for the processors to pay for sufficient stock of raw materials in preparation for the lean months.

Because of the low price of raw lasa, the farmers and other affected sectors decided to process the raw lasa to lasa brooms to increase its value.  The strategy has proven to be a lucrative business because they can triple the value of the raw material. It can also provide livelihood activities to the communities around the plantation areas. However, the processors lack the necessary capital to buy raw lasa during harvest season.  Their common problem in securing financing is insufficient acceptable collateral in the banks since most of their properties are agricultural lands that are not usually acceptable to the financing institutions.

3.    Lack of warehouse facilities for processors to store raw materials.

Another problem identified by the respondents is the lack of warehouse to where their stocks for the rest of the year could be stored. The durability of the material can be affected without proper storage facilities.

4.    Market for soft brooms.

For the new processors who have just entered the business, market is their problem. Market for this product is very volatile considering competition from other provinces. Although Catanduanes lasa edges other provinces in terms of quality and durability,  penetrating the market is difficult specially if they will do it on their own.

Existing processors are also very secretive of their market and choosy of their products to be marketed. They prefer to supervise the processing of lasa softbrooms than buy from independent broommakers.

V.    Recommendation.

The problems encountered by the respondents has become the basis for identifying the interventions that the office will have to the Lasa Industry. 

1.    For the low price of lasa and marketing problems, the office has proposed the conduct of marketing mission in Bataan, Bulacan, Nueva Ecija, and Baguio. We just wanted to know why the very low price of lasa against the stable price of softbrooms.  Likewise, we wanted to visit the villages where lasa brooms are made and probably find stable market and price for raw lasa.

Aside from the market for raw lasa, we also want to see the market for softbrooms in Baguio.  It is a known fact that softbrooms in Baguio are not made there. These are supplied by softbroom-producing provinces also.  Being a stable market for softbrooms, we want to get a share for our locally-made proeducts.

2.    For the problem on capital, we will organize financing clinics with different funding institutions. We have initially conducted clinic with Land Bank of the Philippines but just the same, the entrepreneurs are not qualified to avail of Land Bank loans. 

We are also inviting the SBGFC, Rural Bank of Camalig and Legaspi Savings Bank to conduct their own financing clinic to see if the entrepreneurs will qualify to their bank policies.

3.    On the problem of warehouse facility, we will try to solicit from the LGUs, politicians and independent donors for it is not wise to borrow money to construct a building. It will be a dead investment which is not good for a small anf struggling business like theirs.