M’danao fruit industries gearing up for the big time

The country’s food basket, Mindanao, is home to about 24 banana chip processors. But due to lack of raw materials, most of these are operating at half their installed capacity.

Banana farmers previously shield away from planting cardaba bananas, which is the favorite variety for banana chip makers. Without proper pre- and post- harvest technology and assured buyers for their crops, farmers found cardaba a difficult crop to manage. But with assistance from USAID’s Growth with Equity in Mindanao (GEM) program and the Philippine government, the $25 million annual banana chip export industry is about to get even bigger.

GEM has been at the forefront of technology upgrading in Mindanao’s fruit industry. The USAID-funded program is working with the Mindanao Fruit Industry Development (Minfruit) Council to bring about a dramatic increase in the harvest of cardaba banana farmers from the present annual yield of eight metric tons per hectare up to 20 MT per hectare. The USAID-funded program has also been linking domestic suppliers to foreign distributors and sellers with networks in China, Malaysia, Hong Kong and Singapore.

Southern Mindanao contributes roughly 134,400 hectares of the 320,000 hectares planted to cardaba nationwide. Most cardaba farms are "backyard farms", which according to GEM fruit industry advisor Celso Enriquez are not able to maximize cardaba’s potentials due to limited technology access.

"There is low adoption of new technology among smallholder cardaba farmers because they have meager resources," Enriquez observed.

But the demand for cardaba-based products remains high, especially in the international market. In fact the Bureau of Agricultural Statistics estimates a supply deficit of at least 20,000 metric tons in 2005 and beyond.

Getting Serious On Bananas

Aware of the opportunity to capitalize on demand, Quedan Rural and Credit Guarantee Corporation (Quedancor) has established a loan window for the region’s cardaba growers. At least 1,000 farmers are expected to benefit from the financing program, which aims to improve growers’ access to technology, clean planting materials and proper pest and diseases control.

Pilot areas for the program are located in Davao del Norte, Compostela Valley, Sarangai, Caraga, and some areas in Northern Mindanao.

To ensure a stable market, cardaba growers will be linked with a banana chip processors that are striving to maintain the Philippines strategic position in both the domestic and international markets.

Benefiting From Off Season Technology

Resources are also being channeled toward the mango sector, another export winner.

With technical assistance provided by the Department of Agriculture (DA-11), the Mindanao Fruit Industry Development (MinFruit) Council and GEM, hundreds of farmers in the region – including those in the conflict affected areas – have taken advantage of a new off- season production technology for mangoes. The campaign aims to introduce appropriate technologies and superior farming practices for mango production during the period when other regions are unable to produce mangoes.

"We have already trained more than 1,000 farmers for this pilot project, including those within conflict affected areas in Mindanao. I am confident we can surpass our original 2004 target of 600 hectares devoted to off season production," MinFruit executive director Benjamin Roy said. At least 2,000 metric tons of off-season mangoes have been harvested during the second half of 2004.

The January-July period is considered the peak season for mangoes in the Philippines. However, low production is experienced during the second half of the year, particularly from August to December, due to typhoons in Luzon and Visayas, the traditional mango producing areas. But Mindanao, being typhoon-free, can produce during the off-season and thereby benefit from higher average farm gate prices.

Mindanao accounts for about 23 percent of the country’s total hectarae for mangoes. A third of the country’s $40 million exports of fresh and processed mango in 2002 was estimated to have come from the region.

Minfruit records show that a total of 8,750 metric tons of fresh mango from Mindanao were directly shipped out to various exports markets last year. Twice that amount is sold to local fruit processors for export as puree or in dried form.

Increasing Global Competitiveness

Efforts to maximize the productivity and competitiveness of Mindanao farms are gradually paying off. Foreign investors are slowly discovering that the region can produce high volumes, as before, but now with significantly higher levels of quality.

As a result, an international tading firm serving as a major importer of bulk and canned commodities to China, has opened a lease contract agreement with a Mindanao-based fruit processor. The first shipment of assorted canned goods was completed last month.

"Besides linking Mindanao-based companies to international markets, particularly China, we also have been encouraging foreign companies and businesses to invest in vertically integrated operations to ensure sufficient volume and good quality agriculture products," GEM export market development team leader Agnes Luz emphasized.

She explained that appropriate investments at all stages: from production to marketing, are needed to increase the sector’s competitiveness.

One of the initiatives being considered to further increase the region’s global competitiveness is the introduction of an individual quick frozen (IQF) facility for agricultural produce, particularly fruits.

The IQF process maintains the look, freshness and general quality of produce and inhibits the invasion of bacteria and other harmful elements. Fruits and vegetables that have undergone this process maintain their appearance, flavor, and nutrition as if they were freshly-picked, according to Luz.

IQF-treated commodities may be stored longer and more conveniently, making them increasingly popular to buyers and consumers worldwide.

The IQF process requires produce to pass through acarefully-calibrated temperature zone, about 60 to 90 degrees Fahrenheit, leaving very low and safe microbial counts. The IQF process is already being used in more advanced countries. According to Luz, at least two Mindanao-based fruit processors are planning to utilize the IQF process.

Fruit exporters currently rely on vapor heat treatment (VHT) to meet international phytosanitary standards. Luz said that with some of the region’s produce undergoing IQF process, Mindanao can better obtain a foothold in the global market.

"The challenge of Mindanao fruit growers is to produce high quality products at the lowest possible cost. To date, only our cavendish bananas and pineapples meet the phytosanitary demands of the global market. But with the assistance poured in by GEM and the government, we are confident that our other fruits crops can surpass international productivity standards," Roy said. (GEM program).