A UCPB showcase in Mindanao

The slightly musty, slightly aromatic smell of drying tobacco leaves filled the air as Jose Bagas, 52, opened the door of the curing shed. Inside the dimly-lit room, rows upon rows of drying tobacco leaves hung on wooden racks. Their color had turned a bright brownish red, a sign that they are almost cured. Nong Joe’s eyes surveyed every quarter of the room without a flicker of emotion but, as he closed the shed’s door, a trace of a smile played on his lips. "The year’s harvest has been very good," he said softly.

Nong Joe is one of the 968 small coconut farmer-members of the Alubijid-Laguindingan-Gitagum Integrated Farmers Association (ALGIFA), one of the biggest cooperatives in Mindanao with close to P5 million in assets. A founding member of the cooperative, Nong Joe still recalls with clarity the struggling years when he and his fellow members were mere subsistence farmers who could hardly make ends meet.

Before and after

Before ALGIFA, all that the farmers owned were small plots of land planted to coconuts. Their primary source of income came from copra and it was almost always never enough to provide for their daily needs since the area was not really suited for coconut cultivation. Sometime in the early 1980s, they tried their hands at tobacco farming to augment their income. Having no access to formal credit, however, they soon fell prey to the village money lenders who charged usurious rates or to roving traders who advanced the mill that the farmers owned were small plots of land planted to coconuts. Their primary source of income came from copra and it was almost always never enough to provide for their daily needs since the area was not really suited for coconut cultivation. Sometime in the early 1980s, they tried their hands at tobacco farming to augment their income. Having no access to formal credit, however, they soon fell prey to the village money lenders who charged usurious rates or to roving traders who advanced the mill was specially designed to transform communities of small coconut farmers into self-reliant economic units.

On the recommendation of the Philippine Coconut Authority, UCPB agreed to finance the tobacco growing activities of coconut farmers in three municipalities of Misamis Oriental, namely Laguindingan, Gitagum and Alubijid.

The farmers were each initially given a P2,000 loan at socialized rates by the bank’s subsidiary, UCPB Rural Bank. On top of the credit, the bank’s social development arm, the UCPB-Coconut Industry Investment Fund Foundation, sent a community worker to lay the groundwork for the eventual organization of the farmers into a cooperative.

"Initially, we weren’t sold on the idea of putting up a cooperative. We, however, agreed because we had nothing to lose," Nong Joe said.

Over the next two years, the farmers received instructions on the workings of a cooperative from the UCPB-CIIF Foundation. Grudgingly at first, and then with full enthusiasm, they attended leadership and team-building workshops, values formation training and cooperative management seminars. On the side, the UCPB Rural Bank taught them practical skills like bookkeeping and how to conduct project feasibility studies.

Finally, in 1989, the ALGIFA was registered with the Bureau of Agricultural Cooperative Development. It only had an initial asset base of P40,000 but a wide membership of 426 gave the cooperative enough leverage to obtain volume discounts from dealers of farm inputs. Gradually, the cooperative built up enough capital to start trading operation. As it began buying tobacco leaves from its members, it eventually started to influence the buying price of tobacco leaves in the area.

Higher standard of living

Now more confident in what a cooperative can do, the farmers have ventured into other businesses. They have built a 450-square meter warehouse which they rent out for storage of copra, corn and other farm produce. They have also acquired a minority stake in UCPB Rural Bank.

Outsiders say the more telling indicator that the farmer-members of ALGIFA have achieved a measure of self-reliance and prosperity is that they can now access formal credit and pay commercial rates on their loans.

But to the farmer-members themselves, the big difference lies in the comforts that they now enjoy. As one member said: "Before the cooperative was set up, we had a house that was so small the kitchen was outside. Now, we’ve been able to expand the house and to buy material things like a TV. For some people, these might not be much; to us, these are giant improvements in our standard of living."