Expanding opportunities and making sustainable developments on the dairy industry in Isabela, Philippines. 

By Kathleen Lungub

“A LAND OF DESPAIR,” was how Romeo Bugarin, farmer and chair of the Malaya Development Cooperative (MDC) in Mallig, Isabela described the aftermath of typhoon damage on crops such as rice and corn.

He said that the crops ‘droop’ when such calamities strike, and that the effect was worse on corn. “When it bends, we go back to zero.”

It’s a story familiar to 11 million Filipino farmers who face the same problems: crops submerged in water for days, seeds mixed with mud and clay, and rice plants bent by strong and continuous
winds.

On the average, 20 typhoons enter the Philippines each year; many of these result in the loss of property, lives, and livelihoods. In September 2011 alone, the super typhoon Pedring affected 735 farmers in Isabela, destroying almost 952.2 metric tons of rice and
corn crops valued at around 2 million.

Recovering from the losses incurred during one harvesting season is difficult as typhoons often leave farmers with nothing. Usually, they take out loans at onerous rates with traders to buy seeds, fertilizers, and other inputs for the next planting season and ensure that there is food
on the table for the family. This increases their dependency on traders, especially
since climate change has brought about stronger typhoons that wreak increasing amounts of damage to crops.

With this vicious debt cycle facing farmers in mind, Ernesto Lactao, the current general manager of MDC who is a development worker by profession, worked with a group of women back in 2003 to form a cooperative that sought to uplift the lives of farmers by lending them money at minimal interest rates. While traders lent money to farmers at 10% interest per month, MDC did so at only 1.5%. And while the traders were buying the produce of farmers at minimal prices of, say, 15 per kilo, MDC bought the same produce at up to 20 per kilo.

Lactao realizes that alleviating the farmers’ situation cannot be done by microfinance services alone. “We need to have an alternative (source of) income….(and this) is when we saw (the potential of) dairy (enterprise).”

Ernesto Lactao, Romeo Bugarin, and Filipina Lactao are the pillars of the Malaya Development Cooperative, which was formed out of the desire to help the underserved in their community.

TOWARDS SUSTAINABLE AGRICULTURE – Through the assistance of the Foundation for a Sustainable Society (FSSI), members of MDC visited dairy farms in Bulacan, Batangas, Quezon, and Laguna, where they saw the potential of the dairy industry to create a daily and sustainable source of income for the farmers of Mallig. Thus, MDC decided to venture into integrated dairy enterprise with three main products: milk, animals, and organic fertilizer.

It was not all smooth sailing at the beginning. MDC has had to work to retool the mindset of farmers whose primary goal is to gain income through hybrid and inorganic planting. Together with FSSI, MDC was able to help its members realize the value of the environment and social welfare in the pursuit of gaining income. Aside from the initial training sessions and seminars conducted within MDC, FSSI worked to orient all other dairy cooperatives in the province by forming the Isabela Social Enterprise Local Economy Development (Isabela SELED) Network.

THE MDC’S DAIRY MULTIPLIER FARM – Through the assistance of the Foundation for a Sustainable Society (FSSI), members of MDC visited dairy farms in Bulacan, Batangas, Quezon, and Laguna, where they saw the potential of the dairy industry to create a daily and sustainable
source of income for the farmers of Mallig. Thus, MDC decided to venture into integrated dairy enterprise with three main products: milk, animals, and organic fertilizer.

It was not all smooth sailing at the beginning. MDC has had to work to retool the mindset of farmers whose primary goal is to gain income through hybrid and inorganic planting. Together
with FSSI, MDC was able to help its members realize the value of the environment and social welfare in the pursuit of gaining income. Aside from the initial training sessions and seminars conducted within MDC, FSSI worked to orient all other dairy cooperatives in the province by forming the Isabela Social Enterprise Local Economy Development (Isabela SELED) Network.

THE MDC’S DAIRY MULTIPLIER FARM – MDC’s dairy enterprise follows the multiplier model. Upon procurement of 25 female cows through the assistance of the National Dairy Authority (NDA), MDC’s role was to multiply them and eventually distribute the calves to every member household.

Under the MDC program, each household is to be given three cows, each producing 10 liters of fresh milk every day. With low inputs (corn and napier grass as food), each farming household can expect an assured daily income of 660 from selling the 30 liters of milk the animals will produce at 22 per liter to MDC.

MDC will process the milk bought from farmers into bottled products like fresh milk and yogurt;
the profits realized from the sales of these will be given back to the farmers in the form of dividends. Presently, the milk products of MDC are patronized by ‘byaheros’ (traveling
middlemen) who numbered 5,000 in 2014; its other products are also sold to schools in Isabela through dealers.

MDC’s other products include fresh milk, pasteurized milk, and yoghurt; these are marketed to grocery stores and schools.

If dairy activity is practiced with planting crops, farmers can gain much more. Some of MDC’s 600 farmer-members are now benefiting from selling corn leaves to MDC at 1.80 per kilo.
This translates into an additional income of around 5,000-7,000 per hectare of corn. Other potential sources of livelihood and income are employment for production, marketing and distribution of products, and services that include production loans, micro-financing, and rice and palay trading.

OPPORTUNITIES FOR EXPANDING THE SOCIAL ENTERPRISE – Through the Isabela SE-LED network meetings and other government-arranged conferences in Isabela, MDC got to meet other existing dairy cooperatives and associations in the province, as well as potential buyers and traders of dairy products. MDC was later recognized by the Department of Agriculture (DA) as the project proponent for the DA-World Bank Philippine Rural Development Program (PRDP).

Under the program, MDC will receive a total of 16 million pesos for building facilities and procuring refrigerated vans, a retort machine, and chillers for retail markets envisioned throughout the province.

One of the farmers initially given a set of cows, a Mr. Bugarin, is grateful for the opportunity
extended to farmers like him who were trapped in the debt cycle with traders. He declared that
there had been great improvements in the lives of farmers like himself who had not been aware of the income and livelihood potential represented by dairy. All they knew then was to milk cows, he said; but now that they have seen how dairy has the potential of creating an additional source of daily income, it was seen as something big by farmers, because not only would they be able to provide food everyday to their families, with the additional income, they would be able to send their children to school.

With climate change bringing about the prospect of more intense and frequent typhoons ahead,
MDC members are assured that through the dairy enterprise and the changing mindset towards
sustainable agriculture, farmers will be exposed to fewer economic and natural risks.

This story appeared as “Dairy Enterprise Seen to Supplement Income Generation to Vulnerable Communities of Isabela” in Agriculture Monthly’s June 2015 issue.