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Vietnam is likewise faced with this extreme problem of logistics disrupting the supply chain. This is because as much as 25% of the produce of all farmers rots before it reaches urban areas. Like the Philippines, Vietnam suffers from weak infrastructure resulting into an inefficient supply chain.

7 million tons of vegetables and fruits rot before reaching consumers.

The response of Vietnam's Food Bank is VN Foods; in this government project, produce that is near perishability is purchased instead of being put on transport to rot. The Food Bank, with help of volunteers, then process these vegetables into pickles (atchara), chips, jams, and more. This is then sold to their partner corporations (including names like Mondelez and Bidrico).

Vietnam's Food Bank also purchases these and uses them in food drives for the poor and hungry.

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Philippine agricultural trade has been on a deficit since its accession to the WTO in 1995, trending towards import reliance evidenced by the complete removal of all import quotas and the lowest tariff rates in the ASEAN (Purugganan, 2021)

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Liberalization has resulted in an unincubated agricultural sector that has drowned in the face of foreign farmers who are often highly subsidized by their states (e.g. the US, Thailand, Vietnam). Filipino farmers couldn't build enough economies of scale and acquire technical efficiency to upscale their production and lower average cost. Hence, they could only price above foreign competitors while often settling for lower-than-breakeven prices or burning their produce in times of extreme surplus.

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PH bears the cost of foreign massive subsidization

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PH bears the cost of foreign massive subsidization

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Massive subsidization in the US, the EU, Thailand, and Vietnam's agricultural sectors has led to overproduction that prompts them to dump excess produce in developing countries for "dirt prices." Undeveloped agricultural sectors in such nations fail to match such low prices and hence,  lowering the world prices for agricultural products.

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The Philippines' archipelagic nature, urban sprawl, and shortage of farm-to-market roads make it much more difficult for farmers to access consumers.

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Many farmers are relying on loans from cooperatives, private lending institutions, and loan sharks to finance the deficit left by supply chain disruptions due to the recent pandemic, oil price hikes, and other economic shocks.

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The Philippine government allotted a P500 million subsidy for the agriculture sector to cushion the oil price hikes. However, the subsidy only covers machine-driven corn farming and motorized fishing.

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Good Food Community employs "contract farming", which it dubs "Community Shared Agriculture." City-dwellers pledge a "share" to purchase vegetables (in grocery-sized batches) from Good Food Community for an extended period of time. This functions much like a contract wherein the customers are obligated to purchase and pay before the crops even arrive. This ensures the farmers of profits.

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Farmers, especially those from the Cordillera Administrative Region and Nueva Ecija areas unable to sell their crops when transportation disruptions occur (such as is seen now due to rising fuel prices, and as was seen multiple times when lockdowns and typhoons restricted travel between provinces).

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Farmers trash spoiled vegetables while poor go hungry

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The government plays catch up fixing disrupted supply chains caused by vague lockdown rules

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Rural Rising Philippines is a non-profit grassroots effort to help distressed Filipino farmers get back on their feet and feed the nation with pride. They aim to do this by sending Rescue trucks to areas where there is an over-production of vegetables and paying the farmers above-farm gate prices. Rural Rising then distributes the rescued produce to its members at below-bagsakan prices. All fruits and vegetables that age 48 hours are donated to deeply COVID-impacted communities in NCR and to various community pantries/kitchens, and parishes.

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35% of all farmers experienced heavy logistical disruptions that made selling their produce impossible (ACIAR, 2020). The average losses felt by a family each month amounts to P30,000, which is troubling given that the monthly income of farming families is estimated to only be P35,000.

Even after the Philippine Government bought 13 tons of vegetables from farmers in CAR as a way to alleviate the problem, it was cited as being "far from enough."

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A non-governmental organization (AGREA) established connection between farmers and food demand establishments (e.g. restaurants) to expedite supply connection and reduce transportation costs.

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Good Shepherd Philippines, a company that manufactures famous Baguio ube jams, has allotted their profits from their indigenous-grown products to educational subsidies for indigenous children.

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This challenge persists for three main reasons: (a) the crops of the farmers are inherently perishable, with only a week or two of shelf life at most, and so the crops do not survive until the end of logistical disruptions; (b) the farmers do not have access to technology or methods that can lengthen the lifespan of their crops; and (c) the logistical links between farmers and the consumers of their produce are weak, mostly relying on wholesale regional transport.

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The primary solution set by the Philippine government fails to protect the majority of vulnerable subsectors of farmers (e.g. vegetable farmers who face spoilages and cutthroat competition with foreign producers).

Other non-state entities and startups, on the other hand, fall short in reach, as most of them are focused only in small farming clusters. Moreover, most non-state entities rely on consumer demand. Rural Rising Philippines relies on the willingness of consumers to buy near-perishable, "rescued" crops and Good Food Community relies on the willingness of consumers to enter contracts with farmers, when they are aware that they are going to absorb risk.

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The Borgen Project's Analysis of the Weakness of the Philippine Food Chain

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The Borgen Project's Analysis of the Weakness of the Philippine Food Chain

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The Philippines' state of emergency during the COVID-19 pandemic has had an impact on farmers. While the new coronavirus guidelines halted city life, they were particularly damaging for individuals living in the lower-income rural parts of the island nation. Farmers primarily inhabited these regions of the Philippines and the new guidelines resulted in their isolation along with their farming businesses' isolation from the major cities they feed. Luckily, a farmer rose to the challenge to tackle food waste during the pandemic.

COVID-19 Measures

When the first case of COVID-19 broke out in the Philippines in December 2019, the Filipino government had a severely delayed response over the course of four months which led to high and widespread transmission rates throughout major cities such as Quezon City and Manila. The spread quickly reached rural areas and had infiltrated much of the country before the Filipino government took action. Because the response was so late, it had to be immense. In turn, the Philippines declared a state of emergency and granted Filipino President Rodrigo Duterte emergency powers by mid-March; Duterte treated the pandemic as war and took warlike measures to fight the virus by using ex-military leaders to spearhead the pandemic efforts. Under this new state, Filipinos had to enter strict curfew and lockdown, and the country mandated the use of masks and shut down commercial roads, transportation and businesses.

Impacts of the COVID-19 Pandemic on Farmers

Just as the Philippines entered a state of emergency and lockdown took place, many of the Filipino farmers were harvesting the products of the dry season. Without the pandemic, these farmers would typically gather their crops and utilize commercial routes to bring them into the bigger cities. In these urban areas, the farmers would be able to sell their products to larger markets where the farmers could make a larger profit while simultaneously feeding the cities. However, the coronavirus lockdown in the Philippines shut down the major commercial traveling routes, effectively cutting farmers off from their major source of income. Moreover, lockdown prevented farmers from selling off their crops which resulted in a major food waste during the pandemic.

From March 2020 to May 2020, farmers amassed their Spring crops and eventually had to dispose of them due to a lack of consumers. Consequently, massive amounts of edible food underwent destruction while people in the urban areas did not have access to fresh produce. Moreover, Filipino farmers lost tremendous amounts of money by not being able to sell their fruits and vegetables.

Unfortunately, the government leaders did little to assist the movement of produce from rural areas to big cities and largely left Filipino farmers at a loss of money for months. This was particularly detrimental for the farmers because they were losing income while already living in a low-income area; in turn, the farmers' access to additional job and income opportunities did not exist and made the farmers more vulnerable to falling into deep poverty. Moreover, these farmers became extremely susceptible to the coronavirus as they did not have access to medical resources or personal protective equipment or the money to obtain any medical resources. The pandemic created an extremely unique predicament for the farmers as they were left to fend for themselves against income loss and the spread of the virus.

However, a youth-led initiative fought food waste during the pandemic by providing an avenue of opportunity for these farmers to produce, harvest and sell their products in a manner where they would not experience exposure to the coronavirus while simultaneously maintaining their main source of income.

AGREA: The Road Ahead

Filipino farming organization AGREA saw the struggle that Filipino farmers were facing at the hands of the pandemic and decided to take action. Spearheaded by AGREA CEO Cherrie D. Atilano, AGREA sought to minimize food waste during the pandemic by creating alternative methods for farmers to transport and sell their produce.

Atilano and AGREA organized the #MoveFoodInitiative for many rural villages which sought to engage local communities in the efforts to fight food waste during the pandemic. The initiative mobilized youth food producer groups and local trucker groups which helped ship food from the local farmers to markets in the larger cities. Consumers of these products can easily access a list of fruits and vegetables with their respective prices on an order form, a method of contactless shopping that protects both the producers and the consumers.

AGREA's #MoveFoodInitiative has become wildly successful as it has helped over 7,000 Filipino farmers reach and sell over 160,000 kilograms of fruit and vegetables to over 50,000 families across the Philippines. Additionally, AGREA has been able to utilize the surplus produce by donating the food to local kitchens that feed frontline medical workers who are fighting the coronavirus pandemic.

While the pandemic temporarily brought a stop to the businesses and livelihoods of many lower-income farmers and created massive food waste, AGREA's quick work provided relief for farmers, food for consumers, and initiatives for youth groups to strengthen Filipino communities during these trying times. Due to her immense and important work in decreasing food waste during the pandemic, Cherrie d. Atilano has received the title of the Filipina U.N. Summit Food Systems Champion.

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Tackling Food Waste During the Pandemic - The Borgen Project

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The Philippines' state of emergency during the COVID-19 pandemic has had an impact on farmers. While the new coronavirus guidelines halted city life, they were particularly damaging for individuals living in the lower-income rural parts of the island nation.

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An opportunity that existing solutions look over is the abundant private incentives that exist to help farmers. For example, companies that have CSR programs could transfer old machinery or assist in the transportation of crops. Moreover, food enterprises are constantly on the lookout for cheaper alternatives to vegetables to decrease their cost of production amidst rising prices.

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Although the Philippine government has handed out subsidies to some farmers to cushion their supply, and non-government organizations has helped reduce the cost of supplying and transporting farm products, they do not provide cushion to the demand side.

The average Filipino consumer faces other rising prices amidst the pandemic, oil price hikes, face-to-face shifts, and other economic shocks brought about by natural calamities. Hence, they would naturally reduce their consumption of staple vegetables.

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Canadians get creative in solving food waste problem

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While the projects of Vietnam Food Bank is one of the most lauded in the world (World Bank, 2019), it mostly draws its resources from volunteers.

However, limiting the costs of the preserved food is necessary such that it can be competitively priced when sold to larger companies.

Local projects similar to VN Foods is not large enough in scale to meaningfully affect farmers. Good Shepherd's projects do not focus on the issue of food waste, while #MoveFoodInitiative only focuses on transferring crops.

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The Food Bank of Vietnam has begun a more micro approach, connecting their preserved foods to those who want to purchase them in larger, more urban areas like Ho Chi Minh City and Dongnai Province.

The profits from VN Foods will be directed in expanding the operations of the Food Bank (machinery, workers).

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https://www.studocu.com/ph/document/de-la-salle-university/management/teaching-case-karabella-dairy-business-model-to-polc/3619139

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Teaching Case - Karabella Dairy - Business model to POLC - Unpublished teaching case by Patrick - StuDocu

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Share free summaries, past exams, lecture notes, solutions and more!!

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News Articles

Action Plans from other countries (Vietnam)

Food Chemistry and Agriculture Specialists who likewise share our advocacy of tackling food preservation. We have done extensive consultation with a professor from De La Salle University's Food Chemistry faculty to understand the issues underlying endemic crop spoilage in the country.

In line with contacting specialists such that our solution is thorough, we have also contacted the Municipal Agriculturist of La Trinidad, Benguet.

We have likewise contacted various advocacy groups who are focused on the same issue we are: Rural Rising and Good Food Community PH.

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Similar ventures in the Philippines that also make preserved goods for a cause (e.g. Good Shepherd's Business Model; #MoveFoodInitiative, who moves fresh crops between farmers and urban consumers directly)

Student Advocacy Groups and NGOs likely to give their support

Other entrepreneurs who executed similar ventures, e.g. Cherrie Atilano from #MoveFoodInitiative

CSR means to fund our venture (San Miguel's CSR Organization: https://worldwewant.ph/)

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The researchers used a two-pronged approach to understand the gaps in the focused industry:

Extensive Research - Information on the issues of the Philippine farming industry was collated from news articles, written content, and research papers. This provided the researchers with an initial picture of the gap that exists in the industry, in the form of crop oversupply, crop waste, and imbalance of risk between farmers and contractors.

Qualitative Interviews/Consultations - To deep dive into the mentioned gap, consultations and interviews grounded the foundation on further understanding the situation. Key persons were interviewed for their first-hand experience and asked for expert advice on the initial solutions.

Following these, insights were generated from the collected information sourced from both methods. These insights served as the bases of the proposed solution. To write a proposal on the creation of an enterprise that:
(a) will enter contracts with farmers to purchase crops;
(b) takes these crops and then sells them to a larger consumer base and enterprises;
(c) will use crop insurance from the PCIC to decrease the enterprise’s risk from entering contract farming.

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Based on our research, farmers greatly need our assistance in terms of management and providing better economic opportunities for them. Farmers are the key players in this industry and we must continue to build a thriving and fair relationship with them. Providing farmers with fair economic opportunities will positively impact the agricultural industry progress further.

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Food Science Professional, Chemistry Department Professor, Advocate in the Fight Against Food Spoilage

iris.abrigo@dlsu.edu.ph

🌾Consulted with Ms. Abrigo last May 4, 2022 via Zoom regarding the nature of our problem, our gaps of knowledge, and other solutions that may be more farmer-centric. She gave us exhaustive feedback, condensed into the following points:

Comments and Notes:

1. On Technology Transfer

1. It is necessary for us to talk to farmers (e.g. a focus group) - because they themselves must like the solution.

2. What is the willingness of farmers to process their crops? They usually opt into just selling the things because it is easier that way.

1. Possible angle is the wives/family of the farmers who can process it if they are looking for an alternative source of income.

3. Where is the kimchi processed? Should it be processed in CAR? In NCR? If it is to be processed in NCR, there is transport stress that may decrease the value.

2. Do they have a processing facility?

1. Establish what such a facility would look like + the associated costs of setting up this facility.

3. What do they need to learn?

1. Food Manufacturing

1. YouTube to know how to make Kimchi

2. Basic Food Safety Principles - they need training in this. But not in English but in Filipino/local language. It may be necessary to find someone who can translate things to their mother tongue.

3. Financial Skills

1. Product costing and financial management.

2. Marketing.

1. How involved are you in process (c )?

4. Similar Organizations (we can read their social media pages to see how they work)

1. Rural Rising Philippines (there is a private and public Facebook Group) - Processes Ube and does “rescue buying” ; this is the act of buying lower quality vegetables (in large quantities) for a cause.

2. Good Food Community (Quezon City; FB and Instagram) - eliminates middleman

5. Most organizations that exist now buy from farmers and then process it themselves. They do not involve the farmers. This may be because of (a) lack of farmer willingness and (b) access to facilities.

6. Legalities will make it difficult for farmers to execute themselves.

1. We may need to register with DTI and FDA

1. The farmers will need to say in writing how they will do their thing

2. Lab test for nutrition and safety

7. Contract Farming is another possibility to look at; when they plant their stuff, they know we will buy it. This acts as insurance.

1. The Philippine Government offers insurance for crops, and this can hedge against your risk.

Other Suggestions

1. Instead of forcing farmers to learn it, we can just do rescue buying and then make kimchi ourselves.

2. Or maybe the solution is not Kimchi but for us to take contract farming and taking on the insurance risk ourselves, instead of the farmers. We connect them to other people.

3. Another solution is for us to connect the vegetables to existing processors of vegetable products.

The farmers may have their own local fermented product that we don’t know about, because it’s not popular enough.

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We will consult with the following persons and organizations within the next few weeks:

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We will consult with the following persons and organizations within the next few weeks:

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1. Ms Felicitas Ticbaen, Municipal Agriculturist of La Trinidad, Benguet (Already contacted, awaiting response to our questionnaire)

2. Dr. Arlene Inocencio, Agricultural Economist (Already contacted; we are now working on setting a date to meet next week).

3. Rural Rising (Contacted, awaiting response)

4. Good Food Community (Contacted, awaiting response)

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https://drive.google.com/file/d/1JeGIqdxQ3i2kvZ6BywCdp8CsyL3bjhiA/view?usp=sharing