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The rubber industry in
Sibugay was controlled by a local cartel and made even poorer
by inferior processing techniques, until government agencies
banded together to create a
A rubber
revival
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Edito Lumacang DTI-Provincial
Director
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THE RUBBER FARMERS SHOULD HAVE BEEN RICH,
yet they were poor. In Sibugay, they numbered about 4,500 -
all recipients of large tracts of land after the Agrarian
Reform Law was implemented. Per provincial records, rubber
trees covered 28,000 hectares of land: 4,415.11 hectares
belonged to 6 rubber cooperatives, with small farmers owning
the rest of the area.
The Department of Trade and Industry,
setting up office in Ipil in 2002 in the newly created
province, immediately looked into a disturbing trend: raw
rubber was sold at only P5.50-P7.50 per kilogram, when the
prevailing price was more than half of that. The rubber
industry in Sibugay was literally in its death throes, and
rubber farmers were flocking to the DTI office seeking
assistance.
The DTI started with dialogue, first with
rubber farmers, then with local rubber buyers, both of whom
blamed each other. The buyers said rubber farmers mixed their
field lumps with stones, soil, and other impurities,
presumably to produce heavier field lumps. They also used
battery solution to speed up the coagulation process, leading
to very low dry rubber content of only 35-45%. Thus local
traders offered low prices.
The small farmers testified that local
traders were cheating them by way of high profiteering.
Traders also used defective weighing scales. There were also
accusations of price fixing.
United action
The DTI quickly formed an advocacy team
composed of the Office of the Provincial Agriculturist; the
Economic Planning Unit, and planning and development office,
both of the provincial government; the Department of
Agriculture; the municipal planning officers represented by
Engr. Silverio Panes from the municipality of Alicia; and
three representatives from the small rubber farmers’
organization.
The team met extensively for discussion
and planning. They decided to focus on two major problems:
(1) the low quality of rubber due to the presence of
impurities; and (2) the massive connivance in price fixing
among local traders.
In 2002, a trade mission was organized
and sent to Bukidnon to study how Sibugay’s local rubber
produce compared, and to look at the prices there as well.
The team reported that Sibugay’s rubber was at par with
Bukidnon but it indeed was selling at a very low price. At
the time, rubber was selling in Bukidnon at P13-P14 per
kilogram, which was double the selling price in Sibugay.
The team invited Sammy Saljuga, a trader
from Bukidnon, to compete in the local market. Mr. Saljuga
offered to buy Sibugay’s rubber at Bukidnon’s price, creating
a price war, pushing the price from P8 to P15 per kilogram.
At last, Sibugay’s rubber farmers found relief.
A year later, the provincial government
invited another trader who offered a better price. Jack
Sandique bought rubber at P21 per kilogram, or 62% higher than
the previous buyer.
Organizing
The advocacy team organized the
federation of barangay based rubber producers in Ipil,
composed initially of only 7 barangays, to consolidate
handling and marketing of rubber. The federation sold only to
Jack Sandique, who offered a price incentive of P.065 per
kilogram of raw rubber sales to be the initial build-up
capital of the federation.
The federation has been so successful
that its membership has risen to 33 barangays. The
consolidated volume of produce has increased from 20 metric
tons to an astounding 200 metric tons every 15 days. The
price has also stabilized, based on the prevailing world
market.
Educating
The advocacy team also conducted massive
orientation seminars with the small rubber farmers at the
barangay level to improve quality and productivity through the
use of appropriate processes and materials handling. Eric
Cabarios, now the vice governor of Sibugay, spent some of his
development funds for this purpose.
Quality Circles were organized in the
barangays. Members were obliged to adhere to principles of
quality and productivity improvement, otherwise, their produce
will not be included in the market matching. This met some
opposition at first, both from the farmers and the traders.
The latter even funded a group to sow destabilization, and to
threaten members of the advocacy team.
Part of the advocacy to adopt quality
practices was to discourage the use of battery acid as
coagulant, and to make formic acids available instead through
a loan payable upon harvest. The advocacy team also
successfully negotiated with the buyer to provide coagulating
tubs (where raw rubber is poured and mixed with formic acid
for hardening). Eight thousand tubs were granted to farmers
on credit.
To sustain the operation of the small
rubber producers federation, a bi-monthly Kapihan sa Gumahan
is facilitated by the DTI. It is in these meetings that
issues are settled and prices negotiated. The meeting is
normally attended by no less than 200 rubber farmers,
government representatives, media, and partner-buyer.
Impact
The cooperation of the small farmers is
the key to the survival of the rubber industry in Sibugay.
Through their federation, they are able to negotiate prices in
the local market. From P6.50 - P7.50 per kilogram, prices
have risen to as high as P25 – P32 per kilogram of raw
rubber. The price has never dipped below P20 starting middle
of 2002 to the present.
Because of the conduct of orientation
seminars by the advocacy team, farm productivity has increased
from 274kg per hectare per month to 336kg, or a rise of about
22.63%. Converting this into monetary value, rubber farmers
now earn P1,550 more per hectare per month.
Barangay based rubber association members
of the provincial federation now earn between P20,000 to
P260,000 a month as continuing capital build up, giving the
association support financing for re-planting of rubber.
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