CIDAMI in partnership with Oikocredit organized a training for cacao farmers entitled: Price Risk Management Training for Cacao Organizations. This training was conducted on February 27, 2018 to March 01, 2018 at the Pinnacle Hotel, Davao City.
This training aimed to identify appropriate cacao price risk management strategies for cacao producers/cacao-based organization. The training was participated in by 56 participants coming from different cooperatives and associations namely: Manuel Guianga Multi-Purpose Cooperative (MGMPC), Maragusan Multi-Purpose Cooperative (MAMPCO), Laak Multi-Purpose Cooperative (LAMPCO), Farmers Development Cooperative (FARDECO MPC), Subasta Integrated Farmers Multi-Purpose Cooperative (SIFMPC), Davao City Chocolate Processor, Inc. (DCCPI), Biao Agrarian Reform Beneficiaries Cooperative (BARBCO), Maragusan Growers Multipurpose Cooperative (MAGROW MPC), Salaysay Upland Farmers Association (SUFA), Federation of Cacao Producers in SOCCSKSARGEN (FECAPS), Macabatug Cooperative Federation (MACOFED), Rehoboth Agricultural Cooperative (RACO), Gawad Kalinga Sto. Tomas de Villanueva Association, Cadalian Cacao Cooperative CADCACO, Malabog Integrated Enterprise Multi-Purpose Cooperative (MEIDECO), Calinan Multi-Purpose Cooperative (CMPC), Cacao Masters and Processors Association (COMPRA), and representatives from Davao City Chocolate Processors Association.
This unique capacity building project had resource persons with high-level experience in price risk management. Resource persons ing were Ms. Marilou Baarde, (Managing Consultant of Centaurus Philippines., Inc. and an associate professor of Ateneo de Davao University) and Mr. Grant Vinning (International Marketing Specialist who have worked with various cacao organizations in Asia and the Pacific).
Through this training, the participants learned how to measure the level of risk on their operations, knew about factors that can affect cacao price, learned how to identify good attributes of their beans, and how to become effective negotiator with buyers. Participants were also informed about viable markets of their produce with the presentation on market and market opportunities for Philippine cacao.
Aside from the above accomplishments, possible researchable aspects/areas along the cacao value chain that may have an effect to cacao pricing were identified to be shared with universities and results hoped to be shared with cacao farmers.
Risk identification in the operations, processing, and marketing that can significantly affect price was also highlighted on this training.An action planning per group was done to identify possible interventions and mitigation of the identified price risks. To come up with viable price risk mitigating strategies, a representative of a cacao-based cooperative which exhibited good price risk management strategies, Mr. Alfonso Andoy Jr. of BARBCO, was asked to share their experience.
Common key risk identified was the risk of obtaining low price from low quality cacao beans due to lack of financial capital for cacao crop development. Lack of sufficient cacao buying capital was also one of the common issue raised which increase the likelihood of side selling or pole vaulting among their members resulting to lesser volume consolidated which can then have significant effect to price offered by buyers requiring high volume of cacao beans. With this, it was recommended that cacao farmers should be financially literate to be able to manage their farm operation finances effectively thereby improving their cacao production and income.
Farmer’s attitude of not adhering to the post-harvest handling and processing protocols was commonly identified also as risk to producing quality cacao beans with corresponding unfavorable price. Main strategy identified to mitigate this problem is the values formation/ counselling of delinquent members and constant training and monitoring of members on proper post-harvest handling and processing.
It was observed during this training that participants do not have an in-depth understanding of how cacao price is set and the factors that make up a price of cacao. In-depth understanding on pricing is necessary for cacao farmers/ cacao organizations to be able to successfully negotiate with buyers and set favorable price of cacao beans. With this, another training devoted on cacao pricing is planned to be undertaken within the second quarter of this year.
