World Bank issues NOL1 to P14M Kalinga Coffee Enterprise
The World Bank (WB) has adopted the more than P14-million coffee processing and marketing enterprise proposed by the Province of Kalinga, Cordillera Administrative Region as pilot enterprise development initiative under the Department of Agriculture’s Philippine Rural Development Project (DA-PRDP) Luzon A Cluster.
“After months of anticipation, the Kalinga Integrated Coffee Processing and Marketing Enterprise proposal finally received no objection from the World Bank to proceed to the procurement stage of the project” said Danilo P. Daguio, Deputy Director of DA RPCO CAR.
The coffee enterprise, which was proposed by the member cooperatives of the Kalinga Coffee Cluster last year, is the first enterprise proposal approved by the PRDP under its I-REAP component or the Investments in Rural Enterprises and Agriculture and Fisheries Productivity for Luzon A Cluster.
Ms. Josie Beray, IREAP Component Head in the Cordillera Region said that the Kalinga Integrated Coffee Processing and Marketing Enterprise was chosen to be the sole enterprise to be subject of review and approval by the World Bank out of all the enterprises proposed from PRDP Luzon-A Cluster. “The bank’s approval signifies that the enterprise shall serve as basis for approving successive enterprise proposals within the Cluster,” she added.
It was highlighted that during the first year of operation, the Dupligan Farmers Multi-purpose Cooperative (DUFAMPCO), the project’s lead proponent group, is expected to buy and consolidate roughly 450MT of green coffee beans at its main trading center, the Kalinga Coffee Trading Center or KCTC, located in Bulanao, Tabuk City, Kalinga.
The project will have a total investment cost of P14,804,033.33 composed of total business plan worth P12,404,033.33 plus its Civil Works amounting to P2,400,000.00 and is seen to generate an average annual income of P12.25 million within the project’s six-year implementation period.
Members of the DUFAMPCO, and its six (6) affiliates in the coffee enterprise have expressed a breather from the long wait of the World Bank approval.
It has since then been a good news held in abeyance since date of submission of its business plan in August of 2014 until all required data in the business plan as critique in the series of technical reviews have been complied with, infused and found fitting both in form and substance.
The letter gives clearance for the local government unit (LGU) to proceed with the procurement process of the proposed sub-project. Finding the sub-project compliant with the conditions set under the NOL 1, a No Objection Letter 2 (NOL 2) will be issued, capacitating the LGU to proceed with the awarding of contracts to winning bidders.
Tabuk City Mayor Ferdinand B. Tubban lauded the coordinated efforts of those involved in the entire sub-project saying, “Napakadali ang pag-asenso ng isang bayan kapag ginagawa ng bawat isa ang kanilang responsibilidad” (A local government unit easily achieves development when everyone does his supposed responsibilities).
“You are our Ambassadors of goodwill; this P14 million peso coffee enterprise sub-project will bring about improvement in quality life among our stakeholders,” the mayor emphasized before participants to the PRDP NPCO-PSO-RPCO I-REAP 6th Coordination Meeting and CY 2015 3rd Quarter Assessment who took off from Tuguegarao City in Cagayan via on-site visits to the proposed Kalinga Integrated Coffee Processing Enterprise in Tabuk City and Isabela Dairy Enterprise in Mallig, Isabela.
On top of the proposed enterprise’s felt needs are delivery and hauling trucks, steel dehuller, coffee mill, trading centers as well as additional trading capital, among others. The sub-project has a total cost of a little more than Php 14.8 million pesos.
Ms Grace F. Baluyan, Provincial Director of the Department of Trade and Industry (DTI), presented a comprehensive local and global-based statistical account of the prospects of the Kalinga Coffee Industry.
According to PD Baluyan even before the advent of PRDP in the region, local officials had already been working on the enhancement of coffee production in the entire province.
“As early as 2004, we have decided to work on improving our coffee production. PRDP came in at the right time when we are now ready as preparations had all been set earlier through our Provincial Coffee Council,” Baluyan said.
Available statistical data reveal that among the provinces comprising the Cordillera Administrative Region (CAR), Kalinga is the biggest producer of coffee green beans due to its wide production areas, with soil and climatic conditions suitable for coffee farming. Kalinga is ranked 7th among the coffee producing provinces in the country while over-all, CAR Region which covers the provinces of Abra, Apayao, Benguet, Ifugao, Mt. Province and Kalinga ranked 4th. Kalinga accounts for 67.68% of the region’s total coffee production for 2013.
“There is a very big world demand deficit for coffee. Of the 70 countries in the world producing coffee, 30.95% are consumed by producers while 69.05% are consumed by non-producers,” the DTI Director explained.
Data from the International Coffee Organization (ICO) reveal that Brazil is the world’s top coffee producer while Philippines lags behind being the 30th but surprisingly consumes the most part of its production.
“There is indeed a growing demand for the product as consumption of importing and exporting countries increases annually by at least 2%. The US is the biggest importer of Coffee while the European Union (EU) accounts for more than 50% of total imports,” she said.
It appears from the data that instant coffee is still the most accessible. Global coffee production which has been decreasing for the last three years was 147.6 M bags in 2012-13, 146.7 M bags in 2013-14 and 141.9 M bags in 2014-15.
The coffee industry players are venturing at levelling up coffee production and processing and an improved product packaging to be able to cope- up with the standard of both local and global market.
“With the PRDP’s support, coffee industry is expected to boom in the area benefitting my fellow marginalized coffee planters,” says Mr. Palecpec who was one among the well-wishers during the activity held at the Golden Berries Hotel and Convention Center in Tabuk City on October 1, 2015. (Mabel Zabala and Ferdinand C. Narciso, DA-PRDP)
