04/10/2010 (Business Insight) - The Land Bank of the Philippines (Landbank) yesterday said that it has allocated P50 billion for the Food Supply Chain Program in support of the government’s thrusts of attaining food self-sufficiency and increasing agricultural productivity.

Landbank president and CEO Gilda Pico said the P50 billion is just an initial allocation.

"We will have to assess and if they need more than that we can put in more," Pico said.

She said the P50 billion will be used to support the financial requirements for crop, livestock and fishery production, working capital and acquisition of processing and other fixed asset that are needed to increase agricultural productivity and improve efficiency in the food system.

The amount may be increased depending on the requirements of the market and the industry.

"If there is more demand, then we can increase it and Landbank can put our money in these because this is our priority sector,"Pico said.

The Food Supply Chain Program also aims to increase farmers’ income by way of providing necessary financial and technical support along the value-added chain of a commodity or industry.

Specifically, the program will provide the following: financial assistance to key players in the food system such as agricultural producers, service providers, consolidators, processors and various market players; market linkages between agricultural producers and processors; and capacity building support to strengthen farmers’ organization and enable them to meet product requirements of anchor firms.

"We hope that with the synergy of efforts and resources, we can help ensure food security and provide better economic opportunities for the people in the countryside," Pico said.

Initial projects which were identified include integrated corn production and hog fattening, integrated broiler production and processing, banana production and export, oil palm production and palm oil refining, and vegetable production.

The program’s memorandum of understanding (MOU) was signed yesterday by Agriculture Secretary Proceso Alcala, Finance Secretary and Landbank chairman Cesar Purisima, and Pico, together with representatives of various partner anchor firms.

"This is Landbank’s contribution to President Aquino’s commitment to develop the rural economy and to raise farmers’ income. We look forward to more private sector investments to improve agricultural productivity," Purisima said.

The Food Supply Chain Program’s anchor processors and cooperatives for integrated corn production and hog fattening include Biotech Farms Inc., Marcela Farms Inc., Sorosoro Development Cooperative, Limcoma Multi-Purpose Cooperative and Catmon Multi-Purpose Cooperative.

This requires an investment of at least P550 million for corn production and contract growing for hogs which is expected to benefit more than 3,000 corn farmers and 8,000 contract growers.

Anakciano Inc. will serve as the anchor firm for the integrated broiler production which requires financing support of P242.5 million for broiler and corn production, with more than 1,000 contract growers expected to participate.

For banana production and export which needs P940 million, Sagrex Food Corp. and Fermon Corp. will serve as the anchor firms and exporters.

For oil palm production and palm oil refining, Agumil Philippines Inc. will serve as the processor.

An amount of P1.5 billion is required by more than 6,000 oil palm growers for oil palm production.

Agrinurture Inc. is the program partner for vegetable production for the local and export market.

An amount of P20 million is required for vegetable production.

Other projects in the pipeline are fish production for local and export market with Sta. Cruz Seafoods, General Tuna Corp/Century Pacific Group and APAMI as possible anchor firm tie-ups.

An amount of P45 million is required for fish production.