Objective of the Project
The project aims to increase income and access to food by establishing small scale appropriate and sustainable agro-processing business. The project shall provide funds for processing raw agricultural and fishery products to diversify market and increase value added products. It is designed to help increase the range of options available to the organization by assisting in building up their assets base. Promotional strategies are concerned with widening the horizons of members and helping them develop different perspectives and means for the longer term continuity of the organization. The project has a total amount of Php 18.572M to be implemented this year.
For the first year of implementation, priority shall be given to one (1) commodity per LGU. The DIDP-PMO will validate the commodity and organization qualified for the Agro-Processing Promotion Project according to the following criteria:
Criteria for Commodity Selection
- The volume of raw materials used for agro-processing is abundantly available locally;
- The resources to be used will either minimize adverse environmental effect or restore possible imbalances to be created by the project;
- Commodity has an existing demand and has a potential to expand and explore new markets for resulting product; and
- Commodity should be consistent and aligned with the identified priority sector in the medium term development plan of the province/city.
Criteria for the Organization Selection
- Organization must be registered and operational financial management system for at least 3 years; have a positive net income for the current and two immediately preceding financial years as reflected in the financial statements audited by an external auditor;
- Organization must have the capacity to manage and implement proposed project proven by their track record and experience in similar development projects;
- Target beneficiaries are small-scale farmers and/or processors;
- Organization must have the absorptive capacity to benefit from increased investments such as the necessary staff. Knowledge, physical and other resources to implement the project;
- Organization must promote rural-based (agro-processing) off-farm economic activities that increases farm incomes;
- Organization must promote technology that optimized the use of abundant indigenous resources; and
- The beneficiaries are willing to set aside a portion of their income for capital build-up and forces savings to ensure the continuity of projects’ operations even if the assistance from the project has been terminated.
- Each LGU will be allocated with project funds through a Memorandum of Agreement and will be required to submit the corresponding project proposals with the project logical framework and implementing strategies.
- The project proposals shall be evaluated by the Technical Advisory Group (TAG) established mainly for the evaluation of proposals using their specific criteria to be set by the TAG. Such evaluation (including comments, suggestions, and recommendation) shall be used as bases for appropriate and final action on the proposal.
- The capital investment shall be loaned without interest, however, the principal obligations have to be settled within 4 months or until December 2007.
- The funds shall be deposited in a trust account that will be managed by the LGUs and will be accessed based on the policies and guidelines set up under the project. With the roll-over scheme, the target beneficiaries replenishes the start-up fund granted based on the individual project’s cash flow. The roll-over funds will be used to finance other agro-processing promotion projects for another community. The LGUs shall ensure that the gains under this project can be replicated in other organization that needs the most assistance.
- The project management cost shall not exceed five percent (5%) of the total project allocation.
- A local counterpart of at least ten percent (10%) of the total project allocation (in cash or in kind) shall be required.
Criteria for Livelihood Projects
- Projects should be market driven, sustainable and ecologically sound;
- Project has the potential to create/provide employment and increase income;
- Project should meet the needs of the industry; and
- Project timeframe should be doable within 2 years (at most) or less from the date it started last January 2006.
The APPP has a total allocation of P18.566 Million which was included under the CY 2006 Budget of the DIDP IFSP. This amount was transferred by DA RFU XI to DIDP PMO, which in turn transferred the amount to the 9 implementing LGUs in two tranches upon their compliance with the requirements prescribed by DIDP PMO. The share of the 4 provincial LGUs and Davao City is P2.932 Million each while the allocation for the 4 component city LGUs is P 977,000.00.
Under this project, 14 cooperatives and 1 processors´ association were provided with funds for processing raw agricultural, dairy, meat and fishery products. The funds went into the construction and rehabilitation of the 9 processing plants, installation or procurement of 56 processing equipment and as additional capital for their agro-processing activities. Total amount of credit extended to this cooperatives/association is approximately P 17.155 Million.
A total of 52 products were developed which are derived mainly from the products of the region such as mango, pineapple, banana, coconut, sugarcane and durian. There were also dairy products from buffalo milk, processed meat such as tocino, pork barbecue and pork chicharon; processed vegetables; fishery products such as gourmet sardines; and poultry products such as pickled chicken egg and pickled quail egg. Majority of these products are sold commercially at major supermarkets and "pasalubong centers" in the region.
Others have already penetrated the markets in Luzon and Visayas. Davao Orient Fruits under the Food Processors’ Association of Davao already exports their products to the US and the Tagum City Council of Women for their B’yaneng products to Singapore.
The implementing LGUs also conducted a total of 34 trainings on Capacity Enhancement, Technology Adaptation, Product Development, Technical Capacity, Entrepreneurial Skills and Management Training. The trainings are participated by 6 cooperatives with 677 participants.