Nestlé, DTI sign pact on P4.7-B rural-agro project

Published October 6, 2020, 4:09 PM

by Bernie Cahiles-Magkilat

Nestlé Philippines, the country’s biggest buyer of coffee, and the Department of Trade and Industry (DTI) on Tuesday (Oct. 6) signed a Memorandum of Understanding (MOU) to help implement the P4.781 billion Rural Agro-Enterprise Partnership for Inclusive Development and Growth (RAPID Growth) Project which aims to develop the full potential of the country’s high value crops and improve rural farmer households mostly located in the Mindanao regions.

Trade and Industry Secretary Ramon Lopez (right), and Nestlé Philippines Chairman and CEO Kais Marzouki at the virtual MOU signing ceremony in support of the RAPID Growth Project. This project aims to implement the Rural Agro-Enterprise Partnership for Inclusive Development and Growth (RAPID Growth) Project which aims to foster agricultural development in the country by extending various forms of assistance including financing to farmers in various sectors.

With the signing of the MoU, Commercial Partnership Agreements between Nestle Philippines, Inc., as anchor firm, and the Coffee farmer’s organization will commence. The partnership will initially be implemented in Sultan Kudarat and Bukidnon. It will initially cover 9 farmers cooperatives involving 1,500 farmer households.

Under the MOU, Nestlé Philippines and the DTI will collaborate to increase the incomes of smallholder coffee farmers through various interventions that include training, access to raw materials, technology or equipment, and provision of a ready market.

Both DTI and Nestlé have committed to work together in supporting technology transfer training, which will include building skills in productivity and quality improvement, entrepreneurship, and product and market development that are needed to enhance productivity levels and expand production areas.

Development partner International Fund for Agricultural Development (IFAD) has provided  funding support through a $62.9 million loan and $2.5 million grant components. The objective of the RAPID Growth Project is aligned with IFAD development agenda to focus on the delivery of inclusive and sustainable rural transformation and its objective of investing in rural people to enable them to overcome poverty and achieve food security.

IFAD Country Director Alessandro Marini emphasized the importance of partnerships with agri-business and the private sector, such as the one today established between DTI and Nestle, as drivers of rural transformation and modernization of the agricultural sector, to ultimately benefit smallholder farmers and overall rural communities.

Project Director Edwin Banquerigo said the RAPID Growth project cost is expected to reach P4.781 billion, taking into account the counterparts from the Philippine government, local government units, and  financial service providers, which will provide financing support to cover the counterpart of the project beneficiaries for the matching grant and the equity participation of project beneficiaries, i.e farmers, cooperatives and MSMEs.

Banquerigo said the RAPID Project, which identified four sectors – coffee, cacao, coconut and processed nuts and fruits – will be implemented until September 2025.

These sectors have strong domestic and international market potentials, can significantly increase productivity through better agronomic practices, involvement of large numbers of small farmers with high final value adding potential accruing to farmers, and engagement of a good number of cooperatives and SMEs in processing and trading segments, serving as anchor firms.

These were selected based on the growth potential of the selected priority agricultural value chains in the area, poverty incidence; and cluster operational efficiency considerations.  Additional sectors will be considered taking into account its jobs, livelihoods and income generating potentials and market considerations.

RAPID Growth project will be implemented in 21 provinces in 7 regions (Regions 8, 9, 10, 11, 12 and BARMM) nationwide.

It will benefit 78,000 household farmers and potential 31,000 direct jobs creation and 155,000   indirect jobs and 1,500 micro enterprises.

Under this collaboration, DTI will tap into the best practices and established linkages of Nestlé’s NESCAFÉ Plan, the country’s biggest and longest-running private sector coffee sustainability program, and its flagship Project Coffee+, an initiative seeking to transform 1,500 coffee farmers in Bukidnon and Sultan Kudarat into agripreneurs.

Nestlé Philippines, as the largest local coffee buyer in the country, continuously pursues initiatives seeking to better the lives of Filipino coffee growers. For decades, the company has nurtured a close relationship with coffee farmers by extending assistance such as training, having started manufacturing NESCAFÉ locally in 1962. The training has included teaching farmers sustainable farming practices.

“Investing in rural people is investing in a brighter future for everyone,” said DTI Secretary Ramon Lopez, “As the project generates more income for communities, it stimulates rural economies, which in turn contributes to peace and security. These communities can now advance their own interests and remove the obstacles that prevent them from creating better lives for themselves.”

Lopez cited the RAPID project for its focus for the Mindanao regions, where some areas are one of the poorest in the entire country. Lopez also lauded Nestle for its inclusive business program.

“Nestlé welcomes this opportunity to work with the DTI under the RAPID Growth Project by implementing joint activities that will help improve the livelihood of coffee farmers,” said Kais Marzouki, Chairman and CEO of Nestlé Philippines, “The country’s coffee farmers need support, not just from government and manufacturers, but also from consumers by way of their choosing to buy locally manufactured coffee.”

As a commercial partner, Nestlé will provide a ready market for locally-grown Robusta coffee. The MOU will leverage elements of the NESCAFÉ Plan, including activities under Project Coffee+, to include technical, marketing and other agripreneurial development interventions supporting the growth of the Philippine coffee industry.

Launched in 2019, the RAPID Growth Project is aligned with the Philippine Development Plan 2017-2022, and aims to stimulate agri-enterprise development. Anchored on the value chain approach, it will involve the participation of all government agencies in the delivery of services, expand economic opportunities, create more countryside agri-enterprises, and facilitate access to market, technology financing, and business development support services.