FIBER INDUSTRY DEVELOPMENT AUTHORITY

WEAVING PEACE: the case of the
Klowil Agricultural Enterprise MPC

lake sebu location Beyond Lake Sebu’s fame for tilapia1 , T’boli crafts and foggy afternoons is a story of empowerment unknown to many. Lake Sebu used to be a barangay in the municipality of Surallah, South Cotabato, until it became a third class municipality in November 1982. Mostly populated by the T’boli people, one of Mindanao’s cultural communities and indigenous tribes2 , it is considered a conflict prone area due to the presence of New People’s Army3 operatives and its proximity to conflict affected provinces4 of Sultan Kudarat on its north and Sarangani on its south.

This case narrates the experience of Barangay Klubi, named after a local term meaning betel nut, which is traditionally chewed by T’boli tribespeople. Abaca grows abundantly in Klubi, and although village folk have actively traded abaca fiber since the 1970s, their incomes remained insufficient to meet their basic needs, until lately.

Change was introduced when in 2003, Kasangyangan Foundation Incorporated (KFI) helped set up an abaca trading enterprise5 (or this footnote can be replaced by an Annex describing the work of KFI) The initiative assisted small abaca farmers and harvesters by providing them access to direct markets and better prices than local traders, and by providing access to technologies in abaca production, harvesting, and post harvest operations.

1 Tilapia is a freshwater fish widely consumed in the country because of its availability in the market at relatively low prices.
2 Lake Sebu is also the name of a natural lake in the municipality. It has been recognized it as one of the country's most important watersheds and is one of the many bodies of water supplying irrigation to the provinces of South Cotabato and Sultan Kudarat.
3 The New People’s Army (NPA) is the armed component of the Communist Part of the Philippines (CPP). The CPP-NPA has been waging a protracted armed struggle against the government for almost four decades now. The NPAs are mostly found in the main island of Luzon, though they have expanded in the mountainous areas of Mindanao inhabited by IPs.
4 Conflict in these areas are mainly between the government and the Muslim rebels.
5 KFI is an NGO whose mission is to co-build social enterprises of the rural poor in Mindanao. It envisions a Mindanao where empowered communities of Indigenous People, Muslim and settler, men and women live in peace respecting each others’ cultures and faiths, owning the land they till, having equal access to productive resources and social services, engaging in sustainable enterprises, participating freely in governing their communities and enjoying nature’s gifts and the fruits of their labor. Its objectives include: to create quality jobs that provide adequate incomes for rural households in target communities; to protect, regenerate and manage forest resources in upland areas; and to attain organizational viability and sustainability. It does this by pursuing the establishment of (a) viable, integrated (financing, production, processing, market) social enterprises in agricultural sub-sectors, namely, palm oil, corn, rice, rubber, plantation trees and fruit orchards, coconut, vegetable and livestock; and (b) the operation of a financial institution that provide saving and credit requirement of the rural poor (micro finance).

Determining the people's needs
KFI’s presence in Barangay Klubi started in 2000, when it began implementing its Sustainable Agro Forestry Enterprise (SAFE) project in Lake Sebu .The SAFE project covered five (5) barangays and had components on land and livelihood, agro forestry, advocacy, strengthening of POs and fruit tree planting. Abaca growing was under the component on land and livelihood and non timber forest products (NTFP). Barangay Klubi was one of the priority sites for modeling sustainable agriculture and NTFP because it is one of the immediate upland Barangays of Lake Sebu and Seloton. In 2002, in compliance with its general strategy of Local Convergence Initiatives, the KFI staff assisted Klubi local leaders to draft their Barangay Development Plan (BDP). The consultation for the BDP involved a household survey and resulted in the identification of the community’s priority needs, foremost of which was the need for a more favorable market and fair economic trade for Klubi’s abundant abaca. A sub sector study on abaca was conducted and it revealed that 10 of the 17 sitios in the barangay were natural farms for abaca. The farmers wanted to form a cooperative but they did not know how and they had no leader to guide them. Since the 1970s, traders successfully manipulated the price of abaca, and farmers were unknowingly cheated when their produce was classified as lower grade fibers. The Fiber Industry Development Association (FIDA) had tried to assist the farmers in achieving fairer trading deals but farmers remained uneducated on the classification of fiber. In 2000, abaca was priced at a low P14 per kilo. Initially, KFI itself had to be convinced about the need to form a trading enterprise. The barangay captain was lukewarm about the idea mainly because he himself was an abaca trader and had a lot to lose if the farmers were organized. But as KFI visited all the 17 sitios of Klubi, 10 of the sitio leaders had expressed the same need.		In 2003, KFI put up its own counterpart investment and agreed on a joint venture agreement with the abaca farmers to help establish the Klowil Abaca Enterprise (KAE). Startup capital amounted to PhP150,000 with an additional PhP82,000 to build the bodega (or warehouse). Initial money was accessed from the SAFE project with funding and technical support from Swedish Forest and Wood Trade Union (SFWTU). KAE has since managed as a trading center that purchases abaca fibers from the farmers and “runners”, or consolidators who buy fiber from the smaller and more widely dispersed farmers who live as far as 10 kilometers from the trading center. In turn, KAE sells the fiber that is pre-classified across five grade types (S2, I, S3, G, and JK) to Chingbee in Davao City. (Show picture of abaca fibers) Surmounting difficulties Despite resistance from the Klubi Barangay Captain, the experience of KAE shows that with consensus and persistence, the voice of the community members can prevail. Sitio leaders of the 10 abaca growing areas met among themselves to discuss policies that would govern the management of the enterprise. They discussed matters such as criteria for membership, ceilings for members’ cash advances, schedules of payment, etc., which were later presented during a general assembly. A barangay kagawad of Klubi played a crucial role by donating the land on which the enterprise is housed. Then the Barangay Captain, who realized he could not afford to earn the ire of his constituents or turn a deaf ear to their clamor, finally acceded. Upon the request of the farmers, KAE was first directly managed by KFI staff. However, with KFI’s goal of empowering the farmers by turning over operations to the members of the community, management is now autonomous of KFI .

Klowil for the people of Klubi

Klowil is a T’boli term that means peace and prosperity, and as the name itself suggests, better times have arrived for the residents of Klubi. Before Klowil Agricultural Enterprise MPC formerly Klowil Abaca Enterprise began operations, buying of the fiber happened in a place around 4 kilometers from the current site, which could be reached by incurring a transportation cost of around PhP80 for a round trip.

There used to be three (3) traders in the Klubi. With the entry of KAE, one trader had closed shop. KAE operations may have been unfortunate for traders who now face stiff competition among themselves, but the abaca producers have only one thing to say. They feel fortunate because gone are the days when the price of abaca was dictated by traders. As buying prices began to rise, this translated to improved incomes for the farmers. In KAE’s first few months of operations, buying price of the fiber was raised to PhP23 per kilogram. Prices presently range from PhP42 or PhP45, a far cry from the past prices that fluctuated alongside the dollar exchange rate.

The farmer members of KAE, now numbering 340 abaca farmers and 420 tinalak weavers have been taught to classify tinalak or grade abaca fiber, and are now able to negotiate their selling price. The results of the subsector study on abaca have been shared to them, and the farmers are now educated on the marketing cycle and transport costs.

It was also noted that a number of farmers have shifted from lower valued crops to abaca. KAE operations have also branched out by establishing buying stations in the neighboring barangays of Lamfugon in Lake Sebu and Laconon in the municipality of T’Boli, as well as the municipality of Surallah in Zone 2A, Libertad, now the main office and warehouse of KAEMPC is situated. From these stations, fibers are consolidated by KAE before they are sold in Davao. (show picture of storage room with abaca fiber, and picture of trader in KAE office)

Empowering process
In general, farmers feel empowered because with their knowledge of how abaca is graded and priced, they are no longer easily misled or forced to sell at lower prices. Once a month, five to eight farmer members go to Davao City to visit FIDA and to witness the buying and selling of fiber. Recently, most weavers have also had the chance to make exposure trip in Davao. Some weavers attended the National Textile Symposium, International Trade Fairs in Manila, this is held twice every year and once in Singapore in the celebration of Philippine Independence Day in Singapore showcasing tinalak weaving. The exposure is a learning experience and is considered a once in a lifetime opportunity.
The enterprise has been able to build up some capital through a mechanism where PhP1 is set aside for every kilo that a farmer-member sells and PhP50.00/roll of tinalak for weavers. For example, if a farmer sells 50 kilos of fiber, 50 pesos is set aside as “capital build up”, which in turn is distributed to the farmers during an annual sharing of dividends. This fund also acts as a reserve fund, where farmers’ unpaid loans are deducted from their dividends. While additional earnings from selling fiber at higher prices have made a significant contribution to family income, higher better earnings are achieved by households with women weavers. The Tadeco Corporation in Davao City, known for exporting woven tinalak handicrafts, orders up to 100 rolls of tinalak cloth per month, aside from another 150 rolls of tinalak fabrics being ordered by various buyers based in Manila and Cebu. The enterprise in turn, contacts the women weavers in Klubi to come up with the required orders. The women are happy with the arrangement of KAE consolidating all orders because aside from having a ready market, KAEMPC tinalak buyers buy at a higher price of PhP140 to PhP400 per meter, as opposed to smaller or individual orders which are priced at PhP60 to 100 per yard. In addition, the women are able to make a cash advance from the coop, and for materials like blitus fiber used for the tinalak cloth, dyes, bee wax. Interestingly, many mothers feel fortunate because they are able to earn without having to leave their homes. These women, whose mothers taught them the craft of tinalak weaving, are able to contribute significantly in augmenting family income. Mothers have noted that they have more funds available for their children’s education and their family’s health needs. Some have even been able to improve their houses with the use of sturdier materials like cement and wood. Such a steady demand for tinalak sold at more lucrative prices has encouraged the continuation of the tradition of weaving among Tboli women in Klubi. Moreover, it has helped the women gain a stronger sense of self worth and well being. (show pictures of women weavers, house with half concrete and reserve supply of wood.		Notably, the KAE cooperative also manages a small grocery that earns funds for the enterprise. Upon the suggestion and request of KAE members, the small store located beside the KAE abaca warehouse sells fuel, rice, oil, sugar, noodles, sardines, soap, clothes and other basic household goods. Farmer members, who have the privilege of making cash advances from KAE, may make their advance in the form of goods taken from the store. This system of cash advances has not only taught KAE members to manage budgets and liquidate their sales, but has also given them a sense of security that they have ready access to everyday needs. (show picture of grocery) Moreover, social relations among community members have improved since the establishment of KAE. In the past, farmers were not organized and felt helpless when they experienced dire financial need. In T’boli culture, the feeling of trust can easily be broken with a single bad experience. When KFI first started to work in Klubi, community members were distrustful and even branded KFI as an antichrist. Fortunately, the recent positive experience of fair trade and having someone to count on has built trust among community members. As of 2011 Abaca Farmers and Tinalak Weavers have a total of almost PhP500, 000.00 capital build up in the coop and enjoying not less than to 20% return every year. In 2011 the coop’s assets is close to PhP10M while the total gross sales is PhP60M.

Success yields additional benefits
In addition to income from trading abaca and tinalak and managing the mini grocery, KAE members also gain profit from trading corn and small financing on corn production, palay trading and from running a small trucking services operation. The truck that brings the fiber and tinalak to Davao City does not return empty, as it brings items on its way back to Klubi – merchandise which are sold in the KAE grocery. Apart from gains related to abaca trading activities, KAE members are also reaping auxiliary benefits. Still under a partnership with KFI, a project called Popular Education for People Empowerment (PEPE) implemented in Klubi. Some 30 alternative learning sessions have been conducted in the KAE office for women and youth. The project has produced 87 learners and 15 volunteer educators, whose literacy skills have been upgraded along topics related to culture, livelihood and health and nutrition. KAE purchased a 300 square meter lot which the weaving centers are built with capacity of 60 weaving looms both in the first and second floor at the same time a multipurpose center for other activities of the coop and of the community. The construction amounting to 160T was equally contributed by TADECO, PEPE ALS, and the Coop. Recently FIDA and DA Province granted the coop with abaca drying facility which include abaca mechanical drier, processing shade and 1 unit abaca stripping machine.		The cooperative is also very thankful through DA Region 12 under Agri Pinoy Program, the coop was granted Village Type Corn Postharvest Facilities amounting to more than three million which is being constructed in Surallah and will be fully operationalized early March 2012. Planning for a better future KAE has notable plans for the future. In response to the needs articulated by community members, KAE’s vision includes being able to expand its tinalak production and training womenfolk to make world class tinalak products like wall panels, pillow cases, wallets and utility bags, or to embellish the tinalak cloth with simple beads. The Coop plans to expand on corn production and marketing. Having the village type corn post harvest facilities the coop will have big advantage during rainy and peak seasons. It will improve the quality of grains, reduce losses and increase profit for the cooperative.