FAMILY FARMS: CREATING VALUE FOR PHILIPPINE RICE FARMERS AND CONSUMERS
Rice is the staple food in the Philippines. With more than 100 million people consuming rice and a population growing by 2% annually, rice continues to be a highly demanded commodity in the country. But with limited and continuously decreasing rice land area, due to rapid urbanization and land conversion, achieving rice self-sufficiency in the Philippines has become a real challenge. The Philippines has now become a net rice importer with about 10% of its annual consumption requirements sourced from Vietnam and Thailand. Despite these imports, rice prices for consumers are some of the highest in developing Asia.
Family Farms Incorporated (FFI) recently started operations to improve the position of the Philippine rice farmers and bring back value to farmers by engaging them into organic rice farming. FFI is a private Philippine corporation that produces high quality certified organic rice through small rice farmer-suppliers on Negros Island. It was registered in February 2015 and started producing small test batches of rice of various varieties, all grown under strictly adhered organic farming and processing methods.
In 2016, FFI signed a deal with the National Irrigation Administration (NIA) to operate an unused rice milling facility in Bago City, Negros Occidental. The facility is located in an irrigated rice producing area run by small farm communities of around 200 families. Through its partnership with the farmers’ association, FFI improves and operates the facility for organic rice milling which is the first on Negros Island. With the investment and support from ICCO Investments, it will equip the facility with modern rice milling and color sorting machines with the capacity of supporting over 500 organic rice farmers and improving their income by producing high value organic rice crops.
The FFI business model focuses on organic rice marketing as its core business. To differentiate its business from other rice millers and traders, FFI devotes its operation on milling only organically grown rice from farms that are organically certified and in-conversion (meaning the farm is producing on organic principles for at least 12 to 24 months). By focusing on organic rice and certification, FFI expects to increase the value of its organic rice products and provide premium price to its small farmer producers.
The majority of the organic rice is sold to the metropolitans in the Philippines and for exports. FFI is also ensuring that local consumers are benefitting from healthier rice and improving food security and food safety. The in-conversion rice is sold in the local market and competes on pricing with conventional rice and FFI’s supplying farmers are entitled to buy back organic rice for their own household consumption at milling cost from FFI.
FFI intends to duplicate and scale this rice processing facility to 10 other facilities over the next years in various regions on the Island of Negros.