NOFTA ATFI

Report Updates on the NOFTA Postharvest Financing Project for Negros small farmers

Alter Trade Foundation Inc. , September 2011

NOFTA – FLO ID 1482

The Negros Organic and Fairtrade Association is an FLO certified Second Grade Producers’ Organization in Negros Occidental in the Philippines formed in December 15, 2009.

It is composed of 16 First Grade Producers’ Organizations representing 653 agrarian reform beneficiaries ( 363 men and 290 women) who started their organic and fairtrade practices since 1994 through the assistance of Alter Trade Foundation Inc.

In 2009, NOFTA realized the problem of small farmers who mill their canes at the sugar centrals, in encashing their checks issued by the sugar planters’ associations.

The trip to Bacolod is expensive and risky. On the other hand, they need to return to their farms to pay the harvesters’ weekly wages. Some financiers buy their checks at 1% interest or more, thus taking advantage of their predicament.

Starting December 2009, NOFTA engaged in Postharvest Financing, encashing checks of small sugarcane farmers at the sugar centrals at 0.07% interest. NOFTA used their Fairtrade Premiums amounting to P600,000. In August 2010 NOFTA received a loan from APF of another P2M to augment their capitalization for the Postharvest Financing Project.

NOFTA Postharvest Financing Project for Small Farmers

PROJECT NET INCOME

Sept –Dec 31, 2010

Jan-April 31, 2011

TOTAL NET INCOME

Php 78,292.26. Php 119,027.06 Php197,319.32.

At the end of December 2010, the project earned a net income of Php78,292.26. At the end of the milling season, April 31, 2011, the additional net income was Php 119,027.06. For the whole milling year from September 2010 to April 2011, the total net income of the project amounted to Php197,319.32.

How Did Small Farmers Benefit from the Project ?

1. Small farmers are spared of extra transportation costs from La Carlota to Bacolod City and back to their remote farms that will be deducted from their net income.

2. Small farmers are also spared from risks of being robbed by bad elements on the way home from Bacolod City where they have to encash their checks.

3. Farmworkers could immediately get their wages on Fridays after the payment of the postharvest checks to farmers.

4. NOFTA an organization of small farmers was able to build up its own capital now amounting to P3M.

Lessons and Reflections

1. The NOFTA capitalization (P 2.6M) inspite of the APF loan was still inadequate

2. More small farmers go to NOFTA because of the low interest and the income go back to small farmers through NOFTA

3. NOFTA has to find other investment opportunities during the off-milling season to optimize the project capital

4. NOFTA will comply on time with its obligations to APF, wherein the first loan amortization is due on January 2012

Thank You!Domo Arigatou !Kamsa hamnida !