Muscovado rising

The muscovado industry is considered a sunrise industry with the trend toward healthy lifestyles all over the world, led by people in Europe, Japan and the US.

“Muscovado is naturally processed and organically grown, and this appeals to consumers who are health conscious and health aware,” says Reinzi T. Soliguen, a muscovado farmer based in Negros Occidental.

The Philippines has actually been exporting small quantities of muscovado sugar to Japan, Switzerland, Australia, US and Germany since 1987. But under a project called Promoting Rural Industries and Market Enhancement or PRIME, farmers are being equipped with the capability and the capacity to compete for a bigger share of the international market. Soliguen currently exports muscovado sugar cubes to Japan.

In 2005, the Canadian International Development Agency (CIDA) committed to provide Can$4.95 million for the five-year PRIME initiative, and chose Philippine Development Assistance Programme, Inc. (PDAP) as its executing agency, partner, and recipient.

“PDAP started as a consortium of Filipino and Canadian NGOs (non-government organizations). It was founded in 1986 as a non-stock, non-profit organization, to become an effective instrument in reducing poverty and inequity in the Philippines,” says PDAP executive director Jerry Pacturan.

Under PRIME, which supports the development of organic and natural products to become rural industries, PDAP recommended the shift from conventional to organic farming to push forward the development of the muscovado industry.

Pacturan says, “This shift should see an increase in the production of organic muscovado in order to cater to a growing export market, and thereby obtain higher market prices. Better prices will encourage farmers to engage in organic farming.”

An investment of between P1.5 million and P1.7 million is needed to upgrade existing facilities from traditional to purely food-grade facilities. The focus of conversion is hygiene and sanitation to maintain sediment-free mills.

The participation of muscovado farmers and traders in PRIME, as well as the support of the Region 6 office of the Department of Agriculture, has allowed Antique to increase its muscovado capacity from 700 hectares in 2006 to over 1,000 hectares in 2007.

Farmgate prices for Antique’s muscovado sugar range from P25 to P29 per kilo. This translates into a retail price of about P60 per kilo in Metro Manila.

CIDA second secretary Joseph Goodings says the agency’s commitment to PRIME stems from its mandate to “support sustainable development in developing countries in order to reduce poverty and to contribute to a more secure, equitable, and prosperous world.”

He adds, “CIDA has development programs all over the world and in the Philippines, we have found the rural areas to be most in need. The goal is to increase incomes, to provide jobs. We found that the demand for a premium product like muscovado sugar is there. We want to help (Filipino farmers) take advantage of this business opportunity, which comes from a significantly expanding market.”

The CIDA grant is not intended to provide credit or loans but to improve the technical and field capabilities of farmers and increase their chances of succeeding in the muscovado market through acceptable quality and sufficient volumes or scale.

PRIME is supporting the establishment of 50 microenterprises and strengthening three commodity-specific industries—organic rice, muscovado, and seaweed. It wants to institutionalize PDAP so it can continue to assist rural microenterprises and industries even after CIDA support ends in 2009.

To achieve this, PDAP is gearing to become an integrated business development service (BDS) provider and BDS facilitator for rural enterprise communities with in-house, allied or outsourced capabilities in community capacity building, financial intermediation, business development services, market linkage, financial packaging, documentation and policy advocacy.